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Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2014	Oct. 31, 2014
Document and Entity Information
Entity Registrant Name	ALLIANCE DATA SYSTEMS CORP
Entity Central Index Key	0001101215
Document Type	10-Q
Document Period End Date	Sep. 30, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		59,411,741
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2014	Dec. 31, 2013
ASSETS
Cash and cash equivalents	$ 634,824	$ 969,822
Trade receivables, less allowance for doubtful accounts ($3,096 and $2,262 at September 30, 2014 and December 31, 2013 and 2012, respectively)	455,064	394,822
Credit card and loan receivables:
Credit card receivables - restricted for securitization investors	7,214,380	7,080,014
Other credit card and loan receivables	2,080,465	1,492,868
Total credit card and loan receivables	9,294,845	8,572,882
Allowance for loan loss	(511,354)	(503,169)
Credit card and loan receivables, net	8,783,491	8,069,713
Loan receivables held for sale	70,588	62,082
Deferred tax asset, net	200,094	216,195
Other current assets	728,327	177,859
Redemption settlement assets, restricted	529,037	510,349
Total current assets	11,401,425	10,400,842
Property and equipment, net	337,717	299,188
Deferred tax asset, net	2,609	2,454
Cash collateral, restricted	36,576	34,124
Intangible assets, net	752,614	460,404
Goodwill	2,245,782	1,735,703
Other non-current assets	416,552	311,542
Total assets	15,193,275	13,244,257
LIABILITIES AND EQUITY
Accounts payable	318,798	210,019
Accrued expenses	553,873	262,307
Deposits	2,066,815	1,544,059
Non-recourse borrowings of consolidated securitization entities	1,268,750	1,025,000
Current debt	78,537	364,489
Other current liabilities	210,053	140,186
Deferred revenue	873,332	966,438
Deferred tax liability, net	19
Total current liabilities	5,370,177	4,512,498
Deferred revenue	164,835	170,748
Deferred tax liability, net	362,236	275,757
Deposits	1,660,990	1,272,302
Non-recourse borrowings of consolidated securitization entities	3,183,166	3,566,916
Long-term and other debt	2,878,498	2,435,792
Other liabilities	175,279	154,483
Total liabilities	13,795,181	12,388,496
Commitments and contingencies (Note 11)
Redeemable non-controlling interest	317,423
Stockholders' equity:
Common stock, $0.01 par value; authorized, 200,000 shares; issued, 107,032 shares and 98,302 shares at September 30, 2014 and December 31, 2013, respectively	1,070	983
Additional paid-in capital	1,551,999	1,512,752
Treasury stock, at cost, 47,626 shares and 46,752 shares at September 30, 2014 and December 31, 2013, respectively	(2,906,663)	(2,689,177)
Retained earnings	2,488,511	2,049,430
Accumulated other comprehensive loss	(54,246)	(18,227)
Total stockholders' equity	1,080,671	855,761
Total liabilities and stockholders' equity	$ 15,193,275	$ 13,244,257

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Sep. 30, 2014	Dec. 31, 2013
CONDENSED CONSOLIDATED BALANCE SHEETS
Trade receivables, allowance for doubtful accounts (in dollars)	$ 3,096	$ 2,262
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized shares	200,000	200,000
Common stock, issued shares	107,032	98,302
Treasury stock, shares	47,626	46,752

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Revenues
Transaction	$ 87,162	$ 84,264	$ 251,390	$ 246,185
Redemption	232,464	131,985	744,658	430,339
Finance charges, net	597,892	507,828	1,672,339	1,447,971
Database marketing fees and direct marketing services	353,525	334,720	1,021,813	939,821
Other revenue	48,090	37,650	126,991	113,660
Total revenue	1,319,133	1,096,447	3,817,191	3,177,976
Operating expenses
Cost of operations (exclusive of depreciation and amortization disclosed separately below)	767,415	628,386	2,323,210	1,868,093
Provision for loan loss	114,577	90,976	281,811	215,420
General and administrative	39,169	33,845	101,498	84,392
Depreciation and other amortization	28,070	21,395	79,555	61,401
Amortization of purchased intangibles	48,261	33,077	145,144	99,497
Total operating expenses	997,492	807,679	2,931,218	2,328,803
Operating income	321,641	288,768	885,973	849,173
Interest expense.
Securitization funding costs	22,763	22,914	67,974	72,093
Interest expense on deposits	9,064	7,287	25,526	21,296
Interest expense on long-term and other debt, net	29,637	43,814	98,643	146,636
Total interest expense, net	61,464	74,015	192,143	240,025
Income before income tax	260,177	214,753	693,830	609,148
Provision for income taxes	95,229	81,875	253,946	230,851
Net income	164,948	132,878	439,884	378,297
Less: Net loss attributable to non-controlling interest	706		803
Net income	$ 164,242	$ 132,878	$ 439,081	$ 378,297
Net income attributable to Alliance Data Systems Corporation stockholders per share:
Basic net income per share (in dollars per share)	$ 2.84	$ 2.73	$ 7.98	$ 7.69
Diluted net income per share (in dollars per share)	$ 2.74	$ 2.01	$ 6.98	$ 5.63
Weighted average shares:
Basic (in shares)	57,742	48,710	54,998	49,199
Diluted (in shares)	59,908	66,019	62,887	67,168

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 164,948	$ 132,878	$ 439,884	$ 378,297
Other comprehensive income, net of tax:
Net unrealized gain (loss) on securities available-for-sale, net of tax (benefit) expense of $(228), $167, $688 and $(913) for the three and nine months ended September 30, 2014 and 2013, respectively	(1,991)	50	(1,435)	(5,404)
Net unrealized loss on cash flow hedges, net of tax benefit of $34 for each of the three and nine months ended September 30, 2014	(104)		(104)
Foreign currency translation adjustments	(37,956)	(247)	(34,480)	8,018
Other comprehensive income	(40,051)	(197)	(36,019)	2,614
Total comprehensive income, net of tax	124,897	132,681	403,865	380,911
Less: Comprehensive loss attributable to non-controlling interest	1,251		1,514
Comprehensive income attributable to Alliance Data Systems Corporation stockholders	$ 123,646	$ 132,681	$ 402,351	$ 380,911

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net unrealized (loss) gain on securities, tax (benefit) expense	$ (228)	$ 167	$ 688	$ (913)
Net unrealized loss on cash flow hedges, tax benefit	$ 34		$ 34

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 439,884	$ 378,297
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	224,699	160,898
Deferred income taxes	5,320	4,668
Provision for loan loss	281,811	215,420
Non-cash stock compensation	49,754	43,428
Fair value gain on interest-rate derivatives	(244)	(8,511)
Amortization of discount on debt	12,499	57,900
Amortization of deferred financing costs	17,092	21,186
Change in deferred revenue	(41,537)	(21,951)
Change in other operating assets and liabilities, net of acquisitions	21,786	(1,493)
Originations of loan receivables held for sale	(3,645,315)	(361,151)
Sales of loan receivables held for sale	3,636,809	310,201
Excess tax benefits from stock-based compensation	(31,888)	(12,492)
Other	(2,691)	12,438
Net cash provided by operating activities	967,979	798,838
CASH FLOWS FROM INVESTING ACTIVITIES:
Change in redemption settlement assets	(48,906)	(73,803)
Change in cash collateral, restricted	(1,582)	32,405
Change in restricted cash	(316,071)	39,827
Change in credit card and loan receivables	(633,336)	(220,571)
Purchase of credit card portfolios	(379,616)	(37,056)
Payments for acquired businesses, net of cash	(259,514)
Capital expenditures	(114,595)	(91,759)
Purchases of other investments	(109,780)	(23,632)
Maturities/sales of other investments	4,565	1,639
Other	(4,000)	(1,383)
Net cash used in investing activities	(1,862,835)	(374,333)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under debt agreements	1,920,190	1,747,000
Repayments of borrowings	(1,580,796)	(1,171,428)
Proceeds from convertible note hedge counterparties	1,519,833	1,056,268
Settlement of convertible note borrowings	(1,864,803)	(1,861,239)
Issuances of deposits	2,342,836	1,278,687
Repayments of deposits	(1,431,392)	(1,196,591)
Non-recourse borrowings of consolidated securitization entities	1,495,000	1,633,285
Repayments/maturities of non-recourse borrowings of consolidated securitization entities	(1,635,000)	(1,782,339)
Payment of deferred financing costs	(24,470)	(22,371)
Excess tax benefits from stock-based compensation	31,888	12,492
Proceeds from issuance of common stock	10,439	8,539
Purchase of treasury shares	(217,486)	(231,085)
Other	(1,476)	(13)
Net cash provided by (used in) financing activities	564,763	(528,795)
Effect of exchange rate changes on cash and cash equivalents	(4,905)	(5,020)
Change in cash and cash equivalents	(334,998)	(109,310)
Cash and cash equivalents at beginning of year	969,822	893,352
Cash and cash equivalents at end of year	634,824	784,042
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid	153,839	167,729
Income taxes paid, net	$ 147,927	$ 158,294

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Sep. 30, 2014
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited condensed consolidated financial statements included herein have been prepared by Alliance Data Systems Corporation (“ADSC” or, including its consolidated subsidiaries and variable interest entities, the “Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2013, filed with the SEC on February 28, 2014. The unaudited condensed consolidated financial statements included herein reflect all adjustments (consisting of normal, recurring adjustments) which are, in the opinion of management, necessary to state fairly the results for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for any subsequent interim period or for the fiscal year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (1) the reported amounts of assets; (2) liabilities and disclosure of contingent assets and liabilities at the date of the financial statements; and (3) the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. For purposes of comparability, certain prior period amounts have been reclassified to conform to the current year presentation in accordance with GAAP. Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers,” which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for interim and annual reporting periods beginning after December 15, 2016. Early application is not permitted. ASU 2014-09 permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. Recently Adopted Accounting Standards 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 was effective for interim and annual periods beginning after December 15, 2013 and required prospective application. The adoption of ASU 2013-11 did not have a material impact on the Company’s financial condition, results of operations or cash flows.

EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2014

EARNINGS PER SHARE

EARNINGS PER SHARE

2. EARNINGS PER SHARE

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
	(In thousands, except per share amounts)
Numerator:
Net income attributable to Alliance Data Systems Corporation stockholders	$	164,242	$	132,878	$	439,081	$	378,297
Denominator:
Weighted average shares, basic	57,742		48,710		54,998		49,199
Weighted average effect of dilutive securities:
Shares from assumed conversion of convertible senior notes	—		7,512		2,816		9,419
Shares from assumed conversion of convertible note warrants	1,664		9,141		4,561		7,937
Net effect of dilutive stock options and unvested restricted stock	502		656		512		613
Denominator for diluted calculations	59,908		66,019		62,887		67,168

Net income attributable to Alliance Data Systems Corporation stockholders per share:
Basic	$	2.84	$	2.73	$	7.98	$	7.69
Diluted	$	2.74	$	2.01	$	6.98	$	5.63

The Company calculated the effect of its convertible senior notes on diluted net income per share as if they would be settled in cash as the Company had the intent to settle the convertible senior notes for cash. The convertible senior notes were settled with cash upon maturity in August 2013 and May 2014, respectively.

The Company is also party to prepaid forward contracts in which it purchased 1,857,400 shares of its common stock to be delivered over a settlement period in 2014. These shares have reduced weighted-average basic and diluted shares outstanding for the three and nine months ended September 30, 2014 and 2013. As of September 30, 2014, 510,781 shares have been delivered to the Company, with the remaining 1,346,619 to be delivered throughout the remainder of 2014.

ACQUISITION

9 Months Ended

Sep. 30, 2014

ACQUISITION

ACQUISITION

3. ACQUISITION

On January 2, 2014, the Company acquired a 60% ownership interest in BrandLoyalty Group B.V. (“Brand Loyalty”), 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, Asia and Latin America. The results of BrandLoyalty have been included since the date of acquisition and are reflected in the Company’s LoyaltyOne segment. The initial cash consideration was approximately $259.5 million in addition to the assumption of debt. The goodwill resulting from the acquisition is not deductible for tax purposes.

The Company also recorded a contingent liability for the earn-out provisions included in the share purchase agreement of approximately $248.7 million as of January 2, 2014, which is included in accrued expenses in the Company’s unaudited condensed consolidated balance sheet. The contingent liability was measured at fair value on the date of purchase and any subsequent changes in the fair value of the liability are recorded through earnings.

The following table summarizes the allocation of consideration and the respective fair values of the assets acquired and liabilities assumed in the BrandLoyalty acquisition as of the date of purchase:

	As of January 2, 2014
	(In thousands)
Current assets, net of cash acquired	$	246,769
Deferred tax asset	3,509
Property and equipment	19,719
Other non-current assets	3,994
Intangible assets	423,832
Goodwill	565,015
Total assets acquired	1,262,838

Current liabilities	146,559
Current portion of long-term debt	34,180
Deferred tax liability	105,512
Long-term debt (net of current portion)	126,323
Other liabilities	142
Total liabilities assumed	412,716

Redeemable non-controlling interest	341,907

Net assets acquired	$	508,215

Pursuant to the BrandLoyalty share purchase agreement, the Company may acquire the remaining 40% ownership interest in BrandLoyalty over a four-year period, 10% per year at 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 sellers have a put option to sell the Company their 10% interest for the respective year. See Note 13, “Redeemable Non-Controlling Interest,” for more information.

- 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

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+ Details

CREDIT CARD AND LOAN RECEIVABLES

9 Months Ended

Sep. 30, 2014

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:

	September 30, 2014		December 31, 2013
	(In thousands)
Principal receivables	$	8,849,589	$	8,166,961
Billed and accrued finance charges	381,761		343,521
Other credit card and loan receivables	63,495		62,400
Total credit card and loan receivables	9,294,845		8,572,882
Less credit card receivables — restricted for securitization investors	7,214,380		7,080,014
Other credit card and loan receivables	$	2,080,465	$	1,492,868

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 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. Actual charge-offs for unpaid interest and fees were $70.9 million and $54.1 million for the three months ended September 30, 2014 and 2013, respectively, and $212.9 million and $167.8 million for the nine months ended September 30, 2014 and 2013, respectively.

The following table presents the Company’s allowance for loan loss for the periods indicated:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
	(In thousands)
Balance at beginning of period	$	483,580		$	448,396		$	503,169		$	481,958
Provision for loan loss	114,577			90,976			281,811			215,420
Change in estimate for uncollectible unpaid interest and fees	1,000			—			1,500			—
Recoveries	39,074			26,204			115,548			84,152
Principal charge-offs	(126,877		)	(103,535		)	(390,674		)	(319,489		)
Balance at end of period	$	511,354		$	462,041		$	511,354		$	462,041

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:

	September 30, 2014		% of Total		December 31, 2013		% of Total
	(In thousands, except percentages)
Receivables outstanding — principal	$	8,849,589	100.0	%	$	8,166,961	100.0	%
Principal receivables balances contractually delinquent:
31 to 60 days	138,036		1.6		114,430		1.4
61 to 90 days	85,226		0.9		74,700		0.9
91 or more days	168,368		1.9		150,425		1.9
Total	$	391,630	4.4	%	$	339,555	4.2	%

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 Accounting Standards Codification (“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 $119.0 million and $118.1 million, respectively, as a recorded investment in impaired credit card and loan receivables with an associated allowance for loan loss of $31.8 million and $33.9 million, respectively, as of September 30, 2014 and December 31, 2013. These modified credit card and loan receivables represented less than 2% of the Company’s total credit card and loan receivables as of September 30, 2014 and December 31, 2013, respectively.

The average recorded investment in the impaired credit card receivables was $114.0 million and $116.7 million for the three months ended September 30, 2014 and 2013, respectively, and $114.2 million and $117.2 million for the nine months ended September 30, 2014 and 2013, 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 $3.3 million and $3.2 million for the three months ended September 30, 2014 and 2013, respectively, and $9.6 million and $9.5 million for the nine months ended September 30, 2014 and 2013, 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 provide information on credit card and loan receivables that are considered troubled debt restructurings as described above, which entered into a modification program during the specified periods:

	Three Months Ended September 30, 2014					Nine Months Ended September 30, 2014
	Number of Restructurings	Pre- modification Outstanding Balance		Post- modification Outstanding Balance		Number of Restructurings	Pre- modification Outstanding Balance		Post- modification Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings — credit card receivables	36,846	$	37,130	$	37,100	102,000	$	101,837	$	101,750

	Three Months Ended September 30, 2013					Nine Months Ended September 30, 2013
	Number of Restructurings	Pre- modification Outstanding Balance		Post- modification Outstanding Balance		Number of Restructurings	Pre- modification Outstanding Balance		Post- modification Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings — credit card receivables	37,032	$	34,169	$	34,147	109,927	$	100,270	$	100,209

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

	Three Months Ended September 30, 2014			Nine Months Ended September 30, 2014
	Number of Restructurings	Outstanding Balance		Number of Restructurings	Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings that subsequently defaulted — credit card receivables	14,047	$	14,037	44,545	$	44,009

	Three Months Ended September 30, 2013			Nine Months Ended September 30, 2013
	Number of Restructurings	Outstanding Balance		Number of Restructurings	Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings that subsequently defaulted — credit card receivables	15,536	$	14,874	46,729	$	44,295

Age of Credit Card and Loan Receivable Accounts

The following tables set forth, as of September 30, 2014 and 2013, 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:

	September 30, 2014
Age of Accounts Since Origination	Number of Active Accounts with Balances	Percentage of Active Accounts with Balances		Total Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding
	(In thousands, except percentages)
0-12 Months	4,869	28.2	%	$	2,220,148	25.1	%
13-24 Months	2,554	14.8		1,282,695		14.5
25-36 Months	1,781	10.3		937,043		10.6
37-48 Months	1,283	7.4		701,808		7.9
49-60 Months	969	5.6		557,911		6.3
Over 60 Months	5,828	33.7		3,149,984		35.6
Total	17,284	100.0	%	$	8,849,589	100.0	%

	September 30, 2013
Age of Accounts Since Origination	Number of Active Accounts with Balances	Percentage of Active Accounts with Balances		Total Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding
	(In thousands, except percentages)
0-12 Months	4,233	27.0	%	$	1,660,718	23.5	%
13-24 Months	2,187	13.9		930,082		13.2
25-36 Months	1,514	9.7		684,463		9.7
37-48 Months	1,136	7.2		553,471		7.8
49-60 Months	931	5.9		500,259		7.1
Over 60 Months	5,694	36.3		2,728,040		38.7
Total	15,695	100.0	%	$	7,057,033	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 September 30, 2014 and 2013:

	September 30, 2014				September 30, 2013
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months)	Total Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding		Total Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding
	(In thousands, except percentages)
No Score	$	180,003	2.0	%	$	144,336	2.0	%
27.1% and higher	430,333		4.9		330,802		4.7
17.1% - 27.0%	829,208		9.4		669,535		9.5
12.6% - 17.0%	955,459		10.8		746,424		10.6
3.7% - 12.5%	3,613,024		40.8		2,819,112		39.9
1.9% - 3.6%	1,837,713		20.8		1,487,871		21.1
Lower than 1.9%	1,003,849		11.3		858,953		12.2
Total	$	8,849,589	100.0	%	$	7,057,033	100.0	%

Transfer of Financial Assets

The Company originates loans under an agreement with one of its clients and after origination, these loan receivables are sold to the client 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, the client 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 receivables. The loan receivables originated by the Company that have not yet been sold to the client were $70.6 million and $62.1 million at September 30, 2014 and December 31, 2013, respectively, and are included in loan receivables held for sale in the Company’s unaudited condensed 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 the date of origination and sale. Originations and sales of these loan receivables held for sale are reflected as operating activities in the Company’s unaudited condensed consolidated statements of cash flows.

