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Document and Entity Information - USD ($) $ in Billions	12 Months Ended
Document and Entity Information - USD ($) $ in Billions	Dec. 31, 2013	Feb. 24, 2014	Jun. 30, 2013
Document and Entity Information
Entity Registrant Name	ALLIANCE DATA SYSTEMS CORP
Entity Central Index Key	0001101215
Document Type	10-K
Document Period End Date	Dec. 31, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 8.6
Entity Common Stock, Shares Outstanding		53,172,615
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012
ASSETS
Cash and cash equivalents	$ 969,822	$ 893,352
Trade receivables, less allowance for doubtful accounts ($2,262 and $3,919 at December 31, 2013 and 2012, respectively)	394,822	370,110
Credit card and loan receivables:
Credit card receivables - restricted for securitization investors	7,080,014	6,597,120
Other credit card and loan receivables	1,492,868	852,512
Loan receivables held for sale	62,082
Total credit card and loan receivables	8,634,964	7,449,632
Allowance for loan loss	(503,169)	(481,958)
Credit card and loan receivables, net	8,131,795	6,967,674
Deferred tax asset, net	216,195	237,268
Other current assets	177,859	171,049
Redemption settlement assets, restricted	510,349	492,690
Total current assets	10,400,842	9,132,143
Property and equipment, net	299,188	253,028
Deferred tax asset, net	2,454	30,027
Cash collateral, restricted	34,124	65,160
Intangible assets, net	460,404	582,874
Goodwill	1,735,703	1,751,053
Other non-current assets	311,542	185,854
Total assets	13,244,257	12,000,139
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	210,019	215,470
Accrued expenses	262,307	274,625
Deposits	1,544,059	1,092,753
Non-recourse borrowings of consolidated securitization entities	1,025,000	1,474,054
Current debt	364,489	803,269
Other current liabilities	140,186	117,283
Deferred revenue	966,438	1,055,323
Total current liabilities	4,512,498	5,032,777
Deferred revenue	170,748	193,738
Deferred tax liability, net	275,757	277,354
Deposits	1,272,302	1,135,658
Non-recourse borrowings of consolidated securitization entities	3,566,916	2,656,916
Long-term and other debt	2,435,792	2,051,570
Other liabilities	154,483	123,639
Total liabilities	12,388,496	11,471,652
Commitments and contingencies (Note 11)
Stockholders' equity:
Common stock, $0.01 par value; authorized, 200,000 shares; issued, 98,302 shares and 94,963 shares at December 31, 2013 and 2012, respectively	983	950
Additional paid-in capital	1,512,752	1,454,230
Treasury stock, at cost, 46,752 shares and 45,360 shares at December 31, 2013 and 2012, respectively	(2,689,177)	(2,458,092)
Retained earnings	2,049,430	1,553,260
Accumulated other comprehensive loss	(18,227)	(21,861)
Total stockholders' equity	855,761	528,487
Total liabilities and stockholders' equity	$ 13,244,257	$ 12,000,139

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Dec. 31, 2013	Dec. 31, 2012
CONSOLIDATED BALANCE SHEETS
Trade receivables, allowance for doubtful accounts (in dollars)	$ 2,262	$ 3,919
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized shares	200,000	200,000
Common stock, issued shares	98,302	94,963
Treasury stock, shares	46,752	45,360

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Revenues
Transaction	$ 329,027	$ 300,801	$ 290,582
Redemption	587,187	635,536	572,499
Finance charges, net	1,956,654	1,643,405	1,402,041
Database marketing fees and direct marketing services	1,289,356	931,533	806,470
Other revenue	156,839	130,115	101,695
Total revenue	4,319,063	3,641,390	3,173,287
Operating expenses
Cost of operations (exclusive of depreciation and amortization disclosed separately below)	2,549,159	2,106,612	1,811,882
Provision for loan loss	345,758	285,479	300,316
General and administrative	109,115	108,059	95,256
Depreciation and other amortization	84,291	73,802	70,427
Amortization of purchased intangibles	131,828	93,074	82,726
Total operating expenses	3,220,151	2,667,026	2,360,607
Operating income	1,098,912	974,364	812,680
Interest expense
Securitization funding costs	95,326	92,808	126,711
Interest expense on deposits	29,111	25,181	23,078
Interest expense on long-term and other debt, net	181,063	173,471	148,796
Total interest expense, net	305,500	291,460	298,585
Income before income tax	793,412	682,904	514,095
Provision for income taxes	297,242	260,648	198,809
Net income	$ 496,170	$ 422,256	$ 315,286
Basic income per share (in dollars per share)	$ 10.09	$ 8.44	$ 6.22
Diluted income per share (in dollars per share)	$ 7.42	$ 6.58	$ 5.45
Weighted average shares:
Basic (in shares)	49,190	50,008	50,687
Diluted (in shares)	66,866	64,143	57,804

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 496,170	$ 422,256	$ 315,286
Other comprehensive income, net of tax
Net unrealized (loss) gain on securities, net of tax (benefit) expense of $(1,460) $(377) and $251 for the years ended December 31, 2013, 2012 and 2011, respectively	(6,132)	3,368	27,035
Foreign currency translation adjustments	9,766	(2,173)	(15,591)
Other comprehensive income	3,634	1,195	11,444
Total comprehensive income, net of tax	$ 499,804	$ 423,451	$ 326,730

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net unrealized (loss) gain on securities, tax (benefit) expense	$ (1,460)	$ (377)	$ 251

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Balance at Dec. 31, 2010	$ 23,094	$ 928	$ 1,320,767	$ (2,079,819)	$ 815,718	$ (34,500)
Balance (in shares) at Dec. 31, 2010		92,797
Increase (Decrease) in Stockholders' Equity
Net income	315,286				315,286
Other comprehensive income	11,444					11,444
Stock-based compensation	43,486		43,486
Repurchases of common stock	(240,877)			(240,877)
Other	23,533	$ 13	23,520
Other (in shares)		1,344
Balance at Dec. 31, 2011	175,966	$ 941	1,387,773	(2,320,696)	1,131,004	(23,056)
Balance (in shares) at Dec. 31, 2011		94,141
Increase (Decrease) in Stockholders' Equity
Net income	422,256				422,256
Other comprehensive income	1,195					1,195
Stock-based compensation	50,497		50,497
Repurchases of common stock	(137,396)			(137,396)
Other	15,969	$ 9	15,960
Other (in shares)		822
Balance at Dec. 31, 2012	528,487	$ 950	1,454,230	(2,458,092)	1,553,260	(21,861)
Balance (in shares) at Dec. 31, 2012		94,963
Increase (Decrease) in Stockholders' Equity
Net income	496,170				496,170
Other comprehensive income	3,634					3,634
Stock-based compensation	59,183		59,183
Repurchases of common stock	(231,085)			(231,085)
Other	(628)	$ 33	(661)
Other (in shares)		3,339
Balance at Dec. 31, 2013	$ 855,761	$ 983	$ 1,512,752	$ (2,689,177)	$ 2,049,430	$ (18,227)
Balance (in shares) at Dec. 31, 2013		98,302

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 496,170	$ 422,256	$ 315,286
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	216,119	166,876	153,153
Deferred income taxes	42,913	102,266	47,037
Provision for loan loss	345,758	285,479	300,316
Non-cash stock compensation	59,183	50,497	43,486
Fair value gain on interest-rate derivatives	(8,511)	(29,592)	(31,728)
Amortization of discount on debt	65,677	82,452	73,787
Amortization of deferred financing costs	25,492	24,935	17,527
Change in operating assets and liabilities, net of acquisitions:
Change in trade accounts receivable	(33,414)	(49,219)	(32,158)
Change in other assets	(148,952)	(3,184)	17,518
Change in accounts payable and accrued expenses	(28,011)	115,114	53,676
Change in deferred revenue	(30,383)	(11,225)	33,341
Change in other liabilities	63,914	(13,146)	31,944
Originations of loan receivables held for sale	(1,674,713)
Sales of loan receivables held for sale	1,612,631
Excess tax benefits from stock-based compensation	(17,267)	(20,199)	(15,028)
Other	16,886	10,880	3,190
Net cash provided by operating activities	1,003,492	1,134,190	1,011,347
CASH FLOWS FROM INVESTING ACTIVITIES:
Change in redemption settlement assets	(54,572)	37,232	(49,179)
Change in cash collateral, restricted	32,405	99,035	22,046
Change in restricted cash	39,378	(46,837)	98,408
Change in credit card and loan receivables	(1,420,931)	(1,371,352)	(578,058)
Purchase of credit card portfolios	(46,705)	(780,003)	(68,554)
Payments for acquired businesses, net of cash		(463,964)	(359,076)
Capital expenditures	(135,376)	(116,455)	(73,502)
Purchases of marketable securities	(35,084)	(34,069)	(14,809)
Maturities/sales of marketable securities	2,852	15,651
Investments in the stock of investees	(1,383)	(921)	(17,986)
Other		(9,667)
Net cash used in investing activities	(1,619,416)	(2,671,350)	(1,040,710)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under debt agreements	1,985,000	1,095,148	3,256,500
Repayments of borrowings	(1,300,241)	(506,214)	(3,012,682)
Proceeds from convertible note hedge counterparties	1,056,307
Settlement of convertible note borrowings	(1,861,289)
Issuances of deposits	1,989,576	1,866,213	1,180,284
Repayments of deposits	(1,401,625)	(991,577)	(685,609)
Non-recourse borrowings of consolidated securitization entities	2,268,285	2,543,892	2,179,721
Repayments/maturities of non-recourse borrowings of consolidated securitization entities	(1,807,339)	(1,673,209)	(2,579,577)
Payment of deferred financing costs	(24,772)	(40,267)	(29,025)
Excess tax benefits from stock-based compensation	17,267	20,199	15,028
Proceeds from issuance of common stock	14,090	20,696	29,412
Purchase of treasury shares	(231,085)	(125,840)	(240,877)
Other	(22)	(22)	(3,925)
Net cash provided by financing activities	704,152	2,209,019	109,250
Effect of exchange rate changes on cash and cash equivalents	(11,758)	5,280	(2,788)
Change in cash and cash equivalents	76,470	677,139	77,099
Cash and cash equivalents at beginning of year	893,352	216,213	139,114
Cash and cash equivalents at end of year	969,822	893,352	216,213
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid	239,203	215,708	231,049
Income taxes paid, net	$ 216,530	$ 137,838	$ 123,480

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	12 Months Ended
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	Dec. 31, 2013
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 wholly-owned subsidiaries and its consolidated variable interest entities, the “Company”) is a leading global provider of data-driven marketing and loyalty solutions. The Company offers a comprehensive portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, marketing strategy consulting, analytics and creative services, direct marketing services and private label and co-brand retail credit card programs. The Company focuses on facilitating and managing interactions between its clients and their customers through all consumer marketing channels, including in-store, online, catalog, mail, telephone and email, and emerging channels such as mobile and social media. The Company captures and analyzes data created during each customer interaction, leveraging the insight derived from that data to enable clients to identify and acquire new customers and enhance customer loyalty. The Company operates in the following reportable segments: LoyaltyOne®, Epsilon®, and Private Label Services and Credit. LoyaltyOne includes the Company’s Canadian AIR MILES® Reward Program. Epsilon provides end-to-end, integrated direct marketing solutions that leverage transactional data to help clients more effectively acquire and build stronger relationships with their customers. Private Label Services and Credit encompasses credit card processing, billing and payment processing, customer care and collections services for private label retailers as well as private label retail credit card and loan receivables financing, including securitization of the credit card receivables that it underwrites from its private label retail credit card programs. For purposes of comparability, certain prior period amounts have been reclassified to conform to the current year presentation in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

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+ Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2013

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 its wholly-owned subsidiaries. All intercompany transactions have been eliminated.

The Company also consolidates any variable interest entity (“VIE”) for which the Company is the primary beneficiary. In accordance with Accounting Standards Codification (“ASC”) 860, “Transfers and Servicing,” and ASC 810, “Consolidation,” the Company is the primary beneficiary of World Financial Network Credit Card Master Trust (“Master Trust”), World Financial Network Credit Card Master Note Trust (“Master Trust I”) and World Financial Network Credit Card Master Trust III (“Master Trust III”) (collectively, the “WFN Trusts”), and World Financial Capital Master Note Trust (the “WFC Trust”). The Company is deemed to be the primary beneficiary for the WFN Trusts and the WFC Trust, as it is the servicer for each of the trusts and is a holder of the residual interest. The Company, through its involvement in the activities of the trusts, has the power to direct the activities that most significantly impact the economic performance of the trust, and the obligation (or right) to absorb losses (or receive benefits) of the trust that could potentially be significant.

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. In cases where the Company's equity investment is less than 20% and significant influence does not exist, such investments are carried at cost.

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

Credit Card and Loan Receivables—The Company sells a majority of the credit card receivables originated by Comenity Bank to WFN Credit Company, LLC, which in turn sells them to the WFN Trusts as part of a securitization program. The Company also sells its credit card receivables originated by Comenity Capital Bank to World Financial Capital Credit Company, LLC which in turn sells them to the WFC Trust. The credit card receivables sold to each of the trusts are restricted for securitization investors.

Credit card and loan receivables consist of credit card and loan receivables held for investment and credit card and loan receivables held for sale, if any. All new originations of credit card and loan receivables (except for the amount of new credit card receivables related to existing securitized portfolios transferred to the WFN Trusts or the WFC Trust during the term of a securitization and those originations associated with agreements with subsidiaries of eBay, Inc., further discussed in Note 4, “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. Management makes judgments about the Company’s ability to fund these credit card and loan receivables through means other than securitization, such as money market deposits, certificates of deposit and other borrowings. 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 payment activity. Due to the homogenous nature of 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 are determined on an individual client portfolio basis. The Company carries these assets at the lower of aggregate cost or fair value. Cash flows associated with credit card 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.

Allowance for Loan Loss—The Company maintains an allowance for loan loss at a level that is appropriate to absorb probable losses inherent in credit card and loan receivables. The allowance for loan loss covers forecasted uncollectable principal as well as unpaid interest and fees. The allowance for loan loss is evaluated monthly for adequacy.

In estimating the allowance for uncollectable unpaid interest and fees, the Company utilizes historical charge-off trends, analyzing actual charge-offs for the prior three months. The allowance is maintained through an adjustment to finance charges, net.

In evaluating the allowance for loan loss for both principal and unpaid interest and fees, management also considers factors that may impact loan loss experience, including seasoning, loan volume and amounts, payment rates and forecasting uncertainties.

Allowance for Doubtful Accounts—The Company analyzes the appropriateness of its allowance for doubtful accounts based on the Company’s assessment of various factors, including historical experience, the age of the accounts receivable balance, customer credit-worthiness, 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.

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. The investments are stated at fair value, with the unrealized gains and losses, net of tax, reported as a component of accumulated other comprehensive (loss) income 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 twenty-one 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 generally ranges from one to ten 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.

Cash Collateral, Restricted—Cash collateral, restricted consists of cash and securities and includes spread deposits and excess funding deposits. Spread deposits are held by a trustee or agent and are used to absorb shortfalls in the available net cash flows related to securitized credit card receivables if those available net cash flows are insufficient to satisfy certain obligations of the WFN Trusts and WFC Trust. The spread deposit accounts are recorded in cash collateral, restricted at their estimated fair values. The Company uses a valuation model that calculates the present value of estimated future cash flows for each asset. The model is based on the weighted average life of the underlying securities and discount rate. Changes in the fair value estimates of the spread deposit accounts are recorded in interest expense, net. The excess funding deposits represent cash amounts deposited with the trustee of the securitizations and are used to supplement seller’s interest.

Goodwill and Other Intangible Assets—Goodwill and indefinite lived intangible assets are not amortized, but are reviewed at least annually for impairment or more frequently if circumstances indicate that an impairment may have occurred, using the market comparable and discounted cash flow methods.

Separable intangible assets that have finite useful lives are amortized over those useful lives. The Company also defers costs related to the acquisition or licensing of data for the Company’s proprietary databases which are used in providing data products and services to customers. These costs are amortized over the useful life of the data, which ranges from one to five years.

Revenue Recognition—The Company’s policy follows the guidance from ASC 605, “Revenue Recognition,” and Accounting Standards Update (“ASU”) 2009-13, “Multiple-Deliverable Revenue Arrangements,” which provides guidance on the recognition, presentation, and disclosure of revenue in financial statements. The Company recognizes revenues when all of the following criteria are satisfied: (i) persuasive evidence of an arrangement exists; (ii) the price is fixed or determinable; (iii) collectability is reasonably assured; and (iv) the service has been performed or the product has been delivered.

Transaction —The Company earns transaction fees, which are principally based on the number of transactions processed or statements generated and are recognized as such services are performed. Included are reimbursements received for “out-of-pocket” expenses.

AIR MILES Reward Program —The AIR MILES Reward Program collects fees from its sponsors based on the number of AIR MILES reward miles issued and, in limited circumstances, the number of AIR MILES reward miles redeemed. Because management has determined that the earnings process is not complete at the time an AIR MILES reward mile is issued, the recognition of redemption and service revenue is deferred. Redemption revenue is recognized as AIR MILES reward miles are redeemed and service revenue is amortized over the estimated life of an AIR MILES reward mile.

For those sponsor contracts not yet subject to the adoption of ASU 2009-13, the Company allocates the proceeds received from sponsors for the issuance of AIR MILES reward miles between the redemption element which represents the award ultimately provided to the collector (the “redemption element”) and the service element (the “service element”). The service element consists of direct marketing and support services. For contracts entered into prior to January 1, 2011, revenue related to the service element is determined using the residual method.

The adoption of ASU 2009-13 eliminated the use of the residual method for new sponsor agreements entered into, or existing sponsor agreements that are materially modified, after January 1, 2011. ASU 2009-13 also established the use of a three-level hierarchy when establishing the selling price and the relative selling price method when allocating arrangement consideration. The ASU had no significant impact upon adoption in 2011, as no new material contracts or material modifications were experienced with sponsors in the AIR MILES Reward Program from its adoption through December 31, 2012.

In 2013, as part of the Company’s analysis of the renewal of certain contracts, it was determined that in addition to the redemption and service elements, the right to use of the “AIR MILES” brand name met the criteria for a separate deliverable or element under ASU 2009-13. For the brand element, revenue is recognized at the time an AIR MILES reward mile is issued.

For those sponsor contracts within the scope of ASU 2009-13, proceeds from the issuance of AIR MILES reward miles are allocated to three elements, the redemption element, the service element, and the brand element, based on the relative selling price method. The fair value of each element was determined using management’s estimated selling price for that respective element. The estimated breakage rate changed from 28% to 27%, effective December 31, 2012 and from 27% to 26%, effective December 31, 2013.

Based on its historical analysis, the Company makes a determination as to average life of an AIR MILES reward mile. The estimated life of an AIR MILES reward mile is 42 months. There have been no changes to management’s estimate of the life of an AIR MILES reward mile in the periods presented in the financial statements.

Finance charges, net—Finance charges, net represents revenue earned on customer accounts serviced 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. As discussed in Note 4, “Credit Card and Loan Receivables,” interest and fees continue to accrue on all credit card accounts beyond 90 days, except in limited circumstances, until the credit card account balance and all related interest and other fees are paid or charged off, typically at 180 days delinquent. 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 Subtopic 310-20, “Receivables - Nonrefundable Fees and Other Costs,” direct loan origination costs on credit card and loan receivables are deferred and amortized on a straight-line basis over a one-year period and recorded as a reduction to finance charges, net. As of December 31, 2013 and 2012, the remaining unamortized deferred costs related to loan origination were $20.5 million and $16.4 million, respectively, and were recorded in other current assets in the consolidated balance sheets.

Database marketing fees and direct marketing services—For maintenance and service programs, revenue is recognized as services are provided. Revenue associated with a new database build is deferred until client acceptance. Upon acceptance, it is then recognized over the term of the related agreement as the services are provided. Revenues from the licensing of data are recognized upon delivery of the data to the customer in circumstances where no update or other obligations exist. Revenue from the licensing of data for which the Company is obligated to provide future updates is recognized on a straight-line basis over the license term.

Revenues from agency and creative services are typically billed based on time and materials or at a fixed price. If billed at a fixed price, revenue is recognized either on a proportional performance or completed contract basis as the services specified in the arrangement are performed or completed, respectively. The determination of proportional performance versus completed contract revenue recognition is dependent on the nature of the services specified in the arrangement.

Taxes assessed on revenue-producing transactions described above are presented on a net basis, and are excluded from revenues.

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 are based on the weighted average number of common and potentially dilutive common shares (dilutive stock options, unvested restricted stock and other dilutive securities outstanding during the year).

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

	Years Ended December 31,
	2013		2012		2011
	(In thousands, except per share amounts)
Numerator
Net income	$	496,170	$	422,256	$	315,286
Denominator
Weighted average shares, basic		49,190		50,008		50,687
Weighted average effect of dilutive securities:
Shares from assumed conversion of convertible senior notes		8,516		8,645		4,641
Shares from assumed exercise of convertible note warrants		8,482		4,702		1,510
Net effect of dilutive stock options and unvested restricted stock		678		788		966
Denominator for diluted calculation		66,866		64,143		57,804

Basic net income per share	$	10.09	$	8.44	$	6.22
Diluted net income per share	$	7.42	$	6.58	$	5.45

The Company calculates the effect of its convertible senior notes, which can be settled in cash or shares of common stock, on diluted net income per share as if they will be settled in cash as the Company has elected to settle the convertible senior notes for cash.

Concurrently with the issuance of its convertible senior notes, the Company entered into hedge transactions that are generally expected to offset the potential dilution of the shares from assumed conversion of convertible senior notes.

The Company is also party to prepaid forward contracts to purchase 1,857,400 shares of its common stock that are to be delivered over a settlement period in 2014. The number of shares to be delivered under the prepaid forward contracts is used to reduce weighted-average basic and diluted shares outstanding.

At December 31, 2011, the Company excluded 10.3 million warrants from the calculation of earnings per share as the effect was anti-dilutive.

Currency Translation—The assets and liabilities of the Company’s subsidiaries outside the U.S., primarily Canada, are translated into U.S. dollars at the rates of exchange in effect at the balance sheet dates. 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 income (loss). The Company recognized $(1.0) million, $0.6 million and $(2.7) million in foreign currency transaction (losses) gains for the years ended December 31, 2013, 2012 and 2011, respectively.

Leases —Rent expense on operating leases is recorded on a straight-line basis over the term of the lease agreement and includes executory costs.

Advertising Costs—The Company participates in various advertising and marketing programs, including collaborative arrangements with certain clients. The cost of advertising and marketing programs is expensed in the period incurred. The Company has recognized advertising expenses, including advertising on behalf of its clients, of $206.6 million, $166.1 million and $129.0 million for the years ended December 31, 2013, 2012 and 2011, 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 February 2013, the Financial Accounting Standards Board (“FASB”) issued ASU 2013-02, “Reporting Amounts Reclassified Out of Accumulated Other Comprehensive Income,” which expands the disclosure requirements for items reclassified from accumulated other comprehensive income to net income by requiring the total changes of each component of other comprehensive income to be disaggregated and separately presenting current period reclassification adjustments from the remainder of other comprehensive income for the period. ASU 2013-02 is effective for interim and annual periods beginning after December 15, 2012 and requires prospective application. ASU 2013-02 had no impact on the Company’s financial condition, results of operations or cash flows, but did add certain disclosure requirements. The related disclosures are presented in Note 14, “Accumulated Other Comprehensive Income.”

In July 2013, the FASB issued ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists,” which provides guidance on financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. ASU 2013-11 requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward when settlement in this manner is available under the governing tax law. ASU 2013-11 is effective for interim and annual periods beginning after December 15, 2013 and requires prospective application. The Company does not expect the adoption of ASU 2013-11 to have a material impact on the Company’s financial condition, results of operations or cash flows.

ACQUISITIONS

12 Months Ended

Dec. 31, 2013

ACQUISITIONS

ACQUISITIONS

3. ACQUISITIONS

2012 Acquisitions:

Hyper Marketing Group

On November 30, 2012, the Company acquired all of the stock of HMI Holding Corp. and Solution Set Holding Corp. (collectively, “HMI”). The purchase price was subject to customary working capital adjustments. HMI offers ROI-based targeted marketing services through digital user experience design technology, customer relationship marketing, consumer promotions marketing, direct and digital shopper marketing, distributed and local area marketing, and analytical services that include brand planning and consumer insights. The results of HMI have been included since the date of acquisition and are reflected in the Company’s Epsilon segment. The acquisition enhanced Epsilon’s core capabilities, strengthened its competitive advantage, expanded Epsilon into new industry verticals and added a talented team of marketing professionals.

Total consideration was $451.8 million, net of $7.1 million of cash and cash equivalents acquired. The goodwill that was deductible for tax purposes is $66.4 million. The following table summarizes the allocation of the consideration and the respective fair values of the assets acquired and liabilities assumed in the HMI acquisition as of the date of purchase:

	As of November 30, 2012
	(In thousands)
Current assets	$	49,700
Deferred tax assets		12,050
Property and equipment		6,907
Other assets		118
Intangible assets		194,751
Goodwill		291,249
Total assets acquired		554,775

Current liabilities		33,928
Deferred tax liabilities		68,624
Other liabilities		420
Total liabilities assumed		102,972

Net assets acquired	$	451,803

In connection with the HMI acquisition, on December 31, 2012, the Company acquired Advecor, Inc. (“Advecor”), a marketing services agency, for consideration of $12.2 million, net of $0.4 million of cash and cash equivalents acquired. Total assets acquired were $13.4 million, including $8.8 million of intangible assets and $3.0 million of goodwill, with current liabilities assumed of $1.2 million.

2011 Acquisition:

On May 31, 2011, the Company acquired all of the stock of Aspen Marketing Holdings, Inc. (“Aspen”). Aspen specializes in a full range of digital and direct marketing services, including the use of advanced analytics to perform data-driven customer acquisition and retention campaigns. Aspen is also a leading provider of marketing agency services, with expertise in the automotive and telecommunications industries. The results of Aspen have been included since the date of acquisition and are reflected in the Company’s Epsilon segment. The acquisition enhanced Epsilon’s core capabilities, strengthened its competitive advantage, expanded Epsilon into new industry verticals and added a talented team of marketing professionals.

The final purchase price for Aspen was $359.1 million, net of $13.5 million of cash and cash equivalents acquired. The goodwill resulting from the acquisition was not deductible for tax purposes. The following table summarizes the allocation of the consideration and the respective fair values of the assets acquired and liabilities assumed in the Aspen acquisition as of the date of purchase:

	As of May 31, 2011
	(In thousands)
Current assets	$	39,924
Property and equipment		4,829
Other assets		1,600
Capitalized software		24,000
Intangible assets		140,000
Goodwill		232,910
Total assets acquired		443,263

Current liabilities		30,099
Other liabilities		3,904
Deferred tax liabilities		50,184
Total liabilities assumed		84,187

Net assets acquired	$	359,076

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1497-128463

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 4
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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-URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1486-128463

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 20
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-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4845-128472

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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-URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1500-128463

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1524-128463

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
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-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7000-128479

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 2
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4926-128472

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
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-URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1383-128463

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

CREDIT CARD AND LOAN RECEIVABLES

12 Months Ended

Dec. 31, 2013

CREDIT CARD AND LOAN RECEIVABLES

CREDIT CARD AND LOAN RECEIVABLES

4. CREDIT CARD AND LOAN RECEIVABLES

The Company’s credit card and loan receivables are the only portfolio segment or class of financing receivables. Quantitative information about the components of total credit card and loan receivables is presented in the table below:

	December 31, 2013		December 31, 2012
	(In thousands)
Principal receivables	$	8,166,961	$	7,097,951
Billed and accrued finance charges		343,521		291,476
Other credit card and loan receivables		124,482		60,205
Total credit card and loan receivables		8,634,964		7,449,632
Less credit card receivables – restricted for securitization investors		7,080,014		6,597,120
Less loan receivables held for sale		62,082		—
Other credit card and loan receivables	$	1,492,868	$	852,512

Allowance for Loan Loss

The Company maintains an allowance for loan loss at a level that is appropriate to absorb probable losses inherent in credit card and loan receivables. The allowance for loan loss covers forecasted uncollectible principal as well as unpaid interest and fees. The allowance for loan loss is evaluated monthly for appropriateness.

