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Year Ended December 31, 2014

Number of
Restructurings

Outstanding
Balance

(Dollars in thousands)

Troubled debt restructurings that subsequently defaulted — credit card and loan receivables

Document and Entity Information - USD ($) $ in Billions	12 Months Ended
Dec. 31, 2014	Feb. 23, 2015	Jun. 30, 2014
Document and Entity Information
Entity Registrant Name	ALLIANCE DATA SYSTEMS CORP
Entity Central Index Key	0001101215
Document Type	10-K
Document Period End Date	Dec. 31, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 14.8
Entity Common Stock, Shares Outstanding		62,805,266
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2014	Dec. 31, 2013
ASSETS
Cash and cash equivalents	$ 1,077,152	$ 969,822
Trade receivables, less allowance for doubtful accounts ($3,811 and $2,262 at December 31, 2014 and 2013, respectively)	743,294	394,822
Credit card and loan receivables:
Credit card receivables - restricted for securitization investors	8,312,291	7,080,014
Other credit card and loan receivables	2,931,589	1,492,868
Total credit card and loan receivables	11,243,880	8,572,882
Allowance for loan loss	(570,171)	(503,169)
Credit card and loan receivables, net	10,673,709	8,069,713
Credit card and loan receivables held for sale	125,060	62,082
Deferred tax asset, net	218,872	216,195
Other current assets	456,349	177,859
Redemption settlement assets, restricted	520,340	510,349
Total current assets	13,814,776	10,400,842
Property and equipment, net	559,628	299,188
Deferred tax asset, net	164	2,454
Cash collateral, restricted	22,511	34,124
Intangible assets, net	1,515,994	460,404
Goodwill	3,865,484	1,735,703
Other non-current assets	485,420	311,542
Total assets	20,263,977	13,244,257
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	455,656	210,019
Accrued expenses	457,472	262,307
Contingent Consideration	326,023
Deposits	2,645,995	1,544,059
Non-recourse borrowings of consolidated securitization entities	1,058,750	1,025,000
Current debt	208,164	364,489
Other current liabilities	306,123	140,186
Deferred revenue	846,370	966,438
Deferred tax liability, net	930
Total current liabilities	6,305,483	4,512,498
Deferred revenue	166,807	170,748
Deferred tax liability, net	690,175	275,757
Deposits	2,127,546	1,272,302
Non-recourse borrowings of consolidated securitization entities	4,133,166	3,566,916
Long-term and other debt	4,001,082	2,435,792
Other liabilities	207,772	154,483
Total liabilities	17,632,031	12,388,496
Commitments and contingencies (Note 14)
Redeemable non-controlling interest	235,566
Stockholders' equity:
Common stock, $0.01 par value; authorized, 200,000 shares; issued, 111,686 shares and 98,302 shares at December 31, 2014 and 2013, respectively	1,117	983
Additional paid-in capital	2,905,563	1,512,752
Treasury stock, at cost, 47,874 shares and 46,752 shares at December 31, 2014 and 2013, respectively	(2,975,795)	(2,689,177)
Retained earnings	2,540,948	2,049,430
Accumulated other comprehensive loss	(75,453)	(18,227)
Total stockholders' equity	2,396,380	855,761
Total liabilities and stockholders' equity	$ 20,263,977	$ 13,244,257

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Revenues
Transaction	$ 337,391	$ 329,027	$ 300,801
Redemption	1,053,248	587,187	635,536
Finance charges, net	2,303,698	1,956,654	1,643,405
Database marketing fees and direct marketing services	1,438,688	1,289,356	931,533
Other revenue	169,915	156,839	130,115
Total revenue	5,302,940	4,319,063	3,641,390
Operating expenses
Cost of operations (exclusive of depreciation and amortization disclosed separately below)	3,218,774	2,549,159	2,106,612
Earn-out obligation	105,944
Provision for loan loss	425,205	345,758	285,479
General and administrative	141,468	109,115	108,059
Depreciation and other amortization	109,655	84,291	73,802
Amortization of purchased intangibles	203,427	131,828	93,074
Total operating expenses	4,204,473	3,220,151	2,667,026
Operating income	1,098,467	1,098,912	974,364
Interest expense.
Securitization funding costs	91,103	95,326	92,808
Interest expense on deposits	37,543	29,111	25,181
Interest expense on long-term and other debt, net	131,880	181,063	173,471
Total interest expense, net	260,526	305,500	291,460
Income before income tax	837,941	793,412	682,904
Provision for income taxes	321,801	297,242	260,648
Net income	516,140	496,170	422,256
Less: Net income attributable to non-controlling interest	9,847
Net income attributable to Alliance Data Systems Corporation stockholders	$ 506,293	$ 496,170	$ 422,256
Net income attributable to Alliance Data Systems Corporation stockholders per share:
Basic (in dollars per share)	$ 8.72	$ 10.09	$ 8.44
Diluted (in dollars per share)	$ 7.87	$ 7.42	$ 6.58
Weighted average shares:
Basic (in shares)	56,378	49,190	50,008
Diluted (in shares)	62,445	66,866	64,143

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-In Capital	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Total
Balance at Dec. 31, 2011	$ 941	$ 1,387,773	$ (2,320,696)	$ 1,131,004	$ (23,056)	$ 175,966
Balance (in shares) at Dec. 31, 2011	94,141
Increase (Decrease) in Stockholders' Equity
Net income attributable to Alliance Data Systems Corporation stockholders				422,256		422,256
Other comprehensive income (loss)					1,195	1,195
Stock-based compensation		50,497				50,497
Repurchases of common stock			(137,396)			(137,396)
Other	$ 9	15,960				15,969
Other (in shares)	822
Balance at Dec. 31, 2012	$ 950	1,454,230	(2,458,092)	1,553,260	(21,861)	528,487
Balance (in shares) at Dec. 31, 2012	94,963
Increase (Decrease) in Stockholders' Equity
Net income attributable to Alliance Data Systems Corporation stockholders				496,170		496,170
Other comprehensive income (loss)					3,634	3,634
Stock-based compensation		59,183				59,183
Warrant conversions	$ 28	(37)				(9)
Warrant conversions (in shares)	2,783
Repurchases of common stock			(231,085)			(231,085)
Other	$ 5	(624)				(619)
Other (in shares)	556
Balance at Dec. 31, 2013	$ 983	1,512,752	(2,689,177)	2,049,430	(18,227)	855,761
Balance (in shares) at Dec. 31, 2013	98,302
Increase (Decrease) in Stockholders' Equity
Net income attributable to Alliance Data Systems Corporation stockholders				506,293		506,293
Accretion of non-controlling interest				(14,775)		(14,775)
Other comprehensive income (loss)					(57,226)	(57,226)
Stock-based compensation		72,462				72,462
Warrant conversions	$ 83	(1,559)				(1,476)
Warrant conversions (in shares)	8,289
Acquisition of Conversant, Inc.	$ 46	1,322,695				1,322,741
Acquisition of Conversant, Inc. (in shares)	4,608
Repurchases of common stock			(286,618)			(286,618)
Other	$ 5	(787)				(782)
Other (in shares)	487
Balance at Dec. 31, 2014	$ 1,117	$ 2,905,563	$ (2,975,795)	$ 2,540,948	$ (75,453)	$ 2,396,380
Balance (in shares) at Dec. 31, 2014	111,686

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 516,140	$ 496,170	$ 422,256
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	313,082	216,119	166,876
Deferred income taxes	(13,391)	42,913	102,266
Provision for loan loss	425,205	345,758	285,479
Non-cash stock compensation	72,462	59,183	50,497
Amortization of discount on debt	12,709	65,677	82,452
Amortization of deferred financing costs	24,019	25,492	24,935
Earn-out obligation	105,944
Increase (Decrease) in Operating Capital [Abstract]
Change in deferred revenue	(27,782)	(30,383)	(11,225)
Change in trade receivables	(156,003)	(33,414)	49,219
Change in accounts payable and accrued expenses	125,919	(28,011)	115,114
Change in other assets	(128,660)	(148,952)	(3,184)
Change in other liabilities	89,915	63,914	(13,146)
Originations of credit card and loan receivables held for sale	(5,271,668)	(1,674,713)
Sales of credit card and loan receivables held for sale	5,284,880	1,612,631
Excess tax benefits from stock-based compensation	(34,159)	(17,267)	(20,199)
Other	5,547	8,375	(18,712)
Net cash provided by operating activities	1,344,159	1,003,492	1,134,190
CASH FLOWS FROM INVESTING ACTIVITIES:
Change in redemption settlement assets	(59,701)	(54,572)	37,232
Change in cash collateral, restricted	12,658	32,405	99,035
Change in restricted cash	803	39,378	(46,837)
Change in credit card and loan receivables	(2,260,706)	(1,420,931)	(1,371,352)
Purchase of credit card portfolios	(953,171)	(46,705)	(780,003)
Payments for acquired businesses, net of cash	(1,195,808)		(463,964)
Capital expenditures	(158,694)	(135,376)	(116,455)
Purchases of other investments	(125,729)	(35,084)	(34,069)
Maturities/sales of other investments	7,227	2,852	15,651
Other	(4,000)	(1,383)	(10,588)
Net cash used in investing activities	(4,737,121)	(1,619,416)	(2,671,350)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under debt agreements	3,431,087	1,985,000	1,095,148
Repayments of borrowings	(1,835,161)	(1,300,241)	(506,214)
Proceeds from convertible note hedge counterparties	1,519,833	1,056,307
Settlement of convertible note borrowings	(1,864,803)	(1,861,289)
Issuances of deposits	3,820,867	1,989,576	1,866,213
Repayments of deposits	(1,863,686)	(1,401,625)	(991,577)
Non-recourse borrowings of consolidated securitization entities	2,670,000	2,268,285	2,543,892
Repayments/maturities of non-recourse borrowings of consolidated securitization entities	(2,070,000)	(1,807,339)	(1,673,209)
Payment of deferred financing costs	(55,119)	(24,772)	(40,267)
Excess tax benefits from stock-based compensation	34,159	17,267	20,199
Proceeds from issuance of common stock	17,063	14,090	20,696
Purchase of treasury shares	(286,618)	(231,085)	(125,840)
Other	(1,476)	(22)	(22)
Net cash provided by financing activities	3,516,146	704,152	2,209,019
Effect of exchange rate changes on cash and cash equivalents	(15,854)	(11,758)	5,280
Change in cash and cash equivalents	107,330	76,470	677,139
Cash and cash equivalents at beginning of year	969,822	893,352	216,213
Cash and cash equivalents at end of year	1,077,152	969,822	893,352
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid	221,237	239,203	215,708
Income taxes paid, net	$ 255,985	$ 216,530	$ 137,838

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2014

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation—The accompanying consolidated financial statements include the accounts of ADSC and all subsidiaries in which the Company has a controlling interest. Controlling interest is determined by majority ownership interest and the absence of substantive third party participating rights. All intercompany transactions have been eliminated.