Upon the client’s purchase of the originated loan receivables, the Company is obligated to purchase a participating interest in a pool of loan receivables that includes the loan receivables originated by the Company. 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 and recoveries. The Company bears the risk of loss related to its participation interest in this pool.

During the nine months ended September 30, 2014, the Company purchased $181.8 million of loan receivables under these agreements. The outstanding balance of these loan receivables was $129.6 million and $61.6 million as of September 30, 2014 and December 31, 2013, respectively, and was included in other credit card and loan receivables in the Company’s unaudited condensed consolidated balance sheets.

Portfolio Acquisitions

During the nine months ended September 30, 2014, the Company acquired two co-brand credit card portfolios for purchase prices totaling approximately $402.7 million, which remain subject to customary purchase price adjustments, and consist of $366.9 million of credit card receivables, $37.7 million of intangible assets and a liability of approximately $1.9 million.

Securitized Credit Card Receivables

The Company regularly securitizes its credit card receivables through its credit card securitization trusts, consisting of World Financial Network Credit Card 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 Credit Card Master Note Trust (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 Company’s unaudited condensed consolidated statements of income for the three and nine months ended September 30, 2014 and 2013.

The WFN Trusts and the WFC Trust are variable interest entities (“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.

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

	September 30, 2014		December 31, 2013
	(In thousands)
Total credit card receivables — restricted for securitization investors	$	7,214,380	$	7,080,014
Principal amount of credit card receivables — restricted for securitization investors, 90 days or more past due	$	138,525	$	131,659

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Net charge-offs of securitized principal	$	75,092	$	70,752	$	240,754	$	219,441

INVENTORIES	9 Months Ended
INVENTORIES	Sep. 30, 2014
INVENTORIES
INVENTORIES	5. INVENTORIES Inventories of $218.1 million and $14.6 million at September 30, 2014 and December 31, 2013, respectively, consist of finished goods primarily to be utilized as rewards in the Company’s loyalty programs and are included in other current assets in the Company’s unaudited condensed consolidated balance sheets. The Company acquired $198.9 million of finished goods inventory in the BrandLoyalty acquisition on January 2, 2014. Inventories are stated at lower of cost or market and valued primarily on a first-in-first-out basis. The Company records valuation adjustments to its inventories if the cost of inventory exceeds the amount it expects to realize from the ultimate sale or disposal of the inventory. These estimates are based on management’s judgment regarding future market conditions and analysis of historical experience.

OTHER INVESTMENTS

9 Months Ended

Sep. 30, 2014

OTHER INVESTMENTS

OTHER INVESTMENTS

6. OTHER INVESTMENTS

Other investments consist of restricted cash, marketable securities and U.S. Treasury bonds and are included in other current assets and other assets in the Company’s unaudited condensed consolidated balance sheets. The principal components of other investments, which are carried at fair value, are as follows:

	September 30, 2014									December 31, 2013
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(In thousands)
Restricted cash	$	28,694	$	—	$	—		$	28,694	$	25,988	$	—	$	—		$	25,988
Marketable securities	82,481		223		(2,276		)	80,428		77,351		62		(4,180		)	73,233
U.S. Treasury bonds	100,079		2		(261		)	99,820		—		—		—			—
Total	$	211,254	$	225	$	(2,537	)	$	208,942	$	103,339	$	62	$	(4,180	)	$	99,221

The following tables show the unrealized losses and fair value for those investments that were in an unrealized loss position as of September 30, 2014 and December 31, 2013, aggregated by investment category and the length of time that individual securities have been in a continuous loss position:

	September 30, 2014
	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	$	21,276	$	(261	)	$	49,146	$	(2,015	)	$	70,422	$	(2,276	)
U.S. Treasury bonds	74,798		(261		)	—		—			74,798		(261		)
Total	$	96,074	$	(522	)	$	49,146	$	(2,015	)	$	145,220	$	(2,537	)

	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	)

The amortized cost and estimated fair value of the marketable securities and U.S. Treasury bonds at September 30, 2014 by contractual maturity are as follows

	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	6,684	$	6,620
Due after one year through five years	100,079		99,820
Due after five years through ten years	4,325		4,486
Due after ten years	71,472		69,322
Total	$	182,560	$	180,248

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 September 30, 2014, the Company does not consider the investments to be other-than-temporarily impaired.

There were no realized gains or losses from the sale of investment securities for the three and nine months ended September 30, 2014 and 2013.

REDEMPTION SETTLEMENT ASSETS

9 Months Ended

Sep. 30, 2014

REDEMPTION SETTLEMENT ASSETS

REDEMPTION SETTLEMENT ASSETS

7. 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. The principal components of redemption settlement assets, which are carried at fair value, are as follows:

	September 30, 2014									December 31, 2013
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(In thousands)
Cash and cash equivalents	$	144,500	$	—	$	—		$	144,500	$	73,984	$	—	$	—		$	73,984
Government bonds	4,574		—		(2		)	4,572		—		—		—			—
Corporate bonds	375,745		4,224		(4		)	379,965		429,592		7,083		(310		)	436,365
Total	$	524,819	$	4,224	$	(6	)	$	529,037	$	503,576	$	7,083	$	(310	)	$	510,349

	September 30, 2014
	Less than 12 months					12 Months or Greater				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
Government bonds	$	4,572	$	(2	)	$	—	$	—	$	4,572	$	(2	)
Corporate bonds	12,253		(4		)	—		—		12,253		(4		)
Total	$	16,825	$	(6	)	$	—	$	—	$	16,825	$	(6	)

	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)
Corporate bonds	$	80,493	$	(310	)	$	—	$	—	$	80,493	$	(310	)

The amortized cost and estimated fair value of the securities at September 30, 2014 by contractual maturity are as follows:

	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	178,889	$	180,174
Due after one year through five years	201,430		204,363
Total	$	380,319	$	384,537

There were no realized gains or losses from the sale of investment securities for the three and nine months ended September 30, 2014 and 2013.

INTANGIBLE ASSETS AND GOODWILL

9 Months Ended

Sep. 30, 2014

INTANGIBLE ASSETS AND GOODWILL

INTANGIBLE ASSETS AND GOODWILL

8. INTANGIBLE ASSETS AND GOODWILL

Intangible Assets

Intangible assets consist of the following:

	September 30, 2014
	Gross Assets		Accumulated Amortization			Net		Amortization Life and Method
	(In thousands)
Finite Lived Assets
Customer contracts and lists	$	806,524	$	(273,070	)	$	533,454	3-12 years—straight line
Premium on purchased credit card portfolios	212,848		(102,583		)	110,265		3-10 years—straight line, accelerated
Customer database	161,700		(135,936		)	25,764		4-10 years—straight line
Collector database	62,506		(58,182		)	4,324		30 years—15% declining balance
Tradenames	83,820		(26,079		)	57,741		3-15 years—straight line
Purchased data lists	11,919		(6,401		)	5,518		1-5 years—straight line, accelerated
Favorable lease	3,291		(635		)	2,656		10 years—straight line
Noncompete agreements	1,300		(758		)	542		3 years—straight line
	$	1,343,908	$	(603,644	)	$	740,264
Indefinite Lived Assets
Tradenames	12,350		—			12,350		Indefinite life
Total intangible assets	$	1,356,258	$	(603,644	)	$	752,614

	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

With the BrandLoyalty acquisition on January 2, 2014, the Company acquired $423.8 million of intangible assets, consisting of $396.5 million of customer contracts and a $27.3 million tradename, which are being amortized over weighted average lives of 7.0 years and 3.0 years, respectively.

With the credit card portfolio acquisitions made during the nine months ended September 30, 2014, the Company acquired $37.7 million of intangible assets, consisting of $34.4 million of customer relationships being amortized over a weighted average life of 3.2 years and $3.3 million of marketing relationships being amortized over a weighted average life of 7.0 years.

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 (excluding the nine months ended September 30, 2014)	$	45,240
2015	168,123
2016	150,454
2017	112,283
2018	95,987
2019 & thereafter	168,177

Goodwill

The changes in the carrying amount of goodwill for the nine months ended September 30, 2014 are as follows:

	LoyaltyOne®			Epsilon®			Private Label Services and Credit		Corporate/ Other		Total
	(In thousands)
December 31, 2013	$	232,449		$	1,241,522		$	261,732	$	—	$	1,735,703
Goodwill acquired during the year	565,015			—			—		—		565,015
Effects of foreign currency translation	(54,358		)	(578		)	—		—		(54,936		)
September 30, 2014	$	743,106		$	1,240,944		$	261,732	$	—	$	2,245,782

See Note 3, “Acquisition,” for more information regarding the BrandLoyalty acquisition.

- 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

DEBT

9 Months Ended

Sep. 30, 2014

DEBT

DEBT

9. DEBT

Debt consists of the following:

Description	September 30, 2014			December 31, 2013			Maturity	Interest Rate
	(Dollars in thousands)

Long-term and other debt:
2013 credit facility	$	120,000		$	336,000		July 2018		(1)
2013 term loan	1,210,938			1,234,688			July 2018		(1)
BrandLoyalty credit facility	128,975			—			December 2015		(2)
Convertible senior notes due 2014	—			333,082			—	—
Senior notes due 2017	397,122			396,511			December 2017	5.250	%
Senior notes due 2020	500,000			500,000			April 2020	6.375	%
Senior notes due 2022	600,000			—			August 2022	5.375	%
Total long-term and other debt	2,957,035			2,800,281
Less: current portion	(78,537		)	(364,489		)
Long-term portion	$	2,878,498		$	2,435,792

Deposits:
Certificates of deposit	$	3,065,401		$	2,486,533		Various — October 2014 — January 2021	0.15% to 3.30%
Money market deposits	662,404			329,828			On demand	0.01% to 0.15%
Total deposits	3,727,805			2,816,361
Less: current portion	(2,066,815		)	(1,544,059		)
Long-term portion	$	1,660,990		$	1,272,302

Non-recourse borrowings of consolidated securitization entities:
Fixed rate asset-backed term note securities	$	3,301,916		$	3,001,916		Various — October 2014 - June 2019	0.61% to 6.75%
Floating rate asset-backed term note securities	450,000			—			February 2016		(3)
Conduit asset-backed securities	700,000			1,590,000			Various — September 2015 — May 2016		(4)
Total non-recourse borrowings of consolidated securitization entities	4,451,916			4,591,916
Less: current portion	(1,268,750		)	(1,025,000		)
Long-term portion	$	3,183,166		$	3,566,916

(1)

The interest rate is based upon the London Interbank Offered Rate (“LIBOR”) plus an applicable margin. At September 30, 2014, the weighted average interest rate was 1.91% for both the 2013 Credit Facility and 2013 Term Loan.

(2)

The interest rate is based upon the Euro Interbank Offered Rate (“EURIBOR”) plus an applicable margin. At September 30, 2014, the weighted average interest rate was 3.21%.

(3)

The interest rate is based upon LIBOR plus an applicable margin. At September 30, 2014, the interest rate was 0.53%.

(4)

The interest rate is based upon LIBOR or the asset-backed commercial paper costs of each individual conduit provider plus an applicable margin. At September 30, 2014, the interest rates ranged from 1.00% to 1.69%.

At September 30, 2014, the Company was in compliance with its covenants.

Credit Agreement

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, are party to a credit agreement that provided for a $1.25 billion term loan (the “2013 Term Loan”) with certain principal repayments and a $1.25 billion revolving line of credit (the “2013 Credit Facility”).

In July 2014, the Company exercised in part the accordion feature of the 2013 Credit Agreement and increased the capacity under the 2013 Credit Facility by $50.0 million to $1.3 billion. Also in July 2014, HMI Holding LLC became an additional guarantor under the 2013 Credit Agreement, the Indenture governing the Senior Notes due 2017 and the Indenture governing the Senior Notes due 2020.

Total availability under the 2013 Credit Facility at September 30, 2014 was $1,180.0 million.

BrandLoyalty Credit Agreement

As part of the BrandLoyalty acquisition, the Company assumed the debt outstanding under BrandLoyalty’s Amended and Restated Senior Facilities Agreement, as amended (the “BrandLoyalty Credit Agreement”). The BrandLoyalty Credit Agreement is secured by the accounts receivable, inventory, fixed assets, bank accounts and shares of BrandLoyalty Group B.V. and certain of its subsidiaries. The BrandLoyalty Credit Agreement consists of term loans of €63.0 million and a revolving line of credit of €87.0 million, both of which are scheduled to mature on December 31, 2015. The term loans provide for quarterly principal payments of €6.25 million through September 2015, with the remaining amount payable upon maturity. As of September 30, 2014, amounts outstanding under the term loans and revolving line of credit were €44.3 million and €57.9 million ($55.9 million and $73.1 million), respectively.

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

Convertible Senior Notes

In June 2009, the Company issued $345.0 million aggregate principal amount of convertible senior notes that matured and were repaid on May 15, 2014 (the “Convertible Senior Notes due 2014”). On or prior to May 15, 2014, the Company settled in cash the Convertible Senior Notes due 2014, which were surrendered for conversion for $1,864.8 million. The Company applied $1,519.8 million of cash from the counterparties in settlement of the related convertible note hedge transactions, including Bank of America, N.A., J.P. Morgan Securities LLC, as agent for JPMorgan Chase Bank, National Association, London Branch, and Barclays Bank PLC.

Interest expense on the convertible senior notes recognized in the Company’s unaudited condensed consolidated statements of income for the three and nine months ended September 30, 2014 and 2013 is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
	(In thousands, except percentages)
Interest expense calculated on contractual interest rate	$	—		$	5,074		$	5,630		$	20,073
Amortization of discount on liability component	—			12,602			11,888			57,321
Total interest expense on convertible senior notes	$	—		$	17,676		$	17,518		$	77,394

Effective interest rate (annualized)	—		%	13.2		%	14.2		%	11.8		%

In the first quarter of 2014, the Company completed the settlement of the final 5.1 million of warrants associated with the convertible senior notes that matured on August 1, 2013 by issuing 2.9 million shares of its common stock.

In the third quarter of 2014, the Company completed the settlement of 7.3 million warrants associated with the convertible senior notes that matured on May 15, 2014 by issuing 5.4 million shares of its common stock.

Senior Notes Due 2017

In November 2012, the Company issued and sold $400.0 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 unamortized discount was $2.9 million and $3.5 million at September 30, 2014 and December 31, 2013, respectively. The discount is being amortized using the effective interest method over the remaining life of the Senior Notes due 2017 which, at September 30, 2014, is a period of 3.2 years at an effective annual interest rate of 5.5%.

Senior Notes Due 2022

In July 2014, the Company issued and sold $600.0 million aggregate principal amount of 5.375% senior notes due August 1, 2022 (the “Senior Notes due 2022”). The Senior Notes due 2022 accrue interest on the principal amount at the rate of 5.375% per annum from July 29, 2014, payable semi-annually in arrears, on February 1 and August 1 of each year, beginning on February 1, 2015. The Senior Notes due 2022 are unsecured and are guaranteed on a senior unsecured basis by each of the existing and future domestic restricted subsidiaries that becomes liable for any debt under the domestic credit facilities, including the 2013 Credit Agreement.

Non-Recourse Borrowings of Consolidated Securitization Entities

Asset-Backed Term Notes

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 unaudited condensed consolidated financial statements. These securities mature in February 2016 and have a variable interest rate equal to LIBOR plus a margin of 0.38%.

In July 2014, Master Trust I issued $394.7 million of asset-backed term securities, $94.7 million of which was retained by the Company and eliminated from the unaudited condensed consolidated financial statements. These securities mature in September 2015 and have a fixed interest rate of 0.61%.