In estimating the allowance for principal loan losses, management utilizes a migration analysis of delinquent and current credit card and loan receivables. Migration analysis is a technique used to estimate the likelihood that a credit card or loan receivable will progress through the various stages of delinquency and to charge-off. The allowance is maintained through an adjustment to the provision for loan loss. Charge-offs of principal amounts, net of recoveries are deducted from the allowance. In estimating the allowance for uncollectible unpaid interest and fees, the Company utilizes historical charge-off trends, analyzing actual charge-offs for the prior three months. The allowance is maintained through an adjustment to finance charges, net. In evaluating the allowance for loan loss for both principal and unpaid interest and fees, management also considers factors that may impact loan loss experience, including seasoning, loan volume and amounts, seasonality, payment rates and forecasting uncertainties.

Net charge-offs include the principal amount of losses from credit cardholders unwilling or unable to pay their account balances, as well as bankrupt and deceased credit cardholders, 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 an expense. Credit card and loan receivables, including unpaid interest and fees, are charged-off at the end of the month during which an account becomes 180 days contractually past due, except in the case of customer bankruptcies or death. Credit card and loan receivables, including unpaid interest and fees, associated with customer bankruptcies or death are charged-off at the end of 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, 2013, 2012 and 2011, actual charge-offs for unpaid interest and fees were $240.8 million, $191.1 million and $199.0 million, respectively.

	Years Ended December 31,
	2013			2012			2011
	(In thousands)
Balance at beginning of period	$	481,958		$	468,321		$	518,069
Provision for loan loss		345,758			285,479			300,316
Change in estimate for uncollectible unpaid interest and fees		11,000			11,000			(5,000	)
Recoveries		112,538			97,131			89,764
Principal charge-offs		(448,085	)		(379,973	)		(429,828	)
Other		—			—			(5,000	)
Balance at end of period	$	503,169		$	481,958		$	468,321

Delinquencies

A credit card account is contractually delinquent if the Company does not receive the minimum payment by the specified due date on the cardholder’s statement. It is the Company’s policy to continue to accrue interest and fee income on all credit card accounts beyond 90 days, except in limited circumstances, until the credit card account balance and all related interest and other fees are paid or charged off, typically at 180 days delinquent. When an account becomes delinquent, a message is printed on the credit cardholder’s billing statement requesting payment. 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 delinquency trends of the Company’s credit card and loan receivables portfolio:

	December 31, 2013		% of Total			December 31, 2012		% of Total
	(In thousands, except percentages)
Receivables outstanding - principal	$	8,166,961		100.0	%	$	7,097,951		100.0	%
Principal receivables balances contractually delinquent:
31 to 60 days		114,430		1.4	%		100,479		1.4	%
61 to 90 days		74,700		0.9			62,546		0.9
91 or more days		150,425		1.9			120,163		1.7
Total	$	339,555		4.2	%	$	283,188		4.0	%

The practice of re-aging an account may affect credit card loan delinquencies and charge-offs. A re-age 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, 2013, 2012 and 2011, the Company’s re-aged accounts represented 1.4%, 1.3% and 1.9%, 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 and Loan Receivables

The Company holds certain credit card and loan receivables for which the terms have been modified. The Company’s modified credit card and loan receivables include credit card and loan receivables for which temporary hardship concessions have been granted and credit card and loan receivables in permanent workout programs. These modified credit card and loan 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 and loan receivables if the credit cardholder complies with the terms of the program. These 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 programs, at the end of the concession period, credit card and loan 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 and loan receivables for which temporary hardship and permanent concessions were granted are both considered troubled debt restructurings and are collectively evaluated for impairment. Modified credit card and loan receivables are evaluated at their present value with impairment measured as the difference between the credit card and loan 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 and loan receivables on a pooled basis, the discount rate used for credit card and loan receivables is the average current annual percentage rate the Company applies to non-impaired credit card and loan receivables, which approximates what would have been applied to the pool of modified credit card and loan receivables prior to impairment. In assessing the appropriate allowance for loan loss, these modified credit card and loan receivables are included in the general pool of credit card and loan 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 and loan receivables in these programs, there would not be a material difference in the allowance for loan loss.

The Company had $118.1 million and $117.0 million, respectively, as a recorded investment in impaired credit card and loan receivables with an associated allowance for loan loss of $33.9 million and $39.7 million, respectively, as of December 31, 2013 and 2012. These modified credit card and loan receivables represented less than 3% of the Company’s total credit card and loan receivables as of both December 31, 2013 and 2012.

The average recorded investment in the impaired credit card and loan receivables was $117.4 million and $114.6 million for the years ended December 31, 2013 and 2012, respectively.

Interest income on these modified credit card and loan receivables is accounted for in the same manner as other accruing credit card and loan receivables. Cash collections on these modified credit card and loan receivables are allocated according to the same payment hierarchy methodology applied to credit card and loan receivables that are not in such programs. The Company recognized $12.7 million, $15.5 million and $13.8 million for the years ended December 31, 2013, 2012 and 2011, respectively, in interest income associated with modified credit card and loan receivables during the period that such credit card and loan receivables were impaired.

The following tables indicate the modifications related to troubled debt restructurings within credit card and loan receivables for the years ended December 31, 2013 and 2012:

	Year Ended December 31, 2013
	Number of Restructurings		Pre-modification Outstanding Balance		Post-modification Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings – credit card and loan receivables		147,200	$	134,892	$	134,799


	Year Ended December 31, 2012
	Number of Restructurings		Pre-modification Outstanding Balance		Post-modification Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings – credit card and loan receivables		134,187	$	119,985	$	119,856

The tables below summarize troubled debt restructurings that have defaulted during the years ended December 31, 2013 and 2012 where the default occurred within 12 months of their modification date:

	Year Ended December 31, 2013
	Number of Restructurings		Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings that subsequently defaulted – credit card and loan receivables		63,590	$	60,490


	Year Ended December 31, 2012
	Number of Restructurings		Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings that subsequently defaulted – credit card and loan receivables		55,198	$	53,806

Age of Credit Card and Loan Receivable Accounts

The following table sets forth, as of December 31, 2013 and 2012, the number of active credit card and loan accounts with balances and the related principal balances outstanding, based upon the age of the active credit card and loan accounts from origination:

	December 31, 2013
Age of Accounts Since Origination	Number of Active Accounts with Balances		Percentage of Active Accounts with Balances			Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding
	(In thousands, except percentages)
0-12 Months		5,048		27.2	%	$	1,962,153		24.1	%
13-24 Months		2,550		13.7			1,072,648		13.1
25-36 Months		1,799		9.7			826,911		10.1
37-48 Months		1,318		7.1			622,766		7.6
49-60 Months		1,104		6.0			557,407		6.8
Over 60 Months		6,729		36.3			3,125,076		38.3
Total		18,548		100.0	%	$	8,166,961		100.0	%

	December 31, 2012
Age of Accounts Since Origination	Number of Active Accounts with Balances		Percentage of Active Accounts with Balances			Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding
	(In thousands, except percentages)
0-12 Months		4,287		25.1	%	$	1,545,955		21.8	%
13-24 Months		2,216		12.9			867,230		12.2
25-36 Months		1,580		9.2			676,362		9.5
37-48 Months		1,297		7.6			616,296		8.7
49-60 Months		1,053		6.2			502,217		7.1
Over 60 Months		6,681		39.0			2,889,891		40.7
Total		17,114		100.0	%	$	7,097,951		100.0	%

Credit Quality

The Company uses proprietary scoring models developed specifically for the purpose of monitoring the Company’s obligor credit quality. 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. Information regarding customer performance is factored into these proprietary scoring models to determine the probability of an account becoming 90 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 composition of the Company’s credit card and loan receivables by obligor credit quality as of December 31, 2013 and 2012:

	December 31, 2013					December 31, 2012
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months)	Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding			Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding
	(In thousands, except percentages)
No Score	$	162,366		2.0	%	$	298,829		4.2	%
27.1% and higher		362,366		4.4			286,046		4.0
17.1% - 27.0%		732,425		9.0			613,184		8.7
12.6% - 17.0%		858,721		10.5			713,489		10.1
3.7% - 12.5%		3,234,547		39.6			2,840,964		40.0
1.9% - 3.6%		1,748,317		21.4			1,492,289		21.0
Lower than 1.9%		1,068,219		13.1			853,150		12.0
Total	$	8,166,961		100.0	%	$	7,097,951		100.0	%

Transfer of Financial Assets

In August 2013, under agreements with subsidiaries of eBay, Inc., including PayPal, Inc. and Bill Me Later, Inc. (collectively, “PayPal”), the Company became an issuer for their Bill Me Later® credit products. After origination, these loan receivables are sold to PayPal at par value plus accrued interest. These transfers qualify for sale treatment as they meet the conditions established in ASC 860-10, “Transfers and Servicing.” Following the sale, PayPal owns the loan receivables, bears the risk of loss in the event of loan defaults and is responsible for all servicing functions related to the amounts. The loan receivables originated by the Company that have not yet been sold to PayPal are included in loan receivables held for sale in the Company’s consolidated balance sheets and carried at the lower of cost or fair value. The carrying value of these loan receivables approximates fair value due to the short duration between origination and sale. Purchases and sales of these loan receivables held for sale are reflected as operating activities in the Company’s consolidated statements of cash flows.

Upon PayPal’s purchase of the originated loan receivables, the Company is obligated to purchase a participating interest in the pool of loan receivables generated in the Bill Me Later program. Such interest participates on a pro rata basis in the cash flows of the underlying pool of loan receivables, including principal repayments, finance charges, losses, recoveries, and servicing costs. The Company bears the risk of loss related to its participation interest in this pool. Through December 31, 2013, the Company had purchased $80.1 million of these loan receivables, of which $61.6 million was outstanding at December 31, 2013 and included in other credit card and loan receivables in the Company’s consolidated balance sheets.

Portfolio Acquisitions

During the years ended December 31, 2013 and 2012, the Company acquired the following credit card portfolios:

•

December 2013 – Gulf Credit Union, for a preliminary total purchase price of $9.6 million, which remains subject to customary purchase price adjustments and consists of $8.3 million of credit card receivables, $1.7 million of intangible assets, and $0.4 million assumed customer liabilities;

•

March 2013 – Barneys New York, for a total purchase price of $37.1 million, which consisted of $35.3 million of credit card receivables and $1.8 million of intangible assets;

•

August 2012 – The Talbots, Inc., for a total purchase price of $163.3 million, which consisted of $133.4 million of credit card receivables and $29.9 million of intangible assets;

•

July 2012 – The Bon-Ton Stores, Inc., for a total purchase price of $494.7 million, which consisted of $444.9 million of credit card receivables and $49.8 million of intangible assets;

•

May 2012 – Premier Designs, Inc., for a total purchase price of $24.3 million, which consisted of $22.9 million of credit card receivables and $1.4 million of intangible assets; and

•

March 2012 – Pier 1 Imports, for a total purchase price of $97.7 million, which consisted of $96.2 million of credit card receivables and $1.5 million of intangible assets.

Securitized Credit Card Receivables

The Company regularly securitizes its credit card receivables through its credit card securitization trusts, consisting of the WFN Trusts and the WFC Trust. The Company continues to own and service the accounts that generate credit card receivables held by the WFN Trusts and the WFC Trust. In its capacity as a servicer, each of the respective banks earns a fee from the WFN Trusts and the WFC Trust to service and administer the credit card 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, 2013, 2012 and 2011.

The WFN Trusts and the WFC Trust 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.

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 seller’s interest, which is eliminated in the consolidated balance sheets, 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. None of the cash collateral, restricted deposits were required to be used to cover losses on securitized credit card receivables in the periods ending December 31, 2013, 2012 and 2011, respectively.

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

	December 31, 2013		December 31, 2012
	(In thousands)
Total credit card receivables – restricted for securitization investors	$	7,080,014	$	6,597,120
Principal amount of credit card receivables – restricted for securitization investors, 90 days or more past due	$	131,659	$	112,203

	Years Ended December 31,
	2013		2012		2011
	(In thousands)
Net charge-offs of securitized principal	$	311,111	$	265,305	$	306,301

REDEMPTION SETTLEMENT ASSETS

12 Months Ended

Dec. 31, 2013

REDEMPTION SETTLEMENT ASSETS

REDEMPTION SETTLEMENT ASSETS

5. REDEMPTION SETTLEMENT ASSETS

Redemption settlement assets consist of cash and cash equivalents 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. These assets are primarily denominated in Canadian dollars. Realized gains and losses from the sale of investment securities were not material. The principal components of redemption settlement assets, which are carried at fair value, are as follows:

	December 31, 2013									December 31, 2012
	Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(In thousands)
Cash and cash equivalents	$	73,984	$	—	$	—		$	73,984	$	40,266	$	—	$	—		$	40,266
Government bonds		—		—		—			—		5,064		53		—			5,117
Corporate bonds		429,592		7,083		(310	)		436,365		436,846		10,560		(99	)		447,307
Total	$	503,576	$	7,083	$	(310	)	$	510,349	$	482,176	$	10,613	$	(99	)	$	492,690

As of December 31, 2013, the $0.3 million unrealized losses related to corporate bonds with a fair value of $80.5 million had been unrealized for less than twelve months. As of December 31, 2012, the $0.1 million unrealized losses related to corporate bonds with a fair value of $36.5 million had been unrealized for less than twelve months. There were no unrealized losses for twelve months or greater for the years ended December 31, 2013 and 2012.

Market values were determined for each individual security in the investment portfolio. When evaluating the investments for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the security’s issuer, and the Company’s intent to sell the security and whether it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. The Company typically invests in highly-rated securities with low probabilities of default and has the ability to hold the investments until maturity. As of December 31, 2013, the Company does not consider the investments to be other-than-temporarily impaired.

The net carrying value and estimated fair value of the redemption settlement assets at December 31, 2013 by contractual maturity are as follows:

	Amortized Cost		Estimated Fair Value
	(In thousands)
Due in one year or less	$	195,230	$	196,584
Due after one year through five years		308,346		313,765
Total	$	503,576	$	510,349

PROPERTY AND EQUIPMENT

12 Months Ended

Dec. 31, 2013

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

6. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

	December 31,
	2013			2012
	(In thousands)
Computer software and development	$	373,844		$	293,727
Furniture and equipment		263,373			225,062
Land, buildings and leasehold improvements		106,197			99,644
Construction in progress		49,488			59,417
Total		792,902			677,850
Accumulated depreciation		(493,714	)		(424,822	)
Property and equipment, net	$	299,188		$	253,028

Depreciation expense totaled $53.7 million, $46.6 million and $44.8 million for the years ended December 31, 2013, 2012 and 2011, respectively, and includes purchased software and amortization of capital leases. Amortization associated with internally developed capitalized software totaled $33.9 million, $30.0 million and $29.7 million for the years ended December 31, 2013, 2012 and 2011, respectively.

INTANGIBLE ASSETS AND GOODWILL

12 Months Ended

Dec. 31, 2013

INTANGIBLE ASSETS AND GOODWILL

INTANGIBLE ASSETS AND GOODWILL

7. INTANGIBLE ASSETS AND GOODWILL

Intangible Assets

Intangible assets consist of the following:

	December 31, 2013
	Gross Assets		Accumulated Amortization			Net		Amortization Life and Method
	(In thousands)
Finite Lived Assets
Customer contracts and lists	$	440,200	$	(187,350	)	$	252,850	3-12 years—straight line
Premium on purchased credit card portfolios		216,041		(118,006	)		98,035	5-10 years—straight line, accelerated
Customer database		161,700		(122,230	)		39,470	4-10 years—straight line
Collector database		65,895		(60,711	)		5,184	30 years—15% declining balance
Tradenames		58,567		(15,443	)		43,124	4-15 years—straight line
Purchased data lists		17,567		(11,959	)		5,608	1-5 years—straight line, accelerated
Favorable lease		3,291		(375	)		2,916	10 years—straight line
Noncompete agreements		1,300		(433	)		867	3 years—straight line
	$	964,561	$	(516,507	)	$	448,054
Indefinite Lived Assets
Tradenames		12,350		—			12,350	Indefinite life
Total intangible assets	$	976,911	$	(516,507	)	$	460,404

	December 31, 2012
	Gross Assets		Accumulated Amortization			Net		Amortization Life and Method
	(In thousands)
Finite Lived Assets
Customer contracts and lists	$	440,200	$	(124,351	)	$	315,849	3-12 years—straight line
Premium on purchased credit card portfolios		237,800		(108,227	)		129,573	5-10 years—straight line, accelerated
Customer database		161,700		(102,706	)		58,994	4-10 years—straight line
Collector database		70,550		(63,980	)		6,570	30 years—15% declining balance
Tradenames		59,102		(10,139	)		48,963	4-15 years—straight line
Purchased data lists		14,540		(8,527	)		6,013	1-5 years—straight line, accelerated
Favorable lease		3,291		(29	)		3,262	10 years—straight line
Noncompete agreements		1,300		—			1,300	3 years—straight line
	$	988,483	$	(417,959	)	$	570,524
Indefinite Lived Assets
Tradenames		12,350		—			12,350	Indefinite life
Total intangible assets	$	1,000,833	$	(417,959	)	$	582,874

With the HMI acquisition on November 30, 2012, the Company acquired $194.8 million of intangible assets, consisting of $170.0 million of customer relationships, $21.5 million of trade names and $3.3 million for a favorable lease, which are being amortized over a weighted average life of 6.4 years, 8.7 years and 9.5 years, respectively. With the Advecor acquisition on December 31, 2012, the Company acquired $8.8 million of intangible assets, consisting of $7.5 million of customer relationships and $1.3 million of noncompete agreements, which are being amortized over a weighted average life of 3.5 years and 3.0 years, respectively.

See Note 3, “Acquisitions,” for more information on the HMI and Advecor acquisitions.

With the credit card portfolio acquisitions made during the year ended December 31, 2013, the Company acquired $3.5 million of intangible assets, consisting of $2.0 million of customer relationships being amortized over a weighted average life of 5.0 years and $1.5 million of marketing relationships being amortized over a weighted average life of 9.2 years.

With the credit card portfolio acquisitions made during the year ended December 31, 2012, the Company acquired $82.6 million of intangible assets, consisting of $44.5 million of customer relationships being amortized over a weighted average life of 5.0 years and $38.1 million of marketing relationships being amortized over a weighted average life of 6.6 years. See Note 4, “Credit Card and Loan Receivables,” for additional information related to the credit card portfolio acquisitions.

Amortization expense related to the intangible assets was approximately $128.5 million, $90.3 million and $78.7 million for the years ended December 31, 2013, 2012 and 2011, respectively.

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

	For Years Ending December 31,
	(In thousands)
2014	$	118,945
2015		94,436
2016		77,873
2017		52,172
2018		42,539
2019 & thereafter		62,089

Goodwill

The changes in the carrying amount of goodwill for the years ended December 31, 2013 and 2012, respectively, are as follows:

	LoyaltyOne			Epsilon		Private Label Services and Credit		Corporate/ Other		Total
	(In thousands)
December 31, 2011	$	241,697		$	945,934	$	261,732	$	—	$	1,449,363
Goodwill acquired during year		—			294,275		—		—		294,275
Effects of foreign currency translation		6,373			1,042		—		—		7,415
December 31, 2012		248,070			1,241,251		261,732		—		1,751,053
Effects of foreign currency translation		(15,621	)		271		—		—		(15,350	)
December 31, 2013	$	232,449		$	1,241,522	$	261,732	$	—	$	1,735,703

For the year ended December 31, 2012, the Company acquired $294.3 million of goodwill of which $291.3 million resulted from the HMI acquisition in November 2012 and $3.0 million resulted from the Advecor acquisition in December 2012. See Note 3, “Acquisitions,” for additional information.

The Company completed annual impairment tests for goodwill on July 31, 2013, 2012 and 2011 and determined at each date that no impairment exists. No further testing of goodwill impairments will be performed until July 31, 2014, unless events occur or circumstances indicate an impairment may have occurred.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

ACCRUED EXPENSES

12 Months Ended

Dec. 31, 2013

ACCRUED EXPENSES

ACCRUED EXPENSES

8. ACCRUED EXPENSES

Accrued expenses consist of the following:

	December 31,
	2013		2012
	(In thousands)
Accrued payroll and benefits	$	137,982	$	131,341
Accrued marketing		30,612		28,876
Accrued taxes		18,178		48,202
Accrued other liabilities		75,535		66,206
Accrued expenses	$	262,307	$	274,625

DEBT

12 Months Ended

Dec. 31, 2013

DEBT

DEBT

9. DEBT

Debt consists of the following:

Description	December 31, 2013			December 31, 2012			Maturity	Interest Rate
	(Dollars in thousands)

Long-term and other debt:
2013 credit facility	$	336,000		$	—		July 2018	(1)
2013 term loan		1,234,688			—		July 2018	(1)
2011 term loan		—			885,928		—	—
Convertible senior notes due 2013		—			768,831		—	—
Convertible senior notes due 2014		333,082			304,333		May 2014	4.75%
Senior notes due 2017		396,511			395,734		December 2017	5.250%
Senior notes due 2020		500,000			500,000		April 2020	6.375%
Capital lease obligations and other debt		—			13		—	—
Total long-term and other debt		2,800,281			2,854,839
Less: current portion		(364,489	)		(803,269	)
Long-term portion	$	2,435,792		$	2,051,570

Deposits:
Certificates of deposit	$	2,486,533		$	1,974,158		Various – January 2014 – December 2020	0.15% to 3.55%
Money market deposits		329,828			254,253		On demand	0.01% to 0.12%
Total deposits		2,816,361			2,228,411
Less: current portion		(1,544,059	)		(1,092,753	)
Long-term portion	$	1,272,302		$	1,135,658

Non-recourse borrowings of consolidated securitization entities:
Fixed rate asset-backed term note securities	$	3,001,916		$	2,403,555		Various - October 2014 – June 2019	0.91% to 6.75%
Floating rate asset-backed term note securities		—			545,700		—	—
Conduit asset-backed securities		1,590,000			1,181,715		Various - March 2014 – September 2015	1.18% to 1.70%
Total non-recourse borrowings of consolidated securitization entities		4,591,916			4,130,970
Less: current portion		(1,025,000	)		(1,474,054	)
Long-term portion	$	3,566,916		$	2,656,916

(1)	At December 31, 2013, the weighted average interest rate for the 2013 Credit Facility and 2013 Term Loan was 2.14% and 1.92%, respectively.

At December 31, 2013, the Company was in compliance with its covenants.

Credit Agreements

In July 2013, the Company, as borrower, and ADS Alliance Data Systems, Inc., ADS Foreign Holdings, Inc., Alliance Data Foreign Holdings, Inc., Epsilon Data Management, LLC, Comenity LLC, Comenity Servicing LLC and Aspen Marketing Services, LLC, as guarantors, entered into a credit agreement with various agents and lenders dated July 10, 2013 (the “2013 Credit Agreement”), replacing the Company’s credit agreement dated May 24, 2011 (the “2011 Credit Agreement”), which was concurrently terminated. The 2011 Credit Agreement, as amended, provided for a $903.1 million term loan subject to certain principal repayments and a $917.5 million revolving line of credit.

Wells Fargo Bank, N.A. is the administrative agent and letter of credit issuer under the 2013 Credit Agreement. The 2013 Credit Agreement originally provided for a $1,142.5 million term loan (the “2013 Term Loan”) with certain principal repayments and a $1,142.5 million revolving line of credit (the “2013 Credit Facility”) with a U.S. $65.0 million sublimit for Canadian dollar borrowings and a $65.0 million sublimit for swing line loans. The 2013 Credit Agreement includes an uncommitted accordion feature of up to $500.0 million in the aggregate allowing for future incremental borrowings, subject to certain conditions.

In September 2013, the Company exercised in part the accordion feature of the 2013 Credit Agreement, and increased the borrowings under the 2013 Term Loan and the capacity under the 2013 Credit Facility, each by $57.5 million.

In October 2013, the Company exercised in part the accordion feature of the 2013 Credit Agreement, and increased the borrowings under the 2013 Term Loan and the capacity under the 2013 Credit Facility, each by $25.0 million.

In December 2013, the Company exercised in part the accordion feature of the 2013 Credit Agreement, and increased the borrowings under the 2013 Term Loan by $24.8 million to $1.25 billion and increased the capacity under the 2013 Credit Facility by $25.0 million to $1.25 billion.

Total availability under the 2013 Credit Facility at December 31, 2013 was $914.0 million.

The loans under the 2013 Credit Agreement are scheduled to mature on July 10, 2018. The 2013 Term Loan provides for aggregate principal payments of 2.5% of the initial term loan amount in each of the first and second year and 5% of the initial term loan amount in each of the third, fourth, and fifth year, payable in equal quarterly installments beginning on September 30, 2013. The 2013 Credit Agreement is unsecured.

Advances under the 2013 Credit Agreement are in the form of either U.S. dollar-denominated or Canadian dollar-denominated base rate loans or U.S. dollar-denominated eurodollar loans. The interest rate for base rate loans denominated in U.S. dollars fluctuates and is equal to the highest of (i) Wells Fargo’s prime rate (ii) the Federal funds rate plus 0.5% and (iii) the London Interbank Offered Rate (“LIBOR”) as defined in the 2013 Credit Agreement plus 1.0%, in each case plus a margin of 0.25% to 1.0% based upon the Company’s total leverage ratio as defined in the 2013 Credit Agreement. The interest rate for base rate loans denominated in Canadian dollars fluctuates and is equal to the higher of (i) Wells Fargo’s prime rate for Canadian dollar loans and (ii) the Canadian Dollar Offered Rate (“CDOR”) plus 1.0%, in each case plus a margin of 0.25% to 1.0% based upon the Company’s total leverage ratio as defined in the 2013 Credit Agreement. The interest rate for eurodollar loans fluctuates based on the rate at which deposits of U.S. dollars in the London interbank market are quoted plus a margin of 1.25% to 2.0% based on the Company’s total leverage ratio as defined in the 2013 Credit Agreement.

The 2013 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; pay dividends; and make acquisitions. The negative covenants are subject to certain exceptions as specified in the 2013 Credit Agreement. The 2013 Credit Agreement also requires the Company to satisfy certain financial covenants, including a maximum total leverage ratio as determined in accordance with the 2013 Credit Agreement and a minimum ratio of consolidated operating EBITDA to consolidated interest expense as determined in accordance with the 2013 Credit Agreement. The 2013 Credit Agreement also includes customary events of default.

Convertible Senior Notes

Due 2013

In the third quarter of 2008, the Company issued $805.0 million aggregate principal amount of Convertible Senior Notes due 2013. The Convertible Senior Notes due 2013 matured and were repaid by the Company on August 1, 2013.

Concurrently with the pricing of the Convertible Senior Notes due 2013, the Company entered into convertible note hedge transactions with respect to its common stock (the “2013 Convertible Note Hedges”) with J.P. Morgan Securities Inc., as agent to JPMorgan Chase Bank, National Association, London Branch, and Bank of America, N.A., affiliates of two of the initial purchasers (together, the “2013 Hedge Counterparties”).

Separately, but also concurrently with the pricing of the Convertible Senior Notes due 2013 and the exercise of the over-allotment option, the Company entered into warrant transactions whereby it sold to the 2013 Hedge Counterparties warrants to acquire, subject to customary anti-dilution adjustments, up to approximately 10.2 million shares of its common stock at an initial strike price of approximately $112.14 (the “2013 Convertible Note Warrants”).

Prior to maturity, $32.5 million of Convertible Senior Notes due 2013 were surrendered for conversion and settled in cash. On August 1, 2013, the Company settled in cash the remaining $772.6 million of Convertible Senior Notes due 2013, of which $772.5 million was surrendered for conversion for $1,790.3 million, with the remaining principal paid at maturity. The Company applied $1,017.7 million of cash received from the 2013 Hedge Counterparties in settlement of the 2013 Convertible Note Hedges.

Through December 31, 2013, the Company net settled 5.1 million of the approximately 10.2 million warrants associated with the Convertible Senior Notes due 2013 by issuing 2.8 million shares of our common stock. The remaining 5.1 million warrants are exercisable and will expire in separate tranches through February 25, 2014.