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

For investments in any entities in which the Company owns 50% or less of the outstanding voting stock but in which the Company has significant influence over operating and financial decisions, the Company applies the equity method of accounting. In cases where the Company’s equity investment is less than 20% and significant influence does not exist, such investments are carried at cost.

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

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

Credit card and loan receivables consist of credit card and loan receivables held for investment. All new originations of credit card and loan receivables are deemed to be held for investment at origination because management has the intent and ability to hold them for the foreseeable future. Management makes judgments about the Company’s ability to fund these credit card and loan receivables through means other than securitization, such as money market deposits, certificates of deposit and other borrowings. In determining what constitutes the foreseeable future, management considers the short average life and homogenous nature of the Company’s credit card and loan receivables. In assessing whether these credit card and loan receivables continue to be held for investment, management also considers capital levels and scheduled maturities of funding instruments used. Management believes that the assertion regarding its intent and ability to hold credit card and loan receivables for the foreseeable future can be made with a high degree of certainty given the maturity distribution of the Company’s money market deposits, certificates of deposit and other funding instruments; the historic ability to replace maturing certificates of deposits and other borrowings with new deposits or borrowings; and historic credit card payment activity. Due to the homogenous nature of the Company’s credit card and loan receivables, amounts are classified as held for investment on an individual client portfolio basis.

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

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

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

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

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

Allowance for Doubtful Accounts—The Company analyzes the appropriateness of its allowance for doubtful accounts based on the Company’s assessment of various factors, including historical experience, the age of the accounts receivable balance, customer credit-worthiness, current economic trends, and changes in its customer payment terms and collection trends. Account balances are charged-off against the allowance after all reasonable means of collection have been exhausted and the potential for recovery is considered remote.

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

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

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

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

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

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

Derivatives Designated as Hedging Instruments — Cash Flow Hedges—The Company 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 the derivatives may be expected to remain highly effective in future periods.

The Company discontinues hedge accounting prospectively when (1) it determines that the derivative is no longer highly effective in offsetting changes in cash flow of 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.

Changes in the fair value of derivative instruments designated as cash flow hedges, excluding any ineffective portion are recorded in other comprehensive income (loss) until the hedged transactions affect net income. The ineffective portion of these cash flow hedges impacts net income when the ineffectiveness occurs.

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

Revenue Recognition—The Company’s policy follows the guidance from ASC 605, “Revenue Recognition,” and Accounting Standards Update (“ASU”) 2009-13, “Multiple-Deliverable Revenue Arrangements,” which provides guidance on the recognition, presentation, and disclosure of revenue in financial statements. The Company recognizes revenues when all of the following criteria are satisfied: (i) persuasive evidence of an arrangement exists; (ii) the price is fixed or determinable; (iii) collectability is reasonably assured; and (iv) the service has been performed or the product has been delivered. Reimbursements related to travel and out-of-pocket expenses are also included in revenues. Taxes assessed on revenue-producing transactions described above are presented on a net basis, and are excluded from revenues.

Transaction —The Company earns transaction fees, which are principally based on the number of transactions processed or statements generated and are recognized as such services are performed.

Air Miles Reward Program —The AIR MILES Reward Program collects fees from its sponsors based on the number of AIR MILES reward miles issued and, in limited circumstances, the number of AIR MILES reward miles redeemed. Because management has determined that the earnings process is not complete at the time an AIR MILES reward mile is issued, the recognition of redemption and service revenue is deferred. Redemption revenue is recognized as AIR MILES reward miles are redeemed and is impacted by the Company’s estimate of breakage, or those AIR MILES reward miles the Company estimates will remain unredeemed by collectors. Service revenue is amortized over the estimated life of an AIR MILES reward mile.

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

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

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

For those sponsor contracts within the scope of ASU 2009-13, proceeds from the issuance of AIR MILES reward miles are allocated to three elements, the redemption element, the service element, and the brand element, based on the relative selling price method. The fair value of each element was determined using management’s estimated selling price for that respective element. The estimated breakage rate changed from 28% to 27%, effective December 31, 2012 and from 27% to 26%, effective December 31, 2013 As of December 31, 2014, the estimated breakage rate remained at 26%.

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

Finance charges, net—Finance charges, net represents revenue earned on customer accounts serviced by the Company, and is recognized in the period in which it is earned. The Company recognizes earned finance charges, interest income and fees on credit card and loan receivables in accordance with the contractual provisions of the credit arrangements. As discussed in Note 4, “Credit Card and Loan Receivables,” interest and fees continue to accrue on all credit card accounts beyond 90 days, except in limited circumstances, until the credit card account balance and all related interest and other fees are paid or charged-off, typically at 180 days delinquent. Charge-offs for unpaid interest and fees as well as any adjustments to the allowance associated with unpaid interest and fees are recorded as a reduction to finance charges, net. Pursuant to ASC Subtopic 310-20, “Receivables - Nonrefundable Fees and Other Costs,” direct loan origination costs on credit card and loan receivables are deferred and amortized on a straight-line basis over a one-year period and recorded as a reduction to finance charges, net. As of December 31, 2014 and 2013, the remaining unamortized deferred costs related to loan origination were $32.0 million and $20.5 million, respectively, and were recorded in other current assets in the consolidated balance sheets.

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

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

The Company generates revenues from commission fees from transactions occurring on the Company’s affiliate marketing networks. Commission fee revenue is recognized on a net basis as the Company acts as an agent.

Earnings Per Share— Basic earnings per share is based only on the weighted average number of common shares outstanding, excluding any dilutive effects of options or other dilutive securities. Diluted earnings per share are based on the weighted average number of common and potentially dilutive common shares (dilutive stock options, unvested restricted stock and other dilutive securities outstanding during the year).

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

	Years Ended December 31,
	2014		2013		2012
	(In thousands, except per share amounts)
Numerator
Net income attributable to Alliance Data Systems Corporation stockholders	$	506,293	$	496,170	$	422,256
Less: Accretion of redeemable non-controlling interest	14,775		—		—
Net income attributable to Alliance Data Systems Corporation stockholders after accretion of redeemable non-controlling interest	$	491,518	$	496,170	$	422,256
Denominator
Weighted average shares, basic	56,378		49,190		50,008
Weighted average effect of dilutive securities:
Shares from assumed conversion of convertible senior notes	2,112		8,516		8,645
Shares from assumed exercise of convertible note warrants	3,421		8,482		4,702
Net effect of dilutive stock options and unvested restricted stock	534		678		788
Denominator for diluted calculation	62,445		66,866		64,143

Net income attributable to Alliance Data Systems Corporation stockholders per share:
Basic	$	8.72	$	10.09	$	8.44
Diluted	$	7.87	$	7.42	$	6.58

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.

Currency Translation—The assets and liabilities of the Company’s subsidiaries outside the U.S. are translated into U.S. dollars at the rates of exchange in effect at the balance sheet dates, primarily from Canadian dollars and the Euro. Income and expense items are translated at the average exchange rates prevailing during the period. Gains and losses resulting from currency transactions are recognized currently in income and those resulting from translation of financial statements are included in accumulated other comprehensive income (loss). The Company recognized $12.0 million, $(1.0) million and $0.6 million in foreign currency transaction gains (losses) for the years ended December 31, 2014, 2013 and 2012, respectively.

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

Advertising Costs—The Company participates in various advertising and marketing programs, including collaborative arrangements with certain clients. The cost of advertising and marketing programs is expensed in the period incurred. The Company has recognized advertising expenses, including advertising on behalf of its clients, of $239.5 million, $206.6 million and $166.1 million for the years ended December 31, 2014, 2013 and 2012, respectively.

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

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

Recently Issued Accounting Standards

In August 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” ASU 2014-15 provides guidance regarding management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and if such doubt exists, requires specific disclosures. ASU 2014-15 is effective for interim and annual periods beginning after December 15, 2016 and is not expected to have a significant impact on the Company’s consolidated financial statements.

In May 2014, the FASB issued ASU 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.

ACQUISITION

12 Months Ended

Dec. 31, 2014

ACQUISITION

ACQUISITION

3. ACQUISITIONS

2014 Acquisitions:

Brand Loyalty Group B.V.

On January 2, 2014, the Company acquired a 60% ownership interest in BrandLoyalty Group B.V. (“BrandLoyalty”), 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 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

The Company also recorded a liability for the earn-out provisions included in the BrandLoyalty share purchase agreement of €181.9 million ($248.7 million as of January 2, 2014), which is included in the Company’s consolidated balance sheet. The liability was measured at fair value on the date of purchase and subsequent changes in the fair value of the liability of €87.6 million ($105.9 million at December 31, 2014) are included in operating expenses in the Company’s consolidated statements of income. This earn-out obligation is not deductible for tax purposes.

Pursuant to the BrandLoyalty share purchase agreement, the Company may acquire the remaining 40% ownership interest in BrandLoyalty over a four-year period from the acquisition date at 10% per year at predetermined valuation multiples. If specified annual earnings targets are met by BrandLoyalty, the Company must acquire the additional 10% ownership interest for the year achieved; otherwise, the sellers have a put option to sell the Company their 10% ownership interest for the respective year.

The specified annual earnings target was met for the year ended December 31, 2014 and the Company acquired an additional 10% ownership interest effective January 1, 2015. See Note 15, “Redeemable Non-Controlling Interest,” for more information.

In February 2015, the Company paid €269.9 million to settle the contingent consideration associated with the Company’s 60% ownership interest and €77.2 million for the acquisition of the Company’s additional 10% ownership interest in BrandLoyalty ($305.5 million and $87.4 million on February 10, 2015, respectively).

Conversant, Inc.

On December 10, 2014, the Company completed the acquisition of 100% of the common stock of Conversant, Inc. (“Conversant”), a digital marketing services company offering unique end-to-end digital marketing solutions that empower clients to more effectively market to their customers across all channels.

The results of Conversant have been included since the date of acquisition and are reflected in the Company’s Epsilon segment. The addition of Conversant provides scale in display, mobile, video, and social digital channels, and adds important capabilities to Epsilon’s digital messaging platform, Agility Harmony®. The addition of Conversant’s Common ID initiative, which is able to recognize individuals across devices (desktop, tablet, mobile), as well as the ability to insource all digital capabilities, enhances Agility Harmony. Conversant’s data is also expected to enrich the Company’s existing offline and online data set, allowing for more effective targeted marketing programs. The goodwill recognized is attributable to expected synergies and the assembled workforce. The goodwill resulting from the acquisition is not expected to be deductible for tax purposes.