In October 2014, $316.5 million of Series 2011-A asset backed term notes, of which $66.5 million of subordinated classes were retained by the Company and eliminated from the Company’s unaudited condensed consolidated financial statements, matured and was repaid. Pursuant to the indenture supplement applicable to these securities, as of September 30, 2014, the Company collected $316.5 million of principal payments made by its credit cardholders during the accumulation period. The cash is restricted to the securitization investors and is reflected in other current assets in the Company’s unaudited condensed consolidated balance sheet as of September 30, 2014.

In November 2014, WFN Credit Company, LLC and Comenity Bank entered into an underwriting agreement pursuant to which Master Trust I will issue $427.6 million of asset backed term notes, of which $102.6 million of subordinated classes will be retained by the Company and eliminated from the Company’s unaudited condensed consolidated financial statements. These securities will mature in October 2017 and have a fixed interest rate of 1.54%.

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.

In February 2014, Master Trust I renewed its 2009-VFN conduit facility, extending the maturity to February 29, 2016, with a total capacity of $700.0 million.

In May 2014, the WFC Trust renewed its 2009-VFN conduit facility, extending the maturity to May 31, 2016, with a total capacity of $450.0 million.

As of September 30, 2014, total capacity under the conduit facilities was $1.6 billion, of which $700.0 million had been drawn and was included in non-recourse borrowings of consolidated securitization entities in the Company’s unaudited condensed consolidated balance sheets.

DERIVATIVE INSTRUMENTS

9 Months Ended

Sep. 30, 2014

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Instruments

10. DERIVATIVE INSTRUMENTS

Derivatives Designated as Hedging Instruments — Cash Flow Hedges

During the third quarter of 2014, the Company entered into certain foreign currency derivatives to reduce the volatility of the Company’s cash flows resulting from changes in foreign currency exchange rates associated with certain inventory transactions. The total U.S. dollar equivalent notional amount of these derivative instruments was $58.3 million, with various maturities ranging from October 2014 to August 2015. These derivatives were designated as cash flow hedges and the changes in the fair value, excluding any ineffective portion, are recorded in other comprehensive income until the hedged transactions affect net income. The ineffective portion of these cash flow hedges is classified as cost of operations in the Company’s unaudited condensed consolidated statements of income.

The Company formally assesses, both at a hedge’s inception and on an ongoing basis, whether the derivatives that are used in the hedging transaction have been highly effective in offsetting changes in the cash flows of the hedged items and whether those derivatives may be expected to remain highly effective in future periods.

The Company discontinues hedge accounting prospectively when (1) it determines that the derivative is no longer highly effective in offsetting changes in the cash flows of a hedged item; (2) the derivative expires or is sold, terminated, or exercised; (3) it is no longer probable that the forecasted transaction will occur; or (4) it determines that designating the derivative as a hedging instrument is no longer appropriate.

Derivatives Not Designated as Hedging 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 Company was not a party to any derivative instruments as of December 31, 2013. With the BrandLoyalty acquisition on January 2, 2014, the Company assumed certain derivative instruments. At September 30, 2014, the notional amount of the Company’s outstanding interest rate derivatives was €55.3 million ($69.8 million), with a weighted average maturity of 15 months.

These interest rate derivative instruments involve 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 are not designated as hedges. Such instruments are not speculative and are used to manage interest rate risk, but do not meet the specific hedge accounting requirements of ASC 815, “Derivatives and Hedging.”

In September 2014, the Company entered into a foreign exchange forward contract with a notional amount of $236.6 million to limit its foreign currency exchange exposure to its contingent liability associated with the earn-out provisions in the BrandLoyalty acquisition. This forward contract is not designated as a hedging instrument under ASC 815.

Derivative Instruments

The following table presents the fair values of derivative instruments included within the Company’s unaudited condensed consolidated balance sheets as of September 30, 2014:

	September 30, 2014
	Balance Sheet Location	Fair Value
	(In thousands)
Designated as hedging instruments:
Foreign currency exchange hedges	Accrued expenses	$	138

Not designated as hedging instruments:
Foreign currency exchange forward contract	Other current liabilities	$	7,310
Interest rate derivatives	Other liabilities	$	334

The Company was not a party to any derivative instruments as of December 31, 2013.

The following table summarizes activity related to and identifies the location of the Company’s outstanding derivatives not designated as hedging instruments for the three and nine months ended September 30, 2014 and 2013 recognized in the Company’s unaudited condensed consolidated statements of income:

	2014				2013
For the three months ended September 30,	Income Statement Location	Gain (loss) on Derivative Instruments			Income Statement Location	Gain on Derivative Instruments
	(In thousands)
Interest rate derivatives	Interest expense on long-term and other debt, net	$	131		Securitization funding costs	$	—
Foreign currency exchange forward contract	General and administrative	$	(7,310	)	Securitization funding costs	$	—

For the nine months ended September 30,
Interest rate derivatives	Interest expense on long-term and other debt, net	$	244		Securitization funding costs	$	8,511
Foreign currency exchange forward contract	General and administrative	$	(7,310	)	Securitization funding costs	$	—

Gains and losses on derivatives not designated as hedging instruments are included in other operating activities in the unaudited condensed consolidated statements of cash flows for all periods presented.

A de minimis amount of gains was recognized in other comprehensive income for the three and nine months ended September 30, 2014 related to foreign exchange hedges designated as effective. There were no amounts reclassified from accumulated other comprehensive income into net income for the three and nine months ended September 30, 2014 and no ineffectiveness was recorded for the three and nine months ended September 30, 2014. At September 30, 2014, a de minimis amount is expected to be reclassified from accumulated other comprehensive income into net income in the coming 12 months.

The Company limits its exposure on derivatives by entering into contracts with institutions that are established dealers who maintain certain minimum credit criteria established by the Company. At September 30, 2014, the Company does not maintain any derivative instruments subject to master agreements that would require the Company to post collateral or that contain any credit-risk related contingent features.

- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

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+ Details

DEFERRED REVENUE

9 Months Ended

Sep. 30, 2014

DEFERRED REVENUE

DEFERRED REVENUE

11. DEFERRED REVENUE

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, 2013	$	346,631		$	790,555		$	1,137,186
Cash proceeds	156,335			321,159			477,494
Revenue recognized	(150,676		)	(367,979		)	(518,655		)
Other	—			(356		)	(356		)
Effects of foreign currency translation	(17,961		)	(39,541		)	(57,502		)
September 30, 2014	$	334,329		$	703,838		$	1,038,167
Amounts recognized in the unaudited condensed consolidated balance sheets:
Current liabilities	$	169,494		$	703,838		$	873,332
Non-current liabilities	$	164,835		$	—		$	164,835

COMMITMENTS AND CONTINGENCIES	9 Months Ended
COMMITMENTS AND CONTINGENCIES	Sep. 30, 2014
COMMITMENTS AND CONTINGENCIES.
COMMITMENTS AND CONTINGENCIES	12. COMMITMENTS AND CONTINGENCIES On September 11, 2014, the Company entered into a merger agreement with Conversant, Inc. (“Conversant”), providing for the merger in which the Company will acquire Conversant. Subject to the terms and conditions of the merger agreement, the Company will pay Conversant stockholders consideration valued at $35.00 per share, which is estimated at approximately $2.3 billion in the aggregate based on the closing price as of September 30, 2014. Each outstanding share of Conversant common stock will be exchanged for consideration consisting of (i) 0.07037 shares of the Company’s common stock (the “fixed exchange ratio”), and (ii) an amount in cash equal to $35.00 minus the product of (a) the volume weighted average price per share of the Company’s common stock on the New York Stock Exchange (“NYSE”) for the consecutive period of fifteen trading days ending on the close of trading on the second trading day immediately preceding the closing of the merger and (b) the fixed exchange ratio. However, the amount of cash the Company will pay per share of Conversant common stock is fixed within a collar. The maximum amount of cash the Company will pay per share of Conversant common stock will equal $18.62 and the minimum amount of cash the Company will pay per share of Conversant common stock will equal $14.98. In the event that the maximum or minimum cash amount is reached, the amount of cash per share (i.e., either $18.62 or $14.98) and the fixed exchange ratio of 0.07037 would remain constant and the value received by Conversant stockholders would fluctuate below or above $35.00, respectively, outside of the collar. As an alternative to the base merger consideration described above, Conversant stockholders may instead elect to receive, for each share of Conversant common stock, all stock or all cash consideration, subject to pro ration amongst electing stockholders such that the aggregate amount of cash paid and the aggregate number of shares of the Company’s common stock issued in the merger is the same that would have been paid and issued if each share of Conversant common stock had been converted into the base merger consideration. Completion of the merger is subject to customary conditions, including approval by Conversant stockholders, listing of the shares of the Company’s common stock to be issued in the merger on the NYSE, effectiveness of the Company’s registration statement on Form S-4 filed with the SEC, and receipt of required regulatory approvals.

REDEEMABLE NON-CONTROLLING INTEREST

9 Months Ended

Sep. 30, 2014

REDEEMABLE NON-CONTROLLING INTEREST

REDEEMABLE NON-CONTROLLING INTEREST

13. REDEEMABLE NON-CONTROLLING INTEREST

On January 2, 2014, the Company acquired a 60% ownership interest in BrandLoyalty. The remaining 40% interest held by minority interest shareholders is considered a redeemable non-controlling interest. Pursuant to the BrandLoyalty share purchase agreement, the Company may acquire the remaining 40% ownership interest in BrandLoyalty over a four-year period, 10% per year, at 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 sellers have a put option to sell the Company their 10% interest for the respective year. The Company recognized a redeemable non-controlling interest in the amount of $341.9 million, which was measured at fair value at the acquisition date. A reconciliation of the changes in the redeemable non-controlling interest is as follows:

	Redeemable Non-Controlling Interest
	(In thousands)
Balance at January 2, 2014	$	341,907
Net income attributable to non-controlling interest	803
Other comprehensive income attributable to non-controlling interest	711
Foreign currency translation adjustments	(25,998		)
Balance at September 30, 2014	$	317,423

STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2014

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

14. STOCKHOLDERS’ EQUITY

Stock Repurchase Program

On December 5, 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 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.

For the nine months ended September 30, 2014, the Company acquired a total of 873,397 shares of its common stock for $217.5 million. As of September 30, 2014, the Company had $182.5 million available under the stock repurchase program.

Stock Compensation Expense

Total stock-based compensation expense recognized in the Company’s unaudited condensed consolidated statements of income for the three and nine months ended September 30, 2014 and 2013 is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Cost of operations	$	11,589	$	9,812	$	33,801	$	29,354
General and administrative	6,668		5,601		15,953		14,074
Total	$	18,257	$	15,413	$	49,754	$	43,428

During the nine months ended September 30, 2014, the Company awarded 174,590 performance-based restricted stock units with a weighted average grant date fair value per share of $283.93 as determined on the date of grant. The performance restriction on the awards will lapse upon determination by the Board of Directors or the Compensation Committee of the Board of Directors that the Company’s earnings before taxes for the period from January 1, 2014 to December 31, 2014 met certain pre-defined vesting criteria that permit a range from 50% to 150% of such performance-based restricted stock units to vest. Upon such determination, the restrictions will lapse with respect to 33% of the award on February 18, 2015, an additional 33% of the award on February 18, 2016 and the final 34% of the award on February 21, 2017, provided that the participant is employed by the Company on each such vesting date.

During the nine months ended September 30, 2014, the Company awarded 60,121 service-based restricted stock units with a weighted average grant date fair value per share of $280.29 as determined on the date of grant. Service-based restricted stock units typically vest ratably over three years provided that the participant is employed by the Company on each such vesting date.

- 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
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-Subparagraph (SAB TOPIC 4.C)
-URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187143-122770

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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-Section 50
-Paragraph 6
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-Section 50
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-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
-Topic 505
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-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph d
-Article 4

Reference 15: http://www.xbrl.org/2003/role/presentationRef
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-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 29, 30, 31
-Article 5

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-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section E

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-Name Regulation S-X (SX)
-Number 210
-Section 08
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-Name Staff Accounting Bulletin (SAB)
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Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

+ Details

ACCUMULATED OTHER COMPREHENSIVE INCOME

9 Months Ended

Sep. 30, 2014

ACCUMULATED OTHER COMPREHENSIVE INCOME

ACCUMULATED OTHER COMPREHENSIVE INCOME

15. ACCUMULATED OTHER COMPREHENSIVE INCOME

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

Three Months Ended September 30, 2014	Net Unrealized Gains (Losses) on Securities			Unrealized Losses on Cash Flow Hedges			Foreign Currency Translation Adjustments(1)			Accumulated Other Comprehensive Income (Loss)
	(In thousands)
Balance as of June 30, 2014	$	4,745		$	—		$	(18,940	)	$	(14,195	)
Changes in other comprehensive loss	(1,991		)	(104		)	(37,956		)	(40,051		)
Balance as of September 30, 2014	$	2,754		$	(104	)	$	(56,896	)	$	(54,246	)

Three Months Ended September 30, 2013	Net Unrealized Gains (Losses) on Securities		Unrealized Losses on Cash Flow Hedges		Foreign Currency Translation Adjustments(1)			Accumulated Other Comprehensive Income (Loss)
	(In thousands)
Balance as of June 30, 2013	$	4,867	$	—	$	(23,917	)	$	(19,050	)
Changes in other comprehensive income (loss)	50		—		(247		)	(197		)
Balance as of September 30, 2013	$	4,917	$	—	$	(24,164	)	$	(19,247	)

Nine Months Ended September 30, 2014	Net Unrealized Gains (Losses) on Securities			Unrealized Losses on Cash Flow Hedges			Foreign Currency Translation Adjustments(1)			Accumulated Other Comprehensive Income (Loss)
	(In thousands)
Balance as of December 31, 2013	$	4,189		$	—		$	(22,416	)	$	(18,227	)
Changes in other comprehensive loss	(1,435		)	(104		)	(34,480		)	(36,019		)
Balance as of September 30, 2014	$	2,754		$	(104	)	$	(56,896	)	$	(54,246	)

Nine Months Ended September 30, 2013	Net Unrealized Gains (Losses) on Securities			Unrealized Losses on Cash Flow Hedges		Foreign Currency Translation Adjustments(1)			Accumulated Other Comprehensive Income (Loss)
	(In thousands)
Balance as of December 31, 2012	$	10,321		$	—	$	(32,182	)	$	(21,861	)
Changes in other comprehensive income (loss)	(5,404		)	—		8,018			2,614
Balance as of September 30, 2013	$	4,917		$	—	$	(24,164	)	$	(19,247	)

(1)

Primarily related to the impact of changes in the Canadian dollar and Euro exchange rates for the three and nine months ended September 30, 2014 and to the impact of changes in the Canadian dollar exchange rate for the three and nine months ended September 30, 2013.

There were no reclassifications out of accumulated other comprehensive income (loss) into net income for the three months ended September 30, 2014 and 2013 and the nine months ended September 30, 2014. A de minimis amount was reclassified out of accumulated other comprehensive income (loss) into net income for the nine months ended September 30, 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
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-URI http://asc.fasb.org/extlink&oid=36458714&loc=d3e689-108580

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Publisher FASB
-Name Accounting Standards Codification
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-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
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-Publisher FASB
-Name Accounting Standards Codification
-Glossary Reclassification Adjustments
-URI http://asc.fasb.org/extlink&oid=6522872

+ Details

FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2014

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:

	September 30, 2014				December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In thousands)
Financial assets
Cash and cash equivalents	$	634,824	$	634,824	$	969,822	$	969,822
Trade receivables, net	455,064		455,064		394,822		394,822
Credit card and loan receivables, net	8,783,491		8,783,491		8,069,713		8,069,713
Loan receivables held for sale	70,588		70,588		62,082		62,082
Redemption settlement assets, restricted	529,037		529,037		510,349		510,349
Cash collateral, restricted	36,576		36,576		34,124		34,124
Other investments	208,942		208,942		99,221		99,221
Financial liabilities
Accounts payable	318,798		318,798		210,019		210,019
Derivative instruments	7,782		7,782		—		—
Deposits	3,727,805		3,749,972		2,816,361		2,836,352
Non-recourse borrowings of consolidated securitization entities	4,451,916		4,484,093		4,591,916		4,618,205
Long-term and other debt	2,957,035		2,961,663		2,800,281		4,404,500
Contingent liability	229,781		229,781		—		—

Fair Value of Assets and Liabilities Held at September 30, 2014 and December 31, 2013

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. 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 — Loan receivables held for sale 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 government and corporate bonds. 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, U.S. Treasury bonds 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 — Represents interest rate and foreign currency derivative instruments. The fair value of the interest rate derivative 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. The fair value of the foreign currency derivative instruments is estimated based on published quotations of spot foreign currency rates and forward points which are converted into implied foreign currency rates.

Contingent liability — The fair value is determined using a Monte Carlo simulation valuation technique, which is based on certain key assumptions, including the estimated 2014 earnings and net debt of BrandLoyalty, each as defined in the share purchase agreement, earnings volatility, and discount rate.

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 tables provide information for the assets and liabilities carried at fair value measured on a recurring basis as of September 30, 2014 and December 31, 2013:

	Balance at September 30,		Fair Value Measurements at September 30, 2014 Using
	2014		Level 1		Level 2		Level 3
	(In thousands)
Government bonds (1)	$	4,572	$	—	$	4,572	$	—
Corporate bonds (1)	379,965		—		379,965		—
Cash collateral, restricted	36,576		1,582		—		34,994
Other investments (2)	208,942		133,647		75,295		—
Total assets measured at fair value	$	630,055	$	135,229	$	459,832	$	34,994

Derivative instruments (3)	7,782		—		7,782		—
Contingent liability (4)	229,781		—		—		229,781
Total liabilities measured at fair value	$	237,563	$	—	$	7,782	$	229,781

	Balance at December 31,		Fair Value Measurements at December 31, 2013 Using
	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

(1)

Amounts are included in redemption settlement assets in the unaudited condensed consolidated balance sheets.