The Company accounted for the 2013 Convertible Note Hedges and the 2013 Convertible Note Warrants in accordance with the guidance in ASC 815-40, “Derivatives and Hedging – Contracts in an Entity’s Own Equity.” The 2013 Convertible Note Hedges and 2013 Convertible Note Warrants met the requirements under ASC 815-40 to be accounted for as equity instruments, and accordingly, were recorded to additional paid-in capital in the consolidated balance sheets.

Due 2014

In the second quarter of 2009, the Company issued $345.0 million aggregate principal amount of Convertible Senior Notes due 2014. Holders of the Convertible Senior Notes due 2014 have the right to require the Company to repurchase for cash all or some of their Convertible Senior Notes due 2014 upon the occurrence of certain fundamental changes.

The Convertible Senior Notes due 2014 are governed by an indenture dated June 2, 2009 between the Company and the Bank of New York Mellon Trust Company, National Association, as trustee. Pursuant to the indenture, the Convertible Senior Notes due 2014 are general unsecured senior obligations of the Company, pay interest semi-annually in arrears at a rate of 4.75% per annum on May 15 and November 15 of each year beginning November 15, 2009, will be convertible during certain periods and under certain circumstances and, subject to earlier repurchase by the Company or conversion, will mature on May 15, 2014. The Company may not redeem the Convertible Senior Notes due 2014 prior to their maturity date.

Holders may convert their Convertible Senior Notes due 2014 at their option at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date of the Convertible Senior Notes due 2014, in equal multiples of $1,000 principal amounts, under the following circumstances:

•

during any fiscal quarter (and only during such fiscal quarter) after the fiscal quarter ending December 31, 2009, if the last reported sale price of the Company’s common stock for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is equal to or more than 130% of the conversion price of $47.57 of the Convertible Senior Notes due 2014 on the last day of such preceding fiscal quarter;

•

during the five business-day period after any five consecutive trading-day period, or the measurement period, in which the trading price per $1,000 principal amount of the Convertible Senior Notes due 2014 for each day of that measurement period was less than 98% of the product of the last reported sales price of the Company’s common stock and the conversion rate of the Convertible Senior Notes due 2014 on each such day; or

•

upon the occurrence of certain specified corporate transactions.

In addition, holders may convert their Convertible Senior Notes due 2014 at their option at any time beginning on January 13, 2014 and ending on the close of business on the second scheduled trading day immediately preceding the maturity date, without regard to the foregoing circumstances.

The Convertible Senior Notes due 2014 have an initial conversion rate of 21.0235 shares of common stock per $1,000 principal amount, which is equal to an initial conversion price of approximately $47.57 per share. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination thereof at the Company’s election. The Company has elected to settle the principal amount (or the amount of the Company’s conversion obligation, if less) of the Convertible Senior Notes due 2014 in cash upon conversion.

Through December 31, 2013, certain of the Convertible Senior Notes due 2014 were surrendered for conversion and, in each case, either have been or will be settled in cash following the completion of the applicable cash settlement averaging period. The amounts settled during 2013 were not material. The Company has elected to repay all conversions solely in cash.

Concurrently with the pricing of the Convertible Senior Notes due 2014 and the exercise of the over-allotment option, the Company entered into convertible note hedge transactions with respect to its common stock with the following affiliates of three of the initial purchasers: J.P. Morgan Securities Inc., as agent to JPMorgan Chase Bank, National Association, London Branch; Bank of America, N.A.; and Barclays Capital Inc., as agent for Barclays Bank PLC (together, the “2014 Hedge Counterparties”), which cover, subject to customary anti-dilution adjustments, approximately 7.3 million shares of the Company’s common stock at an initial strike price equal to the initial conversion price of the Convertible Senior Notes due 2014 (the “2014 Convertible Note Hedges”).

Separately but also concurrently with the pricing of the Convertible Senior Notes due 2014 and the exercise of the over-allotment option, the Company entered into warrant transactions whereby it sold to the 2014 Hedge Counterparties warrants to acquire, subject to customary anti-dilution adjustments, up to approximately 7.3 million shares of its common stock at an initial strike price of approximately $70.54 (the “2014 Convertible Note Warrants”). The 2014 Convertible Note Warrants will be exercisable and will expire in 79 equal tranches of 45,331 warrants and an 80th tranche of 45,405 warrants for one of the 2014 Hedge Counterparties and will be exercisable and will expire in 79 equal tranches of 22,665 warrants and an 80th tranche of either 22,741 or 22,743 warrants with respect to the remaining two 2014 Hedge Counterparties, beginning on August 13, 2014 and continuing on each business day through December 4, 2014 as to each of the 2014 Hedge Counterparties.

The cost of the 2014 Convertible Note Hedges, reduced by the proceeds to the Company from the sale of the 2014 Convertible Note Warrants, was approximately $50.7 million. The 2014 Convertible Note Hedges and 2014 Convertible Note Warrants are generally expected to offset the potential dilution of the Company’s common stock upon conversion of the Convertible Senior Notes due 2014 to the extent that the Company’s common stock price does not exceed $70.54 at the time of the exercise of the 2014 Convertible Note Warrants. The Company accounted for the 2014 Convertible Note Hedges and 2014 Convertible Note Warrants as equity instruments in accordance with the guidance in ASC 815-40. Accordingly, the cost of the 2014 Convertible Note Hedges and the proceeds from the sale of the 2014 Convertible Note Warrants are included in additional paid-in capital in the consolidated balance sheets at December 31, 2013.

Concurrently with the pricing of the Convertible Senior Notes due 2014, the Company entered into prepaid forward transactions (the “Prepaid Forwards”) with Merrill Lynch, Pierce, Fenner & Smith Incorporated, as agent for Merrill Lynch International, and Barclays Capital Inc., as agent for Barclays Bank PLC (collectively, the “Forward Counterparties”). Under the Prepaid Forwards, the Company purchased 1,857,400 shares of its common stock for approximately $74.9 million with proceeds from the offering. The shares are to be delivered over a settlement period in 2014. Each of the Prepaid Forwards is subject to early settlement, in whole or in part, at any time prior to the final settlement date at the option of the applicable Forward Counterparty, as well as early settlement or settlement with alternative consideration in the event of certain corporate transactions. In the event the Company pays any cash dividends on its common stock, the Forward Counterparties will pay an equivalent amount to the Company. The shares under the Prepaid Forwards were accounted for as a repurchase of common stock and a reduction of stockholders’ equity.

The table below summarizes the carrying value of the components of the convertible senior notes:

	December 31,
	2013			2012
	(In millions)
Carrying amount of equity component	$	115.9		$	368.7

Principal amount of liability component	$	345.0		$	1,150.0
Unamortized discount		(11.9	)		(76.8	)
Net carrying value of liability component	$	333.1		$	1,073.2

If-converted value of common stock	$	1,906.9		$	2,534.4

The discount on the liability component will be amortized as interest expense over the remaining life of the convertible senior notes which, at December 31, 2013, is a period of 0.4 years.

Interest expense on the convertible senior notes recognized in the Company’s consolidated statements of income for the years ended December 31, 2013, 2012 and 2011 is as follows:

	Years Ended December 31,
	2013			2012			2011
	(In thousands, except percentages)
Interest expense calculated on contractual interest rate	$	24,169		$	30,475		$	30,475
Amortization of discount on liability component		64,900			82,366			73,787
Total interest expense on convertible senior notes	$	89,069		$	112,841		$	104,262

Effective interest rate (annualized)		12.4	%		11.0	%		11.0	%

Senior Notes

Due 2017

In November 2012, the Company issued and sold $400 million aggregate principal amount of 5.250% senior notes due December 1, 2017 (the “Senior Notes due 2017”) at an issue price of 98.912% of the aggregate principal amount. The Senior Notes due 2017 accrue interest on the principal amount at the rate of 5.250% per annum from November 20, 2012, payable semiannually in arrears, on June 1 and December 1 of each year, beginning on June 1, 2013. The unamortized discount at the time of issuance was $4.3 million. The discount is being amortized using the effective interest method over the remaining life of the Senior Notes due 2017 which, at December 31, 2013, is a period of 3.9 years at an effective annual interest rate of 5.5%.

The payment obligations under the Senior Notes due 2017 are governed by an indenture dated November 20, 2012 with Wells Fargo Bank, N.A., as trustee. The Senior Notes due 2017 are unsecured and are guaranteed on a senior unsecured basis by certain of the Company’s existing and future domestic subsidiaries that guarantee its Credit Agreement, including ADS Alliance Data Systems, Inc., ADS Foreign Holdings, Inc., Alliance Data Foreign Holdings, Inc., Epsilon Data Management LLC, Comenity LLC, Comenity Servicing LLC and Aspen Marketing Services, LLC. The indenture includes usual and customary negative covenants and events of default for transactions of this type.

Due 2020

In March 2012, the Company issued and sold $500 million aggregate principal amount of 6.375% senior notes due April 1, 2020 (the “Senior Notes due 2020”). The Senior Notes due 2020 accrue interest on the principal amount at the rate of 6.375% per annum from March 29, 2012, payable semiannually in arrears, on April 1 and October 1 of each year, beginning on October 1, 2012. The proceeds from the issuance of the Senior Notes due 2020 were used to repay outstanding indebtedness under the Company’s Credit Agreement.

The payment obligations under the Senior Notes due 2020 are governed by an indenture dated March 29, 2012 with Wells Fargo Bank, N.A., as trustee. The Senior Notes due 2020 are unsecured and are guaranteed on a senior unsecured basis by certain of the Company’s existing and future domestic subsidiaries that guarantee its Credit Agreement, including ADS Alliance Data Systems, Inc., ADS Foreign Holdings, Inc., Alliance Data Foreign Holdings, Inc., Epsilon Data Management LLC, Comenity LLC, Comenity Servicing LLC and Aspen Marketing Services, LLC. The indenture includes usual and customary negative covenants and events of default for transactions of this type.

Deposits

Terms of the certificates of deposit range from three months to seven years with annual interest rates ranging from 0.15% to 3.55%, with a weighted average interest rate of 1.07%, at December 31, 2013 and 0.20% to 5.25%, with a weighted average interest rate of 1.18%, at December 31, 2012. Interest is paid monthly and at maturity.

Comenity Bank and Comenity Capital Bank offer demand deposit programs through contractual arrangements with securities brokerage firms. Money market deposits are redeemable on demand by the customer and, as such, have no scheduled maturity date. As of December 31, 2013, Comenity Bank and Comenity Capital Bank had $329.8 million in money market deposits outstanding with annual interest rates ranging from 0.01% to 0.12%, with a weighted average interest rate of 0.04%. As of December 31, 2012, Comenity Bank and Comenity Capital Bank had $254.3 million in money market deposits outstanding with annual interest rates ranging from 0.01% to 0.26%, with a weighted average interest rate of 0.22%.

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 credit card receivables to its credit card securitization trusts, the WFN Trusts and the WFC Trust, 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

In 2013, Master Trust I issued $1.2 billion of asset-backed term securities, $282.9 million of which was retained by the Company and eliminated from the consolidated financial statements. These securities have maturities of May 2016 and February 2018 and fixed interest rates of 0.91% and 1.61%. Proceeds from these issuances were used to repay the $822.3 million of asset-backed term securities that matured in 2013.

As of December 31, 2013, $3.8 billion of asset-backed term securities were outstanding, $0.8 billion of which was retained by the Company and eliminated from the consolidated financial statements. These securities have varying maturities from October 2014 through June 2019 and fixed interest rates ranging from 0.91% to 6.75% as of December 31, 2013.

In February 2014, Master Trust I issued $625.0 million of asset-backed term securities, $175.0 million of which was retained by the Company and eliminated from the consolidated financial statements. These securities mature in February 2016 and have a variable interest rate equal to LIBOR plus a margin of 0.38%.

Conduit Facilities

The Company has access to committed undrawn capacity through three conduit facilities to support the funding of its credit card receivables through Master Trust I, Master Trust III and the WFC Trust. As of December 31, 2013, total capacity under the conduit facilities was $2.1 billion, of which $1.6 billion had been drawn and was included in non-recourse borrowings of consolidated securitization entities in the consolidated balance sheets. Borrowings outstanding under each facility bear interest at a margin above LIBOR or the asset-backed commercial paper costs of each individual conduit provider. The conduits have varying maturities from March 2014 to September 2015 with variable interest rates ranging from 1.18% to 1.70% as of December 31, 2013. In February 2014, Master Trust I reduced its capacity under the conduit facility from $1.2 billion to $800.0 million.

Maturities

Debt at December 31, 2013 matures as follows:

Year	Long-Term and Other Debt			Non-Recourse Borrowings of Consolidated Securitization Entities and Deposits		Total
	(In thousands)
2014 (1)	$	376,377		$	2,569,059	$	2,945,436
2015		46,875			1,589,081		1,635,956
2016		62,500			1,010,334		1,072,834
2017 (2)		462,500			585,704		1,048,204
2018		1,367,406			789,471		2,156,877
Thereafter		500,000			864,628		1,364,628
Total maturities		2,815,658			7,408,277		10,223,935
Unamortized discount (3)		(15,377	)		—		(15,377	)
	$	2,800,281		$	7,408,277	$	10,208,558

(1)	Long-Term and Other Debt includes $345.0 million representing the aggregate principal amount of the Convertible Senior Notes due 2014.

(2)	Long-Term and Other Debt includes $400.0 million representing the aggregate principal amount of the Senior Notes due 2017.

(3)	Unamortized discount consists of $11.9 million for the Convertible Senior Notes due 2014 and $3.5 million for the Senior Notes due 2017, respectively.

Derivative Instruments

As part of its interest rate risk management program, the Company may enter into derivative contracts with institutions that are established dealers to manage its exposure to changes in interest rates for certain obligations.

The credit card securitization trusts entered into certain interest rate derivative instruments that involved the receipt of variable rate amounts from counterparties in exchange for the Company making fixed rate payments over the life of the agreement without the exchange of the underlying notional amount. These interest rate derivative instruments were not designated as hedges. Such instruments were not speculative and were used to manage interest rate risk, but did not meet the specific hedge accounting requirements of ASC 815, “Derivatives and Hedging.”

The Company’s outstanding interest rate derivative instruments matured in April 2013. The Company was not a party to any derivative instruments as of December 31, 2013.

During the years ended December 31, 2013, 2012 and 2011, gains on derivative instruments of $8.5 million, $29.6 million and $31.7 million, respectively, were recognized in securitization funding costs within the consolidated statements of income.

The following tables identify the notional amount, fair value and classification of the Company’s outstanding interest rate derivatives at December 31, 2012 in the consolidated balance sheets:

	December 31, 2012
	Notional Amount		Weighted Average Years to Maturity
	(Dollars in thousands)
Interest rate derivatives not designated as hedging instruments	$	545,700		0.51

	December 31, 2012
	Balance Sheet Location	Fair Value
	(In thousands)
Interest rate derivatives not designated as hedging instruments	Other assets	$	4
Interest rate derivatives not designated as hedging instruments	Other current liabilities	$	8,515

DEFERRED REVENUE

12 Months Ended

Dec. 31, 2013

DEFERRED REVENUE

DEFERRED REVENUE

10. DEFERRED REVENUE

As further discussed in Note 2, “Summary of Significant Accounting Policies,” the AIR MILES Reward Program collects fees from its sponsors based on the number of AIR MILES reward miles issued and, in limited circumstances, the number of AIR MILES reward miles redeemed. Because management has determined that the earnings process is not complete at the time an AIR MILES reward mile is issued, the recognition of redemption and service revenue is deferred.

A reconciliation of deferred revenue for the AIR MILES Reward Program is as follows:

	Deferred Revenue
	Service			Redemption			Total
	(In thousands)
December 31, 2011	$	358,973		$	867,463		$	1,226,436
Cash proceeds		216,772			570,439			787,211
Revenue recognized		(205,740	)		(593,679	)		(799,419	)
Other		—			1,000			1,000
Effects of foreign currency translation		10,008			23,825			33,833
December 31, 2012		380,013			869,048			1,249,061
Cash proceeds		203,735			528,474			732,209
Revenue recognized		(212,301	)		(550,577	)		(762,878	)
Other		—			276			276
Effects of foreign currency translation		(24,816	)		(56,666	)		(81,482	)
December 31, 2013	$	346,631		$	790,555		$	1,137,186
Amounts recognized in the consolidated balance sheets:
Current liabilities	$	175,883		$	790,555		$	966,438
Non-current liabilities	$	170,748		$	—		$	170,748

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2013

COMMITMENTS AND CONTINGENCIES.

COMMITMENTS AND CONTINGENCIES

11. 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 $188.2 million at December 31, 2013, 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 settlements 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 to purchase tickets from airlines and other suppliers in connection with redemptions under the AIR MILES Reward Program. These long-term arrangements allow the Company to make purchases at set prices.

Leases

The Company leases certain office facilities and equipment under noncancellable operating leases and is generally responsible for property taxes and insurance related to such facilities. Lease expense was $80.5 million, $71.5 million and $61.4 million for the years ended December 31, 2013, 2012 and 2011, respectively.

Future annual minimum rental payments required under noncancellable operating leases, some of which contain renewal options, as of December 31, 2013, are:

Year	Future Minimum Rental Payments
	(In thousands)
2014	$	67,289
2015		63,950
2016		56,239
2017		50,345
2018		32,551
Thereafter		116,845
Total	$	387,219

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 authorized to do business by the State of Utah and the FDIC.

Quantitative measures established by regulations to ensure capital adequacy require Comenity Bank and Comenity Capital Bank to maintain minimum amounts and ratios of total and Tier 1 capital to risk weighted assets and of Tier 1 capital to average assets as well as adequate allowances for loan losses. Under the regulations, a “well capitalized” institution must have a Tier 1 capital ratio of at least 6%, a total capital ratio of at least 10% and a leverage ratio of at least 5% and not be subject to a capital directive order. An “adequately capitalized” institution must have a Tier 1 capital ratio of at least 4%, a total capital ratio of at least 8% and a leverage ratio of at least 4%, but 3% is allowed in some cases. Under these guidelines, Comenity Bank and Comenity Capital Bank are considered well capitalized. As of December 31, 2013, Comenity Capital Bank’s Tier 1 capital ratio was 14.1%, total capital ratio was 15.4% and leverage ratio was 14.0%, and Comenity Capital Bank was not subject to a capital directive order. As of December 31, 2013, Comenity Bank’s Tier 1 capital ratio was 14.2%, total capital ratio was 15.5% and leverage ratio was 14.2%, and Comenity Bank was not subject to a capital directive order.

Cardholders

The Company’s Private Label Services and Credit segment is active in originating private label and co-branded 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 cardholders that can be used for purchases of merchandise offered for sale by clients of the Company. 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. Excluding loans originated under the Company’s agreements with PayPal, as of December 31, 2013, the Company had approximately 39.3 million cardholders, having unused lines of credit averaging $1,434 per account. The Company also owns 9.5 million accounts through its agreements with PayPal discussed in Note 4, “Credit Card and Loan Receivables,” with unused lines of credit averaging $1,552 per account. The Company only bears the risk for its participating interest in the receivables originated by the Company and subsequently purchased by PayPal.

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, 2013

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

12. STOCKHOLDERS’ EQUITY

Stock Repurchase Programs

On September 13, 2010, the Company’s Board of Directors authorized a stock repurchase program to acquire up to $400.0 million of the Company’s outstanding common stock from September 13, 2010 through December 31, 2011.

On December 13, 2011, the Company’s Board of Directors authorized a stock repurchase program to acquire up to $400.0 million of the Company’s outstanding common stock from January 1, 2012 through December 31, 2012. On January 2, 2013, the Company’s Board of Directors authorized a stock repurchase program to acquire up to $400.0 million of the Company’s outstanding common stock from January 2, 2013 through December 31, 2013, subject to any restrictions pursuant to the terms of the Company’s credit agreements, indentures, applicable securities laws or otherwise.

During 2013, 2012 and 2011, the Company repurchased approximately 1.4 million, 1.0 million and 2.9 million shares of its common stock for an aggregate amount of $231.1 million, $137.4 million and $240.9 million, respectively.

As of December 31, 2013, $168.9 million remained unused under the stock repurchase program that was authorized in January 2013 and expired on December 31, 2013.

On December 5, 2013, the Company’s Board of Directors authorized a stock repurchase program to acquire up to $400.0 million of our outstanding common stock from January 1, 2014 through December 31, 2014, subject to any restrictions pursuant to the terms of the Company’s credit agreements, indentures, applicable securities laws or otherwise.

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 expires on June 30, 2015. This plan reserves 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 performing services for the Company or its affiliates, with only employees being eligible to receive incentive stock options.

Terms of all awards under the 2010 Omnibus Incentive 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.

Total stock-based compensation expense recognized in the Company’s consolidated statements of income for the years ended December 31, 2013, 2012 and 2011, is as follows:

	Years Ended December 31,
	2013		2012		2011
	(In thousands)
Cost of operations	$	40,264	$	32,654	$	25,766
General and administrative		18,919		17,843		17,720
Total	$	59,183	$	50,497	$	43,486

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. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on the Company’s historical experience. The Company’s forfeiture rate was 5% for the years ended December 31, 2013, 2012 and 2011. As of December 31, 2013, there was approximately $70.9 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 1.2 years.

Restricted Stock Awards

During 2013, the Company awarded both service-based and performance-based restricted stock units. Fair value of the restricted stock units is estimated using the Company’s closing share price on the date of grant. In accordance with ASC 718, the Company recognizes the estimated stock-based compensation expense, net of estimated forfeitures, over the applicable service period.

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.

	Performance- Based			Service- Based			Total			Weighted Average Fair Value
Balance at January 1, 2011		1,787,473			773,725			2,561,198		$	51.93
Shares granted		457,180			158,539			615,719			83.28
Shares vested		(373,099	)		(543,643	)		(916,742	)		49.81
Shares cancelled (1)		(1,014,982	)		(43,432	)		(1,058,414	)		56.73
Balance at December 31, 2011		856,572			345,189			1,201,761		$	65.39
Shares granted		527,080			127,646			654,726			110.18
Shares vested		(505,335	)		(130,066	)		(635,401	)		59.06
Shares cancelled		(104,476	)		(27,618	)		(132,094	)		86.13
Balance at December 31, 2012		773,841			315,151			1,088,992		$	93.33
Shares granted		409,575			92,206			501,781			155.31
Shares vested		(448,868	)		(122,931	)		(571,799	)		88.15
Shares cancelled		(49,544	)		(14,915	)		(64,459	)		115.83
Balance at December 31, 2013		685,004			269,511			954,515		$	121.86
Outstanding and Expected to Vest								884,545		$	120.56

(1)

In March 2009, the Company determined that it was no longer probable that the specified performance measures associated with certain performance-based restricted stock units that were granted during 2008 and January 2009 would be achieved. The Company did not recognize stock-based compensation expense related to those awards no longer probable to vest. A total of 939,190 shares related to these certain performance-based restricted stock units did not meet the specified performance criteria and thus did not vest, resulting in their cancellation during the year ended December 31, 2011.

The total fair value of restricted stock units vested was $50.4 million, $37.5 million and $45.7 million for the years ended December 31, 2013, 2012 and 2011, respectively. The aggregate intrinsic value of restricted stock units outstanding and expected to vest was $232.6 million at December 31, 2013. The weighted-average remaining contractual life for unvested restricted stock units was 1.2 years at December 31, 2013.

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. No stock option awards were granted during the years ended December 31, 2013, 2012 and 2011. The fair value of the option awards was estimated on the date of grant using a binomial lattice model.

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

	Outstanding					Exercisable
	Options			Weighted Average Exercise Price		Options		Weighted Average Exercise Price
Balance at January 1, 2011		1,422,264		$	40.12		1,422,264	$	40.12
Granted		—			—
Exercised		(669,712	)		37.24
Forfeited		(12,535	)		31.46
Balance at December 31, 2011		740,017		$	42.87		740,017	$	42.87
Granted		—			—
Exercised		(355,764	)		42.95
Forfeited		—			—
Balance at December 31, 2012		384,253		$	42.80		384,253	$	42.80
Granted		—			—
Exercised		(143,577	)		36.30
Forfeited		(1,000	)		31.38
Balance at December 31, 2013		239,676		$	46.75		239,676	$	46.75
Vested and Expected to Vest (1)		239,676		$	46.75

(1)	All options outstanding at December 31, 2013 are vested and exercisable and there were no remaining options expected to vest.

Based on the market value on their respective exercise dates, the total intrinsic value of stock options exercised was approximately $25.7 million, $31.0 million and $33.9 million for the years ended December 31, 2013, 2012 and 2011, respectively.

The aggregate intrinsic value of the outstanding stock options as of December 31, 2013 was approximately $51.8 million. The weighted average remaining contractual life of stock options vested and exercisable as of December 31, 2013 was approximately 1.8 years.

The Company received cash proceeds of approximately $5.2 million from stock options exercised during the year ended December 31, 2013.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(d),(e))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB TOPIC 4.E)
-URI http://asc.fasb.org/extlink&oid=27010918&loc=d3e74512-122707

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.29-31)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

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-Name Accounting Standards Codification
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-Publisher FASB
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Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

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-Publisher FASB
-Name Accounting Standards Codification
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-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
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-Paragraph d
-Article 4

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
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-Name Regulation S-X (SX)
-Number 210
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Reference 18: http://www.xbrl.org/2003/role/presentationRef
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Reference 19: http://www.xbrl.org/2003/role/presentationRef
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-Name Regulation S-X (SX)
-Number 210
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+ Details

EMPLOYEE BENEFIT PLANS	12 Months Ended
EMPLOYEE BENEFIT PLANS	Dec. 31, 2013
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS	13. EMPLOYEE BENEFIT PLANS Employee Stock Purchase Plan On June 7, 2005, at the annual meeting of stockholders, the stockholders approved and adopted the Amended and Restated Employee Stock Purchase Plan (the “ESPP”), effective on July 1, 2005. No employee may purchase more than $25,000 in stock under the ESPP in any calendar year, and no employee may purchase stock under the 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 ESPP provides for three month offering periods, commencing on the first trading day of each calendar quarter and ending on the last trading day of each 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 each quarter. An employee may elect to pay the purchase price of such common stock through payroll deductions. The maximum number of shares reserved for issuance under the ESPP is 1,500,000 shares, subject to adjustment as provided in the ESPP. Employees are required to hold any stock purchased through the ESPP for 180 days prior to any sale or withdrawal of shares. On August 22, 2001, the Company registered 1,500,000 shares of its common stock for issuance in accordance with the ESPP pursuant to a Registration Statement on Form S-8, File No. 333-68134. During the year ended December 31, 2013, the Company issued 52,241 shares of common stock under the ESPP at a weighted-average issue price of $169.93. Since its adoption, 1,011,423 shares of common stock have been issued under the ESPP. 2010 Omnibus Incentive Plan At the June 8, 2010 annual meeting of stockholders, the Company’s stockholders approved the 2010 Omnibus Incentive Plan. The 2010 plan authorizes the compensation committee to grant cash-based and other equity-based or equity-related awards, including deferred stock units and fully-vested shares. The maximum cash amount that may be awarded to any single participant in any one calendar year may not exceed $7.5 million. 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 January 1, 2014. 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, effective November 1, 2012, 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. The Company, and all of its U.S. subsidiaries, are currently covered under the 401(k) and Retirement Savings Plan. Through December 31, 2013, the Company matched dollar-for-dollar on the first three percent of savings, and an additional fifty cents for each dollar an employee contributed for savings of more than three percent and up to five percent of pay. Effective January 1, 2014, the Company will match dollar-for-dollar up to five percent of savings. All company matching contributions are immediately vested. In addition to the company match, the Company may make an additional annual discretionary contribution based on the Company’s profitability. This contribution, subject to Board of Director approval, is based on a percentage of pay and is subject to a separate three-year cliff vesting schedule. The discretionary contribution vests in full upon achieving three years of service for participants with less than three years of service. All of these contributions vest immediately if the participating employee has more than three years of service, attains age 65, becomes disabled, dies or if the 401(k) and Retirement Savings Plan terminates. Company matching and discretionary contributions for the years ended December 31, 2013, 2012 and 2011 were $28.1 million, $22.0 million and $14.0 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, 2013, 759,194 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 up to 5% of contributions dollar-for-dollar. 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 for the years ended December 31, 2013, 2012 and 2011 were $2.1 million, $2.0 million and $2.0 million, respectively. Executive Deferred Compensation Plan and the Canadian Supplemental Executive Retirement Plan The Company also maintains an Executive Deferred Compensation Plan (“EDCP”). The EDCP provides an opportunity for a defined group of management and highly compensated employees to defer on a pre-tax basis a portion of their regular compensation and bonuses payable for services rendered and to receive certain employer contributions. The Company provides a Canadian Supplemental Executive Retirement Plan (“SERP”) for a defined group of management and highly compensated employees of Loyalty One, Inc., 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.