The Company paid total consideration of approximately $2.3 billion, with cash consideration of approximately $936.3 million, net of cash acquired and equity consideration of $1.3 billion with the issuance of 4.6 million shares and the exchange of certain restricted stock awards and stock options. The cash and equity consideration paid and issued were determined in accordance with the terms of the merger agreement, with the value based on the volume weighted average price per share of the Company’s common stock for the consecutive period of 15 trading days ending on the close of trading on the second trading day immediately preceding the closing of the merger. The following table summarizes the allocation of the consideration and the respective fair values of the assets acquired and liabilities assumed in the Conversant acquisition as of the date of purchase:

	As of December 10, 2014
	(In thousands)
Current assets, net of cash acquired	$	180,030
Deferred tax asset	11,905
Property and equipment	25,555
Developed technology	182,500
Other non-current assets	1,744
Intangible assets	755,600
Goodwill	1,650,299
Total assets acquired	2,807,633

Current liabilities	177,585
Deferred tax liability	344,081
Other liabilities	26,933
Total liabilities assumed	548,599

Net assets acquired	$	2,259,034

The allocation of the purchase price was based upon a preliminary valuation and the Company’s estimates and assumptions are subject to change when purchase price adjustments are finalized, which will occur prior to December 10, 2015.

The following table presents the Company’s unaudited pro forma consolidated revenue and net income for the years ended December 31, 2014 and 2013. The unaudited pro forma results include the historical consolidated statements of income of the Company and Conversant, giving effect to the Conversant acquisition and related financing transactions as if they had occurred on January 1, 2013.

	Years Ended December 31,
	2014		2013
	(In thousands)
Total revenue	$	5,853,501	$	4,892,184
Net income	$	528,870	$	482,221

The unaudited pro forma results are not necessarily indicative of the operating results that would have occurred if the Conversant acquisition had been completed as of the date for which the unaudited pro forma financial information is presented. The unaudited pro forma financial information for the years ended December 31, 2014 and 2013 includes adjustments that are directly related to the acquisition, factually supportable, and expected to have a continuing impact. These adjustments include, but are not limited to, amortization related to fair value adjustments to intangible assets and interest expense on acquisition-related debt. The unaudited pro forma financial information for the year ended December 31, 2014 was also adjusted to exclude $44.1 million of acquisition costs, which primarily consist of advisory, legal, accounting, valuation and other professional or consulting fees.

In addition the unaudited pro forma statements do not purport to project the future consolidated operating results of the combined Company.

2012 Acquisitions:

Hyper Marketing Group

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

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

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

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

Net assets acquired	$	451,803

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

- Definition

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

+ References

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

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1490-128463

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
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-URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1392-128463

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7008-128479

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

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
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-URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6927-128479

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4845-128472

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
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-URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1500-128463

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

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7000-128479

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4922-128472

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
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-URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4934-128472

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4926-128472

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1383-128463

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6996-128479

+ Details

CREDIT CARD AND LOAN RECEIVABLES

12 Months Ended

Dec. 31, 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:

	December 31, 2014		December 31, 2013
	(In thousands)
Principal receivables	$	10,762,498	$	8,166,961
Billed and accrued finance charges	422,838		343,521
Other credit card and loan receivables	58,544		62,400
Total credit card and loan receivables	11,243,880		8,572,882
Less credit card receivables — restricted for securitization investors	8,312,291		7,080,014
Other credit card and loan receivables	$	2,931,589	$	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 and to charge-off. The allowance is maintained through an adjustment to the provision for loan loss. Charge-offs of principal amounts, net of recoveries are deducted from the allowance. In estimating the allowance for uncollectible unpaid interest and fees, the Company utilizes historical charge-off trends, analyzing actual charge-offs for the prior three months. The allowance is maintained through an adjustment to finance charges, net. In evaluating the allowance for loan loss for both principal and unpaid interest and fees, management also considers factors that may impact loan loss experience, including seasoning, loan volume and amounts, seasonality, payment rates and forecasting uncertainties.

Net charge-offs include the principal amount of losses from credit cardholders unwilling or unable to pay their account balances, as well as bankrupt and deceased credit cardholders, less recoveries and exclude charged-off interest, fees and fraud losses. Charged-off interest and fees reduce finance charges, net while fraud losses are recorded as an expense. Credit card and loan receivables, including unpaid interest and fees, are charged-off at the end of the month during which an account becomes 180 days contractually past due, except in the case of customer bankruptcies or death. Credit card and loan receivables, including unpaid interest and fees, associated with customer bankruptcies or death are charged-off at the end of each month subsequent to 60 days after the receipt of notification of the bankruptcy or death, but in any case, not later than the 180-day contractual time frame.

The Company records the actual charge-offs for unpaid interest and fees as a reduction to finance charges, net. In estimating the allowance for uncollectable unpaid interest and fees, the Company utilizes historical charge-off trends, analyzing actual charge-offs for the prior three months. The allowance for unpaid interest and fees is maintained through an adjustment to finance charges, net. For the years ended December 31, 2014, 2013 and 2012, actual charge-offs for unpaid interest and fees were $302.7 million, $240.8 million and $191.1 million, respectively.

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

	Years Ended December 31,
	2014			2013			2012
	(In thousands)
Balance at beginning of period	$	503,169		$	481,958		$	468,321
Provision for loan loss	425,205			345,758			285,479
Change in estimate for uncollectible unpaid interest and fees	12,500			11,000			11,000
Recoveries	178,394			112,538			97,131
Principal charge-offs	(549,097		)	(448,085		)	(379,973		)
Balance at end of period	$	570,171		$	503,169		$	481,958

Delinquencies

A credit card account is contractually delinquent if the Company does not receive the minimum payment by the specified due date on the cardholder’s statement. It is the Company’s policy to continue to accrue interest and fee income on all credit card accounts beyond 90 days, except in limited circumstances, until the credit card account balance and all related interest and other fees are paid or charged-off, typically at 180 days delinquent. When an account becomes delinquent, a message is printed on the credit cardholder’s billing statement requesting payment. After an account becomes 30 days past due, a proprietary collection scoring algorithm automatically scores the risk of the account becoming further delinquent. The collection system then recommends a collection strategy for the past due account based on the collection score and account balance and dictates the contact schedule and collections priority for the account. If the Company is unable to make a collection after exhausting all in-house collection efforts, the Company may engage collection agencies and outside attorneys to continue those efforts.

The following table presents the delinquency trends of the Company’s credit card and loan receivables portfolio:

	December 31, 2014		% of Total		December 31, 2013		% of Total
	(In thousands, except percentages)
Receivables outstanding - principal	$	10,762,498	100.0	%	$	8,166,961	100.0	%
Principal receivables balances contractually delinquent:
31 to 60 days	$	157,760	1.4	%	$	114,430	1.4	%
61 to 90 days	93,175		0.9		74,700		0.9
91 or more days	182,945		1.7		150,425		1.9
Total	$	433,880	4.0	%	$	339,555	4.2	%

The practice of re-aging an account may affect credit card loan delinquencies and charge-offs. A re-age is intended to assist delinquent cardholders who have experienced financial difficulties but who demonstrate both an ability and willingness to repay the amounts due. Accounts meeting specific defined criteria are re-aged when the cardholder makes one or more consecutive payments aggregating a certain pre-defined amount of their account balance. With re-aging, the outstanding balance of a delinquent account is returned to a current status. For the years ended December 31, 2014, 2013 and 2012, the Company’s re-aged accounts represented 1.2%, 1.4% and 1.3%, respectively, of total credit card and loan receivables for each period and thus do not have a significant impact on the Company’s delinquencies or net charge-offs. The Company’s re-aging practices comply with regulatory guidelines.

Modified Credit Card and Loan Receivables

The Company holds certain credit card and loan receivables for which the terms have been modified. The Company’s modified credit card and loan receivables include credit card and loan receivables for which temporary hardship concessions have been granted and credit card and loan receivables in permanent workout programs. These modified credit card and loan receivables include concessions consisting primarily of a reduced minimum payment and an interest rate reduction. The temporary programs’ concessions remain in place for a period no longer than twelve months, while the permanent programs remain in place through the payoff of the credit card and loan receivables if the credit cardholder complies with the terms of the program. These concessions do not include the forgiveness of unpaid principal, but may involve the reversal of certain unpaid interest or fee assessments. In the case of the temporary programs, at the end of the concession period, credit card and loan receivable terms revert to standard rates. These arrangements are automatically terminated if the customer fails to make payments in accordance with the terms of the program, at which time their account reverts back to its original terms.

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

The Company had $134.9 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 $35.2 million and $33.9 million, respectively, as of December 31, 2014 and 2013. These modified credit card and loan receivables represented less than 2% of the Company’s total credit card and loan receivables as of both December 31, 2014 and 2013.

The average recorded investment in the impaired credit card and loan receivables was $117.9 million and $117.4 million for the years ended December 31, 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 $13.2 million, $12.7 million and $15.5 million for the years ended December 31, 2014, 2013 and 2012, 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:

	Year Ended December 31, 2014
	Number of Restructurings	Pre-modification Outstanding Balance		Post- modification Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings — credit card and loan receivables	141,137	$	142,260	$	142,141

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

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:

Age of Credit Card and Loan Receivable Accounts

The following tables set forth, as of December 31, 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:

	December 31, 2014
Age of Accounts Since Origination	Number of Active Accounts with Balances	Percentage of Active Accounts with Balances		Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding
	(In thousands, except percentages)
0-12 Months	6,029	28.8	%	$	2,710,992	25.2	%
13-24 Months	3,026	14.4		1,549,899		14.4
25-36 Months	2,120	10.1		1,113,755		10.3
37-48 Months	1,548	7.4		866,645		8.1
49-60 Months	1,158	5.5		655,351		6.1
Over 60 Months	7,082	33.8		3,865,856		35.9
Total	20,963	100.0	%	$	10,762,498	100.0	%

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

Credit Quality

The Company uses proprietary scoring models developed specifically for the purpose of monitoring the Company’s obligor credit quality. The proprietary scoring models are used as a tool in the underwriting process and for making credit decisions. The proprietary scoring models are based on historical data and require various assumptions about future performance. Information regarding customer performance is factored into these proprietary scoring models to determine the probability of an account becoming 90 or more days past due at any time within the next 12 months. Obligor credit quality is monitored at least monthly during the life of an account. The following table reflects composition of the Company’s credit card and loan receivables by obligor credit quality as of December 31, 2014 and 2013:

	December 31, 2014				December 31, 2013
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months)	Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding		Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding
	(In thousands, except percentages)
No Score	$	227,378	2.1	%	$	162,366	2.0	%
27.1% and higher	499,989		4.6		362,366		4.4
17.1% - 27.0%	967,035		9.0		732,425		9.0
12.6% - 17.0%	1,129,122		10.5		858,721		10.5
3.7% - 12.5%	4,429,399		41.1		3,234,547		39.6
1.9% - 3.6%	2,254,794		21.0		1,748,317		21.4
Lower than 1.9%	1,254,781		11.7		1,068,219		13.1
Total	$	10,762,498	100.0	%	$	8,166,961	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. 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 $48.9 million and $62.1 million at December 31, 2014 and December 31, 2013, respectively, and are included in credit card and loan receivables held for sale in the Company’s consolidated balance sheets and carried at the lower of cost or fair value. The carrying value of these loan receivables approximates fair value due to the short duration between 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 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 years ended December 31, 2014 and 2013, the Company purchased $263.8 and $80.1 million of loan receivables under these agreements, respectively. The outstanding balance of these loan receivables was $160.6 million and $61.6 million as of December 31, 2014 and 2013, respectively, and was included in other credit card and loan receivables in the Company’s consolidated balance sheets.