(2)

Amounts are included in other current assets and other assets in the unaudited condensed consolidated balance sheets.

(3)

Interest rate derivatives are included in other liabilities in the unaudited condensed consolidated balance sheets. Foreign currency derivatives are included in accrued expenses and other current liabilities in the unaudited condensed consolidated balance sheets.

(4)

Amount is included in accrued expenses in the unaudited condensed consolidated balance sheets.

The following tables summarize the changes in fair value of the Company’s asset and liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as defined in ASC 825 as of September 30, 2014 and 2013:

	Cash Collateral, Restricted
	Three Months Ended September 30,					Nine Months Ended September 30,
	2014		2013			2014		2013
	(In thousands)
Balance at beginning of period	$	34,710	$	45,951		$	34,124	$	62,660
Total gains (realized or unrealized):
Included in earnings	284		296			870		1,087
Purchases	—		—			—		—
Sales	—		—			—		—
Issuances	—		—			—		—
Settlements	—		(12,405		)	—		(29,905		)
Transfers in or out of Level 3	—		—			—		—
Balance at end of period	$	34,994	$	33,842		$	34,994	$	33,842

Gains for the period included in earnings related to assets still held at end of period	$	284	$	296		$	870	$	1,087

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 1 to 25 months, with a weighted average term of 7.9 months. The unobservable input used to calculate the fair value was the discount rate of 3.0%, which was based on an interest rate curve that is observable in the market as adjusted for a credit spread. Significant increases in the term or the discount rate would result in a lower fair value. Conversely, significant decreases in the term or the discount rate would result in a higher fair value.

For the three and nine months ended September 30, 2014 and 2013, gains included in earnings attributable to cash collateral, restricted are included in securitization funding costs in the Company’s unaudited condensed consolidated statements of income.

	Contingent Liability
	Three Months Ended September 30,					Nine Months Ended September 30,
	2014			2013		2014			2013
	(In thousands)
Balance at beginning of period	$	249,067		$	—	$	—		$	—
Total gains or losses (realized or unrealized):
Included in earnings	—			—		—			—
Purchases	—			—		248,702			—
Sales	—			—		—			—
Issuances	—			—		—			—
Settlements	—			—		—			—
Foreign currency transaction adjustments	(19,286		)	—		(18,921		)	—
Transfers in or out of Level 3	—			—		—			—
Balance at end of period	$	229,781		$	—	$	229,781		$	—

Gains for the period included in earnings related to liability still held at end of period	$	19,286		$	—	$	18,921		$	—

The contingent liability represents the additional consideration that the Company may be required to pay in the first quarter of 2015 as part of the earn-out provisions included in the share purchase agreement for the BrandLoyalty acquisition. The contingent liability is included in accrued expenses in the Company’s unaudited condensed consolidated balance sheets and is recorded at fair value. The fair value was determined using a Monte Carlo simulation valuation technique, which is based on certain key assumptions, including estimated 2014 earnings and net debt for BrandLoyalty, each as defined in the share purchase agreement, earnings volatility and a discount rate. Earnings volatility was determined based on observed market volatility for a guideline set of similar companies. The discount rate was based on observed borrowing rates on debt instruments with similar terms, adjusted for an unobservable risk premium. Significant increases in the estimated 2014 earnings for BrandLoyalty or significant decreases in the earnings volatility, discount rate or net debt for BrandLoyalty would result in an increase in the fair value of the contingent liability. Conversely, significant decreases in the estimated 2014 earnings for BrandLoyalty or significant increases in the earnings volatility, discount rate or net debt for BrandLoyalty would result in a decrease in the fair value of the contingent liability.

For the three and nine months ended September 30, 2014, foreign currency transaction gains or losses included in earnings attributable to the contingent liability are included in general and administrative expenses in the Company’s unaudited condensed consolidated statements of income.

There were no transfers between Levels 1 and 2 within the fair value hierarchy for the three and nine months ended September 30, 2014 and 2013.

Financial Instruments Disclosed but Not Carried at Fair Value

The following table provides assets and liabilities disclosed but not carried at fair value as of September 30, 2014 and December 31, 2013:

	Fair Value Measurements at September 30, 2014
	Total		Level 1		Level 2		Level 3
	(In thousands)
Financial assets
Cash and cash equivalents	$	634,824	$	634,824	$	—	$	—
Credit card and loan receivables, net	8,783,491		—		—		8,783,491
Loan receivables held for sale	70,588		—		—		70,588
Total	$	9,488,903	$	634,824	$	—	$	8,854,079

Financial liabilities
Deposits	$	3,749,972	$	—	$	3,749,972	$	—
Non-recourse borrowings of consolidated securitization entities	4,484,093		—		4,484,093		—
Long-term and other debt	2,961,663		—		2,961,663		—
Total	$	11,195,728	$	—	$	11,195,728	$	—

	Fair Value Measurements at December 31, 2013
	Total		Level 1		Level 2		Level 3
	(In thousands)
Financial assets
Cash and cash equivalents	$	969,822	$	969,822	$	—	$	—
Credit card and loan receivables, net	8,069,713		—		—		8,069,713
Loan receivables held for sale	62,082		—		—		62,082
Total	$	9,101,617	$	969,822	$	—	$	8,131,795

Financial liabilities
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	$	11,859,057	$	—	$	11,859,057	$	—

- 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

INCOME TAXES	9 Months Ended
INCOME TAXES	Sep. 30, 2014
INCOME TAXES
INCOME TAXES	17. INCOME TAXES For each of the three and nine months ended September 30, 2014, the Company utilized an effective tax rate of 36.6% to calculate its provision for income taxes. For the three and nine months ended September 30, 2013, the Company utilized an effective tax rate of 38.1% and 37.9%, respectively, to calculate its provision for income taxes. In accordance with ASC 740-270, “Income Taxes — Interim Reporting,” the Company’s expected annual effective tax rate for calendar year 2014 based on all known variables is 36.5%.

SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2014

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 and BrandLoyalty;

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, collections and marketing services for the Company’s private label and co-brand credit card programs.

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

Three Months Ended September 30, 2014	LoyaltyOne		Epsilon			Private Label Services and Credit		Corporate/ Other			Eliminations			Total
	(In thousands)
Revenues	$	324,484	$	377,554		$	622,330	$	144		$	(5,379	)	$	1,319,133

Income (loss) before income taxes	51,078		42,597			237,053		(70,551		)	—			260,177
Interest expense, net	1,303		(3		)	30,675		29,489			—			61,464
Operating income (loss)	52,381		42,594			267,728		(41,062		)	—			321,641
Depreciation and amortization	22,529		36,564			15,202		2,036			—			76,331
Stock compensation expense	2,954		5,137			3,498		6,668			—			18,257
Adjusted EBITDA (1)	77,864		84,295			286,428		(32,358		)	—			416,229
Less: Securitization funding costs	—		—			22,763		—			—			22,763
Less: Interest expense on deposits	—		—			9,064		—			—			9,064
Less: Adjusted EBITDA attributable to non-controlling interest	8,378		—			—		—			—			8,378
Adjusted EBITDA, net (1)	$	69,486	$	84,295		$	254,601	$	(32,358	)	$	—		$	376,024

Three Months Ended September 30, 2013	LoyaltyOne			Epsilon			Private Label Services and Credit		Corporate/ Other			Eliminations			Total
	(In thousands)
Revenues	$	213,338		$	356,035		$	531,098	$	40		$	(4,064	)	$	1,096,447

Income (loss) before income taxes	55,139			38,863			201,009		(80,258		)	—			214,753
Interest expense, net	(381		)	(7		)	29,575		44,828			—			74,015
Operating income (loss)	54,758			38,856			230,584		(35,430		)	—			288,768
Depreciation and amortization	4,806			34,886			13,161		1,619			—			54,472
Stock compensation expense	2,664			4,689			2,458		5,602			—			15,413
Adjusted EBITDA (1)	62,228			78,431			246,203		(28,209		)	—			358,653
Less: Securitization funding costs	—			—			22,914		—			—			22,914
Less: Interest expense on deposits	—			—			7,287		—			—			7,287
Less: Adjusted EBITDA attributable to non-controlling interest	—			—			—		—			—			—
Adjusted EBITDA, net (1)	$	62,228		$	78,431		$	216,002	$	(28,209	)	$	—		$	328,452

Nine Months Ended September 30, 2014	LoyaltyOne		Epsilon			Private Label Services and Credit		Corporate/ Other			Eliminations			Total
	(In thousands)
Revenues	$	1,009,037	$	1,082,111		$	1,741,384	$	372		$	(15,713	)	$	3,817,191

Income (loss) before income taxes	155,510		81,342			660,299		(203,321		)	—			693,830
Interest expense, net	4,947		(22		)	90,866		96,352			—			192,143
Operating income (loss)	160,457		81,320			751,165		(106,969		)	—			885,973
Depreciation and amortization	67,501		110,479			40,876		5,843			—			224,699
Stock compensation expense	8,443		15,390			9,968		15,953			—			49,754
Adjusted EBITDA (1)	236,401		207,189			802,009		(85,173		)	—			1,160,426
Less: Securitization funding costs	—		—			67,974		—			—			67,974
Less: Interest expense on deposits	—		—			25,526		—			—			25,526
Less: Adjusted EBITDA attributable to non-controlling interest	24,381		—			—		—			—			24,381
Adjusted EBITDA, net (1)	$	212,020	$	207,189		$	708,509	$	(85,173	)	$	—		$	1,042,545

Nine Months Ended September 30, 2013	LoyaltyOne			Epsilon			Private Label Services and Credit		Corporate/ Other			Eliminations			Total
	(In thousands)
Revenues	$	674,382		$	1,005,789		$	1,508,321	$	40		$	(10,556	)	$	3,177,976

Income (loss) before income taxes	170,458			79,255			596,826		(237,391		)	—			609,148
Interest expense, net	(800		)	(46		)	91,802		149,069			—			240,025
Operating income (loss)	169,658			79,209			688,628		(88,322		)	—			849,173
Depreciation and amortization	13,465			103,814			39,657		3,962			—			160,898
Stock compensation expense	7,883			13,418			8,053		14,074			—			43,428
Adjusted EBITDA (1)	191,006			196,441			736,338		(70,286		)	—			1,053,499
Less: Securitization funding costs	—			—			72,093		—			—			72,093
Less: Interest expense on deposits	—			—			21,296		—			—			21,296
Less: Adjusted EBITDA attributable to non-controlling interest	—			—			—		—			—			—
Adjusted EBITDA, net (1)	$	191,006		$	196,441		$	642,949	$	(70,286	)	$	—		$	960,110

Adjusted EBITDA is a non-GAAP financial measure equal to net income, the most directly comparable financial measure based on GAAP plus stock compensation expense, provision for income taxes, interest expense, net, depreciation and other amortization and amortization of purchased intangibles. Adjusted EBITDA, net is also a non-GAAP financial measure equal to adjusted EBITDA less securitization funding costs, interest expense on deposits and adjusted EBITDA attributable to the non-controlling interest. Adjusted EBITDA and adjusted EBITDA, net are presented in accordance with ASC 280, “Segment Reporting,” as they are the primary performance metrics utilized to assess performance of the segments.

- 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
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 33
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 35
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 29
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599

+ Details

SUBSEQUENT EVENT	9 Months Ended
SUBSEQUENT EVENT	Sep. 30, 2014
SUBSEQUENT EVENT.
SUBSEQUENT EVENT	19. SUBSEQUENT EVENT On November 3, 2014, Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent under the 2013 Term Loan and the 2013 Credit Facility provided under the 2013 Credit Agreement, and certain other lenders party thereto (together, the “Lead Banks”) and the Company entered into a commitment letter to amend the 2013 Credit Agreement. Pursuant to the commitment letter, the Company and the Lead Banks will enter into an amendment to the 2013 Credit Agreement that will provide for, among other things, (i) a new five-year incremental term loan of $1.1 billion and (ii) the extension by the Lead Banks of the maturity date of their portions of the 2013 Term Loan and the 2013 Credit Facility to the date five years from the closing of the new incremental term loan. Other lenders under the 2013 Credit Agreement will be offered the opportunity to extend the maturity date of their portions of the 2013 Term Loan and the 2013 Credit Facility to the same date. The commitment of each Lead Bank under the commitment letter will terminate if, among other things, the parties have not executed the amendment to the 2013 Credit Agreement on or before March 31, 2015, the Company fails to pay the requisite fee to the arranging banks required under the terms of the commitment letter, or any material adverse change occurs with respect to the Company’s business, financial position or operations. Both the new incremental term loan and the proposed extension of maturity of the 2013 Term Loan and the 2013 Credit Facility are subject to the satisfaction of certain conditions specified in the commitment letter. As a result, the Company cannot assure you that it will be able to amend the 2013 Credit Agreement or obtain the new incremental term loan on the terms described above or at all.

EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2014

EARNINGS PER SHARE

Schedule of computation of basic and diluted net income per share

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
	(In thousands, except per share amounts)
Numerator:
Net income attributable to Alliance Data Systems Corporation stockholders	$	164,242	$	132,878	$	439,081	$	378,297
Denominator:
Weighted average shares, basic	57,742		48,710		54,998		49,199
Weighted average effect of dilutive securities:
Shares from assumed conversion of convertible senior notes	—		7,512		2,816		9,419
Shares from assumed conversion of convertible note warrants	1,664		9,141		4,561		7,937
Net effect of dilutive stock options and unvested restricted stock	502		656		512		613
Denominator for diluted calculations	59,908		66,019		62,887		67,168

Net income attributable to Alliance Data Systems Corporation stockholders per share:
Basic	$	2.84	$	2.73	$	7.98	$	7.69
Diluted	$	2.74	$	2.01	$	6.98	$	5.63

ACQUISITION (Tables)

9 Months Ended

Sep. 30, 2014

ACQUISITION

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

	As of January 2, 2014
	(In thousands)
Current assets, net of cash acquired	$	246,769
Deferred tax asset	3,509
Property and equipment	19,719
Other non-current assets	3,994
Intangible assets	423,832
Goodwill	565,015
Total assets acquired	1,262,838

Current liabilities	146,559
Current portion of long-term debt	34,180
Deferred tax liability	105,512
Long-term debt (net of current portion)	126,323
Other liabilities	142
Total liabilities assumed	412,716

Redeemable non-controlling interest	341,907

Net assets acquired	$	508,215

CREDIT CARD AND LOAN RECEIVABLES (Tables)

9 Months Ended

Sep. 30, 2014

CREDIT CARD AND LOAN RECEIVABLES

Schedule of components of total credit card and loan receivables

	September 30, 2014		December 31, 2013
	(In thousands)
Principal receivables	$	8,849,589	$	8,166,961
Billed and accrued finance charges	381,761		343,521
Other credit card and loan receivables	63,495		62,400
Total credit card and loan receivables	9,294,845		8,572,882
Less credit card receivables — restricted for securitization investors	7,214,380		7,080,014
Other credit card and loan receivables	$	2,080,465	$	1,492,868

Schedule of Company's allowance for loan loss

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
	(In thousands)
Balance at beginning of period	$	483,580		$	448,396		$	503,169		$	481,958
Provision for loan loss	114,577			90,976			281,811			215,420
Change in estimate for uncollectible unpaid interest and fees	1,000			—			1,500			—
Recoveries	39,074			26,204			115,548			84,152
Principal charge-offs	(126,877		)	(103,535		)	(390,674		)	(319,489		)
Balance at end of period	$	511,354		$	462,041		$	511,354		$	462,041

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

	September 30, 2014		% of Total		December 31, 2013		% of Total
	(In thousands, except percentages)
Receivables outstanding — principal	$	8,849,589	100.0	%	$	8,166,961	100.0	%
Principal receivables balances contractually delinquent:
31 to 60 days	138,036		1.6		114,430		1.4
61 to 90 days	85,226		0.9		74,700		0.9
91 or more days	168,368		1.9		150,425		1.9
Total	$	391,630	4.4	%	$	339,555	4.2	%

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

	Three Months Ended September 30, 2014					Nine Months Ended September 30, 2014
	Number of Restructurings	Pre- modification Outstanding Balance		Post- modification Outstanding Balance		Number of Restructurings	Pre- modification Outstanding Balance		Post- modification Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings — credit card receivables	36,846	$	37,130	$	37,100	102,000	$	101,837	$	101,750

	Three Months Ended September 30, 2013					Nine Months Ended September 30, 2013
	Number of Restructurings	Pre- modification Outstanding Balance		Post- modification Outstanding Balance		Number of Restructurings	Pre- modification Outstanding Balance		Post- modification Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings — credit card receivables	37,032	$	34,169	$	34,147	109,927	$	100,270	$	100,209

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

	Three Months Ended September 30, 2014			Nine Months Ended September 30, 2014
	Number of Restructurings	Outstanding Balance		Number of Restructurings	Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings that subsequently defaulted — credit card receivables	14,047	$	14,037	44,545	$	44,009

	Three Months Ended September 30, 2013			Nine Months Ended September 30, 2013
	Number of Restructurings	Outstanding Balance		Number of Restructurings	Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings that subsequently defaulted — credit card receivables	15,536	$	14,874	46,729	$	44,295