ACCUMULATED OTHER COMPREHENSIVE INCOME

12 Months Ended

Dec. 31, 2013

ACCUMULATED OTHER COMPREHENSIVE INCOME

ACCUMULATED OTHER COMPREHENSIVE INCOME

14. ACCUMULATED OTHER COMPREHENSIVE INCOME

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

	Net Unrealized Gains (Losses) on Securities			Foreign Currency Translation Adjustments (1)			Accumulated Other Comprehensive Income (Loss)
	(In thousands)
Balance as of January 1, 2011	$	(20,082	)	$	(14,418	)	$	(34,500	)
Changes in other comprehensive income (loss)		27,035			(15,591	)		11,444
Balance as of December 31, 2011		6,953			(30,009	)		(23,056	)
Changes in other comprehensive income (loss)		3,368			(2,173	)		1,195
Balance as of December 31, 2012		10,321			(32,182	)		(21,861	)
Changes in other comprehensive income (loss)		(6,132	)		9,766			3,634
Balance as of December 31, 2013	$	4,189		$	(22,416	)	$	(18,227	)

(1)	Primarily related to the impact of changes in the Canadian currency exchange rate.

A de minimis amount was reclassified out of accumulated other comprehensive income (loss) for the year ended December 31, 2013.

- Definition

The entire disclosure for comprehensive income, which includes, but is not limited to, 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=28358780&loc=d3e689-108580

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
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-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=28358780&loc=SL7669619-108580

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=28358780&loc=d3e640-108580

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=28358780&loc=d3e709-108580

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187085-122770

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 14
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Reclassification Adjustments
-URI http://asc.fasb.org/extlink&oid=6522872

+ Details

INCOME TAXES

12 Months Ended

Dec. 31, 2013

INCOME TAXES

INCOME TAXES

15. INCOME TAXES

The Company files a consolidated federal income tax return.

	Years Ended December 31,
	2013			2012		2011
	(In thousands)
Components of income before income taxes:
Domestic	$	547,757		$	481,243	$	332,010
Foreign		245,655			201,661		182,085
Total	$	793,412		$	682,904	$	514,095
Components of income tax expense are as follows:
Current
Federal	$	188,600		$	143,695	$	71,843
State		33,595			13,991		9,415
Foreign		32,134			696		70,514
Total current		254,329			158,382		151,772
Deferred
Federal		1,477			28,267		46,459
State		(1,485	)		6,176		3,482
Foreign		42,921			67,823		(2,904	)
Total deferred		42,913			102,266		47,037
Total provision for income taxes	$	297,242		$	260,648	$	198,809

A reconciliation of recorded federal provision for income taxes to the expected amount computed by applying the federal statutory rate of 35% for all periods to income before income taxes is as follows:

	Years Ended December 31,
	2013			2012			2011
	(In thousands)
Expected expense at statutory rate	$	277,694		$	239,016		$	179,933
Increase (decrease) in income taxes resulting from:
State income taxes, net of federal benefit		20,871			13,109			8,383
Foreign earnings at other than U.S. rates		(9,225	)		(4,328	)		(7,131	)
Canadian tax rate reductions		—			(7,128	)		7,188
U.S. tax on foreign dividends, net of credits		—			15,617			5,228
Other		7,902			4,362			5,208
Total	$	297,242		$	260,648		$	198,809

Deferred tax assets and liabilities consist of the following:

	December 31,
	2013			2012
	(In thousands)
Deferred tax assets
Deferred revenue	$	42,359		$	90,675
Allowance for doubtful accounts		192,546			186,503
Net operating loss carryforwards and other carryforwards		53,591			51,603
Derivatives		—			4,456
Stock-based compensation and other employee benefits		28,582			27,205
Accrued expenses and other		50,120			44,267
Total deferred tax assets		367,198			404,709
Valuation allowance		(22,414	)		(22,542	)
Deferred tax assets, net of valuation allowance		344,784			382,167
Deferred tax liabilities
Deferred income	$	244,612		$	203,658
Convertible note hedges		1,474			7,553
Depreciation		8,440			8,950
Intangible assets		147,366			172,065
Total deferred tax liabilities		401,892			392,226

Net deferred tax liability	$	(57,108	)	$	(10,059	)

Amounts recognized in the consolidated balance sheets:
Current assets	$	216,195		$	237,268
Non-current assets		2,454			30,027
Non-current liabilities		(275,757	)		(277,354	)
Total – Net deferred tax liability	$	(57,108	)	$	(10,059	)

At December 31, 2013, the Company has approximately $20.1 million of U.S. federal net operating loss carryovers (“NOLs”), approximately $4.6 million of capital losses, and approximately $27.4 million of foreign tax credits (“credits”), which expire at various times through the year 2023. Pursuant to Section 382 of the Internal Revenue Code, the Company’s utilization of such NOLs is subject to an annual limitation. In addition, at December 31, 2013, the Company has state income tax NOLs of approximately $452.8 million, approximately $4.6 million of capital losses, and state credits of approximately $6.1 million available to offset future state taxable income. The state NOLs and credits will expire at various times through the year 2033. The Company believes it is more likely than not that the capital losses and a portion of the state credits and state NOLs will expire before being utilized. Therefore, in accordance with ASC 740-10, “Income Taxes—Overall—Initial Measurement,” the Company has established a valuation allowance on the portion of state credits and state NOLs that the Company expects to expire prior to utilization.

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.

The income tax expense does not reflect the tax effect of certain items recorded directly to additional paid-in capital. The net tax impact resulting from the exercise of employee stock options and other employee stock programs that was recorded in additional paid-in capital was approximately $17.3 million, $21.4 million and $17.3 million for the years ended December 31, 2013, 2012 and 2011, respectively.

In December 2009, the Ontario government enacted a law to reduce the corporate income tax rates for years beginning in 2010. As a result of these rate reductions, the Company was required to book additional expense to reduce the net deferred tax asset in Canada related to the future lower income tax rates. The Company recorded $7.2 million of income tax expense for the year ended December 31, 2011 related to these rate reductions. In June 2012, the Ontario government enacted a law that froze the corporate income tax rate at the current rate, essentially repealing the rate reductions scheduled for future years. As a result of the rate freeze, the Company was required to record a $7.1 million tax benefit to increase its deferred tax asset in Canada related to future years.

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

Balance at December 31, 2010	$	54,200
Increases related to prior years’ tax positions		14,509
Decreases related to prior years’ tax positions		(5,497	)
Increases related to current year tax positions		9,581
Settlements during the period		(2,569	)
Lapses of applicable statutes of limitation		(680	)
Balance at December 31, 2011	$	69,544
Increases related to prior years’ tax positions		4,188
Decreases related to prior years’ tax positions		(7,424	)
Increases related to current year tax positions		11,703
Settlements during the period		(1,253	)
Lapses of applicable statutes of limitation		(604	)
Balance at December 31, 2012	$	76,154
Increases related to prior years’ tax positions		4,328
Decreases related to prior years’ tax positions		(1,580	)
Increases related to current year tax positions		23,567
Settlements during the period		(197	)
Lapses of applicable statutes of limitation		(918	)
Balance at December 31, 2013	$	101,354

Included in the balance at December 31, 2013 are tax positions reclassified from deferred tax liabilities. 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 would not affect the annual effective tax rate but would 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 $18.5 million, $15.5 million and $15.1 million at December 31, 2013, 2012 and 2011, respectively. For the years ended December 31, 2013 and 2012, the Company recorded approximately $2.1 million and $0.3 million, respectively, in potential interest and penalties with respect to unrecognized tax benefits. For the year ended December 31, 2011, the Company released approximately $0.3 million in potential interest and penalties with respect to unrecognized tax benefits.

At December 31, 2013, 2012 and 2011, the Company had unrecognized tax benefits of approximately $56.0 million, $37.5 million and $37.1 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 state and local or foreign income tax examinations for years before 2009 and are no longer subject to U.S. federal income tax examinations by tax authorities for years before 2010.

FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2013

FINANCIAL INSTRUMENTS

FINANCIAL INSTRUMENTS

16. 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,
	2013				2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In thousands)
Financial assets
Cash and cash equivalents	$	969,822	$	969,822	$	893,352	$	893,352
Trade receivables, net		394,822		394,822		370,110		370,110
Credit card and loan receivables, net		8,131,795		8,131,795		6,967,674		6,967,674
Redemption settlement assets, restricted		510,349		510,349		492,690		492,690
Cash collateral, restricted		34,124		34,124		65,160		65,160
Other investments		99,221		99,221		91,972		91,972
Derivative instruments		—		—		4		4
Financial liabilities
Accounts payable		210,019		210,019		215,470		215,470
Deposits		2,816,361		2,836,352		2,228,411		2,255,089
Non-recourse borrowings of consolidated securitization entities		4,591,916		4,618,205		4,130,970		4,225,745
Long-term and other debt		2,800,281		4,404,500		2,854,839		4,358,379
Derivative instruments		—		—		8,515		8,515

Fair Value of Assets and Liabilities Held at December 31, 2013 and 2012

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

Cash and cash equivalents, trade receivables, net and accounts payable — The carrying amount approximates fair value due to the short maturity and the relatively liquid nature of these assets and liabilities.

Credit card and loan receivables, net — Credit card and loan receivables, net includes both receivables issued or purchased by the Company in the normal course of business and loan receivables held for sale as described in Note 4, “Credit Card and Loan Receivables.” The carrying amount of credit card and loan receivables, net approximates fair value due to the short maturity and average interest rates that approximate current market origination rates. Loan receivables held for sale, which were $62.1 million at December 31, 2013, are carried at the lower of cost or fair value, and their carrying amount approximates fair value due to the short duration between origination and sale.

Redemption settlement assets, restricted — Redemption settlement assets, restricted consists of cash and cash equivalents and marketable securities. The fair value for securities is based on quoted market prices for the same or similar securities.

Cash collateral, restricted — The spread deposits are recorded at their fair value based on discounted cash flow models. The Company uses a valuation model that calculates the present value of estimated cash flows for each asset. The fair value is based on the term of the underlying securities and a discount rate. The carrying amount of excess funding deposits approximates its fair value due to the relatively short maturity period and average interest rates, which approximate current market rates.

Other investments — Other investments consist of restricted cash and marketable securities. The fair value is based on quoted market prices for the same or similar securities.

Deposits — 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 valuation of these instruments was determined using 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, including interest rate curves and option volatility.

Other Investments

Other investments consist of restricted cash and marketable securities. As of December 31, 2013 and 2012, other investments are comprised as follows:

	December 31, 2013									December 31, 2012
	Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(In thousands)
Restricted cash	$	25,988	$	—	$	—		$	25,988	$	47,120	$	—	$	—		$	47,120
Marketable securities		77,351		62		(4,180	)		73,233		45,119		202		(469	)		44,852
Total	$	103,339	$	62	$	(4,180	)	$	99,221	$	92,239	$	202	$	(469	)	$	91,972

The following tables show the gross unrealized losses and fair value for those investments that were in an unrealized loss position as of December 31, 2013 and 2012, aggregated by investment category and the length of time that individual securities have been in a continuous loss position:

	December 31, 2013
	Less than 12 months					12 Months or Greater					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(In thousands)
Marketable securities	$	39,954	$	(2,206	)	$	25,785	$	(1,974	)	$	65,739	$	(4,180	)

	December 31, 2012
	Less than 12 months					12 Months or Greater					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(In thousands)
Marketable securities	$	28,886	$	(292	)	$	4,913	$	(177	)	$	33,799	$	(469	)

The amortized cost and estimated fair value of the marketable securities at December 31, 2013 by contractual maturity are as follows:

	Amortized Cost		Estimated Fair Value
	(In thousands)
Due in one year or less	$	6,571	$	6,503
Due after five years through ten years		4,580		4,611
Due after ten years		66,200		62,119
Total	$	77,351	$	73,233

Market values were determined for each individual security in the investment portfolio. When evaluating the investments for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the security’s issuer, and the Company’s intent to sell the security and whether it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. The Company typically invests in highly-rated securities with low probabilities of default and has the ability to hold the investments until maturity. Realized gains and losses from the sale of investment securities were not material.

As of December 31, 2013, the Company does not consider the investments to be other-than-temporarily impaired.

Financial Assets and Financial Liabilities Fair Value Hierarchy

ASC 825 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 table provides information for the assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2013 and 2012:

			Fair Value Measurements at December 31, 2013 Using
	Balance at December 31, 2013		Level 1		Level 2		Level 3
	(In thousands)
Corporate bonds (1)	$	436,365	$	—	$	436,365	$	—
Cash collateral, restricted		34,124		—		—		34,124
Other investments (2)		99,221		30,888		68,333		—
Total assets measured at fair value	$	569,710	$	30,888	$	504,698	$	34,124

			Fair Value Measurements at December 31, 2012 Using
	Balance at December 31, 2012		Level 1		Level 2		Level 3
	(In thousands)
Government bonds (1)	$	5,117	$	—	$	5,117	$	—
Corporate bonds (1)		447,307		6,165		441,142		—
Cash collateral, restricted		65,160		2,500		—		62,660
Other investments (2)		91,972		51,951		40,021		—
Derivative instruments (3)		4		—		4		—
Total assets measured at fair value	$	609,560	$	60,616	$	486,284	$	62,660

Derivative instruments (4)	$	8,515	$	—	$	8,515	$	—
Total liabilities measured at fair value	$	8,515	$	—	$	8,515	$	—

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

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

(3)	Amount is included in other assets in the consolidated balance sheets.

(4)	Amount is included in other current liabilities in the consolidated balance sheets.

The following table summarizes the changes in fair value of the Company’s assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as defined in ASC 825 as of December 31, 2013 and 2012:

	Cash Collateral, Restricted
	Years Ended December 31,
	2013			2012
	(In thousands)
Balance at beginning of period	$	62,660		$	158,727
Total gains (realized or unrealized):
Included in earnings		1,369			5,469
Purchases		—			1,287
Sales		—			—
Issuances		—			—
Settlements		(29,905	)		(102,823	)
Transfers in or out of Level 3		—			—
Balance at end of period	$	34,124		$	62,660

Gains for the period included in earnings related to assets still held at end of period	$	971		$	5,469

There were no transfers between Levels 1 and 2 within the fair value hierarchy for the years ended December 31, 2013 and 2012.

The spread deposits included in cash collateral, restricted are recorded at their fair value based on discounted cash flow models, utilizing the respective term of each instrument which ranged from 10 to 34 months, with a weighted average term of 17 months. The unobservable input used to calculate the fair value was the discount rate of 3.2%, which was based on an interest rate curve that is observable in the market as adjusted for a credit spread. Significant increases (decreases) in the term or the discount rate would result in a lower (higher) fair value.

For the years ended December 31, 2013 and 2012, gains and losses included in earnings attributable to cash collateral, restricted are included in interest in the consolidated statements of income.

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, 2013 and 2012:

	Fair Value Measurements at December 31, 2013
	Total		Level 1		Level 2		Level 3
	(In thousands)
Cash and cash equivalents	$	969,822	$	969,822	$	—	$	—
Credit card and loan receivables, net		8,131,795		—		—		8,131,795
Total assets	$	9,101,617	$	969,822	$	—	$	8,131,795

Deposits	$	2,836,352	$	—	$	2,836,352	$	—
Non-recourse borrowings of consolidated securitization entities		4,618,205		—		4,618,205		—
Long-term and other debt		4,404,500		—		4,404,500		—
Total liabilities	$	11,859,057	$	—	$	11,859,057	$	—

	Fair Value Measurements at December 31, 2012
	Total		Level 1		Level 2		Level 3
	(In thousands)
Cash and cash equivalents	$	893,352	$	893,352	$	—	$	—
Credit card and loan receivables, net		6,967,674		—		—		6,967,674
Total assets	$	7,861,026	$	893,352	$	—	$	6,967,674

Deposits	$	2,255,089	$	—	$	2,255,089	$	—
Non-recourse borrowings of consolidated securitization entities		4,225,745		—		4,225,745		—
Long-term and other debt		4,358,379		—		4,358,379		—
Total liabilities	$	10,839,213	$	—	$	10,839,213	$	—

- 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, 2013

PARENT-ONLY FINANCIAL STATEMENTS

PARENT-ONLY FINANCIAL STATEMENTS

17. 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,
	2013		2012
	(In thousands)
Assets:
Cash and cash equivalents	$	15,216	$	247,478
Investment in subsidiaries		3,819,760		2,813,219
Intercompany receivables		399,305		887,518
Other assets		96,039		61,222
Total assets	$	4,330,320	$	4,009,437
Liabilities:
Current debt	$	364,489	$	803,256
Long-term debt		2,435,792		2,051,570
Intercompany payables		—		8,519
Other liabilities		674,278		617,605
Total liabilities		3,474,559		3,480,950
Stockholders’ equity		855,761		528,487
Total liabilities and stockholders’ equity	$	4,330,320	$	4,009,437

Statements of Income

	Years Ended December 31,
	2013			2012		2011
	(In thousands)
Interest from loans to subsidiaries	$	10,065		$	10,248	$	10,197
Dividends from subsidiaries		68,544			464,971		343,676
Total revenue		78,609			475,219		353,873
Interest expense, net		184,727			179,527		159,088
Other expenses, net		1,240			533		646
Total expenses		185,967			180,060		159,734
(Loss) income before income taxes and equity in undistributed net income of subsidiaries		(107,358	)		295,159		194,139
Benefit for income taxes		32,909			73,106		34,127
(Loss) income before equity in undistributed net income of subsidiaries		(74,449	)		368,265		228,266
Equity in undistributed net income of subsidiaries		570,619			53,991		87,020
Net income	$	496,170		$	422,256	$	315,286

Statements of Cash Flows

	Years Ended December 31,
	2013			2012			2011
	(In thousands)
Net cash provided by (used in) operating activities	$	144,841		$	(224,835	)	$	(10,011	)
Investing activities:
Payments for acquired businesses, net of cash acquired		—			—			(359,076	)
Loans to subsidiaries		(112,903	)		—			—
Investment in subsidiaries		—			(475,000	)		—
Dividends received		68,544			464,971			343,676
Net cash used in investing activities		(44,359	)		(10,029	)		(15,400	)
Financing activities:
Borrowings under debt agreements		1,985,000			1,095,148			3,256,500
Repayments of borrowings		(1,300,241	)		(506,214	)		(3,010,906	)
Proceeds from convertible note hedge counterparties		1,056,307			—			—
Settlement of convertible note borrowings		(1,861,289	)		—			—
Excess tax benefits from stock-based compensation		17,267			20,199			15,028
Payment of deferred financing costs		(12,784	)		(21,672	)		(23,861	)
Purchase of treasury shares		(231,085	)		(125,840	)		(240,877	)
Proceeds from issuance of common stock		14,090			20,696			29,412
Other		(9	)		—			—
Net cash (used in) provided by financing activities		(332,744	)		482,317			25,296
(Decrease) increase in cash and cash equivalents		(232,262	)		247,453			(115	)
Cash and cash equivalents at beginning of year		247,478			25			140
Cash and cash equivalents at end of year	$	15,216		$	247,478		$	25

SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2013

SEGMENT INFORMATION

SEGMENT INFORMATION

18. 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 Company’s chief operating decision maker is the President and Chief Executive Officer. The operating segments are reviewed separately because each operating segment represents a strategic business unit that generally offers different products and serves different markets.

The Company operates in the following reportable segments: LoyaltyOne, Epsilon, and Private Label Services and Credit. Segment operations consist of the following:

•

LoyaltyOne includes the Company’s Canadian AIR MILES Reward Program;

•

Epsilon provides end-to-end, integrated direct marketing solutions that leverage transactional data to help clients more effectively acquire and build stronger relationships with their customers; and

•

Private Label Services and Credit provides risk management solutions, account origination, funding, transaction processing, customer care and collections services for the Company’s private label retail credit card programs.

Corporate and all 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.” Total assets are not allocated to the segments.

The accounting policies of the operating segments are generally the same as those described in the summary of significant accounting policies.

Year Ended December 31, 2013	LoyaltyOne			Epsilon			Private Label Services and Credit		Corporate/ Other			Eliminations			Total
	(In thousands)
Revenues	$	919,480		$	1,380,344		$	2,034,724	$	82		$	(15,567	)	$	4,319,063
Adjusted EBITDA (1)		258,541			289,699			916,099		(90,125	)		—			1,374,214
Stock compensation expense		10,804			18,365			11,095		18,919			—			59,183
Depreciation and amortization		18,057			139,984			52,277		5,801			—			216,119
Operating income (loss)		229,680			131,350			852,727		(114,845	)		—			1,098,912
Interest expense, net		(1,312	)		(56	)		122,159		184,709			—			305,500
Income before income tax		230,992			131,406			730,568		(299,554	)		—			793,412
Capital expenditures	$	28,713		$	67,024		$	27,909	$	11,730		$	—		$	135,376

Year Ended December 31, 2012	LoyaltyOne			Epsilon			Private Label Services and Credit		Corporate/ Other			Eliminations			Total
	(In thousands)
Revenues	$	919,041		$	996,210		$	1,732,160	$	372		$	(6,393	)	$	3,641,390
Adjusted EBITDA (1)		236,094			222,253			823,241		(89,851	)		—			1,191,737
Stock compensation expense		9,311			14,414			8,930		17,842			—			50,497
Depreciation and amortization		19,614			101,684			42,464		3,114			—			166,876
Operating income (loss)		207,169			106,155			771,847		(110,807	)		—			974,364
Interest expense, net		(1,560	)		(67	)		114,193		178,894			—			291,460
Income before income tax		208,729			106,222			657,654		(289,701	)		—			682,904
Capital expenditures	$	19,424		$	60,065		$	28,295	$	8,671		$	—		$	116,455

Year Ended December 31, 2011	LoyaltyOne			Epsilon			Private Label Services and Credit		Corporate/ Other			Eliminations			Total
	(In thousands)
Revenues	$	844,774		$	847,136		$	1,488,998	$	1,136		$	(8,757	)	$	3,173,287
Adjusted EBITDA (1)		217,083			195,397			678,334		(76,407	)		(5,088	)		1,009,319
Stock compensation expense		7,202			11,816			6,748		17,720			—			43,486
Depreciation and amortization		20,253			90,111			35,480		7,309			—			153,153
Operating income (loss)		189,628			93,470			636,106		(101,436	)		(5,088	)		812,680
Interest expense, net		(383	)		(68	)		145,580		158,544			(5,088	)		298,585
Income before income tax		190,011			93,538			490,526		(259,980	)		—			514,095
Capital expenditures	$	18,331		$	35,600		$	13,485	$	6,086		$	—		$	73,502

(1)

Adjusted EBITDA is a non-GAAP financial measure equal to income (loss) from continuing operations, the most directly comparable GAAP financial measure, plus stock compensation expense, provision for income taxes, interest expense, net, depreciation and other amortization and amortization of purchased intangibles. Adjusted EBITDA is presented in accordance with ASC 280 as it is the primary performance metric utilized to assess performance of the segment.

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

	United States		Canada		Other		Total
	(In thousands)
Revenues
Year Ended December 31, 2013	$	3,327,688	$	906,459	$	84,916	$	4,319,063
Year Ended December 31, 2012	$	2,655,506	$	913,188	$	72,696	$	3,641,390
Year Ended December 31, 2011	$	2,264,336	$	833,427	$	75,524	$	3,173,287
Long-lived assets
December 31, 2013	$	2,371,054	$	313,891	$	158,470	$	2,843,415
December 31, 2012	$	2,379,536	$	350,122	$	138,338	$	2,867,996

- 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/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
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-Name Accounting Standards Codification
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-Publisher FASB
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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+ Details

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

12 Months Ended

Dec. 31, 2013

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

19. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

Unaudited quarterly results of operations for the years ended December 31, 2013 and 2012 are presented below.

	Quarter Ended
	March 31, 2013		June 30, 2013		September 30, 2013		December 31, 2013
	(In thousands, except per share amounts)
Revenues	$	1,053,437	$	1,028,092	$	1,096,447	$	1,141,087
Operating expenses		762,212		758,912		807,679		891,348
Operating income		291,225		269,180		288,768		249,739
Interest expense, net		82,544		83,466		74,015		65,475
Income before income taxes		208,681		185,714		214,753		184,264
Provision for income taxes		79,702		69,274		81,875		66,391
Net income	$	128,979	$	116,440	$	132,878	$	117,873
Net income per share—basic	$	2.59	$	2.37	$	2.73	$	2.40
Net income per share—diluted	$	1.92	$	1.71	$	2.01	$	1.79

	Quarter Ended
	March 31, 2012		June 30, 2012		September 30, 2012		December 31, 2012
	(In thousands, except per share amounts)
Revenues	$	891,569	$	866,485	$	911,492	$	971,844
Operating expenses		638,950		625,942		647,021		755,113
Operating income		252,619		240,543		264,471		216,731
Interest expense, net		65,652		73,067		74,365		78,376
Income before income taxes		186,967		167,476		190,106		138,355
Provision for income taxes		71,738		63,655		70,561		54,694
Net income	$	115,229	$	103,821	$	119,545	$	83,661
Net income per share—basic	$	2.30	$	2.07	$	2.39	$	1.68
Net income per share—diluted	$	1.86	$	1.63	$	1.84	$	1.27

NON-CASH FINANCING AND INVESTING ACTIVITIES	12 Months Ended
NON-CASH FINANCING AND INVESTING ACTIVITIES	Dec. 31, 2013
NON-CASH FINANCING AND INVESTING ACTIVITIES
NON-CASH FINANCING AND INVESTING ACTIVITIES	20. NON-CASH FINANCING AND INVESTING ACTIVITIES In December 2012, the Company purchased 0.1 million of treasury shares for an aggregate amount of $11.6 million that had not settled on December 31, 2012 and was included in accounts payable.

SUBSEQUENT EVENT	12 Months Ended
SUBSEQUENT EVENT	Dec. 31, 2013
SUBSEQUENT EVENT
SUBSEQUENT EVENT	21. SUBSEQUENT EVENT On January 2, 2014, the Company acquired a 60% ownership interest in BrandLoyalty Group B.V., a Netherlands-based, data-driven loyalty marketer. BrandLoyalty designs, organizes, implements and evaluates innovative and tailor-made loyalty programs for food retailers worldwide. The acquisition expands the Company’s presence across Europe and Asia. The initial cash consideration was approximately €172.4 million ($235.6 million at January 2, 2014) in addition to the assumption of debt and is subject to certain customary purchase price adjustments. The consideration amount may also be increased through an earn-out provision as defined in the purchase and sale agreement based upon 2014 results. The Company also has the ability to acquire the remaining 40% interest over a four-year period, 10% per year, based upon predetermined valuation multiples. If specified annual earnings targets are met by BrandLoyalty, the Company must acquire the additional 10% interest for the year achieved; otherwise the seller has a put option to sell the Company its 10% interest for the respective year.

SCHEDULE II CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS

12 Months Ended

Dec. 31, 2013

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

Description	Balance at Beginning of Period		Charged to Costs and Expenses		Charged to Other Accounts		Write-Offs Net of Recoveries			Balance at End of Period
	(In thousands)
Allowance for Doubtful Accounts —Trade receivables:
Year Ended December 31, 2013	$	3,919	$	386	$	1,273	$	(3,316	)	$	2,262
Year Ended December 31, 2012	$	2,406	$	2,270	$	384	$	(1,141	)	$	3,919
Year Ended December 31, 2011	$	4,350	$	2,141	$	547	$	(4,632	)	$	2,406

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2013

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

Principles of Consolidation—The accompanying consolidated financial statements include the accounts of ADSC and its wholly-owned subsidiaries. All intercompany transactions have been eliminated.

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.

Credit Card and Loan Receivables

Allowance for Loan Loss

Allowance for Doubtful Accounts

Redemption Settlement Assets, Restricted

Property and Equipment

Cash Collateral, Restricted

Goodwill and Other Intangible Assets

Revenue Recognition

Taxes assessed on revenue-producing transactions described above are presented on a net basis, and are excluded from revenues.