Portfolio Acquisitions

During the year ended December 31, 2014, the Company acquired four credit card portfolios for purchase prices totaling approximately $976.5 million and consisting of $862.4 million of credit card receivables and $114.1 million of intangible assets. The purchase price of one of the portfolio acquisitions remains subject to customary purchase price adjustments.

During the year ended December 31, 2013, the Company acquired two credit card portfolios for purchase prices totaling approximately $46.7 million, which consist of $43.6 million of credit card receivables, $3.5 million of intangible assets and a liability of approximately $0.4 million.

Portfolios Held for Sale

In December 2014, the Company elected to sell two credit card portfolios and reclassified the receivables in these portfolios to credit card and loan receivables held for sale in the Company’s consolidated balance sheets. These credit card receivables held for sale are carried at the lower of cost or fair value, or $76.2 million as of December 31, 2014.

Securitized Credit Card Receivables

The Company regularly securitizes its credit card receivables through its credit card securitization trusts, consisting of the WFN Trusts and the WFC Trust. The Company continues to own and service the accounts that generate credit card receivables held by the WFN Trusts and the WFC Trust. In its capacity as a servicer, each of the respective banks earns a fee from the WFN Trusts and the WFC Trust to service and administer the credit card receivables, collect payments and charge-off uncollectible receivables. These fees are eliminated and therefore are not reflected in the consolidated statements of income for the years ended December 31, 2014, 2013 and 2012.

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

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

The Company is required to maintain minimum interests ranging from 4% to 10% of the securitized credit card receivables. This requirement is met through seller’s interest, which is eliminated in the consolidated balance sheets, and is supplemented through excess funding deposits. Excess funding deposits represent cash amounts deposited with the trustee of the securitizations.

Cash collateral, restricted deposits are generally released proportionately as investors are repaid, although some cash collateral, restricted deposits are released only when investors have been paid in full. None of the cash collateral, restricted deposits were required to be used to cover losses on securitized credit card receivables in the periods ending December 31, 2014, 2013 and 2012, respectively.

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

	December 31, 2014		December 31, 2013
	(In thousands)
Total credit card receivables — restricted for securitization investors	$	8,312,291	$	7,080,014
Principal amount of credit card receivables — restricted for securitization investors, 90 days or more past due	$	145,768	$	131,659

	Years Ended December 31,
	2014		2013		2012
	(In thousands)
Net charge-offs of securitized principal	$	317,877	$	311,111	$	265,305

OTHER INVESTMENTS

12 Months Ended

Dec. 31, 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 consolidated balance sheets. The principal components of other investments, which are carried at fair value, are as follows:

	December 31, 2014									December 31, 2013
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(In thousands)
Restricted cash	$	22,611	$	—	$	—		$	22,611	$	25,988	$	—	$	—		$	25,988
Marketable securities	95,669		520		(1,322		)	94,867		77,351		62		(4,180		)	73,233
U.S. Treasury bonds	100,072		66		(33		)	100,105		—		—		—			—
Total	$	218,352	$	586	$	(1,355	)	$	217,583	$	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 December 31, 2014 and 2013, aggregated by investment category and the length of time that individual securities have been in a continuous loss position:

	December 31, 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	$	8,757	$	(27	)	$	48,961	$	(1,295	)	$	57,718	$	(1,322	)
U.S. Treasury bonds	75,043		(33		)	—		—			75,043		(33		)
Total	$	83,800	$	(60	)	$	48,961	$	(1,295	)	$	132,761	$	(1,355	)

	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 December 31, 2014 by contractual maturity are as follows:

	Amortized Cost		Estimated Fair Value
	(In thousands)
Due in one year or less	$	6,599	$	6,570
Due after one year through five years	100,072		100,105
Due after five years through ten years	4,240		4,439
Due after ten years	84,830		83,858
Total	$	195,741	$	194,972

Market values were determined for each individual security in the investment portfolio. When evaluating the investments for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the security’s issuer, and the Company’s intent to sell the security and whether it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. The Company typically invests in highly-rated securities with low probabilities of default and has the ability to hold the investments until maturity. As of December 31, 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 years ended December 31, 2014, 2013 and 2012.

INTANGIBLE ASSETS AND GOODWILL

12 Months Ended

Dec. 31, 2014

INTANGIBLE ASSETS AND GOODWILL

INTANGIBLE ASSETS AND GOODWILL

9. INTANGIBLE ASSETS AND GOODWILL

Intangible Assets

Intangible assets consist of the following:

	December 31, 2014
	Gross Assets		Accumulated Amortization			Net		Amortization Life and Method
	(In thousands)
Finite Lived Assets
Customer contracts and lists	$	1,328,056	$	(295,263	)	$	1,032,793	4-12 years—straight line
Premium on purchased credit card portfolios	289,173		(114,923		)	174,250		3-10 years—straight line, accelerated
Customer database	210,300		(126,157		)	84,143		3-10 years—straight line
Collector database	60,238		(56,239		)	3,999		30 years—15% declining balance
Publisher networks	140,200		(1,662		)	138,538		5-7 years—straight line
Tradenames	86,934		(29,408		)	57,526		2-15 years—straight line
Purchased data lists	12,335		(6,497		)	5,838		1-5 years—straight line, accelerated
Favorable lease	6,891		(767		)	6,124		3-10 years—straight line
Noncompete agreements	1,300		(867		)	433		3 years—straight line
	$	2,135,427	$	(631,783	)	$	1,503,644
Indefinite Lived Assets
Tradenames	12,350		—			12,350		Indefinite life
Total intangible assets	$	2,147,777	$	(631,783	)	$	1,515,994

	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 databases	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 Conversant acquisition on December 10, 2014, the Company acquired $755.6 million of intangible assets, consisting of $544.0 million of customer contracts, $140.2 million of publisher networks, $63.6 million of customer databases, a $4.2 million tradename and $3.6 million of favorable leases, which are being amortized over weighted average lives of 7.3 years, 5.3 years, 3.0 years, 1.7 years and 5.4 years, respectively.

For more information on these acquisitions, see Note 3, “Acquisitions.”

With the credit card portfolio acquisitions made during the year ended December 31, 2014, the Company acquired $114.1 million of intangible assets, consisting of $82.5 million of customer relationships being amortized over a weighted average life of 3.6 years and $31.6 million of marketing relationships being amortized over a weighted average life of 6.1 years.

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

Amortization expense related to the intangible assets was approximately $197.8 million, $128.5 million and $90.3 million for the years ended December 31, 2014, 2013 and 2012, respectively.

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

	For Years Ending December 31,
	(In thousands)
2015	$	322,682
2016	303,984
2017	261,644
2018	200,738
2019	167,545
2020 & thereafter	247,051

Goodwill

The changes in the carrying amount of goodwill for the years ended December 31, 2014 and 2013, respectively, are as follows:

	LoyaltyOne			Epsilon			Private Label Services and Credit		Corporate/ Other		Total
	(In thousands)
December 31, 2012	$	248,070		$	1,241,251		$	261,732	$	—	$	1,751,053
Effects of foreign currency translation	(15,621		)	271			—		—		(15,350		)
December 31, 2013	232,449			1,241,522			261,732		—		1,735,703
Goodwill acquired during year	565,015			1,650,299			—		—		2,215,314
Effects of foreign currency translation	(84,007		)	(1,526		)	—		—		(85,533		)
December 31, 2014	$	713,457		$	2,890,295		$	261,732	$	—	$	3,865,484

For the year ended December 31, 2014, the Company acquired $2.2 billion of goodwill of which $565.0 million resulted from the BrandLoyalty acquisition in January 2014 and $1.6 billion resulted from the Conversant acquisition in December 2014. See Note 3, “Acquisitions,” for additional information.

The Company completed annual impairment tests for goodwill on July 31, 2014, 2013 and 2012 and determined at each date that no impairment exists. No further testing of goodwill impairments will be performed until July 31, 2015, unless events occur or circumstances indicate an impairment may have occurred.

- Definition

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

+ References + Details

DEBT

12 Months Ended

Dec. 31, 2014

DEBT

DEBT

11. DEBT

Debt consists of the following:

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

Long-term and other debt:
2013 credit facility	$	—		$	336,000		July 2018 or December 2019	(1)
2013 term loan	2,603,125			1,234,688			July 2018 or December 2019	(1)
BrandLoyalty credit facility	108,789			—			December 2015	(2)
2014 convertible senior notes	—			333,082			—	—
Senior notes due 2017	397,332			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	4,209,246			2,800,281
Less: current portion	(208,164		)	(364,489		)
Long-term portion	$	4,001,082		$	2,435,792

Deposits:
Certificates of deposit	$	3,934,906		$	2,486,533		Various — January 2015 — November 2021	0.30% to 3.25%
Money market deposits	838,635			329,828			On demand	(3)
Total deposits	4,773,541			2,816,361
Less: current portion	(2,645,995		)	(1,544,059		)
Long-term portion	$	2,127,546		$	1,272,302

Non-recourse borrowings of consolidated securitization entities:
Fixed rate asset-backed term note securities	$	3,376,916		$	3,001,916		Various - June 2015 — June 2019	0.61% to 6.75%
Floating rate asset-backed term note securities	450,000			—			February 2016	(4)
Conduit asset-backed securities	1,365,000			1,590,000			Various - September 2015 — May 2016	(5)
Total non-recourse borrowings of consolidated securitization entities	5,191,916			4,591,916
Less: current portion	(1,058,750		)	(1,025,000		)
Long-term portion	$	4,133,166		$	3,566,916

(1)

The interest rate is based upon the London Interbank Offered Rate (“LIBOR”) plus an applicable margin. At December 31, 2014, the weighted average interest rate was 1.91% for the 2013 Term Loan.