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

	September 30, 2014
Age of Accounts Since Origination	Number of Active Accounts with Balances	Percentage of Active Accounts with Balances		Total Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding
	(In thousands, except percentages)
0-12 Months	4,869	28.2	%	$	2,220,148	25.1	%
13-24 Months	2,554	14.8		1,282,695		14.5
25-36 Months	1,781	10.3		937,043		10.6
37-48 Months	1,283	7.4		701,808		7.9
49-60 Months	969	5.6		557,911		6.3
Over 60 Months	5,828	33.7		3,149,984		35.6
Total	17,284	100.0	%	$	8,849,589	100.0	%

	September 30, 2013
Age of Accounts Since Origination	Number of Active Accounts with Balances	Percentage of Active Accounts with Balances		Total Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding
	(In thousands, except percentages)
0-12 Months	4,233	27.0	%	$	1,660,718	23.5	%
13-24 Months	2,187	13.9		930,082		13.2
25-36 Months	1,514	9.7		684,463		9.7
37-48 Months	1,136	7.2		553,471		7.8
49-60 Months	931	5.9		500,259		7.1
Over 60 Months	5,694	36.3		2,728,040		38.7
Total	15,695	100.0	%	$	7,057,033	100.0	%

Schedule of composition of obligor credit quality

	September 30, 2014				September 30, 2013
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months)	Total Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding		Total Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding
	(In thousands, except percentages)
No Score	$	180,003	2.0	%	$	144,336	2.0	%
27.1% and higher	430,333		4.9		330,802		4.7
17.1% - 27.0%	829,208		9.4		669,535		9.5
12.6% - 17.0%	955,459		10.8		746,424		10.6
3.7% - 12.5%	3,613,024		40.8		2,819,112		39.9
1.9% - 3.6%	1,837,713		20.8		1,487,871		21.1
Lower than 1.9%	1,003,849		11.3		858,953		12.2
Total	$	8,849,589	100.0	%	$	7,057,033	100.0	%

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

	September 30, 2014		December 31, 2013
	(In thousands)
Total credit card receivables — restricted for securitization investors	$	7,214,380	$	7,080,014
Principal amount of credit card receivables — restricted for securitization investors, 90 days or more past due	$	138,525	$	131,659

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Net charge-offs of securitized principal	$	75,092	$	70,752	$	240,754	$	219,441

OTHER INVESTMENTS (Tables)

9 Months Ended

Sep. 30, 2014

OTHER INVESTMENTS

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

	September 30, 2014									December 31, 2013
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(In thousands)
Restricted cash	$	28,694	$	—	$	—		$	28,694	$	25,988	$	—	$	—		$	25,988
Marketable securities	82,481		223		(2,276		)	80,428		77,351		62		(4,180		)	73,233
U.S. Treasury bonds	100,079		2		(261		)	99,820		—		—		—			—
Total	$	211,254	$	225	$	(2,537	)	$	208,942	$	103,339	$	62	$	(4,180	)	$	99,221

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

	September 30, 2014
	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	$	21,276	$	(261	)	$	49,146	$	(2,015	)	$	70,422	$	(2,276	)
U.S. Treasury bonds	74,798		(261		)	—		—			74,798		(261		)
Total	$	96,074	$	(522	)	$	49,146	$	(2,015	)	$	145,220	$	(2,537	)

	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	)

Schedule of marketable securities and U.S. Treasury bonds by contractual maturity date

	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	6,684	$	6,620
Due after one year through five years	100,079		99,820
Due after five years through ten years	4,325		4,486
Due after ten years	71,472		69,322
Total	$	182,560	$	180,248

REDEMPTION SETTLEMENT ASSETS (Tables)

9 Months Ended

Sep. 30, 2014

REDEMPTION SETTLEMENT ASSETS

Schedule of Redemption Settlement Assets

	September 30, 2014									December 31, 2013
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(In thousands)
Cash and cash equivalents	$	144,500	$	—	$	—		$	144,500	$	73,984	$	—	$	—		$	73,984
Government bonds	4,574		—		(2		)	4,572		—		—		—			—
Corporate bonds	375,745		4,224		(4		)	379,965		429,592		7,083		(310		)	436,365
Total	$	524,819	$	4,224	$	(6	)	$	529,037	$	503,576	$	7,083	$	(310	)	$	510,349

	September 30, 2014
	Less than 12 months					12 Months or Greater				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
Government bonds	$	4,572	$	(2	)	$	—	$	—	$	4,572	$	(2	)
Corporate bonds	12,253		(4		)	—		—		12,253		(4		)
Total	$	16,825	$	(6	)	$	—	$	—	$	16,825	$	(6	)

	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)
Corporate bonds	$	80,493	$	(310	)	$	—	$	—	$	80,493	$	(310	)

Schedule of redemption settlement assets by contractual maturity date

	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	178,889	$	180,174
Due after one year through five years	201,430		204,363
Total	$	380,319	$	384,537

INTANGIBLE ASSETS AND GOODWILL (Tables)

9 Months Ended

Sep. 30, 2014

INTANGIBLE ASSETS AND GOODWILL

Schedule of intangible assets

	September 30, 2014
	Gross Assets		Accumulated Amortization			Net		Amortization Life and Method
	(In thousands)
Finite Lived Assets
Customer contracts and lists	$	806,524	$	(273,070	)	$	533,454	3-12 years—straight line
Premium on purchased credit card portfolios	212,848		(102,583		)	110,265		3-10 years—straight line, accelerated
Customer database	161,700		(135,936		)	25,764		4-10 years—straight line
Collector database	62,506		(58,182		)	4,324		30 years—15% declining balance
Tradenames	83,820		(26,079		)	57,741		3-15 years—straight line
Purchased data lists	11,919		(6,401		)	5,518		1-5 years—straight line, accelerated
Favorable lease	3,291		(635		)	2,656		10 years—straight line
Noncompete agreements	1,300		(758		)	542		3 years—straight line
	$	1,343,908	$	(603,644	)	$	740,264
Indefinite Lived Assets
Tradenames	12,350		—			12,350		Indefinite life
Total intangible assets	$	1,356,258	$	(603,644	)	$	752,614

	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

Schedule of estimated amortization expense related to intangible assets

	For Years Ending December 31,
	(In thousands)
2014 (excluding the nine months ended September 30, 2014)	$	45,240
2015	168,123
2016	150,454
2017	112,283
2018	95,987
2019 & thereafter	168,177

Schedule of changes in carrying amount of goodwill

	LoyaltyOne®			Epsilon®			Private Label Services and Credit		Corporate/ Other		Total
	(In thousands)
December 31, 2013	$	232,449		$	1,241,522		$	261,732	$	—	$	1,735,703
Goodwill acquired during the year	565,015			—			—		—		565,015
Effects of foreign currency translation	(54,358		)	(578		)	—		—		(54,936		)
September 30, 2014	$	743,106		$	1,240,944		$	261,732	$	—	$	2,245,782

DEBT (Tables)

9 Months Ended

Sep. 30, 2014

DEBT

Schedule of debt

Description	September 30, 2014			December 31, 2013			Maturity	Interest Rate
	(Dollars in thousands)

Long-term and other debt:
2013 credit facility	$	120,000		$	336,000		July 2018		(1)
2013 term loan	1,210,938			1,234,688			July 2018		(1)
BrandLoyalty credit facility	128,975			—			December 2015		(2)
Convertible senior notes due 2014	—			333,082			—	—
Senior notes due 2017	397,122			396,511			December 2017	5.250	%
Senior notes due 2020	500,000			500,000			April 2020	6.375	%
Senior notes due 2022	600,000			—			August 2022	5.375	%
Total long-term and other debt	2,957,035			2,800,281
Less: current portion	(78,537		)	(364,489		)
Long-term portion	$	2,878,498		$	2,435,792

Deposits:
Certificates of deposit	$	3,065,401		$	2,486,533		Various — October 2014 — January 2021	0.15% to 3.30%
Money market deposits	662,404			329,828			On demand	0.01% to 0.15%
Total deposits	3,727,805			2,816,361
Less: current portion	(2,066,815		)	(1,544,059		)
Long-term portion	$	1,660,990		$	1,272,302

Non-recourse borrowings of consolidated securitization entities:
Fixed rate asset-backed term note securities	$	3,301,916		$	3,001,916		Various — October 2014 - June 2019	0.61% to 6.75%
Floating rate asset-backed term note securities	450,000			—			February 2016		(3)
Conduit asset-backed securities	700,000			1,590,000			Various — September 2015 — May 2016		(4)
Total non-recourse borrowings of consolidated securitization entities	4,451,916			4,591,916
Less: current portion	(1,268,750		)	(1,025,000		)
Long-term portion	$	3,183,166		$	3,566,916

(1) The interest rate is based upon the London Interbank Offered Rate (“LIBOR”) plus an applicable margin. At September 30, 2014, the weighted average interest rate was 1.91% for both the 2013 Credit Facility and 2013 Term Loan.

(2) The interest rate is based upon the Euro Interbank Offered Rate (“EURIBOR”) plus an applicable margin. At September 30, 2014, the weighted average interest rate was 3.21%.

(3) The interest rate is based upon LIBOR plus an applicable margin. At September 30, 2014, the interest rate was 0.53%.

(4) The interest rate is based upon LIBOR or the asset-backed commercial paper costs of each individual conduit provider plus an applicable margin. At September 30, 2014, the interest rates ranged from 1.00% to 1.69%.

Schedule of interest expense on convertible senior notes

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
	(In thousands, except percentages)
Interest expense calculated on contractual interest rate	$	—		$	5,074		$	5,630		$	20,073
Amortization of discount on liability component	—			12,602			11,888			57,321
Total interest expense on convertible senior notes	$	—		$	17,676		$	17,518		$	77,394

Effective interest rate (annualized)	—		%	13.2		%	14.2		%	11.8		%

DERIVATIVE INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2014

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Schedule of fair value of derivative instruments

	September 30, 2014
	Balance Sheet Location	Fair Value
	(In thousands)
Designated as hedging instruments:
Foreign currency exchange hedges	Accrued expenses	$	138

Not designated as hedging instruments:
Foreign currency exchange forward contract	Other current liabilities	$	7,310
Interest rate derivatives	Other liabilities	$	334

Schedule of activity and location of derivatives not designated as hedging instruments in the condensed consolidated statements of income

	2014				2013
For the three months ended September 30,	Income Statement Location	Gain (loss) on Derivative Instruments			Income Statement Location	Gain on Derivative Instruments
	(In thousands)
Interest rate derivatives	Interest expense on long-term and other debt, net	$	131		Securitization funding costs	$	—
Foreign currency exchange forward contract	General and administrative	$	(7,310	)	Securitization funding costs	$	—

For the nine months ended September 30,
Interest rate derivatives	Interest expense on long-term and other debt, net	$	244		Securitization funding costs	$	8,511
Foreign currency exchange forward contract	General and administrative	$	(7,310	)	Securitization funding costs	$	—

DEFERRED REVENUE (Tables)

9 Months Ended

Sep. 30, 2014

DEFERRED REVENUE

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

	Deferred Revenue
	Service			Redemption			Total
	(In thousands)
December 31, 2013	$	346,631		$	790,555		$	1,137,186
Cash proceeds	156,335			321,159			477,494
Revenue recognized	(150,676		)	(367,979		)	(518,655		)
Other	—			(356		)	(356		)
Effects of foreign currency translation	(17,961		)	(39,541		)	(57,502		)
September 30, 2014	$	334,329		$	703,838		$	1,038,167
Amounts recognized in the unaudited condensed consolidated balance sheets:
Current liabilities	$	169,494		$	703,838		$	873,332
Non-current liabilities	$	164,835		$	—		$	164,835

REDEEMABLE NON-CONTROLLING INTEREST (Tables)

9 Months Ended

Sep. 30, 2014

REDEEMABLE NON-CONTROLLING INTEREST

Schedule of reconciliation of the changes in the Redeemable noncontrolling interest

	Redeemable Non-Controlling Interest
	(In thousands)
Balance at January 2, 2014	$	341,907
Net income attributable to non-controlling interest	803
Other comprehensive income attributable to non-controlling interest	711
Foreign currency translation adjustments	(25,998		)
Balance at September 30, 2014	$	317,423

STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Sep. 30, 2014

STOCKHOLDERS' EQUITY

Schedule of stock-based compensation expense

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Cost of operations	$	11,589	$	9,812	$	33,801	$	29,354
General and administrative	6,668		5,601		15,953		14,074
Total	$	18,257	$	15,413	$	49,754	$	43,428

ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables)

9 Months Ended

Sep. 30, 2014

ACCUMULATED OTHER COMPREHENSIVE INCOME

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

Three Months Ended September 30, 2014	Net Unrealized Gains (Losses) on Securities			Unrealized Losses on Cash Flow Hedges			Foreign Currency Translation Adjustments(1)			Accumulated Other Comprehensive Income (Loss)
	(In thousands)
Balance as of June 30, 2014	$	4,745		$	—		$	(18,940	)	$	(14,195	)
Changes in other comprehensive loss	(1,991		)	(104		)	(37,956		)	(40,051		)
Balance as of September 30, 2014	$	2,754		$	(104	)	$	(56,896	)	$	(54,246	)

Three Months Ended September 30, 2013	Net Unrealized Gains (Losses) on Securities		Unrealized Losses on Cash Flow Hedges		Foreign Currency Translation Adjustments(1)			Accumulated Other Comprehensive Income (Loss)
	(In thousands)
Balance as of June 30, 2013	$	4,867	$	—	$	(23,917	)	$	(19,050	)
Changes in other comprehensive income (loss)	50		—		(247		)	(197		)
Balance as of September 30, 2013	$	4,917	$	—	$	(24,164	)	$	(19,247	)

Nine Months Ended September 30, 2014	Net Unrealized Gains (Losses) on Securities			Unrealized Losses on Cash Flow Hedges			Foreign Currency Translation Adjustments(1)			Accumulated Other Comprehensive Income (Loss)
	(In thousands)
Balance as of December 31, 2013	$	4,189		$	—		$	(22,416	)	$	(18,227	)
Changes in other comprehensive loss	(1,435		)	(104		)	(34,480		)	(36,019		)
Balance as of September 30, 2014	$	2,754		$	(104	)	$	(56,896	)	$	(54,246	)

Nine Months Ended September 30, 2013	Net Unrealized Gains (Losses) on Securities			Unrealized Losses on Cash Flow Hedges		Foreign Currency Translation Adjustments(1)			Accumulated Other Comprehensive Income (Loss)
	(In thousands)
Balance as of December 31, 2012	$	10,321		$	—	$	(32,182	)	$	(21,861	)
Changes in other comprehensive income (loss)	(5,404		)	—		8,018			2,614
Balance as of September 30, 2013	$	4,917		$	—	$	(24,164	)	$	(19,247	)

(1) Primarily related to the impact of changes in the Canadian dollar and Euro exchange rates for the three and nine months ended September 30, 2014 and to the impact of changes in the Canadian dollar exchange rate for the three and nine months ended September 30, 2013.

FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2014

FINANCIAL INSTRUMENTS

Schedule of estimated fair value of Company's financial instruments

	September 30, 2014				December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In thousands)
Financial assets
Cash and cash equivalents	$	634,824	$	634,824	$	969,822	$	969,822
Trade receivables, net	455,064		455,064		394,822		394,822
Credit card and loan receivables, net	8,783,491		8,783,491		8,069,713		8,069,713
Loan receivables held for sale	70,588		70,588		62,082		62,082
Redemption settlement assets, restricted	529,037		529,037		510,349		510,349
Cash collateral, restricted	36,576		36,576		34,124		34,124
Other investments	208,942		208,942		99,221		99,221
Financial liabilities
Accounts payable	318,798		318,798		210,019		210,019
Derivative instruments	7,782		7,782		—		—
Deposits	3,727,805		3,749,972		2,816,361		2,836,352
Non-recourse borrowings of consolidated securitization entities	4,451,916		4,484,093		4,591,916		4,618,205
Long-term and other debt	2,957,035		2,961,663		2,800,281		4,404,500
Contingent liability	229,781		229,781		—		—

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

	Balance at September 30,		Fair Value Measurements at September 30, 2014 Using
	2014		Level 1		Level 2		Level 3
	(In thousands)
Government bonds (1)	$	4,572	$	—	$	4,572	$	—
Corporate bonds (1)	379,965		—		379,965		—
Cash collateral, restricted	36,576		1,582		—		34,994
Other investments (2)	208,942		133,647		75,295		—
Total assets measured at fair value	$	630,055	$	135,229	$	459,832	$	34,994

Derivative instruments (3)	7,782		—		7,782		—
Contingent liability (4)	229,781		—		—		229,781
Total liabilities measured at fair value	$	237,563	$	—	$	7,782	$	229,781

	Balance at December 31,		Fair Value Measurements at December 31, 2013 Using
	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

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

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

(3) Interest rate derivatives are included in other liabilities in the unaudited condensed consolidated balance sheets. Foreign currency derivatives are included in accrued expenses and other current liabilities in the unaudited condensed consolidated balance sheets.