Earnings Per Share

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

	Years Ended December 31,
	2013		2012		2011
	(In thousands, except per share amounts)
Numerator
Net income	$	496,170	$	422,256	$	315,286
Denominator
Weighted average shares, basic		49,190		50,008		50,687
Weighted average effect of dilutive securities:
Shares from assumed conversion of convertible senior notes		8,516		8,645		4,641
Shares from assumed exercise of convertible note warrants		8,482		4,702		1,510
Net effect of dilutive stock options and unvested restricted stock		678		788		966
Denominator for diluted calculation		66,866		64,143		57,804

Basic net income per share	$	10.09	$	8.44	$	6.22
Diluted net income per share	$	7.42	$	6.58	$	5.45

At December 31, 2011, the Company excluded 10.3 million warrants from the calculation of earnings per share as the effect was anti-dilutive.

Currency Translation

Leases

Leases —Rent expense on operating leases is recorded on a straight-line basis over the term of the lease agreement and includes executory costs.

Advertising Costs

Stock Compensation Expense

Management Estimates

Recently Issued Accounting Standards

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2013

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of computation of basic and diluted net income per share

	Years Ended December 31,
	2013		2012		2011
	(In thousands, except per share amounts)
Numerator
Net income	$	496,170	$	422,256	$	315,286
Denominator
Weighted average shares, basic		49,190		50,008		50,687
Weighted average effect of dilutive securities:
Shares from assumed conversion of convertible senior notes		8,516		8,645		4,641
Shares from assumed exercise of convertible note warrants		8,482		4,702		1,510
Net effect of dilutive stock options and unvested restricted stock		678		788		966
Denominator for diluted calculation		66,866		64,143		57,804

Basic net income per share	$	10.09	$	8.44	$	6.22
Diluted net income per share	$	7.42	$	6.58	$	5.45

ACQUISITIONS (Tables)

12 Months Ended

Dec. 31, 2013

HMI

Acquisitions

Summary of allocation of the consideration and the respective fair values of the assets acquired and liabilities assumed

	As of November 30, 2012
	(In thousands)
Current assets	$	49,700
Deferred tax assets		12,050
Property and equipment		6,907
Other assets		118
Intangible assets		194,751
Goodwill		291,249
Total assets acquired		554,775

Current liabilities		33,928
Deferred tax liabilities		68,624
Other liabilities		420
Total liabilities assumed		102,972

Net assets acquired	$	451,803

Aspen

Acquisitions

Summary of allocation of the consideration and the respective fair values of the assets acquired and liabilities assumed

	As of May 31, 2011
	(In thousands)
Current assets	$	39,924
Property and equipment		4,829
Other assets		1,600
Capitalized software		24,000
Intangible assets		140,000
Goodwill		232,910
Total assets acquired		443,263

Current liabilities		30,099
Other liabilities		3,904
Deferred tax liabilities		50,184
Total liabilities assumed		84,187

Net assets acquired	$	359,076

CREDIT CARD AND LOAN RECEIVABLES (Tables)

12 Months Ended

Dec. 31, 2013

CREDIT CARD AND LOAN RECEIVABLES

Schedule of components of total credit card and loan receivables

	December 31, 2013		December 31, 2012
	(In thousands)
Principal receivables	$	8,166,961	$	7,097,951
Billed and accrued finance charges		343,521		291,476
Other credit card and loan receivables		124,482		60,205
Total credit card and loan receivables		8,634,964		7,449,632
Less credit card receivables – restricted for securitization investors		7,080,014		6,597,120
Less loan receivables held for sale		62,082		—
Other credit card and loan receivables	$	1,492,868	$	852,512

Schedule of Company's allowance for loan loss

	Years Ended December 31,
	2013			2012			2011
	(In thousands)
Balance at beginning of period	$	481,958		$	468,321		$	518,069
Provision for loan loss		345,758			285,479			300,316
Change in estimate for uncollectible unpaid interest and fees		11,000			11,000			(5,000	)
Recoveries		112,538			97,131			89,764
Principal charge-offs		(448,085	)		(379,973	)		(429,828	)
Other		—			—			(5,000	)
Balance at end of period	$	503,169		$	481,958		$	468,321

Schedule of delinquency trends of the Company's credit card and loan receivables portfolio

	December 31, 2013		% of Total			December 31, 2012		% of Total
	(In thousands, except percentages)
Receivables outstanding - principal	$	8,166,961		100.0	%	$	7,097,951		100.0	%
Principal receivables balances contractually delinquent:
31 to 60 days		114,430		1.4	%		100,479		1.4	%
61 to 90 days		74,700		0.9			62,546		0.9
91 or more days		150,425		1.9			120,163		1.7
Total	$	339,555		4.2	%	$	283,188		4.0	%

Schedule of modifications related to troubled debt restructurings within credit card and loan receivables

The following tables indicate the modifications related to troubled debt restructurings within credit card and loan receivables for the years ended December 31, 2013 and 2012:

	Year Ended December 31, 2013
	Number of Restructurings		Pre-modification Outstanding Balance		Post-modification Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings – credit card and loan receivables		147,200	$	134,892	$	134,799


	Year Ended December 31, 2012
	Number of Restructurings		Pre-modification Outstanding Balance		Post-modification Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings – credit card and loan receivables		134,187	$	119,985	$	119,856

The tables below summarize troubled debt restructurings that have defaulted during the years ended December 31, 2013 and 2012 where the default occurred within 12 months of their modification date:

	Year Ended December 31, 2013
	Number of Restructurings		Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings that subsequently defaulted – credit card and loan receivables		63,590	$	60,490


	Year Ended December 31, 2012
	Number of Restructurings		Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings that subsequently defaulted – credit card and loan receivables		55,198	$	53,806

Schedule of number of active credit card and loan accounts with balances and the related principal balances outstanding, based upon the age of the active credit card accounts from origination

	December 31, 2013
Age of Accounts Since Origination	Number of Active Accounts with Balances		Percentage of Active Accounts with Balances			Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding
	(In thousands, except percentages)
0-12 Months		5,048		27.2	%	$	1,962,153		24.1	%
13-24 Months		2,550		13.7			1,072,648		13.1
25-36 Months		1,799		9.7			826,911		10.1
37-48 Months		1,318		7.1			622,766		7.6
49-60 Months		1,104		6.0			557,407		6.8
Over 60 Months		6,729		36.3			3,125,076		38.3
Total		18,548		100.0	%	$	8,166,961		100.0	%

	December 31, 2012
Age of Accounts Since Origination	Number of Active Accounts with Balances		Percentage of Active Accounts with Balances			Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding
	(In thousands, except percentages)
0-12 Months		4,287		25.1	%	$	1,545,955		21.8	%
13-24 Months		2,216		12.9			867,230		12.2
25-36 Months		1,580		9.2			676,362		9.5
37-48 Months		1,297		7.6			616,296		8.7
49-60 Months		1,053		6.2			502,217		7.1
Over 60 Months		6,681		39.0			2,889,891		40.7
Total		17,114		100.0	%	$	7,097,951		100.0	%

Schedule of composition of obligor credit quality

	December 31, 2013					December 31, 2012
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months)	Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding			Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding
	(In thousands, except percentages)
No Score	$	162,366		2.0	%	$	298,829		4.2	%
27.1% and higher		362,366		4.4			286,046		4.0
17.1% - 27.0%		732,425		9.0			613,184		8.7
12.6% - 17.0%		858,721		10.5			713,489		10.1
3.7% - 12.5%		3,234,547		39.6			2,840,964		40.0
1.9% - 3.6%		1,748,317		21.4			1,492,289		21.0
Lower than 1.9%		1,068,219		13.1			853,150		12.0
Total	$	8,166,961		100.0	%	$	7,097,951		100.0	%

Schedule of Company's net charge-offs

	December 31, 2013		December 31, 2012
	(In thousands)
Total credit card receivables – restricted for securitization investors	$	7,080,014	$	6,597,120
Principal amount of credit card receivables – restricted for securitization investors, 90 days or more past due	$	131,659	$	112,203

	Years Ended December 31,
	2013		2012		2011
	(In thousands)
Net charge-offs of securitized principal	$	311,111	$	265,305	$	306,301

REDEMPTION SETTLEMENT ASSETS (Tables)

12 Months Ended

Dec. 31, 2013

REDEMPTION SETTLEMENT ASSETS

Schedule of Redemption Settlement Assets

	December 31, 2013									December 31, 2012
	Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(In thousands)
Cash and cash equivalents	$	73,984	$	—	$	—		$	73,984	$	40,266	$	—	$	—		$	40,266
Government bonds		—		—		—			—		5,064		53		—			5,117
Corporate bonds		429,592		7,083		(310	)		436,365		436,846		10,560		(99	)		447,307
Total	$	503,576	$	7,083	$	(310	)	$	510,349	$	482,176	$	10,613	$	(99	)	$	492,690

Schedule of redemption settlement assets by contractual maturity date

	Amortized Cost		Estimated Fair Value
	(In thousands)
Due in one year or less	$	195,230	$	196,584
Due after one year through five years		308,346		313,765
Total	$	503,576	$	510,349

PROPERTY AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2013

PROPERTY AND EQUIPMENT

Schedule of property and equipment

	December 31,
	2013			2012
	(In thousands)
Computer software and development	$	373,844		$	293,727
Furniture and equipment		263,373			225,062
Land, buildings and leasehold improvements		106,197			99,644
Construction in progress		49,488			59,417
Total		792,902			677,850
Accumulated depreciation		(493,714	)		(424,822	)
Property and equipment, net	$	299,188		$	253,028

INTANGIBLE ASSETS AND GOODWILL (Tables)

12 Months Ended

Dec. 31, 2013

INTANGIBLE ASSETS AND GOODWILL

Schedule of intangible assets

	December 31, 2013
	Gross Assets		Accumulated Amortization			Net		Amortization Life and Method
	(In thousands)
Finite Lived Assets
Customer contracts and lists	$	440,200	$	(187,350	)	$	252,850	3-12 years—straight line
Premium on purchased credit card portfolios		216,041		(118,006	)		98,035	5-10 years—straight line, accelerated
Customer database		161,700		(122,230	)		39,470	4-10 years—straight line
Collector database		65,895		(60,711	)		5,184	30 years—15% declining balance
Tradenames		58,567		(15,443	)		43,124	4-15 years—straight line
Purchased data lists		17,567		(11,959	)		5,608	1-5 years—straight line, accelerated
Favorable lease		3,291		(375	)		2,916	10 years—straight line
Noncompete agreements		1,300		(433	)		867	3 years—straight line
	$	964,561	$	(516,507	)	$	448,054
Indefinite Lived Assets
Tradenames		12,350		—			12,350	Indefinite life
Total intangible assets	$	976,911	$	(516,507	)	$	460,404

	December 31, 2012
	Gross Assets		Accumulated Amortization			Net		Amortization Life and Method
	(In thousands)
Finite Lived Assets
Customer contracts and lists	$	440,200	$	(124,351	)	$	315,849	3-12 years—straight line
Premium on purchased credit card portfolios		237,800		(108,227	)		129,573	5-10 years—straight line, accelerated
Customer database		161,700		(102,706	)		58,994	4-10 years—straight line
Collector database		70,550		(63,980	)		6,570	30 years—15% declining balance
Tradenames		59,102		(10,139	)		48,963	4-15 years—straight line
Purchased data lists		14,540		(8,527	)		6,013	1-5 years—straight line, accelerated
Favorable lease		3,291		(29	)		3,262	10 years—straight line
Noncompete agreements		1,300		—			1,300	3 years—straight line
	$	988,483	$	(417,959	)	$	570,524
Indefinite Lived Assets
Tradenames		12,350		—			12,350	Indefinite life
Total intangible assets	$	1,000,833	$	(417,959	)	$	582,874

Schedule of estimated amortization expense related to intangible assets

	For Years Ending December 31,
	(In thousands)
2014	$	118,945
2015		94,436
2016		77,873
2017		52,172
2018		42,539
2019 & thereafter		62,089

Schedule of changes in carrying amount of goodwill

	LoyaltyOne			Epsilon		Private Label Services and Credit		Corporate/ Other		Total
	(In thousands)
December 31, 2011	$	241,697		$	945,934	$	261,732	$	—	$	1,449,363
Goodwill acquired during year		—			294,275		—		—		294,275
Effects of foreign currency translation		6,373			1,042		—		—		7,415
December 31, 2012		248,070			1,241,251		261,732		—		1,751,053
Effects of foreign currency translation		(15,621	)		271		—		—		(15,350	)
December 31, 2013	$	232,449		$	1,241,522	$	261,732	$	—	$	1,735,703

ACCRUED EXPENSES (Tables)

12 Months Ended

Dec. 31, 2013

ACCRUED EXPENSES

Schedule of accrued expenses

	December 31,
	2013		2012
	(In thousands)
Accrued payroll and benefits	$	137,982	$	131,341
Accrued marketing		30,612		28,876
Accrued taxes		18,178		48,202
Accrued other liabilities		75,535		66,206
Accrued expenses	$	262,307	$	274,625

DEBT (Tables)

12 Months Ended

Dec. 31, 2013

DEBT

Schedule of debt

Description	December 31, 2013			December 31, 2012			Maturity	Interest Rate
	(Dollars in thousands)

Long-term and other debt:
2013 credit facility	$	336,000		$	—		July 2018	(1)
2013 term loan		1,234,688			—		July 2018	(1)
2011 term loan		—			885,928		—	—
Convertible senior notes due 2013		—			768,831		—	—
Convertible senior notes due 2014		333,082			304,333		May 2014	4.75%
Senior notes due 2017		396,511			395,734		December 2017	5.250%
Senior notes due 2020		500,000			500,000		April 2020	6.375%
Capital lease obligations and other debt		—			13		—	—
Total long-term and other debt		2,800,281			2,854,839
Less: current portion		(364,489	)		(803,269	)
Long-term portion	$	2,435,792		$	2,051,570

Deposits:
Certificates of deposit	$	2,486,533		$	1,974,158		Various – January 2014 – December 2020	0.15% to 3.55%
Money market deposits		329,828			254,253		On demand	0.01% to 0.12%
Total deposits		2,816,361			2,228,411
Less: current portion		(1,544,059	)		(1,092,753	)
Long-term portion	$	1,272,302		$	1,135,658

Non-recourse borrowings of consolidated securitization entities:
Fixed rate asset-backed term note securities	$	3,001,916		$	2,403,555		Various - October 2014 – June 2019	0.91% to 6.75%
Floating rate asset-backed term note securities		—			545,700		—	—
Conduit asset-backed securities		1,590,000			1,181,715		Various - March 2014 – September 2015	1.18% to 1.70%
Total non-recourse borrowings of consolidated securitization entities		4,591,916			4,130,970
Less: current portion		(1,025,000	)		(1,474,054	)
Long-term portion	$	3,566,916		$	2,656,916

(1)	At December 31, 2013, the weighted average interest rate for the 2013 Credit Facility and 2013 Term Loan was 2.14% and 1.92%, respectively.

Summary of the carrying value of the components of the convertible senior notes

	December 31,
	2013			2012
	(In millions)
Carrying amount of equity component	$	115.9		$	368.7

Principal amount of liability component	$	345.0		$	1,150.0
Unamortized discount		(11.9	)		(76.8	)
Net carrying value of liability component	$	333.1		$	1,073.2

If-converted value of common stock	$	1,906.9		$	2,534.4

Schedule of interest expense on convertible senior notes

	Years Ended December 31,
	2013			2012			2011
	(In thousands, except percentages)
Interest expense calculated on contractual interest rate	$	24,169		$	30,475		$	30,475
Amortization of discount on liability component		64,900			82,366			73,787
Total interest expense on convertible senior notes	$	89,069		$	112,841		$	104,262

Effective interest rate (annualized)		12.4	%		11.0	%		11.0	%

Schedule of maturity of debt

Year	Long-Term and Other Debt			Non-Recourse Borrowings of Consolidated Securitization Entities and Deposits		Total
	(In thousands)
2014 (1)	$	376,377		$	2,569,059	$	2,945,436
2015		46,875			1,589,081		1,635,956
2016		62,500			1,010,334		1,072,834
2017 (2)		462,500			585,704		1,048,204
2018		1,367,406			789,471		2,156,877
Thereafter		500,000			864,628		1,364,628
Total maturities		2,815,658			7,408,277		10,223,935
Unamortized discount (3)		(15,377	)		—		(15,377	)
	$	2,800,281		$	7,408,277	$	10,208,558

(1)	Long-Term and Other Debt includes $345.0 million representing the aggregate principal amount of the Convertible Senior Notes due 2014.

(2)	Long-Term and Other Debt includes $400.0 million representing the aggregate principal amount of the Senior Notes due 2017.

(3)	Unamortized discount consists of $11.9 million for the Convertible Senior Notes due 2014 and $3.5 million for the Senior Notes due 2017, respectively.

Schedule of notional amount, fair value and classification of Company's outstanding interest rate contracts

	December 31, 2012
	Notional Amount		Weighted Average Years to Maturity
	(Dollars in thousands)
Interest rate derivatives not designated as hedging instruments	$	545,700		0.51

	December 31, 2012
	Balance Sheet Location	Fair Value
	(In thousands)
Interest rate derivatives not designated as hedging instruments	Other assets	$	4
Interest rate derivatives not designated as hedging instruments	Other current liabilities	$	8,515

DEFERRED REVENUE (Tables)

12 Months Ended

Dec. 31, 2013

DEFERRED REVENUE

Schedule of reconciliation of deferred revenue for the AIR MILES Reward Program

	Deferred Revenue
	Service			Redemption			Total
	(In thousands)
December 31, 2011	$	358,973		$	867,463		$	1,226,436
Cash proceeds		216,772			570,439			787,211
Revenue recognized		(205,740	)		(593,679	)		(799,419	)
Other		—			1,000			1,000
Effects of foreign currency translation		10,008			23,825			33,833
December 31, 2012		380,013			869,048			1,249,061
Cash proceeds		203,735			528,474			732,209
Revenue recognized		(212,301	)		(550,577	)		(762,878	)
Other		—			276			276
Effects of foreign currency translation		(24,816	)		(56,666	)		(81,482	)
December 31, 2013	$	346,631		$	790,555		$	1,137,186
Amounts recognized in the consolidated balance sheets:
Current liabilities	$	175,883		$	790,555		$	966,438
Non-current liabilities	$	170,748		$	—		$	170,748

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2013

COMMITMENTS AND CONTINGENCIES.

Schedule of future minimum payments required under noncancellable operating leases

Year	Future Minimum Rental Payments
	(In thousands)
2014	$	67,289
2015		63,950
2016		56,239
2017		50,345
2018		32,551
Thereafter		116,845
Total	$	387,219

STOCKHOLDERS' EQUITY (Tables)

12 Months Ended

Dec. 31, 2013

STOCKHOLDERS' EQUITY

Schedule of stock-based compensation expense

	Years Ended December 31,
	2013		2012		2011
	(In thousands)
Cost of operations	$	40,264	$	32,654	$	25,766
General and administrative		18,919		17,843		17,720
Total	$	59,183	$	50,497	$	43,486

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

	Performance- Based			Service- Based			Total			Weighted Average Fair Value
Balance at January 1, 2011		1,787,473			773,725			2,561,198		$	51.93
Shares granted		457,180			158,539			615,719			83.28
Shares vested		(373,099	)		(543,643	)		(916,742	)		49.81
Shares cancelled (1)		(1,014,982	)		(43,432	)		(1,058,414	)		56.73
Balance at December 31, 2011		856,572			345,189			1,201,761		$	65.39
Shares granted		527,080			127,646			654,726			110.18
Shares vested		(505,335	)		(130,066	)		(635,401	)		59.06
Shares cancelled		(104,476	)		(27,618	)		(132,094	)		86.13
Balance at December 31, 2012		773,841			315,151			1,088,992		$	93.33
Shares granted		409,575			92,206			501,781			155.31
Shares vested		(448,868	)		(122,931	)		(571,799	)		88.15
Shares cancelled		(49,544	)		(14,915	)		(64,459	)		115.83
Balance at December 31, 2013		685,004			269,511			954,515		$	121.86
Outstanding and Expected to Vest								884,545		$	120.56

(1)

Summary of stock option activity

	Outstanding					Exercisable
	Options			Weighted Average Exercise Price		Options		Weighted Average Exercise Price
Balance at January 1, 2011		1,422,264		$	40.12		1,422,264	$	40.12
Granted		—			—
Exercised		(669,712	)		37.24
Forfeited		(12,535	)		31.46
Balance at December 31, 2011		740,017		$	42.87		740,017	$	42.87
Granted		—			—
Exercised		(355,764	)		42.95
Forfeited		—			—
Balance at December 31, 2012		384,253		$	42.80		384,253	$	42.80
Granted		—			—
Exercised		(143,577	)		36.30
Forfeited		(1,000	)		31.38
Balance at December 31, 2013		239,676		$	46.75		239,676	$	46.75
Vested and Expected to Vest (1)		239,676		$	46.75

(1)	All options outstanding at December 31, 2013 are vested and exercisable and there were no remaining options expected to vest.

ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables)

12 Months Ended

Dec. 31, 2013

ACCUMULATED OTHER COMPREHENSIVE INCOME

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

	Net Unrealized Gains (Losses) on Securities			Foreign Currency Translation Adjustments (1)			Accumulated Other Comprehensive Income (Loss)
	(In thousands)
Balance as of January 1, 2011	$	(20,082	)	$	(14,418	)	$	(34,500	)
Changes in other comprehensive income (loss)		27,035			(15,591	)		11,444
Balance as of December 31, 2011		6,953			(30,009	)		(23,056	)
Changes in other comprehensive income (loss)		3,368			(2,173	)		1,195
Balance as of December 31, 2012		10,321			(32,182	)		(21,861	)
Changes in other comprehensive income (loss)		(6,132	)		9,766			3,634
Balance as of December 31, 2013	$	4,189		$	(22,416	)	$	(18,227	)

(1)	Primarily related to the impact of changes in the Canadian currency exchange rate.

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

INCOME TAXES

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

	Years Ended December 31,
	2013			2012		2011
	(In thousands)
Components of income before income taxes:
Domestic	$	547,757		$	481,243	$	332,010
Foreign		245,655			201,661		182,085
Total	$	793,412		$	682,904	$	514,095
Components of income tax expense are as follows:
Current
Federal	$	188,600		$	143,695	$	71,843
State		33,595			13,991		9,415
Foreign		32,134			696		70,514
Total current		254,329			158,382		151,772
Deferred
Federal		1,477			28,267		46,459
State		(1,485	)		6,176		3,482
Foreign		42,921			67,823		(2,904	)
Total deferred		42,913			102,266		47,037
Total provision for income taxes	$	297,242		$	260,648	$	198,809

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,
	2013			2012			2011
	(In thousands)
Expected expense at statutory rate	$	277,694		$	239,016		$	179,933
Increase (decrease) in income taxes resulting from:
State income taxes, net of federal benefit		20,871			13,109			8,383
Foreign earnings at other than U.S. rates		(9,225	)		(4,328	)		(7,131	)
Canadian tax rate reductions		—			(7,128	)		7,188
U.S. tax on foreign dividends, net of credits		—			15,617			5,228
Other		7,902			4,362			5,208
Total	$	297,242		$	260,648		$	198,809

Summary of deferred tax assets and liabilities

	December 31,
	2013			2012
	(In thousands)
Deferred tax assets
Deferred revenue	$	42,359		$	90,675
Allowance for doubtful accounts		192,546			186,503
Net operating loss carryforwards and other carryforwards		53,591			51,603
Derivatives		—			4,456
Stock-based compensation and other employee benefits		28,582			27,205
Accrued expenses and other		50,120			44,267
Total deferred tax assets		367,198			404,709
Valuation allowance		(22,414	)		(22,542	)
Deferred tax assets, net of valuation allowance		344,784			382,167
Deferred tax liabilities
Deferred income	$	244,612		$	203,658
Convertible note hedges		1,474			7,553
Depreciation		8,440			8,950
Intangible assets		147,366			172,065
Total deferred tax liabilities		401,892			392,226

Net deferred tax liability	$	(57,108	)	$	(10,059	)

Amounts recognized in the consolidated balance sheets:
Current assets	$	216,195		$	237,268
Non-current assets		2,454			30,027
Non-current liabilities		(275,757	)		(277,354	)
Total – Net deferred tax liability	$	(57,108	)	$	(10,059	)

Summary of reconciliation of unrecognized tax benefits

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

Balance at December 31, 2010	$	54,200
Increases related to prior years’ tax positions		14,509
Decreases related to prior years’ tax positions		(5,497	)
Increases related to current year tax positions		9,581
Settlements during the period		(2,569	)
Lapses of applicable statutes of limitation		(680	)
Balance at December 31, 2011	$	69,544
Increases related to prior years’ tax positions		4,188
Decreases related to prior years’ tax positions		(7,424	)
Increases related to current year tax positions		11,703
Settlements during the period		(1,253	)
Lapses of applicable statutes of limitation		(604	)
Balance at December 31, 2012	$	76,154
Increases related to prior years’ tax positions		4,328
Decreases related to prior years’ tax positions		(1,580	)
Increases related to current year tax positions		23,567
Settlements during the period		(197	)
Lapses of applicable statutes of limitation		(918	)
Balance at December 31, 2013	$	101,354

FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2013

FINANCIAL INSTRUMENTS

Schedule of estimated fair value of Company's financial instruments

	December 31,
	2013				2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In thousands)
Financial assets
Cash and cash equivalents	$	969,822	$	969,822	$	893,352	$	893,352
Trade receivables, net		394,822		394,822		370,110		370,110
Credit card and loan receivables, net		8,131,795		8,131,795		6,967,674		6,967,674
Redemption settlement assets, restricted		510,349		510,349		492,690		492,690
Cash collateral, restricted		34,124		34,124		65,160		65,160
Other investments		99,221		99,221		91,972		91,972
Derivative instruments		—		—		4		4
Financial liabilities
Accounts payable		210,019		210,019		215,470		215,470
Deposits		2,816,361		2,836,352		2,228,411		2,255,089
Non-recourse borrowings of consolidated securitization entities		4,591,916		4,618,205		4,130,970		4,225,745
Long-term and other debt		2,800,281		4,404,500		2,854,839		4,358,379
Derivative instruments		—		—		8,515		8,515

Schedule of other investments

	December 31, 2013									December 31, 2012
	Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(In thousands)
Restricted cash	$	25,988	$	—	$	—		$	25,988	$	47,120	$	—	$	—		$	47,120
Marketable securities		77,351		62		(4,180	)		73,233		45,119		202		(469	)		44,852
Total	$	103,339	$	62	$	(4,180	)	$	99,221	$	92,239	$	202	$	(469	)	$	91,972

Schedule of gross 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, 2013
	Less than 12 months					12 Months or Greater					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(In thousands)
Marketable securities	$	39,954	$	(2,206	)	$	25,785	$	(1,974	)	$	65,739	$	(4,180	)

	December 31, 2012
	Less than 12 months					12 Months or Greater					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(In thousands)
Marketable securities	$	28,886	$	(292	)	$	4,913	$	(177	)	$	33,799	$	(469	)

Schedule of securities by contractual maturity date

	Amortized Cost		Estimated Fair Value
	(In thousands)
Due in one year or less	$	6,571	$	6,503
Due after five years through ten years		4,580		4,611
Due after ten years		66,200		62,119
Total	$	77,351	$	73,233

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

			Fair Value Measurements at December 31, 2013 Using
	Balance at December 31, 2013		Level 1		Level 2		Level 3
	(In thousands)
Corporate bonds (1)	$	436,365	$	—	$	436,365	$	—
Cash collateral, restricted		34,124		—		—		34,124
Other investments (2)		99,221		30,888		68,333		—
Total assets measured at fair value	$	569,710	$	30,888	$	504,698	$	34,124

			Fair Value Measurements at December 31, 2012 Using
	Balance at December 31, 2012		Level 1		Level 2		Level 3
	(In thousands)
Government bonds (1)	$	5,117	$	—	$	5,117	$	—
Corporate bonds (1)		447,307		6,165		441,142		—
Cash collateral, restricted		65,160		2,500		—		62,660
Other investments (2)		91,972		51,951		40,021		—
Derivative instruments (3)		4		—		4		—
Total assets measured at fair value	$	609,560	$	60,616	$	486,284	$	62,660

Derivative instruments (4)	$	8,515	$	—	$	8,515	$	—
Total liabilities measured at fair value	$	8,515	$	—	$	8,515	$	—

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

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

(3)	Amount is included in other assets in the consolidated balance sheets.