(2)

The interest rate is based upon the Euro Interbank Offered Rate (“EURIBOR”) plus an applicable margin. At December 31, 2014, the weighted average interest rate was 2.83%.

(3)

The interest rates are based on the Federal Funds rate. At December 31, 2014, the interest rates ranged from 0.01% to 0.42%.

(4)

The interest rate is based upon LIBOR plus an applicable margin. At December 31, 2014, the interest rate was 0.54%.

(5)

The interest rate is based upon LIBOR or the asset-backed commercial paper costs of each individual conduit provider plus an applicable margin. At December 31, 2014, the interest rates ranged from 1.05% to 1.71%.

At December 31, 2014, the Company was in compliance with its covenants.

Credit Agreements

In July 2013, the Company, as borrower, and ADS Alliance Data Systems, Inc., ADS Foreign Holdings, Inc., Alliance Data Foreign Holdings, Inc., Epsilon Data Management, LLC, Comenity LLC, Comenity Servicing LLC and Aspen Marketing Services, LLC, as guarantors, entered into a credit agreement with various agents and lenders dated July 10, 2013 (the “2013 Credit Agreement”). Wells Fargo Bank, National Association (“Wells Fargo”), is the administrative agent and letter of credit issuer under the 2013 Credit Agreement. At December 31, 2013, the 2013 Credit Agreement provided for a $1.25 billion term loan (the “2013 Term Loan”), subject to certain principal repayments, and a $1.25 billion revolving line of credit (the “2013 Credit Facility”) with a U.S. $65.0 million sublimit for Canadian dollar borrowings and a $65.0 million sublimit for swing line loans. The 2013 Credit Agreement included an uncommitted accordion feature of up to $500.0 million in the aggregate allowing for future incremental borrowings, subject to certain conditions.

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.

On December 8, 2014, the Company entered into an amendment to the 2013 Credit Agreement (the “Amended 2013 Credit Agreement”), which provides for, among other things, (i) a new five-year incremental term loan of $1.4 billion which matures on December 8, 2019 and (ii) the extension of the maturity date for the majority of the existing term loans under the Amended 2013 Credit Agreement from July 10, 2018 to December 8, 2019. The Amended 2013 Credit Agreement also gives the Company the right to elect to optionally prepay non-extended term loans prior to the extended term loans and the new incremental term loan. The incremental term loans bear interest at the same rates as, and are generally subject to the same terms as, the existing term loans under the Amended 2013 Credit Agreement.

Total availability under the 2013 Credit Facility at December 31, 2014 was $1.3 billion.

The 2013 Term Loan, as amended, provides for aggregate principal payments of 2.5% of the initial term loan amount in each of the first and second year and 5% of the initial term loan amount in each of the third, fourth, and fifth year, payable in equal quarterly installments beginning on March 31, 2015.

The Amended 2013 Credit Agreement is unsecured.

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

The Amended 2013 Credit Agreement contains the usual and customary negative covenants for transactions of this type, including, but not limited to, restrictions on the Company’s ability and in certain instances, its subsidiaries’ ability to consolidate or merge; substantially change the nature of its business; sell, lease, or otherwise transfer any substantial part of its assets; create or incur indebtedness; create liens; pay dividends; and make acquisitions. The negative covenants are subject to certain exceptions as specified in the Amended 2013 Credit Agreement. The Amended 2013 Credit Agreement also requires the Company to satisfy certain financial covenants, including a maximum total leverage ratio as determined in accordance with the Amended 2013 Credit Agreement and a minimum ratio of consolidated operating EBITDA to consolidated interest expense as determined in accordance with the Amended 2013 Credit Agreement. The Amended 2013 Credit Agreement also includes customary events of default.

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 in December 2015. As of December 31, 2014, amounts outstanding under the term loans and revolving line of credit were €38.0 million and €51.9 million ($46.0 million and $62.8 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 August 2008, the Company issued $805.0 million aggregate principal amount of convertible senior notes that matured and were repaid on August 1, 2013 (the “2013 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 “2014 Convertible Senior Notes”). Concurrently, with the pricing of the 2014 Convertible Senior Notes, the Company entered into convertible note hedge transactions with respect to its common stock. On or prior to May 15, 2014, the Company settled in cash the 2014 Convertible Senior Notes, 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.

Concurrently with the issuance of the Company’s 2013 Convertible Senior Notes and 2014 Convertible Senior Notes, the Company entered into warrant transactions with respect to its common stock. With respect to the 2013 Convertible Senior Notes, the Company net settled 10.2 million warrants by issuing 5.7 million shares of its common stock, of which 2.8 million shares were issued in 2013 and 2.9 million shares were issued in 2014. With respect to the 2014 Convertible Senior Notes, the Company net settled 7.3 million warrants by issuing 5.4 million shares of its common stock in 2014.

Concurrently with the pricing of the 2014 Convertible Senior Notes, the Company entered into prepaid forward transactions (the “Prepaid Forwards”) with Merrill Lynch, Pierce, Fenner & Smith Incorporated, as agent for Merrill Lynch International, and Barclays Capital Inc., as agent for Barclays Bank PLC. Under the Prepaid Forwards, the Company purchased 1,857,400 shares of its common stock for approximately $74.9 million with proceeds from the 2014 Convertible Senior Notes offering. The shares were delivered over a settlement period in 2014.

The table below summarizes the carrying value of the components of the convertible senior notes at December 31, 2013:

	(In millions)

Carrying amount of equity component	$	115.9

Principal amount of liability component	$	345.0
Unamortized discount	(11.9		)
Net carrying value of liability component	$	333.1

If-converted value of common stock	$	1,906.9

Interest expense on the convertible senior notes recognized in the Company’s consolidated statements of income for the years ended December 31, 2014, 2013 and 2012 is as follows:

	Years Ended December 31,
	2014			2013			2012
	(In thousands, except percentages)
Interest expense calculated on contractual interest rate	$	5,630		$	24,169		$	30,475
Amortization of discount on liability component	11,888			64,900			82,366
Total interest expense on convertible senior notes	$	17,518		$	89,069		$	112,841

Effective interest rate (annualized)	14.2		%	12.4		%	11.0		%

Senior Notes

Due 2017

In November 2012, the Company issued and sold $400 million aggregate principal amount of 5.250% senior notes due December 1, 2017 (the “Senior Notes due 2017”) at an issue price of 98.912% of the aggregate principal amount. The Senior Notes due 2017 accrue interest on the principal amount at the rate of 5.250% per annum from November 20, 2012, payable semiannually in arrears, on June 1 and December 1 of each year, beginning on June 1, 2013. The unamortized discount was $2.7 million and $3.5 million at December 31, 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 December 31, 2014, is a period of 2.9 years at an effective annual interest rate of 5.5%.

The payment obligations under the Senior Notes due 2017 are governed by an indenture dated November 20, 2012 with Wells Fargo Bank, N.A., as trustee. The Senior Notes due 2017 are unsecured and are guaranteed on a senior unsecured basis by certain of the Company’s existing and future domestic subsidiaries that guarantee its Amended 2013 Credit Agreement, including ADS Alliance Data Systems, Inc., ADS Foreign Holdings, Inc., Alliance Data Foreign Holdings, Inc., Epsilon Data Management LLC, Comenity LLC, Comenity Servicing LLC and Aspen Marketing Services, LLC. The indenture includes usual and customary negative covenants and events of default for transactions of this type.

Due 2020

In March 2012, the Company issued and sold $500 million aggregate principal amount of 6.375% senior notes due April 1, 2020 (the “Senior Notes due 2020”). The Senior Notes due 2020 accrue interest on the principal amount at the rate of 6.375% per annum from March 29, 2012, payable semiannually in arrears, on April 1 and October 1 of each year, beginning on October 1, 2012. The proceeds from the issuance of the Senior Notes due 2020 were used to repay outstanding indebtedness under the Company’s Amended 2013 Credit Agreement.

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

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 proceeds from the issuance of the Senior Notes due 2022 were used to repay outstanding indebtedness under the Company’s Amended 2013 Credit Agreement.

The payment obligations under the Senior Notes due 2022 are governed by an indenture dated July 29, 2014 with Wells Fargo Bank, N.A., as trustee. The Senior Notes due 2022 are unsecured and are guaranteed on a senior unsecured basis by certain of the Company’s existing and future domestic subsidiaries that guarantee its Credit Agreement, including ADS Alliance Data Systems, Inc., ADS Foreign Holdings, Inc., Alliance Data Foreign Holdings, Inc., Epsilon Data Management LLC, Comenity LLC, Comenity Servicing LLC and Aspen Marketing Services, LLC. The indenture includes usual and customary negative covenants and events of default for transactions of this type.

Deposits

Terms of the certificates of deposit range from three months to seven years with annual interest rates ranging from 0.30% to 3.25%, with a weighted average interest rate of 1.27%, at December 31, 2014 and 0.15% to 3.55%, with a weighted average interest rate of 1.07%, at December 31, 2013. Interest is paid monthly and at maturity.

Comenity Bank and Comenity Capital Bank offer demand deposit programs through contractual arrangements with securities brokerage firms. Money market deposits are redeemable on demand by the customer and, as such, have no scheduled maturity date. As of December 31, 2014, Comenity Bank and Comenity Capital Bank had $838.6 million in money market deposits outstanding with annual interest rates ranging from 0.01% to 0.42%, with a weighted average interest rate of 0.23%. As of December 31, 2013, Comenity Bank and Comenity Capital Bank had $329.8 million in money market deposits outstanding with annual interest rates ranging from 0.01% to 0.12%, with a weighted average interest rate of 0.04%.

Non-Recourse Borrowings of Consolidated Securitization Entities

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

Asset-Backed Term Notes

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

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 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 was retained by the Company and eliminated from the Company’s consolidated financial statements, matured and was repaid.

In November 2014, Master Trust I issued $427.6 million of asset-backed term notes, of which $102.6 million was retained by the Company and eliminated from the Company’s consolidated financial statements. These securities 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. As of December 31, 2014, total capacity under the conduit facilities was $ 1.6 billion, of which $1.4 billion had been drawn and was included in non-recourse borrowings of consolidated securitization entities in the consolidated balance sheets. Borrowings outstanding under each facility bear interest at a margin above LIBOR or the asset-backed commercial paper costs of each individual conduit provider. The conduits have varying maturities from September 2015 to May 2016 with variable interest rates ranging from 1.05% to 1.71% as of December 31, 2014.