(4) Amount is included in accrued expenses in the unaudited condensed 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
	Three Months Ended September 30,					Nine Months Ended September 30,
	2014		2013			2014		2013
	(In thousands)
Balance at beginning of period	$	34,710	$	45,951		$	34,124	$	62,660
Total gains (realized or unrealized):
Included in earnings	284		296			870		1,087
Purchases	—		—			—		—
Sales	—		—			—		—
Issuances	—		—			—		—
Settlements	—		(12,405		)	—		(29,905		)
Transfers in or out of Level 3	—		—			—		—
Balance at end of period	$	34,994	$	33,842		$	34,994	$	33,842

Gains for the period included in earnings related to assets still held at end of period	$	284	$	296		$	870	$	1,087

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

	Contingent Liability
	Three Months Ended September 30,					Nine Months Ended September 30,
	2014			2013		2014			2013
	(In thousands)
Balance at beginning of period	$	249,067		$	—	$	—		$	—
Total gains or losses (realized or unrealized):
Included in earnings	—			—		—			—
Purchases	—			—		248,702			—
Sales	—			—		—			—
Issuances	—			—		—			—
Settlements	—			—		—			—
Foreign currency transaction adjustments	(19,286		)	—		(18,921		)	—
Transfers in or out of Level 3	—			—		—			—
Balance at end of period	$	229,781		$	—	$	229,781		$	—

Gains for the period included in earnings related to liability still held at end of period	$	19,286		$	—	$	18,921		$	—

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

	Fair Value Measurements at September 30, 2014
	Total		Level 1		Level 2		Level 3
	(In thousands)
Financial assets
Cash and cash equivalents	$	634,824	$	634,824	$	—	$	—
Credit card and loan receivables, net	8,783,491		—		—		8,783,491
Loan receivables held for sale	70,588		—		—		70,588
Total	$	9,488,903	$	634,824	$	—	$	8,854,079

Financial liabilities
Deposits	$	3,749,972	$	—	$	3,749,972	$	—
Non-recourse borrowings of consolidated securitization entities	4,484,093		—		4,484,093		—
Long-term and other debt	2,961,663		—		2,961,663		—
Total	$	11,195,728	$	—	$	11,195,728	$	—

	Fair Value Measurements at December 31, 2013
	Total		Level 1		Level 2		Level 3
	(In thousands)
Financial assets
Cash and cash equivalents	$	969,822	$	969,822	$	—	$	—
Credit card and loan receivables, net	8,069,713		—		—		8,069,713
Loan receivables held for sale	62,082		—		—		62,082
Total	$	9,101,617	$	969,822	$	—	$	8,131,795

Financial liabilities
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	$	11,859,057	$	—	$	11,859,057	$	—

SEGMENT INFORMATION (Tables)

9 Months Ended

Sep. 30, 2014

SEGMENT INFORMATION

Schedule of segment information

Three Months Ended September 30, 2014	LoyaltyOne		Epsilon			Private Label Services and Credit		Corporate/ Other			Eliminations			Total
	(In thousands)
Revenues	$	324,484	$	377,554		$	622,330	$	144		$	(5,379	)	$	1,319,133

Income (loss) before income taxes	51,078		42,597			237,053		(70,551		)	—			260,177
Interest expense, net	1,303		(3		)	30,675		29,489			—			61,464
Operating income (loss)	52,381		42,594			267,728		(41,062		)	—			321,641
Depreciation and amortization	22,529		36,564			15,202		2,036			—			76,331
Stock compensation expense	2,954		5,137			3,498		6,668			—			18,257
Adjusted EBITDA (1)	77,864		84,295			286,428		(32,358		)	—			416,229
Less: Securitization funding costs	—		—			22,763		—			—			22,763
Less: Interest expense on deposits	—		—			9,064		—			—			9,064
Less: Adjusted EBITDA attributable to non-controlling interest	8,378		—			—		—			—			8,378
Adjusted EBITDA, net (1)	$	69,486	$	84,295		$	254,601	$	(32,358	)	$	—		$	376,024

Three Months Ended September 30, 2013	LoyaltyOne			Epsilon			Private Label Services and Credit		Corporate/ Other			Eliminations			Total
	(In thousands)
Revenues	$	213,338		$	356,035		$	531,098	$	40		$	(4,064	)	$	1,096,447

Income (loss) before income taxes	55,139			38,863			201,009		(80,258		)	—			214,753
Interest expense, net	(381		)	(7		)	29,575		44,828			—			74,015
Operating income (loss)	54,758			38,856			230,584		(35,430		)	—			288,768
Depreciation and amortization	4,806			34,886			13,161		1,619			—			54,472
Stock compensation expense	2,664			4,689			2,458		5,602			—			15,413
Adjusted EBITDA (1)	62,228			78,431			246,203		(28,209		)	—			358,653
Less: Securitization funding costs	—			—			22,914		—			—			22,914
Less: Interest expense on deposits	—			—			7,287		—			—			7,287
Less: Adjusted EBITDA attributable to non-controlling interest	—			—			—		—			—			—
Adjusted EBITDA, net (1)	$	62,228		$	78,431		$	216,002	$	(28,209	)	$	—		$	328,452

Nine Months Ended September 30, 2014	LoyaltyOne		Epsilon			Private Label Services and Credit		Corporate/ Other			Eliminations			Total
	(In thousands)
Revenues	$	1,009,037	$	1,082,111		$	1,741,384	$	372		$	(15,713	)	$	3,817,191

Income (loss) before income taxes	155,510		81,342			660,299		(203,321		)	—			693,830
Interest expense, net	4,947		(22		)	90,866		96,352			—			192,143
Operating income (loss)	160,457		81,320			751,165		(106,969		)	—			885,973
Depreciation and amortization	67,501		110,479			40,876		5,843			—			224,699
Stock compensation expense	8,443		15,390			9,968		15,953			—			49,754
Adjusted EBITDA (1)	236,401		207,189			802,009		(85,173		)	—			1,160,426
Less: Securitization funding costs	—		—			67,974		—			—			67,974
Less: Interest expense on deposits	—		—			25,526		—			—			25,526
Less: Adjusted EBITDA attributable to non-controlling interest	24,381		—			—		—			—			24,381
Adjusted EBITDA, net (1)	$	212,020	$	207,189		$	708,509	$	(85,173	)	$	—		$	1,042,545

Nine Months Ended September 30, 2013	LoyaltyOne			Epsilon			Private Label Services and Credit		Corporate/ Other			Eliminations			Total
	(In thousands)
Revenues	$	674,382		$	1,005,789		$	1,508,321	$	40		$	(10,556	)	$	3,177,976

Income (loss) before income taxes	170,458			79,255			596,826		(237,391		)	—			609,148
Interest expense, net	(800		)	(46		)	91,802		149,069			—			240,025
Operating income (loss)	169,658			79,209			688,628		(88,322		)	—			849,173
Depreciation and amortization	13,465			103,814			39,657		3,962			—			160,898
Stock compensation expense	7,883			13,418			8,053		14,074			—			43,428
Adjusted EBITDA (1)	191,006			196,441			736,338		(70,286		)	—			1,053,499
Less: Securitization funding costs	—			—			72,093		—			—			72,093
Less: Interest expense on deposits	—			—			21,296		—			—			21,296
Less: Adjusted EBITDA attributable to non-controlling interest	—			—			—		—			—			—
Adjusted EBITDA, net (1)	$	191,006		$	196,441		$	642,949	$	(70,286	)	$	—		$	960,110

(1) Adjusted EBITDA is a non-GAAP financial measure equal to net income, the most directly comparable financial measure based on GAAP plus stock compensation expense, provision for income taxes, interest expense, net, depreciation and other amortization and amortization of purchased intangibles. Adjusted EBITDA, net is also a non-GAAP financial measure equal to adjusted EBITDA less securitization funding costs, interest expense on deposits and adjusted EBITDA attributable to the non-controlling interest. Adjusted EBITDA and adjusted EBITDA, net are presented in accordance with ASC 280, “Segment Reporting,” as they are the primary performance metrics utilized to assess performance of the segments.

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Numerator:
Net income attributable to Alliance Data Systems Corporation stockholders	$ 164,242	$ 132,878	$ 439,081	$ 378,297
Denominator:
Weighted average shares, basic	57,742,000	48,710,000	54,998,000	49,199,000
Weighted average effect of dilutive securities:
Shares from assumed conversion of convertible senior notes		7,512,000	2,816,000	9,419,000
Shares from assumed exercise of convertible note warrants	1,664,000	9,141,000	4,561,000	7,937,000
Net effect of dilutive stock options and unvested restricted stock (in shares)	502,000	656,000	512,000	613,000
Denominator for diluted calculation (in shares)	59,908,000	66,019,000	62,887,000	67,168,000
Net income attributable to Alliance Data Systems Corporation stockholders per share:
Basic net income per share (in dollars per share)	$ 2.84	$ 2.73	$ 7.98	$ 7.69
Diluted net income per share (in dollars per share)	$ 2.74	$ 2.01	$ 6.98	$ 5.63
Prepaid forward contracts to purchase common stock that are to be delivered over a settlement period in 2014 (in shares)			1,857,400
Shares delivered per prepaid forward contract			510,781
The number of shares to be delivered per prepaid forward contract	1,346,619		1,346,619

ACQUISITION (Details) - USD ($) $ in Thousands		9 Months Ended
ACQUISITION (Details) - USD ($) $ in Thousands	Jan. 02, 2014	Sep. 30, 2014	Dec. 31, 2013
Acquisition
Initial cash consideration		$ 259,514
Fair values of assets acquired and liabilities assumed in acquisition
Goodwill		$ 2,245,782	$ 1,735,703
Brand Loyalty
Acquisition
Ownership interest acquired (as a percent)	60.00%
Initial cash consideration	$ 259,500
Contingent liability	248,700
Fair values of assets acquired and liabilities assumed in acquisition
Current assets	246,769
Deferred tax assets	3,509
Property and equipment	19,719
Other assets	3,994
Intangible assets	423,832
Goodwill	565,015
Total assets acquired	1,262,838
Current liabilities	146,559
Current portion of long-term debt	34,180
Deferred tax liabilities	105,512
Long-term debt (net of current portion)	126,323
Other liabilities	142
Total liabilities assumed	412,716
Redeemable noncontrolling interest	341,907
Net assets acquired	$ 508,215
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
Ownership interest that may be acquired each year (as a percent)		10.00%
Additional interest which the entity must acquire if specified annual earnings targets are met (as a percent)		10.00%
Ownership interest for which sellers have a put option to sell if specified annual earnings targets are not met (as a percent)		10.00%

CREDIT CARD AND LOAN RECEIVABLES (Details) $ in Thousands	3 Months Ended		9 Months Ended
CREDIT CARD AND LOAN RECEIVABLES (Details) $ in Thousands	Sep. 30, 2014 USD ($) item	Sep. 30, 2013 USD ($) item	Sep. 30, 2014 USD ($) item	Sep. 30, 2013 USD ($) item	Dec. 31, 2013 USD ($)
CREDIT CARD AND LOAN RECEIVABLES
Principal receivables	$ 8,849,589		$ 8,849,589		$ 8,166,961
Billed and accrued finance charges	381,761		381,761		343,521
Other credit card and loan receivables	63,495		63,495		62,400
Total credit card and loan receivables	9,294,845		9,294,845		8,572,882
Less credit card receivables - restricted for securitization investors	7,214,380		7,214,380		7,080,014
Other credit card and loan receivables	2,080,465		$ 2,080,465		1,492,868
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	70,900	$ 54,100	$ 212,900	$ 167,800
Balance at beginning of period	483,580	448,396	503,169	481,958
Provision for loan loss	114,577	90,976	281,811	215,420
Change in estimate for uncollectible unpaid interest and fees	1,000		1,500
Recoveries	39,074	26,204	115,548	84,152
Principal charge-offs	(126,877)	(103,535)	(390,674)	(319,489)
Balance at end of period	511,354	462,041	$ 511,354	462,041
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	8,849,589		$ 8,849,589		8,166,961
Principal receivables balances contractually delinquent:
31 to 60 days	138,036		138,036		114,430
61 to 90 days	85,226		85,226		74,700
91 or more days	168,368		168,368		150,425
Total	$ 391,630		$ 391,630		$ 339,555
Percentage Principal receivables balances contractually delinquent :
Receivables outstanding - principal (as a percent)	100.00%		100.00%		100.00%
Principal receivables balances contractually delinquent:
31 to 60 days (as a percent)	1.60%		1.60%		1.40%
61 to 90 days (as a percent)	0.90%		0.90%		0.90%
91 or more days (as a percent)	1.90%		1.90%		1.90%
Total (as a percent)	4.40%		4.40%		4.20%
Modified Credit Card and Loan Receivables
Maximum period of time temporary programs' concessions remain in place			12 months
Impaired credit card and loan receivables	$ 119,000		$ 119,000		$ 118,100
Allowance for loan loss on impaired credit card and loan receivables	$ 31,800		$ 31,800		$ 33,900
Maximum percentage of credit card and loan receivables to total portfolio	2.00%		2.00%		2.00%
Average recorded investment in impaired credit card and loan receivables	$ 114,000	116,700	$ 114,200	117,200
Interest income on modified credit card and loan receivables	$ 3,300	$ 3,200	$ 9,600	$ 9,500
Troubled debt restructurings - credit card and loan receivables
Modifications related to troubled debt restructurings within credit card and loan receivables
Number of Restructurings \| item	36,846	37,032	102,000	109,927
Pre-modification Outstanding Balance	$ 37,130	$ 34,169	$ 101,837	$ 100,270
Post-modification Outstanding Balance	$ 37,100	$ 34,147	$ 101,750	$ 100,209
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	14,047	15,536	44,545	46,729
Outstanding Balance	$ 14,037	$ 14,874	$ 44,009	$ 44,295

CREDIT CARD AND LOAN RECEIVABLES (Details 2) item in Thousands, $ in Thousands	Sep. 30, 2014 USD ($) item	Sep. 30, 2013 USD ($) item
Age of Accounts Since Origination
Number of Active Accounts with Balances \| item	17,284	15,695
Percentage of Active Accounts with Balances	100.00%	100.00%
Principal Receivables Outstanding \| $	$ 8,849,589	$ 7,057,033
Percentage of Principal Receivables Outstanding	100.00%	100.00%
0-12 Months
Age of Accounts Since Origination
Number of Active Accounts with Balances \| item	4,869	4,233
Percentage of Active Accounts with Balances	28.20%	27.00%
Principal Receivables Outstanding \| $	$ 2,220,148	$ 1,660,718
Percentage of Principal Receivables Outstanding	25.10%	23.50%
13-24 Months
Age of Accounts Since Origination
Number of Active Accounts with Balances \| item	2,554	2,187
Percentage of Active Accounts with Balances	14.80%	13.90%
Principal Receivables Outstanding \| $	$ 1,282,695	$ 930,082
Percentage of Principal Receivables Outstanding	14.50%	13.20%
25-36 Months
Age of Accounts Since Origination
Number of Active Accounts with Balances \| item	1,781	1,514
Percentage of Active Accounts with Balances	10.30%	9.70%
Principal Receivables Outstanding \| $	$ 937,043	$ 684,463
Percentage of Principal Receivables Outstanding	10.60%	9.70%
37-48 Months
Age of Accounts Since Origination
Number of Active Accounts with Balances \| item	1,283	1,136
Percentage of Active Accounts with Balances	7.40%	7.20%
Principal Receivables Outstanding \| $	$ 701,808	$ 553,471
Percentage of Principal Receivables Outstanding	7.90%	7.80%
49-60 Months
Age of Accounts Since Origination
Number of Active Accounts with Balances \| item	969	931
Percentage of Active Accounts with Balances	5.60%	5.90%
Principal Receivables Outstanding \| $	$ 557,911	$ 500,259
Percentage of Principal Receivables Outstanding	6.30%	7.10%
Over 60 Months
Age of Accounts Since Origination
Number of Active Accounts with Balances \| item	5,828	5,694
Percentage of Active Accounts with Balances	33.70%	36.30%
Principal Receivables Outstanding \| $	$ 3,149,984	$ 2,728,040
Percentage of Principal Receivables Outstanding	35.60%	38.70%

CREDIT CARD AND LOAN RECEIVABLES (Details 3) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2013
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months)
Principal Receivables Outstanding	$ 8,849,589		$ 7,057,033
Percentage of Principal Receivables Outstanding	100.00%		100.00%
Transfer of Financial Assets
Loan receivables originated that have not yet been sold to the client	$ 70,588	$ 62,082
Purchase of loan receivables generated in the client program	181,800
Loan receivables	129,600	$ 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	$ 180,003		$ 144,336
Percentage of Principal Receivables Outstanding	2.00%		2.00%
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	$ 430,333		$ 330,802
Percentage of Principal Receivables Outstanding	4.90%		4.70%
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	$ 829,208		$ 669,535
Percentage of Principal Receivables Outstanding	9.40%		9.50%
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	$ 955,459		$ 746,424
Percentage of Principal Receivables Outstanding	10.80%		10.60%
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	$ 3,613,024		$ 2,819,112
Percentage of Principal Receivables Outstanding	40.80%		39.90%
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	$ 1,837,713		$ 1,487,871
Percentage of Principal Receivables Outstanding	20.80%		21.10%
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	$ 1,003,849		$ 858,953
Percentage of Principal Receivables Outstanding	11.30%		12.20%

CREDIT CARD AND LOAN RECEIVABLES (Details 4) $ in Thousands	3 Months Ended		9 Months Ended
CREDIT CARD AND LOAN RECEIVABLES (Details 4) $ in Thousands	Sep. 30, 2014 USD ($)	Sep. 30, 2013 USD ($)	Sep. 30, 2014 USD ($) item	Sep. 30, 2013 USD ($)	Dec. 31, 2013 USD ($)
Securitized Credit Card Receivables
Total credit card receivables - restricted for securitization investors	$ 7,214,380		$ 7,214,380		$ 7,080,014
Principal amount of credit card receivables - restricted for securitization investors, 90 days or more past due	138,525		138,525		$ 131,659
Net charge-offs of securitized principal	75,092	$ 70,752	240,754	$ 219,441
Portfolio Acquisitions
Purchase price of credit card portfolios	402,700		402,700
Purchase price of credit card receivables portfolio, gross principal	366,900		366,900
Purchase price of credit card receivables portfolio, intangible assets	37,700		$ 37,700
Number of credit card portfolios purchased \| item			2
Purchase price of credit card receivables portfolio, assumed customer liabilities	$ 1,900		$ 1,900