(4)	Amount is included in other current liabilities in the consolidated balance sheets.

Summary of changes in fair value of the Company's assets measured on a recurring basis using significant unobservable inputs (Level 3)

	Cash Collateral, Restricted
	Years Ended December 31,
	2013			2012
	(In thousands)
Balance at beginning of period	$	62,660		$	158,727
Total gains (realized or unrealized):
Included in earnings		1,369			5,469
Purchases		—			1,287
Sales		—			—
Issuances		—			—
Settlements		(29,905	)		(102,823	)
Transfers in or out of Level 3		—			—
Balance at end of period	$	34,124		$	62,660

Gains for the period included in earnings related to assets still held at end of period	$	971		$	5,469

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

	Fair Value Measurements at December 31, 2013
	Total		Level 1		Level 2		Level 3
	(In thousands)
Cash and cash equivalents	$	969,822	$	969,822	$	—	$	—
Credit card and loan receivables, net		8,131,795		—		—		8,131,795
Total assets	$	9,101,617	$	969,822	$	—	$	8,131,795

Deposits	$	2,836,352	$	—	$	2,836,352	$	—
Non-recourse borrowings of consolidated securitization entities		4,618,205		—		4,618,205		—
Long-term and other debt		4,404,500		—		4,404,500		—
Total liabilities	$	11,859,057	$	—	$	11,859,057	$	—

	Fair Value Measurements at December 31, 2012
	Total		Level 1		Level 2		Level 3
	(In thousands)
Cash and cash equivalents	$	893,352	$	893,352	$	—	$	—
Credit card and loan receivables, net		6,967,674		—		—		6,967,674
Total assets	$	7,861,026	$	893,352	$	—	$	6,967,674

Deposits	$	2,255,089	$	—	$	2,255,089	$	—
Non-recourse borrowings of consolidated securitization entities		4,225,745		—		4,225,745		—
Long-term and other debt		4,358,379		—		4,358,379		—
Total liabilities	$	10,839,213	$	—	$	10,839,213	$	—

PARENT-ONLY FINANCIAL STATEMENTS (Tables)

12 Months Ended

Dec. 31, 2013

PARENT-ONLY FINANCIAL STATEMENTS

Schedule of balance sheets

	December 31,
	2013		2012
	(In thousands)
Assets:
Cash and cash equivalents	$	15,216	$	247,478
Investment in subsidiaries		3,819,760		2,813,219
Intercompany receivables		399,305		887,518
Other assets		96,039		61,222
Total assets	$	4,330,320	$	4,009,437
Liabilities:
Current debt	$	364,489	$	803,256
Long-term debt		2,435,792		2,051,570
Intercompany payables		—		8,519
Other liabilities		674,278		617,605
Total liabilities		3,474,559		3,480,950
Stockholders’ equity		855,761		528,487
Total liabilities and stockholders’ equity	$	4,330,320	$	4,009,437

Schedule of statements of income

	Years Ended December 31,
	2013			2012		2011
	(In thousands)
Interest from loans to subsidiaries	$	10,065		$	10,248	$	10,197
Dividends from subsidiaries		68,544			464,971		343,676
Total revenue		78,609			475,219		353,873
Interest expense, net		184,727			179,527		159,088
Other expenses, net		1,240			533		646
Total expenses		185,967			180,060		159,734
(Loss) income before income taxes and equity in undistributed net income of subsidiaries		(107,358	)		295,159		194,139
Benefit for income taxes		32,909			73,106		34,127
(Loss) income before equity in undistributed net income of subsidiaries		(74,449	)		368,265		228,266
Equity in undistributed net income of subsidiaries		570,619			53,991		87,020
Net income	$	496,170		$	422,256	$	315,286

Schedule of statements of cash flows

	Years Ended December 31,
	2013			2012			2011
	(In thousands)
Net cash provided by (used in) operating activities	$	144,841		$	(224,835	)	$	(10,011	)
Investing activities:
Payments for acquired businesses, net of cash acquired		—			—			(359,076	)
Loans to subsidiaries		(112,903	)		—			—
Investment in subsidiaries		—			(475,000	)		—
Dividends received		68,544			464,971			343,676
Net cash used in investing activities		(44,359	)		(10,029	)		(15,400	)
Financing activities:
Borrowings under debt agreements		1,985,000			1,095,148			3,256,500
Repayments of borrowings		(1,300,241	)		(506,214	)		(3,010,906	)
Proceeds from convertible note hedge counterparties		1,056,307			—			—
Settlement of convertible note borrowings		(1,861,289	)		—			—
Excess tax benefits from stock-based compensation		17,267			20,199			15,028
Payment of deferred financing costs		(12,784	)		(21,672	)		(23,861	)
Purchase of treasury shares		(231,085	)		(125,840	)		(240,877	)
Proceeds from issuance of common stock		14,090			20,696			29,412
Other		(9	)		—			—
Net cash (used in) provided by financing activities		(332,744	)		482,317			25,296
(Decrease) increase in cash and cash equivalents		(232,262	)		247,453			(115	)
Cash and cash equivalents at beginning of year		247,478			25			140
Cash and cash equivalents at end of year	$	15,216		$	247,478		$	25

SEGMENT INFORMATION (Tables)

12 Months Ended

Dec. 31, 2013

SEGMENT INFORMATION

Schedule of segment information

Year Ended December 31, 2013	LoyaltyOne			Epsilon			Private Label Services and Credit		Corporate/ Other			Eliminations			Total
	(In thousands)
Revenues	$	919,480		$	1,380,344		$	2,034,724	$	82		$	(15,567	)	$	4,319,063
Adjusted EBITDA (1)		258,541			289,699			916,099		(90,125	)		—			1,374,214
Stock compensation expense		10,804			18,365			11,095		18,919			—			59,183
Depreciation and amortization		18,057			139,984			52,277		5,801			—			216,119
Operating income (loss)		229,680			131,350			852,727		(114,845	)		—			1,098,912
Interest expense, net		(1,312	)		(56	)		122,159		184,709			—			305,500
Income before income tax		230,992			131,406			730,568		(299,554	)		—			793,412
Capital expenditures	$	28,713		$	67,024		$	27,909	$	11,730		$	—		$	135,376

Year Ended December 31, 2012	LoyaltyOne			Epsilon			Private Label Services and Credit		Corporate/ Other			Eliminations			Total
	(In thousands)
Revenues	$	919,041		$	996,210		$	1,732,160	$	372		$	(6,393	)	$	3,641,390
Adjusted EBITDA (1)		236,094			222,253			823,241		(89,851	)		—			1,191,737
Stock compensation expense		9,311			14,414			8,930		17,842			—			50,497
Depreciation and amortization		19,614			101,684			42,464		3,114			—			166,876
Operating income (loss)		207,169			106,155			771,847		(110,807	)		—			974,364
Interest expense, net		(1,560	)		(67	)		114,193		178,894			—			291,460
Income before income tax		208,729			106,222			657,654		(289,701	)		—			682,904
Capital expenditures	$	19,424		$	60,065		$	28,295	$	8,671		$	—		$	116,455

Year Ended December 31, 2011	LoyaltyOne			Epsilon			Private Label Services and Credit		Corporate/ Other			Eliminations			Total
	(In thousands)
Revenues	$	844,774		$	847,136		$	1,488,998	$	1,136		$	(8,757	)	$	3,173,287
Adjusted EBITDA (1)		217,083			195,397			678,334		(76,407	)		(5,088	)		1,009,319
Stock compensation expense		7,202			11,816			6,748		17,720			—			43,486
Depreciation and amortization		20,253			90,111			35,480		7,309			—			153,153
Operating income (loss)		189,628			93,470			636,106		(101,436	)		(5,088	)		812,680
Interest expense, net		(383	)		(68	)		145,580		158,544			(5,088	)		298,585
Income before income tax		190,011			93,538			490,526		(259,980	)		—			514,095
Capital expenditures	$	18,331		$	35,600		$	13,485	$	6,086		$	—		$	73,502

(1)

Schedule of information concerning principal geographic areas

	United States		Canada		Other		Total
	(In thousands)
Revenues
Year Ended December 31, 2013	$	3,327,688	$	906,459	$	84,916	$	4,319,063
Year Ended December 31, 2012	$	2,655,506	$	913,188	$	72,696	$	3,641,390
Year Ended December 31, 2011	$	2,264,336	$	833,427	$	75,524	$	3,173,287
Long-lived assets
December 31, 2013	$	2,371,054	$	313,891	$	158,470	$	2,843,415
December 31, 2012	$	2,379,536	$	350,122	$	138,338	$	2,867,996

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Tables)

12 Months Ended

Dec. 31, 2013

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

Summary of unaudited quarterly results of operations

	Quarter Ended
	March 31, 2013		June 30, 2013		September 30, 2013		December 31, 2013
	(In thousands, except per share amounts)
Revenues	$	1,053,437	$	1,028,092	$	1,096,447	$	1,141,087
Operating expenses		762,212		758,912		807,679		891,348
Operating income		291,225		269,180		288,768		249,739
Interest expense, net		82,544		83,466		74,015		65,475
Income before income taxes		208,681		185,714		214,753		184,264
Provision for income taxes		79,702		69,274		81,875		66,391
Net income	$	128,979	$	116,440	$	132,878	$	117,873
Net income per share—basic	$	2.59	$	2.37	$	2.73	$	2.40
Net income per share—diluted	$	1.92	$	1.71	$	2.01	$	1.79

	Quarter Ended
	March 31, 2012		June 30, 2012		September 30, 2012		December 31, 2012
	(In thousands, except per share amounts)
Revenues	$	891,569	$	866,485	$	911,492	$	971,844
Operating expenses		638,950		625,942		647,021		755,113
Operating income		252,619		240,543		264,471		216,731
Interest expense, net		65,652		73,067		74,365		78,376
Income before income taxes		186,967		167,476		190,106		138,355
Provision for income taxes		71,738		63,655		70,561		54,694
Net income	$	115,229	$	103,821	$	119,545	$	83,661
Net income per share—basic	$	2.30	$	2.07	$	2.39	$	1.68
Net income per share—diluted	$	1.86	$	1.63	$	1.84	$	1.27

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	12 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	Dec. 31, 2013
Allowance for Loan Loss
Period considered for charge-off trends utilized for analyzing actual charge-offs	3 months
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	21 years
Software Development and Conversion Costs \| Minimum
Property and Equipment
Estimated useful life	1 year
Software Development and Conversion Costs \| Maximum
Property and Equipment
Estimated useful life	10 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - Licensing of data	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Maximum
Goodwill and Other Intangible Assets
Useful life	5 years	5 years
Minimum
Goodwill and Other Intangible Assets
Useful life	1 year	1 year

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Revenue Recognition
Estimated unredeemed percentage of AIR MILES	26.00%				27.00%				26.00%	27.00%	28.00%
Estimated Life of an AIR MILES reward mile									42 months
Period beyond which interest and fee income accrue on credit card accounts									90 days
Period for which interest and fee income accrue until balance, interest and fees paid or charged off									180 days
Amortization term of direct loan amortization costs									1 year
Unamortized deferred costs related to loan origination	$ 20,500				$ 16,400				$ 20,500	$ 16,400
Numerator
Net income	$ 117,873	$ 132,878	$ 116,440	$ 128,979	$ 83,661	$ 119,545	$ 103,821	$ 115,229	$ 496,170	$ 422,256	$ 315,286
Denominator
Weighted average shares, basic									49,190,000	50,008,000	50,687,000
Weighted average effect of dilutive securities:
Shares from assumed conversion of convertible senior notes									8,516,000	8,645,000	4,641,000
Shares from assumed exercise of convertible note warrants									8,482,000	4,702,000	1,510,000
Net effect of dilutive stock options and unvested restricted stock (in shares)									678,000	788,000	966,000
Denominator for diluted calculation (in shares)									66,866,000	64,143,000	57,804,000
Basic net income per share (in dollars per share)	$ 2.40	$ 2.73	$ 2.37	$ 2.59	$ 1.68	$ 2.39	$ 2.07	$ 2.30	$ 10.09	$ 8.44	$ 6.22
Diluted net income per share (in dollars per share)	$ 1.79	$ 2.01	$ 1.71	$ 1.92	$ 1.27	$ 1.84	$ 1.63	$ 1.86	$ 7.42	$ 6.58	$ 5.45
Prepaid forward contracts to purchase common stock that are to be delivered over a settlement period in 2014 (in shares)									1,857,400
Anti-dilutive warrants excluded from the calculation of net income per share (in shares)											10,300,000
Currency Translation
Foreign currency transaction (losses) gains recognized									$ (1,000)	$ 600	$ (2,700)
Advertising Costs
Advertising expenses, including advertising on behalf of clients									$ 206,600	$ 166,100	$ 129,000

ACQUISITIONS (Details) - USD ($) $ in Thousands	Dec. 31, 2012	Nov. 30, 2012	May 31, 2011	Dec. 31, 2013	Dec. 31, 2011
Fair values of assets acquired and liabilities assumed in acquisition
Goodwill	$ 1,751,053			$ 1,735,703	$ 1,449,363
HMI
Acquisitions
Total consideration		$ 451,800
Cash and cash equivalents acquired		7,100
Amount of goodwill deductible for tax purposes		66,400
Fair values of assets acquired and liabilities assumed in acquisition
Current assets		49,700
Deferred tax assets		12,050
Property and equipment		6,907
Other assets		118
Intangible assets		194,751
Goodwill		291,249
Total assets acquired		554,775
Current liabilities		33,928
Deferred tax liabilities		68,624
Other liabilities		420
Total liabilities assumed		102,972
Net assets acquired		$ 451,803
Advecor
Acquisitions
Total consideration	12,200
Cash and cash equivalents acquired	400
Fair values of assets acquired and liabilities assumed in acquisition
Intangible assets	8,800
Goodwill	3,000
Total assets acquired	13,400
Current liabilities	$ 1,200
Aspen
Acquisitions
Total consideration			$ 359,100
Cash and cash equivalents acquired			13,500
Fair values of assets acquired and liabilities assumed in acquisition
Current assets			39,924
Property and equipment			4,829
Other assets			1,600
Capitalized software			24,000
Intangible assets			140,000
Goodwill			232,910
Total assets acquired			443,263
Current liabilities			30,099
Deferred tax liabilities			50,184
Other liabilities			3,904
Total liabilities assumed			84,187
Net assets acquired			$ 359,076

CREDIT CARD AND LOAN RECEIVABLES (Details) $ in Thousands	12 Months Ended
CREDIT CARD AND LOAN RECEIVABLES (Details) $ in Thousands	Dec. 31, 2013 USD ($) item	Dec. 31, 2012 USD ($) item	Dec. 31, 2011 USD ($)
CREDIT CARD AND LOAN RECEIVABLES
Principal receivables	$ 8,166,961	$ 7,097,951
Billed and accrued finance charges	343,521	291,476
Other credit card and loan receivables	124,482	60,205
Total credit card and loan receivables	8,634,964	7,449,632
Less credit card receivables - restricted for securitization investors	7,080,014	6,597,120
Less loan receivables held for sale	62,082
Other credit card and loan receivables	$ 1,492,868	852,512
Allowance for Loan Loss
The period over which the Company analyzes actual charge-offs	3 months
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	$ 240,800	191,100	$ 199,000
Balance at beginning of period	481,958	468,321	518,069
Provision for loan loss	345,758	285,479	300,316
Change in estimate for uncollectible unpaid interest and fees	11,000	11,000	(5,000)
Recoveries	112,538	97,131	89,764
Principal charge-offs	(448,085)	(379,973)	(429,828)
Other			(5,000)
Balance at end of period	$ 503,169	481,958	$ 468,321
Period beyond which interest and fee income accrue on credit card accounts	90 days
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
Credit card and loan receivables portfolio delinquency trend
Receivables outstanding - principal	$ 8,166,961	7,097,951
Principal receivables balances contractually delinquent:
31 to 60 days	114,430	100,479
61 to 90 days	74,700	62,546
91 or more days	150,425	120,163
Total	$ 339,555	$ 283,188
Percentage Principal receivables balances contractually delinquent :
Receivables outstanding - principal (as a percent)	100.00%	100.00%
Principal receivables balances contractually delinquent:
31 to 60 days (as a percent)	1.40%	1.40%
61 to 90 days (as a percent)	0.90%	0.90%
91 or more days (as a percent)	1.90%	1.70%
Total (as a percent)	4.20%	4.00%
Re-aged accounts as percentage of total credit card and loan receivables	1.40%	1.30%	1.90%
Modified Credit Card and Loan Receivables
Maximum period of time temporary programs' concessions remain in place	12 months
Impaired credit card and loan receivables	$ 118,100	$ 117,000
Allowance for loan loss on impaired credit card and loan receivables	$ 33,900	$ 39,700
Maximum percentage of credit card and loan receivables to total portfolio	3.00%	3.00%
Average recorded investment in impaired credit card and loan receivables	$ 117,400	$ 114,600
Interest income on modified credit card and loan receivables	$ 12,700	$ 15,500	$ 13,800
Troubled debt restructurings - credit card and loan receivables
Modifications related to troubled debt restructurings within credit card and loan receivables
Number of Restructurings \| item	147,200	134,187
Pre-modification Outstanding Balance	$ 134,892	$ 119,985
Post-modification Outstanding Balance	$ 134,799	$ 119,856
Troubled debt restructurings that subsequently defaulted - credit card and loan receivables
Modifications related to troubled debt restructurings within credit card and loan receivables
Number of Restructurings \| item	63,590	55,198
Outstanding Balance	$ 60,490	$ 53,806

CREDIT CARD AND LOAN RECEIVABLES (Details 2) AC in Thousands, $ in Thousands	Dec. 31, 2013 USD ($) AC	Dec. 31, 2012 USD ($) AC
Age of Accounts Since Origination
Number of Active Accounts with Balances \| AC	18,548	17,114
Percentage of Active Accounts with Balances	100.00%	100.00%
Principal Receivables Outstanding \| $	$ 8,166,961	$ 7,097,951
Percentage of Principal Receivables Outstanding	100.00%	100.00%
0-12 Months
Age of Accounts Since Origination
Number of Active Accounts with Balances \| AC	5,048	4,287
Percentage of Active Accounts with Balances	27.20%	25.10%
Principal Receivables Outstanding \| $	$ 1,962,153	$ 1,545,955
Percentage of Principal Receivables Outstanding	24.10%	21.80%
13-24 Months
Age of Accounts Since Origination
Number of Active Accounts with Balances \| AC	2,550	2,216
Percentage of Active Accounts with Balances	13.70%	12.90%
Principal Receivables Outstanding \| $	$ 1,072,648	$ 867,230
Percentage of Principal Receivables Outstanding	13.10%	12.20%
25-36 Months
Age of Accounts Since Origination
Number of Active Accounts with Balances \| AC	1,799	1,580
Percentage of Active Accounts with Balances	9.70%	9.20%
Principal Receivables Outstanding \| $	$ 826,911	$ 676,362
Percentage of Principal Receivables Outstanding	10.10%	9.50%
37-48 Months
Age of Accounts Since Origination
Number of Active Accounts with Balances \| AC	1,318	1,297
Percentage of Active Accounts with Balances	7.10%	7.60%
Principal Receivables Outstanding \| $	$ 622,766	$ 616,296
Percentage of Principal Receivables Outstanding	7.60%	8.70%
49-60 Months
Age of Accounts Since Origination
Number of Active Accounts with Balances \| AC	1,104	1,053
Percentage of Active Accounts with Balances	6.00%	6.20%
Principal Receivables Outstanding \| $	$ 557,407	$ 502,217
Percentage of Principal Receivables Outstanding	6.80%	7.10%
Over 60 Months
Age of Accounts Since Origination
Number of Active Accounts with Balances \| AC	6,729	6,681
Percentage of Active Accounts with Balances	36.30%	39.00%
Principal Receivables Outstanding \| $	$ 3,125,076	$ 2,889,891
Percentage of Principal Receivables Outstanding	38.30%	40.70%

CREDIT CARD AND LOAN RECEIVABLES (Details 3) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months)
Principal Receivables Outstanding	$ 8,166,961	$ 7,097,951
Percentage of Principal Receivables Outstanding	100.00%	100.00%
Transfer of Financial Assets
Purchase of loan receivables generated in the Bill Me Later program	$ 80,100
Bill Me Later loan receivables	61,600
No Score
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months)
Principal Receivables Outstanding	$ 162,366	$ 298,829
Percentage of Principal Receivables Outstanding	2.00%	4.20%
27.1% and higher
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months)
Principal Receivables Outstanding	$ 362,366	$ 286,046
Percentage of Principal Receivables Outstanding	4.40%	4.00%
17.1% - 27.0%
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months)
Principal Receivables Outstanding	$ 732,425	$ 613,184
Percentage of Principal Receivables Outstanding	9.00%	8.70%
12.6% - 17.0%
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months)
Principal Receivables Outstanding	$ 858,721	$ 713,489
Percentage of Principal Receivables Outstanding	10.50%	10.10%
3.7% - 12.5%
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months)
Principal Receivables Outstanding	$ 3,234,547	$ 2,840,964
Percentage of Principal Receivables Outstanding	39.60%	40.00%
1.9% - 3.6%
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months)
Principal Receivables Outstanding	$ 1,748,317	$ 1,492,289
Percentage of Principal Receivables Outstanding	21.40%	21.00%
Lower than 1.9%
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months)
Principal Receivables Outstanding	$ 1,068,219	$ 853,150
Percentage of Principal Receivables Outstanding	13.10%	12.00%

CREDIT CARD AND LOAN RECEIVABLES (Details 4) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Mar. 31, 2013	Aug. 31, 2012	Jul. 31, 2012	May 31, 2012	Mar. 31, 2012
Securitized Credit Card Receivables
Cash collateral, restricted deposits which are required to be used to cover losses on securitized credit card receivable	$ 0	$ 0	$ 0
Total credit card receivables - restricted for securitization investors	7,080,014	6,597,120
Principal amount of credit card receivables - restricted for securitization investors, 90 days or more past due	131,659	112,203
Net charge-offs of securitized principal	$ 311,111	$ 265,305	$ 306,301
Minimum
Securitized Credit Card Receivables
Minimum interests requirement (as a percent)	4.00%
Maximum
Securitized Credit Card Receivables
Minimum interests requirement (as a percent)	10.00%
Barneys New York Private Label Credit Card Portfolio
Portfolio Acquisitions
Purchase price of credit card portfolio				$ 37,100
Purchase price of credit card receivables portfolio, gross principal				35,300
Purchase price of credit card receivables portfolio, intangible assets				$ 1,800
The Talbots Private Label Credit Card Portfolio
Portfolio Acquisitions
Purchase price of credit card portfolio					$ 163,300
Purchase price of credit card receivables portfolio, gross principal					133,400
Purchase price of credit card receivables portfolio, intangible assets					$ 29,900
The Bon-Ton Stores Private Label Credit Card Portfolio
Portfolio Acquisitions
Purchase price of credit card portfolio						$ 494,700
Purchase price of credit card receivables portfolio, gross principal						444,900
Purchase price of credit card receivables portfolio, intangible assets						$ 49,800
Premier Designs Private Label Credit Card Portfolio
Portfolio Acquisitions
Purchase price of credit card portfolio							$ 24,300
Purchase price of credit card receivables portfolio, gross principal							22,900
Purchase price of credit card receivables portfolio, intangible assets							$ 1,400
Pier 1 Private Label Credit Card Portfolio
Portfolio Acquisitions
Purchase price of credit card portfolio								$ 97,700
Purchase price of credit card receivables portfolio, gross principal								96,200
Purchase price of credit card receivables portfolio, intangible assets								$ 1,500
Gulf Credit Union Private Label Credit Card Portfolio
Portfolio Acquisitions
Purchase price of credit card portfolio	$ 9,600
Purchase price of credit card receivables portfolio, gross principal	8,300
Purchase price of credit card receivables portfolio, intangible assets	1,700
Purchase price of credit card receivables portfolio, assumed customer liabilities	$ 400

REDEMPTION SETTLEMENT ASSETS (Details) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012
REDEMPTION SETTLEMENT ASSETS
Cost	$ 503,576	$ 482,176
Unrealized Gains	7,083	10,613
Unrealized Losses	(310)	(99)
Total	510,349	492,690
Net carrying value of the redemption settlement assets by contractual maturity
Due in one year or less	195,230
Due after one year through five years	308,346
Total	503,576
Estimated fair value of the redemption settlement assets by contractual maturity
Due in one year or less	196,584
Due after one year through five years	313,765
Total	510,349	492,690
Cash and cash equivalents
REDEMPTION SETTLEMENT ASSETS
Cost	73,984	40,266
Total	73,984	40,266
Estimated fair value of the redemption settlement assets by contractual maturity
Total	73,984	40,266
Government bonds
REDEMPTION SETTLEMENT ASSETS
Cost		5,064
Unrealized Gains		53
Total		5,117
Estimated fair value of the redemption settlement assets by contractual maturity
Total		5,117
Corporate bonds
REDEMPTION SETTLEMENT ASSETS
Cost	429,592	436,846
Unrealized Gains	7,083	10,560
Unrealized Losses	(310)	(99)
Total	436,365	447,307
Estimated fair value of the redemption settlement assets by contractual maturity
Total	436,365	447,307
Fair value for investments in unrealized loss position
Less than 12 months	$ 80,500	$ 36,500

PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	12 Months Ended
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Property and equipment
Total	$ 792,902	$ 677,850
Accumulated depreciation	(493,714)	(424,822)
Property and equipment, net	299,188	253,028
Depreciation
Depreciation and other amortization	53,700	46,600	$ 44,800
Amortization of capitalized software development	33,900	30,000	$ 29,700
Computer software and development
Property and equipment
Total	373,844	293,727
Furniture and equipment
Property and equipment
Total	263,373	225,062
Land, buildings and leasehold improvements
Property and equipment
Total	106,197	99,644
Construction in progress
Property and equipment
Total	$ 49,488	$ 59,417

INTANGIBLE ASSETS AND GOODWILL (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Schedule of Finite and Indefinite-lived Intangible Assets
Finite lived assets, gross	$ 964,561	$ 988,483
Accumulated Amortization	(516,507)	(417,959)
Finite lived assets, net	448,054	570,524
Total Intangible Assets
Gross Assets	976,911	1,000,833
Accumulated Amortization	(516,507)	(417,959)
Net	460,404	582,874
Trade names
Indefinite Lived Assets
Indefinite lived assets	12,350	12,350
Total Intangible Assets
Net	12,350	12,350
Customer contracts and lists
Schedule of Finite and Indefinite-lived Intangible Assets
Finite lived assets, gross	440,200	440,200
Accumulated Amortization	(187,350)	(124,351)
Finite lived assets, net	252,850	315,849
Total Intangible Assets
Accumulated Amortization	$ (187,350)	$ (124,351)
Customer contracts and lists \| Minimum
Amortization Life and Method
Useful life	3 years	3 years
Customer contracts and lists \| Maximum
Amortization Life and Method
Useful life	12 years	12 years
Premium on purchased credit card portfolios
Schedule of Finite and Indefinite-lived Intangible Assets
Finite lived assets, gross	$ 216,041	$ 237,800
Accumulated Amortization	(118,006)	(108,227)
Finite lived assets, net	98,035	129,573
Total Intangible Assets
Accumulated Amortization	$ (118,006)	$ (108,227)
Premium on purchased credit card portfolios \| Minimum
Amortization Life and Method
Useful life	5 years	5 years
Premium on purchased credit card portfolios \| Maximum
Amortization Life and Method
Useful life	10 years	10 years
Customer database
Schedule of Finite and Indefinite-lived Intangible Assets
Finite lived assets, gross	$ 161,700	$ 161,700
Accumulated Amortization	(122,230)	(102,706)
Finite lived assets, net	39,470	58,994
Total Intangible Assets
Accumulated Amortization	$ (122,230)	$ (102,706)
Customer database \| Minimum
Amortization Life and Method
Useful life	4 years	4 years
Customer database \| Maximum
Amortization Life and Method
Useful life	10 years	10 years
Collector database
Schedule of Finite and Indefinite-lived Intangible Assets
Finite lived assets, gross	$ 65,895	$ 70,550
Accumulated Amortization	(60,711)	(63,980)
Finite lived assets, net	$ 5,184	$ 6,570
Amortization Life and Method
Useful life	30 years	30 years
Declining balance (as a percent)	15.00%	15.00%
Total Intangible Assets
Accumulated Amortization	$ (60,711)	$ (63,980)
Tradenames
Schedule of Finite and Indefinite-lived Intangible Assets
Finite lived assets, gross	58,567	59,102
Accumulated Amortization	(15,443)	(10,139)
Finite lived assets, net	43,124	48,963
Total Intangible Assets
Accumulated Amortization	$ (15,443)	$ (10,139)
Tradenames \| Minimum
Amortization Life and Method
Useful life	4 years	4 years
Tradenames \| Maximum
Amortization Life and Method
Useful life	15 years	15 years
Purchased data lists
Schedule of Finite and Indefinite-lived Intangible Assets
Finite lived assets, gross	$ 17,567	$ 14,540
Accumulated Amortization	(11,959)	(8,527)
Finite lived assets, net	5,608	6,013
Total Intangible Assets
Accumulated Amortization	$ (11,959)	$ (8,527)
Purchased data lists \| Minimum
Amortization Life and Method
Useful life	1 year	1 year
Purchased data lists \| Maximum
Amortization Life and Method
Useful life	5 years	5 years
Favorable lease
Schedule of Finite and Indefinite-lived Intangible Assets
Finite lived assets, gross	$ 3,291	$ 3,291
Accumulated Amortization	(375)	(29)
Finite lived assets, net	$ 2,916	$ 3,262
Amortization Life and Method
Useful life	10 years	10 years
Total Intangible Assets
Accumulated Amortization	$ (375)	$ (29)
Noncompete agreements
Schedule of Finite and Indefinite-lived Intangible Assets
Finite lived assets, gross	1,300	1,300
Accumulated Amortization	(433)
Finite lived assets, net	$ 867	$ 1,300
Amortization Life and Method
Useful life	3 years	3 years
Total Intangible Assets
Accumulated Amortization	$ (433)