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.

Maturities

Debt at December 31, 2014 matures as follows:

Year	Long-Term and Other Debt			Non-Recourse Borrowings of Consolidated Securitization Entities		Deposits		Total
	(In thousands)
2015	$	208,164		$	1,058,750	$	2,645,995	$	3,912,909
2016	132,500			2,050,000		809,293		2,991,793
2017 (1)	532,500			650,000		532,168		1,714,668
2018	184,911			631,000		386,728		1,202,639
2019	2,053,839			802,166		322,236		3,178,241
Thereafter	1,100,000			—		77,121		1,177,121
Total maturities	4,211,914			5,191,916		4,773,541		14,177,371
Unamortized discount (2)	(2,668		)	—		—		(2,668		)
	$	4,209,246		$	5,191,916	$	4,773,541	$	14,174,703

(1)

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

(2)

Unamortized discount represents the unamortized discount, at December 31, 2014, associated with the Senior Notes due 2017.

DERIVATIVE INSTRUMENTS

12 Months Ended

Dec. 31, 2014

Derivative Instruments And Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS

12. DERIVATIVE INSTRUMENTS

The Company uses derivatives to manage risks associated with certain assets and liabilities arising from the potential adverse impact of fluctuations in interest rates and foreign currencies.

The Company is a party to certain interest rate derivative instruments that 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.”

The Company enters 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, certain of which are designated as cash flow hedges.

The following table presents the fair values of the derivative instruments included within the Company’s consolidated balance sheets as of December 31, 2014:

	December 31, 2014
	Balance Sheet Location	Notional Amount		Maturity	Fair Value
	(In thousands)
Designated as hedging instruments:
Foreign currency exchange hedges	Other current assets	$	50,908	January 2015 to September 2015	$	3,528

Not designated as hedging instruments:
Foreign currency exchange hedges	Other current assets	$	3,125	January 2015 to March 2015	$	343
Foreign currency exchange forward contract	Other current liabilities	$	236,578	January 2015	$	16,990
Interest rate derivatives	Other current liabilities	$	79,429	December 2015 to August 2016	$	330

Gains of $2.4 million, net of tax, were recognized in other comprehensive income for the year ended December 31, 2014 related to foreign exchange hedges designated as effective. At December 31, 2014, $0.3 million was reclassified from accumulated other comprehensive income into net income. A de minimus amount of ineffectiveness was recorded for the year ended December 31, 2014. At December 31, 2014, $2.4 million is expected to be reclassified from accumulated other comprehensive income into net income in the coming 12 months.

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 years ended December 31, 2014, 2013 and 2012 recognized in the Company’s consolidated statements of income:

	Years Ended December 31,
	2014				2013			2012
	Income Statement Location	Gain (loss) on Derivative Instruments			Income Statement Location	Gain on Derivative Instruments		Income Statement Location	Gain on Derivative Instruments
	(In thousands)
Interest rate derivatives	Interest expense on long-term and other debt, net	$	297		Securitization funding costs	$	8,511	Securitization funding costs	$	29,592
Foreign currency exchange forward contract	General and administrative	$	(16,990	)	General and administrative	$	—	General and administrative	$	—
Foreign currency exchange hedges	Cost of operations	$	257		Cost of operations	$	—	Cost of operations	$	—

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

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 December 31, 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

STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2014

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

16. STOCKHOLDERS’ EQUITY

Stock Repurchase Programs

On December 13, 2011, the Company’s Board of Directors authorized a stock repurchase program to acquire up to $400.0 million of the Company’s outstanding common stock from January 1, 2012 through December 31, 2012. On January 2, 2013, the Company’s Board of Directors authorized a stock repurchase program to acquire up to $400.0 million of the Company’s outstanding common stock from January 2, 2013 through December 31, 2013. On December 5, 2013, the Company’s Board of Directors authorized a stock repurchase program to acquire up to $400.0 million of our outstanding common stock from January 1, 2014 through December 31, 2014, subject to any restrictions pursuant to the terms of the Company’s credit agreements, indentures, applicable securities laws or otherwise.

During the years ended December 31, 2014, 2013 and 2012, the Company repurchased approximately 1.1 million, 1.4 million and 1.0 million shares of its common stock for an aggregate amount of $286.6 million, $231.1 million and $137.4 million, respectively.

As of December 31, 2014, $113.4 million remained unused under the stock repurchase program that was authorized in December 2013 and expired on December 31, 2014.

On January 1, 2015, our Board of Directors authorized a stock repurchase program to acquire up to $600.0 million of our outstanding common stock from January 1, 2015 through December 31, 2015, subject to any restrictions pursuant to the terms of our credit agreements, indentures, applicable securities laws or otherwise.

Stock Compensation Plans

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

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

Terms of all awards under the 2010 Omnibus Incentive Plan are determined by the Board of Directors or the compensation committee of the Board of Directors or its designee at the time of award.

Stock Compensation Expense

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

Total stock-based compensation expense recognized in the Company’s consolidated statements of income for the years ended December 31, 2014, 2013 and 2012, is as follows:

	Years Ended December 31,
	2014		2013		2012
	(In thousands)
Cost of operations	$	50,790	$	40,264	$	32,654
General and administrative	21,672		18,919		17,843
Total	$	72,462	$	59,183	$	50,497

As the amount of stock-based compensation expense recognized is based on awards ultimately expected to vest, the amount recognized in the Company’s results of operations has been reduced for estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on the Company’s historical experience. The Company’s forfeiture rate was 5% for the years ended December 31, 2014, 2013 and 2012. As of December 31, 2014, there was approximately $112.7 million of unrecognized expense, adjusted for estimated forfeitures, related to non-vested, stock-based equity awards granted to employees, which is expected to be recognized over a weighted average period of approximately 1.9 years.

Restricted Stock Awards

During 2014, the Company awarded both service-based and performance-based restricted stock units. Fair value of the restricted stock units is estimated using the Company’s closing share price on the date of grant. In accordance with ASC 718, the Company recognizes the estimated stock-based compensation expense, net of estimated forfeitures, over the applicable service period.

Service-based restricted stock unit awards typically vest ratably over a three year period. Performance-based restricted stock unit awards typically vest ratably over a three year period if specified performance measures tied to the Company’s financial performance are met.

	Performance- Based		Service- Based		Total		Weighted Average Fair Value
Balance at January 1, 2012	856,572		345,189		1,201,761		$	65.39
Shares granted	527,080		127,646		654,726		110.18
Shares vested	(505,335	)	(130,066	)	(635,401	)	59.06
Shares cancelled	(104,476	)	(27,618	)	(132,094	)	86.13
Balance at December 31, 2012	773,841		315,151		1,088,992		$	93.33
Shares granted	409,575		92,206		501,781		155.31
Shares vested	(448,868	)	(122,931	)	(571,799	)	88.15
Shares cancelled	(49,544	)	(14,915	)	(64,459	)	115.83
Balance at December 31, 2013	685,004		269,511		954,515		$	121.86
Shares granted (1)	271,616		246,867		518,483		282.34
Shares vested	(405,655	)	(99,037	)	(504,692	)	116.07
Shares cancelled	(32,898	)	(16,074	)	(48,972	)	177.14
Balance at December 31, 2014	518,067		401,267		919,334		$	198.85
Outstanding and Expected to Vest					839,110		$	194.82

(1)

During the year ended December 31, 2014, shares granted for service-based restricted stock awards include 181,487 shares exchanged pursuant to the Conversant acquisition.

The total fair value of restricted stock units vested was $58.6 million, $50.4 million and $37.5 million for the years ended December 31, 2014, 2013 and 2012, respectively. The aggregate intrinsic value of restricted stock units outstanding and expected to vest was $240.0 million at December 31, 2014. The weighted-average remaining contractual life for unvested restricted stock units was 1.2 years at December 31, 2014.

Stock Options

Stock option awards are granted with an exercise price equal to the market price of the Company’s stock on the date of grant. Options typically vest ratably over three years and expire ten years after the date of grant.

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

	Outstanding				Exercisable
	Options		Weighted Average Exercise Price		Options	Weighted Average Exercise Price
Balance at January 1, 2012	740,017		$	42.87	740,017	$	42.87
Granted	—		—
Exercised	(355,764	)	42.95
Forfeited	—		—
Balance at December 31, 2012	384,253		$	42.80	384,253	$	42.80
Granted	—		—
Exercised	(143,577	)	36.30
Forfeited	(1,000	)	31.38
Balance at December 31, 2013	239,676		$	46.75	239,676	$	46.75
Granted (1)	49,117		41.94
Exercised	(117,260	)	48.68
Forfeited	—		—
Balance at December 31, 2014	171,533		$	44.05	165,745	$	44.62
Vested and Expected to Vest	171,244		$	44.03

(1)

During the year ended December 31, 2014, stock options granted represent those options exchanged pursuant to the Conversant acquisition.

Based on the market value on their respective exercise dates, the total intrinsic value of stock options exercised was approximately $25.9 million, $25.7 million and $31.0 million for the years ended December 31, 2014, 2013 and 2012, respectively.

The aggregate intrinsic value of the outstanding stock options as of December 31, 2014 was approximately $41.5 million. The aggregate intrinsic value of stock options exercisable as of December 31, 2014 was approximately $40.0 million. The weighted average remaining contractual life of stock options vested and exercisable as of December 31, 2014 was approximately 1.9 years.

The Company received cash proceeds of approximately $5.7 million from stock options exercised during the year ended December 31, 2014.

- 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.

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

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph d
-Article 4

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

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section E

Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Article 4

Reference 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section C

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

+ Details

INCOME TAXES

12 Months Ended

Dec. 31, 2014

INCOME TAXES

INCOME TAXES

19. INCOME TAXES

The Company files a consolidated federal income tax return.