INVENTORIES (Details) - USD ($) $ in Millions	Sep. 30, 2014	Jan. 02, 2014	Dec. 31, 2013
INVENTORIES
Inventories	$ 218.1		$ 14.6
Amount of finished goods inventory acquired in the BrandLoyalty acquisition		$ 198.9

OTHER INVESTMENTS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
OTHER INVESTMENTS (Details) - USD ($) $ in Thousands	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Restricted cash
Amortized Cost	$ 28,694		$ 28,694		$ 25,988
Fair value	28,694		28,694		25,988
Marketable securities
Amortized Cost	82,481		82,481		77,351
Unrealized Gains	223		223		62
Unrealized Losses	(2,276)		(2,276)		(4,180)
Fair Value	80,428		80,428		73,233
U.S. Treasury bonds
Amortized Cost	100,079		100,079
Unrealized Gains	2		2
Unrealized Losses	(261)		(261)
Fair Value	99,820		99,820
Other Investments, Total
Amortized Cost	211,254		211,254		103,339
Unrealized Gains	225		225		62
Unrealized Losses	(2,537)		(2,537)		(4,180)
Fair Value	208,942		208,942		99,221
Fair Value, Marketable securities
Less than 12 months	21,276		21,276		39,954
12 Months or Greater	49,146		49,146		25,785
Total	70,422		70,422		65,739
Unrealized Losses, Marketable securities
Less than 12 months	(261)		(261)		(2,206)
12 Months or Greater	(2,015)		(2,015)		(1,974)
Total	(2,276)		(2,276)		(4,180)
Fair Value, U.S. Treasury bonds
Less than 12 months	74,798		74,798
Total	74,798		74,798
Unrealized Losses, U.S. Treasury bonds
Less than 12 months	(261)		(261)
Total	(261)		(261)
Fair Value, Total
Less than 12 months	96,074		96,074
12 Months or Greater	49,146		49,146
Total	145,220		145,220
Unrealized Losses, Total
Less than 12 months	(522)		(522)
12 Months or Greater	(2,015)		(2,015)
Total	(2,537)		(2,537)
Amortized Cost
Due in one year or less	6,684		6,684
Due after one year through five years	100,079		100,079
Due after five years through ten years	4,325		4,325
Due after ten years	71,472		71,472
Total	182,560		182,560
Fair Value
Due in one year or less	6,620		6,620
Due after one year through five years	99,820		99,820
Due after five years through ten years	4,486		4,486
Due after ten years	69,322		69,322
Fair Value	180,248		180,248
Realized gains or losses
Realized gains or losses from the sale of investment securities	0	$ 0	0	$ 0
Fair Value
Fair Value	$ 80,428		$ 80,428		$ 73,233

REDEMPTION SETTLEMENT ASSETS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
REDEMPTION SETTLEMENT ASSETS
Cost	$ 524,819		$ 524,819		$ 503,576
Unrealized Gains	4,224		4,224		7,083
Unrealized Losses	(6)		(6)		(310)
Total	529,037		529,037		510,349
Estimated fair value of the redemption settlement assets by contractual maturity
Less than 12 months	16,825		16,825
Total	16,825		16,825
Fair value for investments in unrealized loss position
Less than 12 months	(6)		(6)
Total	(6)		(6)
Amortized cost of the redemption settlement assets by contractual maturity
Due in one year or less	178,889		178,889
Due after one year through five years	201,430		201,430
Total	380,319		380,319
Estimated fair value of the redemption settlement assets by contractual maturity
Due in one year or less	180,174		180,174
Due after one year through five years	204,363		204,363
Total	384,537		384,537
Realized gains or losses from the sale of investment securities	0	$ 0	0	$ 0
Cash and cash equivalents
REDEMPTION SETTLEMENT ASSETS
Cost	144,500		144,500		73,984
Total	144,500		144,500		73,984
Government bonds
REDEMPTION SETTLEMENT ASSETS
Cost	4,574		4,574
Unrealized Losses	(2)		(2)
Total	4,572		4,572
Estimated fair value of the redemption settlement assets by contractual maturity
Less than 12 months	4,572		4,572
Total	4,572		4,572
Fair value for investments in unrealized loss position
Less than 12 months	(2)		(2)
Total	(2)		(2)
Corporate bonds
REDEMPTION SETTLEMENT ASSETS
Cost	375,745		375,745		429,592
Unrealized Gains	4,224		4,224		7,083
Unrealized Losses	(4)		(4)		(310)
Total	379,965		379,965		436,365
Estimated fair value of the redemption settlement assets by contractual maturity
Less than 12 months	12,253		12,253		80,493
Total	12,253		12,253		80,493
Fair value for investments in unrealized loss position
Less than 12 months	(4)		(4)		(310)
Total	$ (4)		$ (4)		$ (310)

INTANGIBLE ASSETS AND GOODWILL (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Schedule of Finite and Indefinite-lived Intangible Assets
Finite lived assets, gross	$ 1,343,908	$ 964,561
Accumulated Amortization	(603,644)	(516,507)
Finite lived assets, net	740,264	448,054
Total Intangible Assets
Gross Assets	1,356,258	976,911
Accumulated Amortization	(603,644)	(516,507)
Net	752,614	460,404
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	806,524	440,200
Accumulated Amortization	(273,070)	(187,350)
Finite lived assets, net	533,454	252,850
Total Intangible Assets
Accumulated Amortization	$ (273,070)	$ (187,350)
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	$ 212,848	$ 216,041
Accumulated Amortization	(102,583)	(118,006)
Finite lived assets, net	110,265	98,035
Total Intangible Assets
Accumulated Amortization	$ (102,583)	$ (118,006)
Premium on purchased credit card portfolios \| Minimum
Amortization Life and Method
Useful life	3 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	(135,936)	(122,230)
Finite lived assets, net	25,764	39,470
Total Intangible Assets
Accumulated Amortization	$ (135,936)	$ (122,230)
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	$ 62,506	$ 65,895
Accumulated Amortization	(58,182)	(60,711)
Finite lived assets, net	$ 4,324	$ 5,184
Amortization Life and Method
Useful life	30 years	30 years
Declining balance (as a percent)	15.00%	15.00%
Total Intangible Assets
Accumulated Amortization	$ (58,182)	$ (60,711)
Tradenames
Schedule of Finite and Indefinite-lived Intangible Assets
Finite lived assets, gross	83,820	58,567
Accumulated Amortization	(26,079)	(15,443)
Finite lived assets, net	57,741	43,124
Total Intangible Assets
Accumulated Amortization	$ (26,079)	$ (15,443)
Tradenames \| Minimum
Amortization Life and Method
Useful life	3 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	$ 11,919	$ 17,567
Accumulated Amortization	(6,401)	(11,959)
Finite lived assets, net	5,518	5,608
Total Intangible Assets
Accumulated Amortization	$ (6,401)	$ (11,959)
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	(635)	(375)
Finite lived assets, net	$ 2,656	$ 2,916
Amortization Life and Method
Useful life	10 years	10 years
Total Intangible Assets
Accumulated Amortization	$ (635)	$ (375)
Noncompete agreements
Schedule of Finite and Indefinite-lived Intangible Assets
Finite lived assets, gross	1,300	1,300
Accumulated Amortization	(758)	(433)
Finite lived assets, net	$ 542	$ 867
Amortization Life and Method
Useful life	3 years	3 years
Total Intangible Assets
Accumulated Amortization	$ (758)	$ (433)

INTANGIBLE ASSETS AND GOODWILL (Details 2) - USD ($) $ in Thousands			9 Months Ended
	Jan. 02, 2014	Jan. 02, 2014	Sep. 30, 2014	Dec. 31, 2013
Estimated amortization expense related to intangible assets for the next five years and thereafter
2014 (excluding the nine months ended September 30, 2014)				$ 45,240
2015				168,123
2016				150,454
2017				112,283
2018				95,987
2019 & thereafter				$ 168,177
Brand Loyalty
Intangible assets
Acquired intangible assets	$ 423,800	$ 423,800
Brand Loyalty \| Customer contracts and lists
Intangible assets
Acquired intangible assets	$ 396,500
Weighted average life	7 years
Brand Loyalty \| Trade names
Intangible assets
Acquired intangible assets	$ 27,300
Weighted average life	3 years
Credit card portfolio
Intangible assets
Acquired intangible assets			$ 37,700
Credit card portfolio \| Marketing relationships
Intangible assets
Acquired intangible assets			$ 3,300
Weighted average life			7 years
Credit card portfolio \| Customer relationships
Intangible assets
Acquired intangible assets			$ 34,400
Weighted average life			3 years 2 months 12 days

INTANGIBLE ASSETS AND GOODWILL (Details 3) $ in Thousands	9 Months Ended
INTANGIBLE ASSETS AND GOODWILL (Details 3) $ in Thousands	Sep. 30, 2014 USD ($)
Goodwill
Beginning Balance	$ 1,735,703
Goodwill acquired during year	565,015
Effects of foreign currency translation	(54,936)
Ending Balance	2,245,782
LoyaltyOne
Goodwill
Beginning Balance	232,449
Goodwill acquired during year	565,015
Effects of foreign currency translation	(54,358)
Ending Balance	743,106
Epsilon
Goodwill
Beginning Balance	1,241,522
Effects of foreign currency translation	(578)
Ending Balance	1,240,944
Private Label Services and Credit
Goodwill
Beginning Balance	261,732
Ending Balance	$ 261,732

DEBT (Details) € in Thousands, $ in Thousands, shares in Millions	1 Months Ended				3 Months Ended			9 Months Ended
	Nov. 30, 2014 USD ($)	Oct. 31, 2014 USD ($)	Jul. 31, 2014 USD ($)	Feb. 28, 2014 USD ($)	Sep. 30, 2014 EUR (€) shares	Mar. 31, 2014 shares	Sep. 30, 2013 USD ($)	Sep. 30, 2014 EUR (€) item	Sep. 30, 2014 USD ($) item	Sep. 30, 2013 USD ($)	Sep. 30, 2014 USD ($)	Jun. 30, 2014 USD ($)	May 31, 2014 USD ($)	May 15, 2014 USD ($)	Dec. 31, 2013 USD ($)	Nov. 30, 2012 USD ($)	Jun. 30, 2009 USD ($)
Debt
Less current portion											$ (78,537)				$ (364,489)
Long-term and other debt											2,878,498				2,435,792
Less: current portion											(2,066,815)				(1,544,059)
Long-term portion											1,660,990				1,272,302
Less: current portion											(1,268,750)				(1,025,000)
Long-term portion											3,183,166				3,566,916
Interest expense on debt recognized
Amortization of discount on liability component									$ 12,499	$ 57,900
Total deposits
Debt
Deposits											3,727,805				2,816,361
Less: current portion											(2,066,815)				(1,544,059)
Long-term portion											1,660,990				1,272,302
Certificates of deposit
Debt
Deposits											3,065,401				2,486,533
Interest Rate - minimum (as a percent)								0.15%	0.15%
Interest Rate - maximum (as a percent)								3.30%	3.30%
Money market deposits
Debt
Deposits											662,404				329,828
Interest Rate - minimum (as a percent)								0.01%	0.01%
Interest Rate - maximum (as a percent)								0.15%	0.15%
Non-recourse borrowings of consolidated securitization entities
Debt
Total non-recourse borrowings of consolidated securitization											4,451,916				4,591,916
Less: current portion											(1,268,750)				(1,025,000)
Long-term portion											3,183,166				3,566,916
Fixed rate asset-backed term note securities
Debt
Total non-recourse borrowings of consolidated securitization											$ 3,301,916				3,001,916
Interest Rate - minimum (as a percent)								0.61%	0.61%
Interest Rate - maximum (as a percent)								6.75%	6.75%
Floating rate asset-backed term note securities
Debt
Interest Rate (as a percent)					0.53%			0.53%			0.53%
Total non-recourse borrowings of consolidated securitization											$ 450,000
Debt instrument description of Variable rate basis								LIBOR	LIBOR
Conduit asset-backed securities
Debt
Total non-recourse borrowings of consolidated securitization											700,000				1,590,000
Interest Rate - minimum (as a percent)								1.00%	1.00%
Interest Rate - maximum (as a percent)								1.69%	1.69%
Maximum borrowing capacity											1,600,000
Debt instrument description of Variable rate basis								LIBOR	LIBOR
Interest expense on debt recognized
Amount drawn											700,000
Number of facilities with access to undrawn committed capacity \| item								3	3
2009-VFN conduit facility under World Financial Capital Credit Card Master Trust I
Debt
Maximum borrowing capacity				$ 700,000									$ 450,000
Master Trust I \| February 2014 issuance
Debt
Debt instrument description of Variable rate basis				LIBOR
Basis spread on variable rate (as a percent)				0.38%
Amount borrowed				$ 625,000
Retained amount of subordinated class of notes				$ 175,000
Master Trust I \| July 2014 issuance
Debt
Interest Rate (as a percent)			0.61%
Amount borrowed			$ 394,700
Retained amount of subordinated class of notes			94,700
Master Trust I \| November 2014 Issuance \| Subsequent event
Debt
Interest Rate (as a percent)	1.54%
Amount borrowed	$ 427,600
Retained amount of subordinated class of notes	$ 102,600
Master Trust I \| November 2011 issuance
Debt
Retained amount of subordinated class of notes		$ 66,500
Interest expense on debt recognized
Principal payments collected during accumulation period									$ 316,500
Master Trust I \| November 2011 issuance \| Subsequent event
Debt
Debt repaid by the company		$ 316,500
Long-term and other debt
Debt
Total long-term and other debt											2,957,035				2,800,281
Less current portion											(78,537)				(364,489)
Long-term and other debt											2,878,498				2,435,792
2013 Credit Facility
Debt
Total long-term and other debt											$ 120,000				336,000
Weighted average interest rate (as a percent)					1.91%			1.91%			1.91%
Maximum borrowing capacity			1,300,000								$ 1,300,000
Maximum borrowing capacity under certain circumstances												$ 1,250,000
Total availability under Credit Facility											1,180,000
Debt instrument description of Variable rate basis								LIBOR	LIBOR
Interest expense on debt recognized
Increase in Credit Facility			50,000
2013 Term Loan
Debt
Total long-term and other debt											1,210,938				1,234,688
Maximum borrowing capacity under certain circumstances												$ 1,250,000
Senior Notes due 2017
Debt
Total long-term and other debt											$ 397,122				396,511	$ 400,000
Interest Rate (as a percent)					5.25%			5.25%			5.25%					5.25%
Interest expense on debt recognized
Unamortized discount											$ 2,900				3,500
Period over which discount will be amortized as interest expense								3 years 2 months 12 days	3 years 2 months 12 days
Issue price as a percentage of the aggregate principal amount																98.912%
Effective annual interest rate (as a percent)					5.50%			5.50%			5.50%
Senior Notes Due 2020
Debt
Total long-term and other debt											$ 500,000				500,000
Interest Rate (as a percent)					6.375%			6.375%			6.375%
Senior Notes Due 2022
Debt
Total long-term and other debt			$ 600,000								$ 600,000
Interest Rate (as a percent)			5.375%		5.375%			5.375%			5.375%
Convertible Senior Notes
Interest expense on debt recognized
Interest expense calculated on contractual interest rate							$ 5,074		$ 5,630	20,073
Amortization of discount on liability component							12,602		11,888	57,321
Total interest expense on convertible senior notes							$ 17,676		$ 17,518	$ 77,394
Effective interest rate (annualized) (as a percent)							13.20%	14.20%	14.20%	11.80%
Convertible senior notes due 2013
Interest expense on debt recognized
Number of warrants net settled by issuing shares of common stock \| shares						5.1
Shares of common stock issued to net settle warrants \| shares						2.9
Convertible senior notes due 2014
Debt
Total long-term and other debt															$ 333,082		$ 345,000
Interest expense on debt recognized
Number of warrants net settled by issuing shares of common stock \| shares					7.3
Shares of common stock issued to net settle warrants \| shares					5.4
Conversion amount														$ 1,864,800
Amount applied from convertible note hedge counterparties														$ 1,519,800
BrandLoyalty credit facility
Debt
Total long-term and other debt											$ 128,975
Weighted average interest rate (as a percent)					3.21%			3.21%			3.21%
Debt instrument description of Variable rate basis								EURIBOR	EURIBOR
Term Facility \| Brand Loyalty
Debt
Total long-term and other debt					€ 44,300			€ 44,300			$ 56,000
Loan amount \| €					63,000			63,000
Quarterly principal payments \| €								6,250
Revolving Facility \| Brand Loyalty
Debt
Total long-term and other debt					57,900			57,900			$ 73,100
Loan amount \| €					€ 87,000			€ 87,000

DERIVATIVE INSTRUMENTS (Details) - 9 months ended Sep. 30, 2014 $ in Thousands, € in Millions	EUR (€)	USD ($)
Designated as hedging instrument \| Foreign currency derivative
Notional amount, fair value and classification of the company's outstanding derivative contracts
Notional Amount		$ 58,300
Designated as hedging instrument \| Foreign currency derivative \| Accrued expenses
Notional amount, fair value and classification of the company's outstanding derivative contracts
Fair Value		138
Not designated as hedging instrument \| Foreign currency derivative
Notional amount, fair value and classification of the company's outstanding derivative contracts
Notional Amount		236,600
Not designated as hedging instrument \| Foreign currency derivative \| Other current liabilities
Notional amount, fair value and classification of the company's outstanding derivative contracts
Fair Value		7,310
Not designated as hedging instrument \| Interest rate derivatives
Notional amount, fair value and classification of the company's outstanding derivative contracts
Notional Amount	€ 55.3	69,800
Weighted Average Years to Maturity	15 months
Not designated as hedging instrument \| Interest rate derivatives \| Other liabilities
Notional amount, fair value and classification of the company's outstanding derivative contracts
Fair Value		$ 334