INTANGIBLE ASSETS AND GOODWILL (Details 2) - USD ($) $ in Thousands			12 Months Ended
	Dec. 31, 2012	Nov. 30, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Intangible assets
Amortization expense			$ 128,500	$ 90,300	$ 78,700
Estimated amortization expense related to intangible assets for the next five years and thereafter
2014			118,945
2015			94,436
2016			77,873
2017			52,172
2018			42,539
2019 & thereafter			62,089
HMI
Intangible assets
Acquired intangible assets		$ 194,800
HMI \| Customer relationships
Intangible assets
Acquired intangible assets		$ 170,000
Weighted average life		6 years 4 months 24 days
HMI \| Trade names
Intangible assets
Acquired intangible assets		$ 21,500
Weighted average life		8 years 8 months 12 days
HMI \| Favorable lease
Intangible assets
Acquired intangible assets		$ 3,300
Weighted average life		9 years 6 months
Advecor
Intangible assets
Acquired intangible assets	$ 8,800
Advecor \| Customer relationships
Intangible assets
Acquired intangible assets	$ 7,500
Weighted average life	3 years 6 months
Advecor \| Noncompete agreements
Intangible assets
Acquired intangible assets	$ 1,300
Weighted average life	3 years
Credit card portfolio
Intangible assets
Acquired intangible assets			3,500	82,600
Credit card portfolio \| Customer relationships
Intangible assets
Acquired intangible assets			$ 2,000	$ 44,500
Weighted average life			5 years	5 years
Credit card portfolio \| Marketing relationships
Intangible assets
Acquired intangible assets			$ 1,500	$ 38,100
Weighted average life			9 years 2 months 12 days	6 years 7 months 6 days

INTANGIBLE ASSETS AND GOODWILL (Details 3) - USD ($) $ in Thousands	1 Months Ended		12 Months Ended
	Dec. 31, 2012	Nov. 30, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Goodwill
Beginning Balance			$ 1,751,053	$ 1,449,363
Goodwill acquired during year				294,275
Effects of foreign currency translation			(15,350)	7,415
Ending Balance	$ 1,751,053		1,735,703	1,751,053	$ 1,449,363
Goodwill impairment			0	0	0
HMI
Goodwill
Beginning Balance	291,249
Goodwill acquired during year		$ 291,300
Ending Balance		$ 291,249
Advecor
Goodwill
Beginning Balance			3,000
Goodwill acquired during year	3,000
Ending Balance	3,000			3,000
LoyaltyOne
Goodwill
Beginning Balance			248,070	241,697
Effects of foreign currency translation			(15,621)	6,373
Ending Balance	248,070		232,449	248,070	241,697
Epsilon
Goodwill
Beginning Balance			1,241,251	945,934
Goodwill acquired during year				294,275
Effects of foreign currency translation			271	1,042
Ending Balance	1,241,251		1,241,522	1,241,251	945,934
Private Label Services and Credit
Goodwill
Beginning Balance			261,732	261,732
Ending Balance	$ 261,732		$ 261,732	$ 261,732	$ 261,732

ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012
ACCRUED EXPENSES
Accrued payroll and benefits	$ 137,982	$ 131,341
Accrued marketing	30,612	28,876
Accrued taxes	18,178	48,202
Accrued other liabilities	75,535	66,206
Accrued expenses	$ 262,307	$ 274,625

DEBT (Details)	1 Months Ended					3 Months Ended		12 Months Ended
DEBT (Details)	Feb. 28, 2014 USD ($)	Dec. 31, 2013 USD ($) $ / shares shares	Oct. 31, 2013 USD ($)	Sep. 30, 2013 USD ($)	Jul. 31, 2013 USD ($)	Jun. 30, 2009 USD ($)	Sep. 30, 2008 USD ($)	Dec. 31, 2013 USD ($) item $ / shares shares	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Aug. 02, 2013 USD ($)	Nov. 30, 2012 USD ($)	Mar. 31, 2012 USD ($)
Debt
Less current portion		$ (364,489,000)						$ (364,489,000)	$ (803,269,000)
Long-term and other debt		2,435,792,000						2,435,792,000	2,051,570,000
Less: current portion		(1,544,059,000)						(1,544,059,000)	(1,092,753,000)
Long-term portion		1,272,302,000						1,272,302,000	1,135,658,000
Less: current portion		(1,025,000,000)						(1,025,000,000)	(1,474,054,000)
Long-term portion		3,566,916,000						3,566,916,000	2,656,916,000
Components of the notes
Principal amount of liability component		2,815,658,000						2,815,658,000
Unamortized discount		(15,377,000)						(15,377,000)
Net carrying value of liability component		2,800,281,000						2,800,281,000
Interest expense on debt recognized
Amortization of discount on liability component								65,677,000	82,452,000	$ 73,787,000
Maturities of long-term and other debt
2014		376,377,000						376,377,000
2015		46,875,000						46,875,000
2016		62,500,000						62,500,000
2017		462,500,000						462,500,000
2018		1,367,406,000						1,367,406,000
Thereafter		500,000,000						500,000,000
Total maturities		2,815,658,000						2,815,658,000
Unamortized discount		(15,377,000)						(15,377,000)
Net carrying value of liability component		2,800,281,000						2,800,281,000
Maturities of non-recourse borrowings of consolidated securitization entities and deposits
2014		2,569,059,000						2,569,059,000
2015		1,589,081,000						1,589,081,000
2016		1,010,334,000						1,010,334,000
2017		585,704,000						585,704,000
2018		789,471,000						789,471,000
Thereafter		864,628,000						864,628,000
Total maturities		7,408,277,000						7,408,277,000
Total non-recourse borrowings of consolidated securitization entities and deposits		7,408,277,000						7,408,277,000
Maturities of long-term and other debt and non-recourse borrowings of consolidated securitization entities and deposits
2014		2,945,436,000						2,945,436,000
2015		1,635,956,000						1,635,956,000
2016		1,072,834,000						1,072,834,000
2017		1,048,204,000						1,048,204,000
2018		2,156,877,000						2,156,877,000
Thereafter		1,364,628,000						1,364,628,000
Total maturities		10,223,935,000						10,223,935,000
Unamortized discount on convertible senior notes		(15,377,000)						(15,377,000)
Total long-term debt and non-recourse borrowings of consolidated securitization entities and deposits		10,208,558,000						10,208,558,000
Total deposits
Debt
Deposits		2,816,361,000						2,816,361,000	2,228,411,000
Less: current portion		(1,544,059,000)						(1,544,059,000)	(1,092,753,000)
Long-term portion		1,272,302,000						1,272,302,000	1,135,658,000
Certificates of deposit
Debt
Deposits		$ 2,486,533,000						$ 2,486,533,000	$ 1,974,158,000
Interest Rate - minimum (as a percent)								0.15%	0.20%
Interest Rate - maximum (as a percent)								3.55%	5.25%
Weighted average interest rate (as a percent)		1.07%						1.07%	1.18%
Certificates of deposit \| Maximum
Interest expense on debt recognized
Maturity term								7 years
Certificates of deposit \| Minimum
Interest expense on debt recognized
Maturity term								3 months
Money market deposits
Debt
Deposits		$ 329,828,000						$ 329,828,000	$ 254,253,000
Interest Rate - minimum (as a percent)								0.01%
Interest Rate - maximum (as a percent)								0.12%
Money market deposits \| Comenity Bank and Comenity Capital Bank
Debt
Deposits		$ 329,800,000						$ 329,800,000	$ 254,300,000
Interest Rate - minimum (as a percent)								0.01%	0.01%
Interest Rate - maximum (as a percent)								0.12%	0.26%
Weighted average interest rate (as a percent)		0.04%						0.04%	0.22%
Non-recourse borrowings of consolidated securitization entities
Debt
Total non-recourse borrowings of consolidated securitization		$ 4,591,916,000						$ 4,591,916,000	$ 4,130,970,000
Less: current portion		(1,025,000,000)						(1,025,000,000)	(1,474,054,000)
Long-term portion		3,566,916,000						3,566,916,000	2,656,916,000
Retained amount of subordinated class of notes								800,000,000
Components of the notes
Principal amount of liability component		3,800,000,000						3,800,000,000
Maturities of long-term and other debt
Total maturities		$ 3,800,000,000						$ 3,800,000,000
Non-recourse borrowings of consolidated securitization entities \| Maximum
Debt
Interest Rate (as a percent)		6.75%						6.75%
Non-recourse borrowings of consolidated securitization entities \| Minimum
Debt
Interest Rate (as a percent)		0.91%						0.91%
Non-recourse borrowings of consolidated securitization entities \| 2013 issuance \| Maximum
Debt
Interest Rate (as a percent)		1.61%						1.61%
Non-recourse borrowings of consolidated securitization entities \| 2013 issuance \| Minimum
Debt
Interest Rate (as a percent)		0.91%						0.91%
Fixed rate asset-backed term note securities
Debt
Total non-recourse borrowings of consolidated securitization		$ 3,001,916,000						$ 3,001,916,000	2,403,555,000
Interest Rate - minimum (as a percent)								0.91%
Interest Rate - maximum (as a percent)								6.75%
Floating rate asset-backed term note securities
Debt
Total non-recourse borrowings of consolidated securitization									545,700,000
Conduit asset-backed securities
Debt
Total non-recourse borrowings of consolidated securitization		1,590,000,000						$ 1,590,000,000	1,181,715,000
Interest Rate - minimum (as a percent)								1.18%
Interest Rate - maximum (as a percent)								1.70%
Maximum borrowing capacity		2,100,000,000						$ 2,100,000,000
Debt instrument description of Variable rate basis								LIBOR
Interest expense on debt recognized
Number of facilities \| item								3
Amount drawn		$ 1,600,000,000						$ 1,600,000,000
Conduit asset-backed securities \| Maximum
Interest expense on debt recognized
Variable interest rates (as a percent)		1.70%						1.70%
Conduit asset-backed securities \| Minimum
Interest expense on debt recognized
Variable interest rates (as a percent)		1.18%						1.18%
Master Trust I \| 2013 issuance
Debt
Debt repaid by the company								$ 822,300,000
Amount borrowed								1,200,000,000
Retained amount of subordinated class of notes								282,900,000
Master Trust I \| 2013 issuance \| Subsequent event
Components of the notes
Principal amount of liability component	$ 800,000,000
Maturities of long-term and other debt
Total maturities	800,000,000
Master Trust I \| February 2014 issuance \| Subsequent event
Debt
Amount borrowed	625,000,000
Retained amount of subordinated class of notes	$ 175,000,000
Master Trust I \| February 2014 issuance \| LIBOR \| Subsequent event
Debt
Debt instrument description of Variable rate basis	LIBOR
Basis spread on variable rate (as a percent)	0.38%
Long-term and other debt
Debt
Total long-term and other debt		$ 2,800,281,000						2,800,281,000	2,854,839,000
Less current portion		(364,489,000)						(364,489,000)	(803,269,000)
Long-term and other debt		2,435,792,000						2,435,792,000	2,051,570,000
2013 Credit Facility
Debt
Total long-term and other debt		$ 336,000,000						$ 336,000,000
Weighted average interest rate (as a percent)		2.14%						2.14%
Maximum borrowing capacity		$ 1,250,000,000			$ 1,142,500,000			$ 1,250,000,000
Total availability under Credit Facility		914,000,000						914,000,000
Increase in Credit Facility		25,000,000	$ 25,000,000	$ 57,500,000
2013 Credit Agreement, U.S. sublimit for Canadian Dollar Borrowings
Debt
Maximum borrowing capacity					65,000,000
2013 Credit Agreement, sublimit for swing line loans
Debt
Maximum borrowing capacity					65,000,000
2013 Credit Agreement, uncommitted accordion feature
Debt
Maximum borrowing capacity					500,000,000
2013 Term Loan
Debt
Total long-term and other debt		$ 1,234,688,000						$ 1,234,688,000
Weighted average interest rate (as a percent)		1.92%						1.92%
Total borrowings		$ 1,250,000,000			$ 1,142,500,000			$ 1,250,000,000
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					2.50%
Aggregate principal payments as a percentage of the initial term loan amount in each of the third, fourth and fifth year of the term loan equal quarterly installments					5.00%
Amount borrowed		24,800,000	$ 25,000,000	$ 57,500,000
Base rate loans \| Canadian dollars \| Prime rate
Debt
Debt instrument description of Variable rate basis					prime rate
Base rate loans \| Canadian dollars \| CDOR
Debt
Debt instrument description of Variable rate basis					Canadian Dollar Offered Rate
Basis spread on variable rate (as a percent)					1.00%
Base rate loans \| Canadian dollars \| Maximum \| CDOR
Debt
Applicable margin over variable rate (as a percent)					1.00%
Base rate loans \| Canadian dollars \| Minimum \| CDOR
Debt
Applicable margin over variable rate (as a percent)					0.25%
Base rate loans \| U.S. dollars \| LIBOR
Debt
Debt instrument description of Variable rate basis					LIBOR
Basis spread on variable rate (as a percent)					1.00%
Base rate loans \| U.S. dollars \| Prime rate
Debt
Debt instrument description of Variable rate basis					prime rate
Base rate loans \| U.S. dollars \| Federal funds rate
Debt
Debt instrument description of Variable rate basis					Federal funds rate
Basis spread on variable rate (as a percent)					0.50%
Base rate loans \| U.S. dollars \| Maximum \| LIBOR
Debt
Applicable margin over variable rate (as a percent)					1.00%
Base rate loans \| U.S. dollars \| Minimum \| LIBOR
Debt
Applicable margin over variable rate (as a percent)					0.25%
Eurodollar loans \| U.S. dollars \| LIBOR
Debt
Debt instrument description of Variable rate basis					London interbank market
Eurodollar loans \| U.S. dollars \| Maximum \| LIBOR
Debt
Applicable margin over variable rate (as a percent)					2.00%
Eurodollar loans \| U.S. dollars \| Minimum \| LIBOR
Debt
Applicable margin over variable rate (as a percent)					1.25%
2011 Term Loan
Debt
Total long-term and other debt									885,928,000
Maximum borrowing capacity under certain circumstances					$ 903,100,000
Senior Notes due 2017
Debt
Total long-term and other debt		$ 396,511,000						$ 396,511,000	395,734,000			$ 400,000,000
Interest Rate (as a percent)		5.25%						5.25%				5.25%
Components of the notes
Principal amount of liability component		$ 400,000,000						$ 400,000,000
Unamortized discount		$ (3,500,000)						$ (3,500,000)				$ (4,300,000)
Period over which discount will be amortized as interest expense								3 years 10 months 24 days
Interest expense on debt recognized
Issue price as a percentage of the aggregate principal amount												98.912%
Effective annual interest rate (as a percent)		5.50%						5.50%
Maturities of long-term and other debt
Total maturities		$ 400,000,000						$ 400,000,000
Unamortized discount		(3,500,000)						(3,500,000)				$ (4,300,000)
Senior Notes Due 2020
Debt
Total long-term and other debt		$ 500,000,000						$ 500,000,000	500,000,000				$ 500,000,000
Interest Rate (as a percent)		6.375%						6.375%					6.375%
2011 Revolving line of credit
Debt
Maximum borrowing capacity under certain circumstances					917,500,000
Convertible Senior Notes
Components of the notes
Carrying amount of equity component		$ 115,900,000						$ 115,900,000	368,700,000
Principal amount of liability component		345,000,000						345,000,000	1,150,000,000
Unamortized discount		(11,900,000)						(11,900,000)	(76,800,000)
Net carrying value of liability component		333,100,000						333,100,000	1,073,200,000
If-converted value of common stock								$ 1,906,900,000	2,534,400,000
Period over which discount will be amortized as interest expense								4 months 24 days
Interest expense on debt recognized
Interest expense calculated on contractual interest rate								$ 24,169,000	30,475,000	30,475,000
Amortization of discount on liability component								64,900,000	82,366,000	73,787,000
Total interest expense on convertible senior notes								$ 89,069,000	$ 112,841,000	$ 104,262,000
Effective interest rate (annualized) (as a percent)								12.40%	11.00%	11.00%
Maturities of long-term and other debt
Total maturities		345,000,000						$ 345,000,000	$ 1,150,000,000
Unamortized discount		(11,900,000)						(11,900,000)	(76,800,000)
Net carrying value of liability component		$ 333,100,000						$ 333,100,000	1,073,200,000
Convertible senior notes due 2013
Debt
Total long-term and other debt									768,831,000
Interest Rate (as a percent)		1.75%						1.75%
Amount borrowed							$ 805,000,000
Amount settled in cash											$ 772,600,000
Principal amount of debt surrendered for conversion											772,500,000
Conversion amount											$ 1,790,300,000
Number of shares covered in the convertible note hedge transactions \| shares								10,200,000
Amount received from convertible note hedge counterparties		$ 1,017,700,000						$ 1,017,700,000
Number of warrants net settled by issuing shares of common stock \| shares								5,100,000
Maximum number of shares in which the holder of the warrant has the right but not the obligation to purchase from the issuer at a specified price \| shares								10,200,000
Shares of common stock issued to net settle warrants \| shares								2,800,000
Warrants exercisable \| shares		5,100,000						5,100,000
Initial strike price of shares acquired in warrant transaction (in dollars per share) \| $ / shares								$ 112.14
Principal amount of debt surrendered for conversion and settled in cash					$ 32,500,000
Convertible senior notes due 2014
Debt
Total long-term and other debt		$ 333,082,000						$ 333,082,000	304,333,000
Interest Rate (as a percent)		4.75%				4.75%		4.75%
Amount borrowed						$ 345,000,000
Number of shares covered in the convertible note hedge transactions \| shares								7,300,000
Maximum number of shares in which the holder of the warrant has the right but not the obligation to purchase from the issuer at a specified price \| shares								7,300,000
Initial strike price of shares acquired in warrant transaction (in dollars per share) \| $ / shares								$ 70.54
Number of tranches of expiring warrants \| item								79
Cost of the Convertible Note Hedges								$ 50,700,000
Conversion ratio, principal amount, denominator								$ 1,000
Number of days within 30 consecutive trading days during which the closing price of the entity's common stock must exceed the conversion price for the notes to be redeemable								20 days
Number of consecutive trading days during which the closing price of the entity's common stock must exceed the conversion price for at least 20 days in order for the notes to be redeemable								30 days
Convertibility of debt, closing price of stock test, percentage of stock price to conversion price that must be exceeded								130.00%
Conversion price (in dollars per share) \| $ / shares		$ 47.57						$ 47.57
Convertibility of debt, trading price of debt test, length of consecutive trading day period that debt will be convertible								5 days
Convertibility of debt, trading price of debt test, length of consecutive trading-day period that the trading price of the debt must not exceed calculated target								5 days
Convertibility of debt, trading price of debt test, percentage of closing price of stock used to calculate the target that the debt price must stay below								98.00%
Conversion ratio, number of shares per $1,000 principal amount, numerator \| shares								21.0235
Number of warrants expiring in 79 equal tranches for one Hedge Counterparty \| shares								45,331
Number of warrants expiring in 80th tranche for one Hedge counterparty \| shares								45,405
Number of warrants expiring in 79 equal tranches for two Hedge Counterparties \| shares								22,665
Number of warrants expiring in 80th tranche for two Hedge counterparties, under the first option \| shares								22,741
Number of warrants expiring in 80th tranche for two 2014 Hedge Counterparties in the second option \| shares								22,743
Number of shares purchased under prepaid forwards \| shares								1,857,400
Price of shares purchased under prepaid forwards								$ 74,900,000
Capital lease obligations and other debt
Debt
Total long-term and other debt									$ 13,000

DEBT (Details 2) - USD ($) $ in Millions	12 Months Ended
DEBT (Details 2) - USD ($) $ in Millions	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Securitization funding costs
Activity related to company's outstanding interest rate contracts and location
Gain on derivative instruments	$ 8.5	$ 29.6	$ 31.7

DEBT (Details 3) - Not designated as hedging instrument - Interest rate derivatives $ in Thousands	12 Months Ended
	Dec. 31, 2012 USD ($)
Notional amount, fair value and classification of the company's outstanding interest rate contracts
Notional Amount	$ 545,700
Weighted Average Years to Maturity	6 months 4 days
Other assets
Notional amount, fair value and classification of the company's outstanding interest rate contracts
Fair Value	$ 4
Other current liabilities
Notional amount, fair value and classification of the company's outstanding interest rate contracts
Fair Value	$ 8,515

DEFERRED REVENUE (Details) - USD ($) $ in Thousands	12 Months Ended
DEFERRED REVENUE (Details) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012
Movement in deferred revenue
Beginning balance	$ 1,249,061	$ 1,226,436
Cash proceeds	732,209	787,211
Revenue recognized	(762,878)	(799,419)
Other	276	1,000
Effects of foreign currency translation	(81,482)	33,833
Ending balance	1,137,186	1,249,061
Amounts recognized in the consolidated balance sheets:
Current liabilities	966,438	1,055,323
Non-current liabilities	170,748	193,738
Service
Movement in deferred revenue
Beginning balance	380,013	358,973
Cash proceeds	203,735	216,772
Revenue recognized	(212,301)	(205,740)
Effects of foreign currency translation	(24,816)	10,008
Ending balance	346,631	380,013
Amounts recognized in the consolidated balance sheets:
Current liabilities	175,883
Non-current liabilities	170,748
Redemption
Movement in deferred revenue
Beginning balance	869,048	867,463
Cash proceeds	528,474	570,439
Revenue recognized	(550,577)	(593,679)
Other	276	1,000
Effects of foreign currency translation	(56,666)	23,825
Ending balance	790,555	$ 869,048
Amounts recognized in the consolidated balance sheets:
Current liabilities	$ 790,555

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
AIR MILES Reward Program
Letters of credit and other assurances	$ 188,200
Leases
Lease expense	80,500	$ 71,500	$ 61,400
Future Minimum Rental Payments
2014	67,289
2015	63,950
2016	56,239
2017	50,345
2018	32,551
Thereafter	116,845
Total	$ 387,219
Regulatory Matters
Tier 1 capital ratio for well capitalized institutions (as a percent)	6.00%
Total capital ratio for well capitalized institutions (as a percent)	10.00%
Leverage ratio for well capitalized institutions (as a percent)	5.00%
Tier 1 capital ratio for adequately capitalized institutions (as a percent)	4.00%
Total capital ratio for adequately capitalized institutions (as a percent)	8.00%
Leverage ratio for adequately capitalized institutions (as a percent)	4.00%
Leverage ratio for adequately capitalized institutions, allowed in some cases (as a percent)	3.00%
Comenity Capital Bank
Regulatory Matters
Tier 1 capital ratio (as a percent)	14.10%
Total capital ratio (as a percent)	15.40%
Leverage ratio (as a percent)	14.00%
Comenity Bank
Regulatory Matters
Tier 1 capital ratio (as a percent)	14.20%
Total capital ratio (as a percent)	15.50%
Leverage ratio (as a percent)	14.20%

COMMITMENTS AND CONTINGENCIES (Details 2) item in Millions	Dec. 31, 2013 USD ($) item
Cardholders
Approximate number of cardholders \| item	39.3
Average unused lines of credit per account \| $	$ 1,434
Number of accounts owned by the entity through agreements with PayPal \| item	9.5
Average unused lines of credit per account owned by the entity through agreements with PayPal \| $	$ 1,552

STOCKHOLDERS' EQUITY (Details) - USD ($) $ in Millions					12 Months Ended
STOCKHOLDERS' EQUITY (Details) - USD ($) $ in Millions	Dec. 05, 2013	Jan. 02, 2013	Dec. 13, 2011	Sep. 13, 2010	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Jul. 01, 2010
Stock Repurchase Programs
Amount of company's outstanding common stock authorized to be repurchased	$ 400.0	$ 400.0	$ 400.0	$ 400.0
Number of shares repurchased					1,400,000	1,000,000	2,900,000
Total cost of shares repurchased					$ 231.1	$ 137.4	$ 240.9
Unused balance under stock repurchase program					$ 168.9
2010 Omnibus Incentive Plan
Stock Compensation Plans
Shares of common stock reserved for grant								3,000,000

STOCKHOLDERS' EQUITY (Details 2) - USD ($) $ in Thousands	12 Months Ended
STOCKHOLDERS' EQUITY (Details 2) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Stock-based compensation expense	$ 59,183	$ 50,497	$ 43,486
Forfeiture rate (as a percent)	5.00%	5.00%	5.00%
Unrecognized expenses	$ 70,900
Approximate weighted average period for recognizing expenses	1 year 2 months 12 days
Cost of operations
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Stock-based compensation expense	$ 40,264	$ 32,654	$ 25,766
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Stock-based compensation expense	$ 18,919	$ 17,843	$ 17,720