	Years Ended December 31,
	2014			2013			2012
	(In thousands)
Components of income before income taxes:
Domestic	$	667,869		$	547,757		$	481,243
Foreign	170,072			245,655			201,661
Total	$	837,941		$	793,412		$	682,904
Components of income tax expense are as follows:
Current
Federal	$	224,604		$	188,600		$	143,695
State	31,049			33,595			13,991
Foreign	79,539			32,134			696
Total current	335,192			254,329			158,382
Deferred
Federal	(14,250		)	1,477			28,267
State	(18,935		)	(1,485		)	6,176
Foreign	19,794			42,921			67,823
Total deferred	(13,391		)	42,913			102,266
Total provision for income taxes	$	321,801		$	297,242		$	260,648

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

	Years Ended December 31,
	2014			2013			2012
	(In thousands)
Expected expense at statutory rate	$	293,279		$	277,694		$	239,016
Increase (decrease) in income taxes resulting from:
State income taxes, net of federal benefit	7,874			20,871			13,109
Foreign earnings at other than U.S. rates	(8,108		)	(9,225		)	(4,328		)
Canadian tax rate reductions	—			—			(7,128		)
U.S. tax on foreign dividends, net of credits	—			—			15,617
Non-deductible expenses (non-taxable income)	27,347			(742		)	4,282
Other	1,409			8,644			80
Total	$	321,801		$	297,242		$	260,648

Deferred tax assets and liabilities consist of the following:

	December 31,
	2014			2013
	(In thousands)
Deferred tax assets
Deferred revenue	$	7,111		$	42,359
Allowance for doubtful accounts	220,527			192,546
Net operating loss carryforwards and other carryforwards	98,910			53,591
Stock-based compensation and other employee benefits	44,694			28,582
Accrued expenses and other	48,444			50,120
Total deferred tax assets	419,686			367,198
Valuation allowance	(13,013		)	(22,414		)
Deferred tax assets, net of valuation allowance	406,673			344,784
Deferred tax liabilities
Deferred income	$	301,282		$	244,612
Convertible note hedges	—			1,474
Depreciation	19,379			8,440
Intangible assets	558,081			147,366
Total deferred tax liabilities	878,742			401,892

Net deferred tax liability	$	(472,069	)	$	(57,108	)

Amounts recognized in the consolidated balance sheets:
Current assets	$	218,872		$	216,195
Non-current assets	164			2,454
Current liabilities	(930		)	—
Non-current liabilities	(690,175		)	(275,757		)
Total — Net deferred tax liability	$	(472,069	)	$	(57,108	)

At December 31, 2014, the Company has approximately $33.8 million of U.S. federal net operating loss carryovers (“NOLs”), approximately $8.5 million of capital losses, and approximately $57.9 million of credits, of which $57.1 million are foreign tax credits, that expire at various times through the year 2024. Pursuant to Section 382 and Section 383 of the Internal Revenue Code, the Company’s utilization of such NOLs and a portion of such credits is subject to an annual limitation. At December 31, 2014, the Company has state income tax NOLs of approximately $447.8 million, approximately $8.5 million of capital losses, and state credits of approximately $7.5 million available to offset future state taxable income. The state NOLs and credits will expire at various times through the year 2034. The Company believes it is more likely than not that the capital losses and a portion of the federal and state credits and state NOLs will expire before being utilized. Therefore, in accordance with ASC 740-10, “Income Taxes—Overall—Initial Measurement,” the Company has established a valuation allowance on the capital losses and a portion of federal and state credits and state NOLs that the Company expects to expire prior to utilization.

The Company has $17.9 million of foreign NOLs at December 31, 2014, which have an unlimited carryforward period. The Company does not believe it is more likely than not that these NOLs will be utilized and has therefore established a full valuation allowance against them.

The Company’s valuation allowance decreased during the year ended December 31, 2014 as a result of anticipated utilization of state NOLs following the Conversant acquisition.

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

As of December 31, 2014, income taxes have not been provided on approximately $55.0 million of unremitted earnings of certain non-U.S. subsidiaries as such earnings are expected to be indefinitely reinvested in foreign operations. The determination of taxes associated with the $55.0 million is not practicable.

The income tax expense does not reflect the tax effect of certain items recorded directly to additional paid-in capital. The net tax impact resulting from the exercise of employee stock options and other employee stock programs that was recorded in additional paid-in capital was approximately $34.2 million, $17.3 million and $21.4 million for the years ended December 31, 2014, 2013 and 2012, respectively.

In June 2012, the Ontario government enacted a law that froze the corporate income tax rate at the current rate, essentially repealing rate reductions scheduled for future years. As a result of the rate freeze, the Company was required to record a $7.1 million tax benefit in the year ended December 31, 2012 to increase its deferred tax asset in Canada related to future years.

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

Balance at December 31, 2011	$	69,544
Increases related to prior years’ tax positions	4,188
Decreases related to prior years’ tax positions	(7,424		)
Increases related to current year tax positions	11,703
Settlements during the period	(1,253		)
Lapses of applicable statutes of limitation	(604		)
Balance at December 31, 2012	$	76,154
Increases related to prior years’ tax positions	4,328
Decreases related to prior years’ tax positions	(1,580		)
Increases related to current year tax positions	23,567
Settlements during the period	(197		)
Lapses of applicable statutes of limitation	(918		)
Balance at December 31, 2013	$	101,354
Increases related to prior years’ tax positions	3,500
Decreases related to prior years’ tax positions	(4,184		)
Increases related to current year tax positions	18,404
Settlements during the period	(1,841		)
Lapses of applicable statutes of limitation	(1,936		)
Increases related to acquisitions	22,253
Balance at December 31, 2014	$	137,550

Included in the balance at December 31, 2014 are tax positions reclassified from deferred tax liabilities. Deductibility or taxability is highly certain for these tax positions but there is uncertainty about the timing of such deductibility or taxability. Because of the impact of deferred tax accounting, other than interest and penalties, this timing uncertainty would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company has potential cumulative interest and penalties with respect to unrecognized tax benefits of approximately $25.2 million, $18.5 million and $15.5 million at December 31, 2014, 2013 and 2012, respectively. For the years ended December 31, 2014, 2013 and 2012, the Company recorded approximately $1.4 million, $2.1 million and $0.3 million, respectively, in potential interest and penalties with respect to unrecognized tax benefits.

At December 31, 2014, 2013 and 2012, the Company had unrecognized tax benefits of approximately $88.9 million, $56.0 million and $37.5 million, respectively that, if recognized, would impact the effective tax rate. The Company does not anticipate a significant change to the total amount of unrecognized tax benefits over the next twelve months.

The Company files income tax returns in the U.S. federal jurisdiction and in many state and foreign jurisdictions. With some exceptions, the tax returns filed by the Company are no longer subject to U.S. federal income tax examinations for the years before 2011, state and local examinations for years before 2010 or foreign income tax examinations for years before 2008.

FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2014

FINANCIAL INSTRUMENTS

FINANCIAL INSTRUMENTS

20. FINANCIAL INSTRUMENTS

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

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

	December 31,
	2014				2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In thousands)
Financial assets
Cash and cash equivalents	$	1,077,152	$	1,077,152	$	969,822	$	969,822
Trade receivables, net	743,294		743,294		394,822		394,822
Credit card and loan receivables, net	10,673,709		10,673,709		8,069,713		8,069,713
Credit card and loan receivables held for sale	125,060		125,060		62,082		62,082
Redemption settlement assets, restricted	520,340		520,340		510,349		510,349
Cash collateral, restricted	22,511		22,511		34,124		34,124
Other investments	217,583		217,583		99,221		99,221
Derivative instruments	3,871		3,871		—		—
Financial liabilities
Accounts payable	455,656		455,656		210,019		210,019
Derivative instruments	17,290		17,290		—		—
Deposits	4,773,541		4,801,464		2,816,361		2,836,352
Non-recourse borrowings of consolidated securitization entities	5.191,916		5,225,359		4,591,916		4,618,205
Long-term and other debt	4,209,246		4,227,414		2,800,281		4,404,500
Contingent consideration	326,023		326,023		—		—

Fair Value of Assets and Liabilities Held at December 31, 2014 and 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 as described in Note 4, “Credit Card and Loan Receivables.” The carrying amount of credit card and loan receivables, net approximates fair value due to the short maturity and average interest rates that approximate current market origination rates.

Credit card and loan receivables held for sale — Credit card and 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 of the holding period of the receivables prior to 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 — 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 consideration — The fair value at inception was 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 BrandLoyalty share purchase agreement, earnings volatility, and discount rate. As of December 31, 2014, the fair value was determined based on the provisions in the BrandLoyalty share purchase agreement which was based on a defined multiple, 2014 BrandLoyalty EBITDA, and net debt.

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 December 31, 2014 and 2013:

	Balance at December 31,		Fair Value Measurements at December 31, 2014 Using
	2014		Level 1		Level 2		Level 3
	(In thousands)
Corporate bonds (1)	$	283,213	$	—	$	283,213	$	—
Cash collateral, restricted	22,511		—		—		22,511
Other investments (2)	217,583		127,764		89,819		—
Derivative instruments (3)	3,871		—		3,871		—
Total assets measured at fair value	$	527,178	$	127,764	$	376,903	$	22,511

Derivative instruments (3)	$	17,290	$	—	$	17,290	$	—
Contingent consideration	326,023		—		—		326,023
Total liabilities measured at fair value	$	343,313	$	—	$	17,290	$	326,023

	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 consolidated balance sheets.

(2)

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

(3)

Interest rate derivatives are included in other current liabilities in the consolidated balance sheets. Foreign currency derivatives are included in other current assets and other current liabilities in the consolidated balance sheets.

The following table summarizes 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 December 31, 2014 and 2013:

	Cash Collateral, Restricted
	Years Ended December 31,
	2014			2013
	(In thousands)
Balance at beginning of period	$	34,124		$	62,660
Total gains (realized or unrealized):
Included in earnings	1,046			1,369
Purchases	—			—
Sales	—			—
Issuances	—			—
Settlements	(12,659		)	(29,905		)
Transfers in or out of Level 3	—			—
Balance at end of period	$	22,511		$	34,124

Gains for the period included in earnings related to asset still held at end of period	$	716		$	971

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 6 to 22 months, with a weighted average term of nine months. The unobservable input used to calculate the fair value was the discount rate of 3.1%, 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 years ended December 31, 2014, 2013 and 2012 gains included in earnings attributable to cash collateral, restricted are included in securitization funding costs in the Company’s consolidated statements of income.

	Contingent Consideration
	Years Ended December 31,
	2014			2013
	(In thousands)
Balance at beginning of period	$	—		$	—
Total losses (realized or unrealized):
Included in earnings	105,944			—
Purchases	248,702			—
Sales	—			—
Issuances	—			—
Settlements	—			—
Foreign currency transaction adjustments	(28,623		)	—
Transfers in or out of Level 3	—			—
Balance at end of period	$	326,023		$	—

Losses for the period included in earnings related to liability still held at end of period	$	77,321		$	—

The contingent consideration represents the additional consideration that the Company was 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. At December 31, 2014, the contingent consideration was included in the Company’s consolidated balance sheets and was recorded at fair value. The fair value of €270.0 million ($326.0 million as of December 31, 2014) was determined based on BrandLoyalty’s earnings for the year ended December 31, 2014 using the methodology defined in the BrandLoyalty share purchase agreement.