DERIVATIVE INSTRUMENTS (Details 2) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
DERIVATIVE INSTRUMENTS (Details 2) - USD ($) $ in Thousands	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Activity related to company's outstanding derivative contracts and location
Reclassifications out of accumulated other comprehensive income (loss) into net income	$ 0	$ 0	$ 0	$ 0
Interest expense
Activity related to company's outstanding derivative contracts and location
Gains (losses) on derivative instruments	131		244
General and administrative
Activity related to company's outstanding derivative contracts and location
Gains (losses) on derivative instruments	$ (7,310)		$ (7,310)
Securitization funding costs
Activity related to company's outstanding derivative contracts and location
Gains (losses) on derivative instruments				$ 8,511

DEFERRED REVENUE (Details) - USD ($) $ in Thousands	9 Months Ended
DEFERRED REVENUE (Details) - USD ($) $ in Thousands	Sep. 30, 2014	Dec. 31, 2013
Movement in deferred revenue
Beginning balance	$ 1,137,186
Cash proceeds	477,494
Revenue recognized	(518,655)
Other	(356)
Effects of foreign currency translation	(57,502)
Ending balance	1,038,167
Amounts recognized in the consolidated balance sheets:
Current liabilities	873,332	$ 966,438
Non-current liabilities	164,835	$ 170,748
Service
Movement in deferred revenue
Beginning balance	346,631
Cash proceeds	156,335
Revenue recognized	(150,676)
Effects of foreign currency translation	(17,961)
Ending balance	334,329
Amounts recognized in the consolidated balance sheets:
Current liabilities	169,494
Non-current liabilities	164,835
Redemption
Movement in deferred revenue
Beginning balance	790,555
Cash proceeds	321,159
Revenue recognized	(367,979)
Other	(356)
Effects of foreign currency translation	(39,541)
Ending balance	703,838
Amounts recognized in the consolidated balance sheets:
Current liabilities	$ 703,838

COMMITMENTS AND CONTINGENCIES (Details) - Conversant $ / shares in Units, $ in Billions	Sep. 11, 2014 USD ($) $ / shares
Acquisition
Consideration per share	$ 35.00
Aggregate consideration \| $	$ 2.3
Fixed exchange ratio	0.07037
The consecutive period of trading days ending on the close of trading on the second trading day immediately preceding the closing of the merger, used to determine the cash consideration to be paid	15 days
Maximum
Acquisition
Cash consideration paid for each share of acquiree	$ 18.62
Minimum
Acquisition
Cash consideration paid for each share of acquiree	$ 14.98

REDEEMABLE NON-CONTROLLING INTEREST (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2014	Jan. 02, 2014
Reconciliation of the changes in the Redeemable noncontrolling interest
Net loss attributable to non-controlling interest	$ 706	$ 803
Other comprehensive income attributable to non-controlling interest		711
Foreign currency translation adjustments		(25,998)
Balance at the end of the period	$ 317,423	$ 317,423
Brand Loyalty
Redeemable noncontrolling interest
Ownership interest acquired (as a percent)			60.00%
Ownership interest held by minority interest (as a percent)			40.00%
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
Ownership interest that may be acquired each year (as a percent)		10.00%
Additional interest which the entity must acquire if specified annual earnings targets are met (as a percent)		10.00%
Ownership interest for which sellers have a put option to sell if specified annual earnings targets are not met (as a percent)		10.00%
Redeemable non-controlling interest recognized			$ 341,907

STOCKHOLDERS' EQUITY (Details) - USD ($) $ in Millions	9 Months Ended
STOCKHOLDERS' EQUITY (Details) - USD ($) $ in Millions	Sep. 30, 2014	Dec. 05, 2013
Stock Repurchase Programs
Amount of company's outstanding common stock authorized to be repurchased		$ 400.0
Stock acquired (in shares)	873,397
Total cost of shares repurchased	$ 217.5
Available balance under stock repurchase program	$ 182.5

STOCKHOLDERS' EQUITY (Details 2) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
STOCKHOLDERS' EQUITY (Details 2) - USD ($) $ in Thousands	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Stock-based compensation expense	$ 18,257	$ 15,413	$ 49,754	$ 43,428
Cost of operations
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Stock-based compensation expense	11,589	9,812	33,801	29,354
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Stock-based compensation expense	$ 6,668	$ 5,601	$ 15,953	$ 14,074

STOCKHOLDERS' EQUITY (Details 3)	9 Months Ended
STOCKHOLDERS' EQUITY (Details 3)	Sep. 30, 2014 $ / shares shares
Performance-based restricted stock unit awards
Stock Compensation Plans
Shares granted \| shares	174,590
Weighted average grant-date fair value (in dollars per share) \| $ / shares	$ 283.93
Percentage of stock units for which restrictions lapse on February 18, 2015	33.00%
Percentage of stock units for which restrictions lapse on February 18, 2016	33.00%
Percentage of stock units for which restrictions lapse on February 21, 2017	34.00%
Performance-based restricted stock unit awards \| Minimum
Stock Compensation Plans
Percentage of stock units to vest	50.00%
Performance-based restricted stock unit awards \| Maximum
Stock Compensation Plans
Percentage of stock units to vest	150.00%
Service-based restricted stock unit awards
Stock Compensation Plans
Shares granted \| shares	60,121
Weighted average grant-date fair value (in dollars per share) \| $ / shares	$ 280.29
Award vesting period	3 years

ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Accumulated Other Comprehensive Income
Balance at the beginning of the period			$ (18,227)
Changes in other comprehensive income (loss)	$ (40,051)	$ (197)	(36,019)	$ 2,614
Balance at the end of the period	(54,246)		(54,246)
Reclassifications out of accumulated other comprehensive income (loss) into net income	0	0	0	0
Net Unrealized Gains (Losses) on Securities
Accumulated Other Comprehensive Income
Balance at the beginning of the period	4,745	4,867	4,189	10,321
Changes in other comprehensive income (loss)	(1,991)	50	(1,435)	(5,404)
Balance at the end of the period	2,754	4,917	2,754	4,917
Unrealized Losses on Cash Flow Hedges
Accumulated Other Comprehensive Income
Changes in other comprehensive income (loss)	(104)		(104)
Balance at the end of the period	(104)		(104)
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income
Balance at the beginning of the period	(18,940)	(23,917)	(22,416)	(32,182)
Changes in other comprehensive income (loss)	(37,956)	(247)	(34,480)	8,018
Balance at the end of the period	(56,896)	(24,164)	(56,896)	(24,164)
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income
Balance at the beginning of the period	(14,195)	(19,050)	(18,227)	(21,861)
Changes in other comprehensive income (loss)	(40,051)	(197)	(36,019)	2,614
Balance at the end of the period	$ (54,246)	$ (19,247)	$ (54,246)	$ (19,247)

- 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

FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	Sep. 30, 2014	Dec. 31, 2013
Financial assets
Cash and cash equivalents	$ 634,824	$ 969,822
Credit card and loan receivables, net	8,783,491	8,069,713
Loan receivables held for sale	70,588	62,082
Redemption settlement assets, restricted	529,037	510,349
Cash collateral, restricted	36,576	34,124
Other investments	208,942	99,221
Financial liabilities
Deposits	3,749,972	2,836,352
Non-recourse borrowings of consolidated securitization entities	4,484,093	4,618,205
Long-term and other debt	2,961,663	4,404,500
Carrying Amount
Financial assets
Cash and cash equivalents	634,824	969,822
Trade receivables, net	455,064	394,822
Credit card and loan receivables, net	8,783,491	8,069,713
Loan receivables held for sale	70,588	62,082
Redemption settlement assets, restricted	529,037	510,349
Cash collateral, restricted	36,576	34,124
Other investments	208,942	99,221
Financial liabilities
Accounts payable	318,798	210,019
Deposits	3,727,805	2,816,361
Non-recourse borrowings of consolidated securitization entities	4,451,916	4,591,916
Long-term and other debt	2,957,035	2,800,281
Derivative instruments	7,782
Contingent liability	229,781
Fair Value.
Financial assets
Cash and cash equivalents	634,824	969,822
Trade receivables, net	455,064	394,822
Credit card and loan receivables, net	8,783,491	8,069,713
Loan receivables held for sale	70,588	62,082
Redemption settlement assets, restricted	529,037	510,349
Cash collateral, restricted	36,576	34,124
Other investments	208,942	99,221
Financial liabilities
Accounts payable	318,798	210,019
Deposits	3,749,975	2,836,352
Non-recourse borrowings of consolidated securitization entities	4,484,093	4,618,205
Long-term and other debt	2,961,663	$ 4,404,500
Derivative instruments	7,782
Contingent liability	$ 229,781

FINANCIAL INSTRUMENTS (Details 2) - USD ($) $ in Thousands	Sep. 30, 2014	Dec. 31, 2013
Assets disclosed at fair value
Cash collateral, restricted	$ 36,576	$ 34,124
Other investments	208,942	99,221
Total assets measured at fair value	9,488,903	9,101,617
Liabilities disclosed at fair value
Total liabilities measured at fair value	11,195,728	11,859,057
Level 1
Assets disclosed at fair value
Total assets measured at fair value	634,824	969,822
Level 2
Liabilities disclosed at fair value
Total liabilities measured at fair value	11,195,728	11,859,057
Level 3
Assets disclosed at fair value
Total assets measured at fair value	8,854,079	8,131,795
Recurring
Assets disclosed at fair value
Government bonds	4,572
Corporate bonds	379,965	436,365
Cash collateral, restricted	36,576	34,124
Other investments	208,942	99,221
Total assets measured at fair value	630,055	569,710
Liabilities disclosed at fair value
Derivative instruments	7,782
Contingent liability	229,781
Total liabilities measured at fair value	237,563
Recurring \| Level 1
Assets disclosed at fair value
Cash collateral, restricted	1,582
Other investments	133,647	30,888
Total assets measured at fair value	135,229	30,888
Recurring \| Level 2
Assets disclosed at fair value
Government bonds	4,572
Corporate bonds	379,965	436,365
Other investments	75,295	68,333
Total assets measured at fair value	459,832	504,698
Liabilities disclosed at fair value
Derivative instruments	7,782
Total liabilities measured at fair value	7,782
Recurring \| Level 3
Assets disclosed at fair value
Cash collateral, restricted	34,994	34,124
Total assets measured at fair value	34,994	$ 34,124
Liabilities disclosed at fair value
Contingent liability	229,781
Total liabilities measured at fair value	$ 229,781

FINANCIAL INSTRUMENTS (Details 3) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
FINANCIAL INSTRUMENTS (Details 3) - USD ($) $ in Thousands	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Contingent Consideration
Changes in fair value of the Company's asset and liability measured on a recurring basis using significant unobservable inputs (Level 3)
Beginning Balance	$ 249,067
Purchases			$ 248,702
Foreign currency transaction adjustments	(19,286)		(18,921)
Ending Balance	229,781		229,781
Gains for the period included in earnings related to liability still held at end of period	19,286		18,921
Cash Collateral, Restricted
Changes in fair value of the Company's asset and liability measured on a recurring basis using significant unobservable inputs (Level 3)
Beginning Balance	34,710	$ 45,951	34,124	$ 62,660
Total gains (realized or unrealized) included in earnings	284	296	870	1,087
Settlements		(12,405)		(29,905)
Ending Balance	34,994	33,842	34,994	33,842
Gains for the period included in earnings related to assets still held at end of period	$ 284	$ 296	$ 870	$ 1,087
Discount rate (as a percent)			3.00%
Cash Collateral, Restricted \| Minimum
Changes in fair value of the Company's asset and liability measured on a recurring basis using significant unobservable inputs (Level 3)
Term			1 month
Cash Collateral, Restricted \| Maximum
Changes in fair value of the Company's asset and liability measured on a recurring basis using significant unobservable inputs (Level 3)
Term			25 months
Cash Collateral, Restricted \| Weighted average
Changes in fair value of the Company's asset and liability measured on a recurring basis using significant unobservable inputs (Level 3)
Term			7 months 27 days

FINANCIAL INSTRUMENTS (Details 4) - USD ($) $ in Thousands	Sep. 30, 2014	Dec. 31, 2013
Financial assets
Cash and cash equivalents	$ 634,824	$ 969,822
Credit card and loan receivables, net	8,783,491	8,069,713
Loan receivables held for sale	70,588	62,082
Total assets measured at fair value	9,488,903	9,101,617
Financial liabilities
Deposits	3,749,972	2,836,352
Non-recourse borrowings of consolidated securitization entities	4,484,093	4,618,205
Long-term and other debt	2,961,663	4,404,500
Total liabilities measured at fair value	11,195,728	11,859,057
Level 1
Financial assets
Cash and cash equivalents	634,824	969,822
Total assets measured at fair value	634,824	969,822
Level 2
Financial liabilities
Deposits	3,749,972	2,836,352
Non-recourse borrowings of consolidated securitization entities	4,484,093	4,618,205
Long-term and other debt	2,961,663	4,404,500
Total liabilities measured at fair value	11,195,728	11,859,057
Level 3
Financial assets
Credit card and loan receivables, net	8,783,491	8,069,713
Loan receivables held for sale	70,588	62,082
Total assets measured at fair value	$ 8,854,079	$ 8,131,795

INCOME TAXES (Details)	3 Months Ended		9 Months Ended		12 Months Ended
INCOME TAXES (Details)	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2014
INCOME TAXES
Effective tax rate utilized (as a percent)	36.60%	38.10%	36.60%	37.90%	36.50%

SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Segment information
Revenues	$ 1,319,133	$ 1,096,447	$ 3,817,191	$ 3,177,976
Income (loss) before income taxes	260,177	214,753	693,830	609,148
Interest expense, net	61,464	74,015	192,143	240,025
Operating income	321,641	288,768	885,973	849,173
Depreciation and amortization	76,331	54,472	224,699	160,898
Stock compensation expense	18,257	15,413	49,754	43,428
Adjusted EBITDA	416,229	358,653	1,160,426	1,053,499
Less: Securitization funding costs	22,763	22,914	67,974	72,093
Less: Interest expense on deposits	9,064	7,287	25,526	21,296
Less: Adjusted EBITDA attributable to non-controlling interest	8,378		24,381
Adjusted EBITDA, net	376,024	328,452	1,042,545	960,110
Operating segment \| LoyaltyOne
Segment information
Revenues	324,484	213,338	1,009,037	674,382
Income (loss) before income taxes	51,078	55,139	155,510	170,458
Interest expense, net	1,303	(381)	4,947	(800)
Operating income	52,381	54,758	160,457	169,658
Depreciation and amortization	22,529	4,806	67,501	13,465
Stock compensation expense	2,954	2,664	8,443	7,883
Adjusted EBITDA	77,864	62,228	236,401	191,006
Less: Adjusted EBITDA attributable to non-controlling interest	8,378		24,381
Adjusted EBITDA, net	69,486	62,228	212,020	191,006
Operating segment \| Epsilon
Segment information
Revenues	377,554	356,035	1,082,111	1,005,789
Income (loss) before income taxes	42,597	38,863	81,342	79,255
Interest expense, net	(3)	(7)	(22)	(46)
Operating income	42,594	38,856	81,320	79,209
Depreciation and amortization	36,564	34,886	110,479	103,814
Stock compensation expense	5,137	4,689	15,390	13,418
Adjusted EBITDA	84,295	78,431	207,189	196,441
Adjusted EBITDA, net	84,295	78,431	207,189	196,441
Operating segment \| Private Label Services and Credit
Segment information
Revenues	622,330	531,098	1,741,384	1,508,321
Income (loss) before income taxes	237,053	201,009	660,299	596,826
Interest expense, net	30,675	29,575	90,866	91,802
Operating income	267,728	230,584	751,165	688,628
Depreciation and amortization	15,202	13,161	40,876	39,657
Stock compensation expense	3,498	2,458	9,968	8,053
Adjusted EBITDA	286,428	246,203	802,009	736,338
Less: Securitization funding costs	22,763	22,914	67,974	72,093
Less: Interest expense on deposits	9,064	7,287	25,526	21,296
Adjusted EBITDA, net	254,601	216,002	708,509	642,949
Corporate/Other.
Segment information
Revenues	144	40	372	40
Income (loss) before income taxes	(70,551)	(80,258)	(203,321)	(237,391)
Interest expense, net	29,489	44,828	96,352	149,069
Operating income	(41,062)	(35,430)	(106,969)	(88,322)
Depreciation and amortization	2,036	1,619	5,843	3,962
Stock compensation expense	6,668	5,602	15,953	14,074
Adjusted EBITDA	(32,358)	(28,209)	(85,173)	(70,286)
Adjusted EBITDA, net	(32,358)	(28,209)	(85,173)	(70,286)
Eliminations
Segment information
Revenues	$ (5,379)	$ (4,064)	$ (15,713)	$ (10,556)

SUBSEQUENT EVENT (Details) - USD ($) $ in Millions	Nov. 03, 2014	Jun. 30, 2014
2013 Credit Facility
Subsequent Events
Maximum borrowing capacity under certain circumstances		$ 1,250
2013 Term Loan
Subsequent Events
Maximum borrowing capacity under certain circumstances		$ 1,250
Subsequent event \| 2013 Credit Agreement
Subsequent Events
Term extension period	5 years
Subsequent event \| Incremental Term Loan
Subsequent Events
Maximum borrowing capacity under certain circumstances	$ 1,100
Maturity term	5 years