STOCKHOLDERS' EQUITY (Details 3) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Restricted Stock Unit Awards
Number of Shares
Balance at the beginning of the period (in shares)	1,088,992	1,201,761	2,561,198
Shares granted	501,781	654,726	615,719
Shares vested	(571,799)	(635,401)	(916,742)
Shares cancelled	(64,459)	(132,094)	(1,058,414)
Balance at the end of the period (in shares)	954,515	1,088,992	1,201,761
Outstanding and Expected to Vest (in shares)	884,545
Weighted Average Fair Value
Balance at the beginning of the period (in dollars per share)	$ 93.33	$ 65.39	$ 51.93
Shares granted (in dollars per share)	155.31	110.18	83.28
Shares vested (in dollars per share)	85.15	59.06	49.81
Shares cancelled (in dollars per share)	115.83	86.13	56.73
Balance at the end of the period (in dollars per share)	121.86	$ 93.33	$ 65.39
Outstanding and Expected to Vest (in dollars per share)	$ 120.56
Total fair value of units vested	$ 50.4	$ 37.5	$ 45.7
Aggregate intrinsic value of units outstanding and expected to vest	$ 232.6
Weighted-average remaining contractual life	1 year 2 months 12 days
Performance-based restricted stock unit awards
Number of Shares
Balance at the beginning of the period (in shares)	773,841	856,572	1,787,473
Shares granted	409,575	527,080	457,180
Shares vested	(448,868)	(505,335)	(373,099)
Shares cancelled	(49,544)	(104,476)	(1,014,982)
Balance at the end of the period (in shares)	685,004	773,841	856,572
Weighted Average Fair Value
Number of shares that did not meet the specified performance criteria			939,190
Stock Compensation Plans, Additional Disclosures
Award vesting period	3 years
Service-based restricted stock unit awards
Number of Shares
Balance at the beginning of the period (in shares)	315,151	345,189	773,725
Shares granted	92,206	127,646	158,539
Shares vested	(122,931)	(130,066)	(543,643)
Shares cancelled	(14,915)	(27,618)	(43,432)
Balance at the end of the period (in shares)	269,511	315,151	345,189
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)	384,253	740,017	1,422,264
Exercised (in shares)	(143,577)	(355,764)	(669,712)
Forfeited (in shares)	(1,000)		(12,535)
Balance at the end of the period (in shares)	239,676	384,253	740,017
Vested and expected to vest (in shares)	239,676
Outstanding, Weighted Average Exercise Price, Beginning of Period (in dollars per share)	$ 42.80	$ 42.87	$ 40.12
Exercised, Weighted Average Exercise Price (in dollars per share)	36.30	42.95	37.24
Forfeited, Weighted Average Exercise Price (in dollars per share)	31.38		31.46
Outstanding, Weighted Average Exercise Price, End of Period (in dollars per share)	46.75	$ 42.80	$ 42.87
Vested and expected to vest, Weighted Average Exercise Price (in dollars per share)	$ 46.75
Exercisable, options (in shares)	239,676	384,253	740,017	1,422,264
Exercisable, weighted average exercise price (in dollars per share)	$ 46.75	$ 42.80	$ 42.87	$ 40.12
Stock options activity, additional disclosures
Total intrinsic value of stock options exercised	$ 25.7	$ 31.0	$ 33.9
Aggregate intrinsic value of stock options vested and exercisable	$ 51.8
Weighted average remaining contractual life of stock options vested and exercisable	1 year 9 months 18 days
Cash proceeds from stock options exercised	$ 5.2

EMPLOYEE BENEFIT PLANS (Details) - USD ($)		12 Months Ended
EMPLOYEE BENEFIT PLANS (Details) - USD ($)	Aug. 22, 2001	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Jul. 20, 2001
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		3 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		1,500,000
Holding period for shares purchased under ESPP		180 days
Number of shares registered for issuance	1,500,000
Number of shares issued under the ESPP		52,241
Weighted-average issue price of shares issued under the ESPP (in dollars per share)		$ 169.93
Number of shares issued under the ESPP since the inception of the plan		1,011,423
2010 Omnibus Incentive Plan
Maximum cash amount that may be awarded to any single participant		$ 7,500,000
401(k) and Retirement Savings Plan
Defined contribution plans
Service period after which employees begin receiving employer matching contribution		180 days
Minimum age limit of employees covered by the plan		18 years
Service period after which seasonal employees begin receiving employer matching contribution		12 months
Percentage of employees' contribution matched by dollar-to-dollar contribution by employer		3.00%
Additional employer matching contribution per dollar of employee's contribution for savings more than 3% and up to 5%		$ 0.50
Lower limit that the percentage must exceed, additionally matched by employer for each dollar of employee's contribution		3.00%
Maximum percentage additionally matched by employer for each dollar of employee's contribution		5.00%
Service period after which additional annual discretionary contributions vest		3 years
Age of employees, contributions vest immediately		65 years
Company's matching and discretionary contributions		$ 28,100,000	$ 22,000,000	$ 14,000,000
Number of shares registered for issuance					1,500,000
Number of shares available for issuance		759,194
Group Retirement Savings Plan and Deferred Profit Sharing Plan \| LoyaltyOne
Defined contribution plans
Company's matching and discretionary contributions		$ 2,100,000	$ 2,000,000	$ 2,000,000
Group Retirement Savings Plan \| LoyaltyOne
Defined contribution 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
Defined contribution plans
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%
Service period after which contributions vest		1 year

ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Accumulated Other Comprehensive Income
Balance at the beginning of the period	$ (21,861)
Changes in other comprehensive income (loss)	3,634	$ 1,195	$ 11,444
Balance at the end of the period	(18,227)	(21,861)
Net Unrealized Gains (Losses) on Securities
Accumulated Other Comprehensive Income
Balance at the beginning of the period	10,321	6,953	(20,082)
Changes in other comprehensive income (loss)	(6,132)	3,368	27,035
Balance at the end of the period	4,189	10,321	6,953
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income
Balance at the beginning of the period	(32,182)	(30,009)	(14,418)
Changes in other comprehensive income (loss)	9,766	(2,173)	(15,591)
Balance at the end of the period	(22,416)	(32,182)	(30,009)
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income
Balance at the beginning of the period	(21,861)	(23,056)	(34,500)
Changes in other comprehensive income (loss)	3,634	1,195	11,444
Balance at the end of the period	$ (18,227)	$ (21,861)	$ (23,056)

- Definition

Accumulated change in equity from transactions and other events and circumstances from non-owner sources, net of tax effect, at period end. Excludes Net Income (Loss), and accumulated changes in equity from transactions resulting from investments by owners and distributions to owners. Includes foreign currency translation items, certain pension adjustments, unrealized gains and losses on certain investments in debt and equity securities, other than temporary impairment (OTTI) losses related to factors other than credit losses on available-for-sale and held-to-maturity debt securities that an entity does not intend to sell and it is not more likely than not that the entity will be required to sell before recovery of the amortized cost basis, as well as changes in the fair value of derivatives related to the effective portion of a designated cash flow hedge.

+ References + Details

INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
INCOME TAXES (Details) - USD ($) $ in Thousands	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Components of income before income taxes:
Domestic									$ 547,757	$ 481,243	$ 332,010
Foreign									245,655	201,661	182,085
Income before income tax	$ 184,264	$ 214,753	$ 185,714	$ 208,681	$ 138,355	$ 190,106	$ 167,476	$ 186,967	793,412	682,904	514,095
Current
Federal									188,600	143,695	71,843
State									33,595	13,991	9,415
Foreign									32,134	696	70,514
Total current									254,329	158,382	151,772
Deferred
Federal									1,477	28,267	46,459
State									(1,485)	6,176	3,482
Foreign									42,921	67,823	(2,904)
Total deferred									42,913	102,266	47,037
Total provision for income taxes	66,391	81,875	69,274	79,702	54,694	70,561	63,655	71,738	$ 297,242	$ 260,648	$ 198,809
Federal statutory rate (as a percent)									35.00%	35.00%	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									$ 277,694	$ 239,016	$ 179,933
Increase (decrease) in income taxes resulting from:
State income taxes, net of federal benefit									20,871	13,109	8,383
Foreign earnings at other than U.S. rates									(9,225)	(4,328)	(7,131)
Canadian tax rate reductions										(7,128)	7,188
U.S. tax on foreign dividends, net of credits										15,617	5,228
Other									7,902	4,362	5,208
Total provision for income taxes	66,391	$ 81,875	$ 69,274	$ 79,702	54,694	$ 70,561	$ 63,655	$ 71,738	297,242	260,648	$ 198,809
Deferred tax assets
Deferred revenue	42,359				90,675				42,359	90,675
Allowance for doubtful accounts	192,546				186,503				192,546	186,503
Net operating loss carryforwards and other carryforwards	53,591				51,603				53,591	51,603
Derivatives					4,456					4,456
Stock-based compensation and other employee benefits	28,582				27,205				28,582	27,205
Accrued expenses and other	50,120				44,267				50,120	44,267
Total deferred tax assets	367,198				404,709				367,198	404,709
Valuation allowance	(22,414)				(22,542)				(22,414)	(22,542)
Deferred tax assets, net of valuation allowance	344,784				382,167				344,784	382,167
Deferred tax liabilities
Deferred income	244,612				203,658				244,612	203,658
Convertible note hedges	1,474				7,553				1,474	7,553
Depreciation	8,440				8,950				8,440	8,950
Intangible assets	147,366				172,065				147,366	172,065
Total deferred tax liabilities	401,892				392,226				401,892	392,226
Total - Net deferred tax liability	(57,108)				(10,059)				(57,108)	(10,059)
Amounts recognized in the consolidated balance sheets:
Current assets	216,195				237,268				216,195	237,268
Non-current assets	2,454				30,027				2,454	30,027
Non-current liabilities	(275,757)				(277,354)				(275,757)	(277,354)
Total - Net deferred tax liability	$ (57,108)				$ (10,059)				$ (57,108)	$ (10,059)

INCOME TAXES (Details 2) - USD ($) $ in Thousands	12 Months Ended
INCOME TAXES (Details 2) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Operating Loss, Carryforwards
Tax impact resulting from exercise of employee stock options and other employee stock program	$ 17,300	$ 21,400	$ 17,300
Income tax expenses (benefit) related to foreign rate changes	(7,100)		7,200
Reconciliation of unrecognized tax benefits
Balance at the beginning of the period	76,154	69,544	54,200
Increases related to prior years' tax positions	4,328	4,188	14,509
Decreases related to prior years' tax positions	(1,580)	(7,424)	(5,497)
Increases related to current year tax positions	23,567	11,703	9,581
Settlements during the period	(197)	(1,253)	(2,569)
Lapses of applicable statutes of limitation	(918)	(604)	(680)
Balance at the end of the period	101,354	76,154	69,544
Cumulative interest and penalties with respect to unrecognized tax benefits	18,500	15,500	15,100
Potential interest and penalties with respect to unrecognized tax benefits	2,100	300	(300)
Unrecognized tax benefits, if recognized, would impact effective tax rate	56,000	$ 37,500	$ 37,100
Federal
Operating Loss, Carryforwards
Net operating loss carryovers	20,100
Federal \| Capital losses
Operating Loss, Carryforwards
Net operating loss carryovers	4,600
Foreign
Operating Loss, Carryforwards
Tax credits	27,400
State
Operating Loss, Carryforwards
Net operating loss carryovers	452,800
Tax credits	6,100
State \| Capital losses
Operating Loss, Carryforwards
Net operating loss carryovers	$ 4,600

FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012
Financial assets
Cash and cash equivalents	$ 969,822	$ 893,352
Credit card and loan receivables, net	8,131,795	6,967,674
Redemption settlement assets, restricted	510,349	492,690
Cash collateral, restricted	34,124	65,160
Restricted cash, fair value	25,988	47,120
Other investments	99,221	91,972
Financial liabilities
Deposits	2,836,352	2,255,089
Non-recourse borrowings of consolidated securitization entities	4,618,205	4,225,745
Long-term and other debt	4,404,500	4,358,379
Credit card and loan receivables, net
Loan receivables held for sale	62,082
Restricted cash
Cost	25,988	47,120
Fair value	25,988	47,120
Marketable securities
Cost	77,351	45,119
Unrealized Gains	62	202
Unrealized Losses	(4,180)	(469)
Fair Value	73,233	44,852
Other Investments, Total
Cost	103,339	92,239
Unrealized Gains	62	202
Unrealized Losses	(4,180)	(469)
Fair Value	99,221	91,972
Fair Value, Marketable securities
Less than 12 months	39,954	28,886
12 Months or Greater	25,785	4,913
Total	65,739	33,799
Unrealized Losses, Marketable securities
Less than 12 months	(2,206)	(292)
12 Months or Greater	(1,974)	(177)
Total	(4,180)	(469)
Amortized Cost
Due in one year or less	6,571
Due after five years through ten years	4,580
Due after ten years	66,200
Total	77,351
Estimated Fair Value
Due in one year or less	6,503
Due after five years through ten years	4,611
Due after ten years	62,119
Fair Value	73,233	44,852
Carrying Amount
Financial assets
Cash and cash equivalents	969,822	893,352
Trade receivables, net	394,822	370,110
Credit card and loan receivables, net	8,131,795	6,967,674
Redemption settlement assets, restricted	510,349	492,690
Cash collateral, restricted	34,124	65,160
Other investments	99,221	91,972
Derivative instruments		4
Financial liabilities
Accounts payable	210,019	215,470
Deposits	2,816,361	2,228,411
Non-recourse borrowings of consolidated securitization entities	4,591,916	4,130,970
Long-term and other debt	2,800,281	2,854,839
Derivative instruments		8,515
Other Investments, Total
Fair Value	99,221	91,972
Fair Value
Financial assets
Cash and cash equivalents	969,822	893,352
Trade receivables, net	394,822	370,110
Credit card and loan receivables, net	8,131,795	6,967,674
Redemption settlement assets, restricted	510,349	492,690
Cash collateral, restricted	34,124	65,160
Other investments	99,221	91,972
Derivative instruments		4
Financial liabilities
Accounts payable	210,019	215,470
Deposits	2,836,352	2,255,089
Non-recourse borrowings of consolidated securitization entities	4,618,205	4,225,745
Long-term and other debt	4,404,500	4,358,379
Derivative instruments		8,515
Other Investments, Total
Fair Value	$ 99,221	$ 91,972

FINANCIAL INSTRUMENTS (Details 2) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012
Assets disclosed at fair value
Cash collateral, restricted	$ 34,124	$ 65,160
Other investments	99,221	91,972
Total assets measured at fair value	9,101,617	7,861,026
Liabilities disclosed at fair value
Total liabilities measured at fair value	11,859,057	10,839,213
Level 1
Assets disclosed at fair value
Total assets measured at fair value	969,822	893,352
Level 2
Liabilities disclosed at fair value
Total liabilities measured at fair value	11,859,057	10,839,213
Level 3
Assets disclosed at fair value
Total assets measured at fair value	8,131,795	6,967,674
Recurring
Assets disclosed at fair value
Government bonds		5,117
Corporate bonds	436,365	447,307
Cash collateral, restricted	34,124	65,160
Other investments	99,221	91,972
Derivative instruments		4
Total assets measured at fair value	569,710	609,560
Liabilities disclosed at fair value
Derivative instruments		8,515
Total liabilities measured at fair value		8,515
Recurring \| Level 1
Assets disclosed at fair value
Corporate bonds		6,165
Cash collateral, restricted		2,500
Other investments	30,888	51,951
Total assets measured at fair value	30,888	60,616
Recurring \| Level 2
Assets disclosed at fair value
Government bonds		5,117
Corporate bonds	436,365	441,142
Other investments	68,333	40,021
Derivative instruments		4
Total assets measured at fair value	504,698	486,284
Liabilities disclosed at fair value
Derivative instruments		8,515
Total liabilities measured at fair value		8,515
Recurring \| Level 3
Assets disclosed at fair value
Cash collateral, restricted	34,124	62,660
Total assets measured at fair value	$ 34,124	$ 62,660

FINANCIAL INSTRUMENTS (Details 3) - Cash collateral, restricted - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Change in fair value of the Company's assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3)
Beginning Balance	$ 62,660	$ 158,727
Total gains (realized or unrealized) included in earnings	1,369	5,469
Purchases		1,287
Settlements	(29,905)	(102,823)
Ending Balance	34,124	62,660
Gains for the period included in earnings related to assets still held	$ 971	$ 5,469
Discount rate (as a percent)	3.20%
Minimum
Change in fair value of the Company's assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3)
Term	10 months
Maximum
Change in fair value of the Company's assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3)
Term	34 months
Weighted average
Change in fair value of the Company's assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3)
Term	17 months

FINANCIAL INSTRUMENTS (Details 4) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012
Assets disclosed at fair value
Cash and cash equivalents	$ 969,822	$ 893,352
Credit card and loan receivables, net	8,131,795	6,967,674
Total assets measured at fair value	9,101,617	7,861,026
Liabilities disclosed at fair value
Deposits	2,836,352	2,255,089
Non-recourse borrowings of consolidated securitization entities	4,618,205	4,225,745
Long-term and other debt	4,404,500	4,358,379
Total liabilities measured at fair value	11,859,057	10,839,213
Level 1
Assets disclosed at fair value
Cash and cash equivalents	969,822	893,352
Total assets measured at fair value	969,822	893,352
Level 2
Liabilities disclosed at fair value
Deposits	2,836,352	2,255,089
Non-recourse borrowings of consolidated securitization entities	4,618,205	4,225,745
Long-term and other debt	4,404,500	4,358,379
Total liabilities measured at fair value	11,859,057	10,839,213
Level 3
Assets disclosed at fair value
Credit card and loan receivables, net	8,131,795	6,967,674
Total assets measured at fair value	$ 8,131,795	$ 6,967,674

PARENT-ONLY FINANCIAL STATEMENTS (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Assets:
Cash and cash equivalents	$ 969,822			$ 893,352	$ 893,352			$ 216,213	$ 893,352	$ 893,352	$ 216,213	$ 969,822	$ 893,352	$ 216,213	$ 139,114
Total assets												13,244,257	12,000,139
Liabilities:
Current debt												364,489	803,269
Total liabilities												12,388,496	11,471,652
Stockholders' equity												855,761	528,487	175,966	23,094
Total liabilities and stockholders' equity												13,244,257	12,000,139
Statements of Income
Total revenue	1,141,087	$ 1,096,447	$ 1,028,092	1,053,437	971,844	$ 911,492	$ 866,485	891,569	4,319,063	3,641,390	3,173,287
Interest expense, net	65,475	74,015	83,466	82,544	78,376	74,365	73,067	65,652	305,500	291,460	298,585
Income before income tax	184,264	214,753	185,714	208,681	138,355	190,106	167,476	186,967	793,412	682,904	514,095
Benefit for income taxes	(66,391)	(81,875)	(69,274)	(79,702)	(54,694)	(70,561)	(63,655)	(71,738)	(297,242)	(260,648)	(198,809)
Net income	117,873	$ 132,878	$ 116,440	128,979	83,661	$ 119,545	$ 103,821	115,229	496,170	422,256	315,286
Statements of Cash Flows
Net cash provided by (used in) operating activities									1,003,492	1,134,190	1,011,347
Investing activities:
Payments for acquired businesses, net of cash acquired										(463,964)	(359,076)
Net cash used in investing activities									(1,619,416)	(2,671,350)	(1,040,710)
Financing activities:
Borrowings under debt agreements									1,985,000	1,095,148	3,256,500
Repayments of borrowings									(1,300,241)	(506,214)	(3,012,682)
Proceeds from convertible note hedge counterparties									1,056,307
Settlement of convertible note borrowings									(1,861,289)
Excess tax benefits from stock-based compensation									17,267	20,199	15,028
Payment of deferred financing costs									(24,772)	(40,267)	(29,025)
Purchase of treasury shares									(231,085)	(125,840)	(240,877)
Proceeds from issuance of common stock									14,090	20,696	29,412
Other									(22)	(22)	(3,925)
Net cash provided by financing activities									704,152	2,209,019	109,250
Change in cash and cash equivalents									76,470	677,139	77,099
Cash and cash equivalents at beginning of year				893,352				216,213	893,352	216,213	139,114
Cash and cash equivalents at end of year	969,822				893,352				969,822	893,352	216,213
Parent company
Assets:
Cash and cash equivalents	15,216			247,478	247,478			25	247,478	25	140	15,216	247,478	$ 25	$ 140
Investment in subsidiaries												3,819,760	2,813,219
Intercompany receivables												399,305	887,518
Other assets												96,039	61,222
Total assets												4,330,320	4,009,437
Liabilities:
Current debt												364,489	803,256
Long-term debt												2,435,792	2,051,570
Intercompany payables													8,519
Other liabilities												674,278	617,605
Total liabilities												3,474,559	3,480,950
Stockholders' equity												855,761	528,487
Total liabilities and stockholders' equity												$ 4,330,320	$ 4,009,437
Statements of Income
Interest from loans to subsidiaries									10,065	10,248	10,197
Dividends from subsidiaries									68,544	464,971	343,676
Total revenue									78,609	475,219	353,873
Interest expense, net									184,727	179,527	159,088
Other expenses, net									1,240	533	646
Total expenses									185,967	180,060	159,734
Income before income tax									(107,358)	295,159	194,139
Benefit for income taxes									32,909	73,106	34,127
(Loss) Income before equity in undistributed net income of subsidiaries									(74,449)	368,265	228,266
Equity in undistributed net income of subsidiaries									570,619	53,991	87,020
Net income									496,170	422,256	315,286
Statements of Cash Flows
Net cash provided by (used in) operating activities									144,841	(224,835)	(10,011)
Investing activities:
Payments for acquired businesses, net of cash acquired											(359,076)
Loans to subsidiaries									(112,903)
Investment in subsidiaries										(475,000)
Dividends received									68,544	464,971	343,676
Net cash used in investing activities									(44,359)	(10,029)	(15,400)
Financing activities:
Borrowings under debt agreements									1,985,000	1,095,148	3,256,500
Repayments of borrowings									(1,300,241)	(506,214)	(3,010,906)
Proceeds from convertible note hedge counterparties									1,056,307
Settlement of convertible note borrowings									(1,861,289)
Excess tax benefits from stock-based compensation									17,267	20,199	15,028
Payment of deferred financing costs									(12,784)	(21,672)	(23,861)
Purchase of treasury shares									(231,085)	(125,840)	(240,877)
Proceeds from issuance of common stock									14,090	20,696	29,412
Other									(9)
Net cash provided by financing activities									(332,744)	482,317	25,296
Change in cash and cash equivalents									(232,262)	247,453	(115)
Cash and cash equivalents at beginning of year				$ 247,478				$ 25	247,478	25	140
Cash and cash equivalents at end of year	$ 15,216				$ 247,478				$ 15,216	$ 247,478	$ 25

SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Segment information
Revenues	$ 1,141,087	$ 1,096,447	$ 1,028,092	$ 1,053,437	$ 971,844	$ 911,492	$ 866,485	$ 891,569	$ 4,319,063	$ 3,641,390	$ 3,173,287
Adjusted EBITDA									1,374,214	1,191,737	1,009,319
Stock compensation expense									59,183	50,497	43,486
Depreciation and amortization									216,119	166,876	153,153
Operating income (loss)	249,739	288,768	269,180	291,225	216,731	264,471	240,543	252,619	1,098,912	974,364	812,680
Interest expense, net	65,475	74,015	83,466	82,544	78,376	74,365	73,067	65,652	305,500	291,460	298,585
Income before income tax	$ 184,264	$ 214,753	$ 185,714	$ 208,681	$ 138,355	$ 190,106	$ 167,476	$ 186,967	793,412	682,904	514,095
Capital expenditures									135,376	116,455	73,502
Operating segment \| LoyaltyOne
Segment information
Revenues									919,480	919,041	844,774
Adjusted EBITDA									258,541	236,094	217,083
Stock compensation expense									10,804	9,311	7,202
Depreciation and amortization									18,057	19,614	20,253
Operating income (loss)									229,680	207,169	189,628
Interest expense, net									(1,312)	(1,560)	(383)
Income before income tax									230,992	208,729	190,011
Capital expenditures									28,713	19,424	18,331
Operating segment \| Epsilon
Segment information
Revenues									1,380,344	996,210	847,136
Adjusted EBITDA									289,699	222,253	195,397
Stock compensation expense									18,365	14,414	11,816
Depreciation and amortization									139,984	101,684	90,111
Operating income (loss)									131,350	106,155	93,740
Interest expense, net									(56)	(67)	(68)
Income before income tax									131,406	106,222	93,538
Capital expenditures									67,024	60,065	35,600
Operating segment \| Private Label Services and Credit
Segment information
Revenues									2,034,724	1,732,160	1,488,998
Adjusted EBITDA									916,099	823,241	678,334
Stock compensation expense									11,095	8,930	6,748
Depreciation and amortization									52,277	42,464	35,480
Operating income (loss)									852,727	771,847	636,106
Interest expense, net									122,159	114,193	145,580
Income before income tax									730,568	657,654	490,526
Capital expenditures									27,909	28,295	13,485
Corporate/Other
Segment information
Revenues									82	372	1,136
Adjusted EBITDA									(90,125)	(89,851)	(76,407)
Stock compensation expense									18,919	17,842	17,720
Depreciation and amortization									5,801	3,114	7,309
Operating income (loss)									(114,845)	(110,807)	(101,436)
Interest expense, net									184,709	178,894	158,544
Income before income tax									(299,554)	(289,701)	(259,980)
Capital expenditures									11,730	8,671	6,086
Eliminations
Segment information
Revenues									$ (15,567)	$ (6,393)	(8,757)
Adjusted EBITDA											(5,088)
Operating income (loss)											(5,088)
Interest expense, net											$ (5,088)

SEGMENT INFORMATION (Details 2) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
SEGMENT INFORMATION (Details 2) - USD ($) $ in Thousands	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Information concerning principal geographic areas
Revenues	$ 1,141,087	$ 1,096,447	$ 1,028,092	$ 1,053,437	$ 971,844	$ 911,492	$ 866,485	$ 891,569	$ 4,319,063	$ 3,641,390	$ 3,173,287
Long-lived assets	2,843,415				2,867,996				2,843,415	2,867,996
United States
Information concerning principal geographic areas
Revenues									3,327,688	2,655,506	2,264,336
Long-lived assets	2,371,054				2,379,536				2,371,054	2,379,536
Canada
Information concerning principal geographic areas
Revenues									906,459	913,188	833,427
Long-lived assets	313,891				350,122				313,891	350,122
Other
Information concerning principal geographic areas
Revenues									84,916	72,696	$ 75,524
Long-lived assets	$ 158,470				$ 138,338				$ 158,470	$ 138,338

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
Revenues	$ 1,141,087	$ 1,096,447	$ 1,028,092	$ 1,053,437	$ 971,844	$ 911,492	$ 866,485	$ 891,569	$ 4,319,063	$ 3,641,390	$ 3,173,287
Operating expenses	891,348	807,679	758,912	762,212	755,113	647,021	625,942	638,950	3,220,151	2,667,026	2,360,607
Operating income	249,739	288,768	269,180	291,225	216,731	264,471	240,543	252,619	1,098,912	974,364	812,680
Interest expense, net	65,475	74,015	83,466	82,544	78,376	74,365	73,067	65,652	305,500	291,460	298,585
Income before income tax	184,264	214,753	185,714	208,681	138,355	190,106	167,476	186,967	793,412	682,904	514,095
Provision for income taxes	66,391	81,875	69,274	79,702	54,694	70,561	63,655	71,738	297,242	260,648	198,809
Net income	$ 117,873	$ 132,878	$ 116,440	$ 128,979	$ 83,661	$ 119,545	$ 103,821	$ 115,229	$ 496,170	$ 422,256	$ 315,286
Net income per share-basic (in dollars per share)	$ 2.40	$ 2.73	$ 2.37	$ 2.59	$ 1.68	$ 2.39	$ 2.07	$ 2.30	$ 10.09	$ 8.44	$ 6.22
Net income per share-diluted (in dollars per share)	$ 1.79	$ 2.01	$ 1.71	$ 1.92	$ 1.27	$ 1.84	$ 1.63	$ 1.86	$ 7.42	$ 6.58	$ 5.45

NON-CASH FINANCING AND INVESTING ACTIVITIES (Details) shares in Millions, $ in Millions	1 Months Ended
	Dec. 31, 2012 USD ($) shares
NON-CASH FINANCING AND INVESTING ACTIVITIES
Treasury shares purchased (in shares) \| shares	0.1
Treasury shares purchased \| $	$ 11.6

SUBSEQUENT EVENT (Details) € in Millions, $ in Millions			12 Months Ended
SUBSEQUENT EVENT (Details) € in Millions, $ in Millions	Jan. 02, 2014 USD ($)	Jan. 02, 2014 EUR (€)	Dec. 31, 2013
Subsequent Events
Ownership interest that may be acquired over a four-year period (as a percent)			40.00%
Period over which remaining ownership interest may be acquired			4 years
Subsequent event \| BrandLoyalty Group B.V.
Subsequent Events
Ownership interest acquired (as a percent)	60.00%	60.00%
Initial cash consideration	$ 235.6	€ 172.4
Ownership interest that may be acquired each year (as a percent)	10.00%	10.00%
Additional interest which the entity must acquire if specified annual earnings targets are met (as a percent)	10.00%	10.00%
Ownership interest for which seller has a put option to sell if specified annual earnings targets are not met (as a percent)	10.00%	10.00%

SCHEDULE II CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS (Details) - Allowance for Doubtful Accounts -Trade receivables - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Movement in valuation and qualifying accounts
Balance at Beginning of Period	$ 3,919	$ 2,406	$ 4,350
Charged to Costs and Expenses	386	2,270	2,141
Charged to Other Accounts	1,273	384	547
Write-Offs Net of Recoveries	(3,316)	(1,141)	(4,632)
Balance at End of Period	$ 2,262	$ 3,919	$ 2,406