For the year ended December 31, 2014, the change in fair value of the contingent consideration was included in operating expenses in the Company’s consolidated statements of income, while foreign currency transaction gains are included in general and administrative expenses in the Company’s consolidated statements of income.

There were no transfers between Levels 1 and 2 within the fair value hierarchy for the years ended December 31, 2014 and 2013.

Financial Instruments Disclosed but Not Carried at Fair Value

The following tables provide assets and liabilities disclosed but not carried at fair value as of December 31, 2014 and 2013:

	Fair Value Measurements at December 31, 2014
	Total		Level 1		Level 2		Level 3
	(In thousands)
Financial assets:
Cash and cash equivalents	$	1,077,152	$	1,077,152	$	—	$	—
Credit card and loan receivables, net	10,673,709		—		—		10,673,709
Credit card and loan receivables held for sale	125,060		—		—		125,060
Total	$	11,875,921	$	1,077,152	$	—	$	10,798,769

Financial liabilities:
Deposits	$	4,801,464	$	—	$	4,801,464	$	—
Non-recourse borrowings of consolidated securitization entities	5,225,359		—		5,225,359		—
Long-term and other debt	4,227,414		—		4,227,414		—
Total liabilities	$	14,254,237	$	—	$	14,254,237	$	—

	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
Credit card and 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 liabilities	$	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

PARENT-ONLY FINANCIAL STATEMENTS

12 Months Ended

Dec. 31, 2014

PARENT-ONLY FINANCIAL STATEMENTS

PARENT-ONLY FINANCIAL STATEMENTS

21. PARENT-ONLY FINANCIAL STATEMENTS

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

Balance Sheets

	December 31,
	2014		2013
	(In thousands)
Assets:
Cash and cash equivalents	$	533	$	15,216
Investment in subsidiaries	6,731,287		3,819,760
Intercompany receivables	378,562		399,305
Other assets	148,240		96,039
Total assets	$	7,258,622	$	4,330,320
Liabilities:
Current debt	$	99,375	$	364,489
Long-term debt	4,001,082		2,435,792
Intercompany payables	—		—
Other liabilities	761,785		674,278
Total liabilities	4,862,242		3,474,559
Stockholders’ equity	2,396,380		855,761
Total liabilities and stockholders’ equity	$	7,258,622	$	4,330,320

Statements of Income

	Years Ended December 31,
	2014		2013			2012
	(In thousands)
Interest from loans to subsidiaries	$	9,988	$	10,065		$	10,248
Dividends from subsidiaries	194,441		68,544			464,971
Total revenue	204,429		78,609			475,219
Interest expense, net	129,831		184,727			179,527
Other expenses, net	17,867		1,240			533
Total expenses	147,698		185,967			180,060
Income (loss) before income taxes and equity in undistributed net income of subsidiaries	56,731		(107,358		)	295,159
Benefit for income taxes	36,615		32,909			73,106
Income (loss) before equity in undistributed net income of subsidiaries	93,346		(74,449		)	368,265
Equity in undistributed net income of subsidiaries	422,794		570,619			53,991
Net income	$	516,140	$	496,170		$	422,256

Statements of Cash Flows

	Years Ended December 31,
	2014			2013			2012
	(In thousands)
Net cash (used in) provided by operating activities	$	(318,116	)	$	144,841		$	(224,835	)
Investing activities:
Payments for acquired businesses, net of cash acquired	(1,003,237		)	—			—
Repayment of loans to subsidiaries	112,903			—			—
Loans to subsidiaries	—			(112,903		)	—
Investment in subsidiaries	(15,000		)	—			(475,000		)
Dividends received	194,441			68,544			464,971
Net cash used in investing activities	(710,893		)	(44,359		)	(10,029		)
Financing activities:
Borrowings under debt agreements	3,358,000			1,985,000			1,095,148
Repayments of borrowings	(1,725,563		)	(1,300,241		)	(506,214		)
Proceeds from convertible note hedge counterparties	1,519,833			1,056,307			—
Settlement of convertible note borrowings	(1,864,803		)	(1,861,289		)	—
Excess tax benefits from stock-based compensation	34,159			17,267			20,199
Payment of deferred financing costs	(36,269		)	(12,784		)	(21,672		)
Purchase of treasury shares	(286,618		)	(231,085		)	(125,840		)
Proceeds from issuance of common stock	17,063			14,090			20,696
Other	(1,476		)	(9		)	—
Net cash provided by (used in) financing activities	1,014,326			(332,744		)	482,317
(Decrease) increase in cash and cash equivalents	(14,683		)	(232,262		)	247,453
Cash and cash equivalents at beginning of year	15,216			247,478			25
Cash and cash equivalents at end of year	$	533		$	15,216		$	247,478

SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2014

SEGMENT INFORMATION

SEGMENT INFORMATION

22. 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 retail 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.”

Year Ended December 31, 2014	LoyaltyOne		Epsilon			Private Label Services and Credit		Corporate/ Other			Eliminations			Total
	(In thousands)
Revenues	$	1,406,877	$	1,522,423		$	2,395,076	$	556		$	(21,992	)	$	5,302,940

Income (loss) before income taxes	244,438		126,461			851,843		(384,801		)	—			837,941
Interest expense, net	5,861		(49		)	124,906		129,808			—			260,526
Operating income (loss)	250,299		126,412			976,749		(254,993		)	—			1,098,467
Depreciation and amortization	88,710		157,353			58,884		8,135			—			313,082
Stock compensation expense	11,549		25,335			13,905		21,673			—			72,462
Business acquisition costs	—		—			—		7,301			—			7,301
Earn-out obligation	—		—			—		105,944			—			105,944
Adjusted EBITDA (1)	350,558		309,100			1,049,538		(111,940		)	—			1,597,256
Less: Securitization funding costs	—		—			91,103		—			—			91,103
Less: Interest expense on deposits	—		—			37,543		—			—			37,543
Less: Adjusted EBITDA attributable to non-controlling interest	43,050		—			—		—			—			43,050
Adjusted EBITDA, net (1)	$	307,508	$	309,100		$	920,892	$	(111,940	)	$	—		$	1,425,560

Capital expenditures	$	31,751	$	85,906		$	29,932	$	11,105		$	—		$	158,694
Total assets	$	2,362,722	$	5,014,947		$	12,645,228	$	241,080		$	—		$	20,263,977

Year Ended December 31, 2013	LoyaltyOne			Epsilon			Private Label Services and Credit		Corporate/ Other			Eliminations			Total
	(In thousands)
Revenues	$	919,480		$	1,380,344		$	2,034,724	$	82		$	(15,567	)	$	4,319,063

Income (loss) before income taxes	230,992			131,406			730,568		(299,554		)	—			793,412
Interest expense, net	(1,312		)	(56		)	122,159		184,709			—			305,500
Operating income (loss)	229,680			131,350			852,727		(114,845		)	—			1,098,912
Depreciation and amortization	18,057			139,984			52,277		5,801			—			216,119
Stock compensation expense	10,804			18,365			11,095		18,919			—			59,183
Adjusted EBITDA (1)	258,541			289,699			916,099		(90,125		)	—			1,374,214
Less: Securitization funding costs	—			—			95,326		—			—			95,326
Less: Interest expense on deposits	—			—			29,111		—			—			29,111
Adjusted EBITDA, net (1)	$	258,541		$	289,699		$	791,662	$	(90,125	)	$	—		$	1,249,777

Capital expenditures	$	28,713		$	67,024		$	27,909	$	11,730		$	—		$	135,376
Total assets	$	1,100,396		$	2,116,569		$	9,677,651	$	349,641		$	—		$	13,244,257

Year Ended December 31, 2012	LoyaltyOne			Epsilon			Private Label Services and Credit		Corporate/ Other			Eliminations			Total
	(In thousands)
Revenues	$	919,041		$	996,210		$	1,732,160	$	372		$	(6,393	)	$	3,641,390

Income (loss) before income taxes	208,729			106,222			657,654		(289,701		)	—			682,904
Interest expense, net	(1,560		)	(67		)	114,193		178,894			—			291,460
Operating income (loss)	207,169			106,155			771,847		(110,807		)	—			974,364
Depreciation and amortization	19,614			101,684			42,464		3,114			—			166,876
Stock compensation expense	9,311			14,414			8,930		17,842			—			50,497
Adjusted EBITDA (1)	236,094			222,253			823,241		(89,851		)	—			1,191,737
Less: Securitization funding costs	—			—			92,808		—			—			92,808
Less: Interest expense on deposits	—			—			25,181		—			—			25,181
Adjusted EBITDA, net (1)	$	236,094		$	222,253		$	705,252	$	(89,851	)	$	—		$	1,073,748

Capital expenditures	$	19,424		$	60,065		$	28,295	$	8,671		$	—		$	116,455
Total assets	$	1,083,374		$	2,129,796		$	8,171,541	$	615,428		$	—		$	12,000,139

(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 is presented in accordance with ASC 280 as it is the primary performance metric utilized to assess performance of the segments.

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

	United States		Canada		Europe, Middle East and Africa		Asia Pacific		Other		Total
	(In thousands)
Revenues
Year Ended December 31, 2014	$	3,867,013	$	851,641	$	463,299	$	101,245	$	19,742	$	5,302,940
Year Ended December 31, 2013	$	3,327,688	$	906,459	$	80,280	$	4,636	$	—	$	4,319,063
Year Ended December 31, 2012	$	2,655,506	$	913,188	$	67,384	$	5,312	$	—	$	3,641,390

Long-Lived Assets
Year Ended December 31, 2014	$	5,295,776	$	282,663	$	865,961	$	4,666	$	135	$	6,449,201
Year Ended December 31, 2013	$	2,371,054	$	313,891	$	158,470	$	—	$	—	$	2,843,415

- 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

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

12 Months Ended

Dec. 31, 2014

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

23. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

Unaudited quarterly results of operations for the years ended December 31, 2014 and 2013 are presented below.

	Quarter Ended
	March 31, 2014			June 30, 2014		September 30, 2014		December 31, 2014
	(In thousands, except per share amounts)
Revenues	$	1,232,900		$	1,265,158	$	1,319,133	$	1,485,749
Operating expenses (1)	951,108			982,618		997,492		1,273,255
Operating income	281,792			282,540		321,641		212,494
Interest expense, net	67,747			62,932		61,464		68,383
Income before income taxes	214,045			219,608		260,177		144,111
Provision for income taxes	78,298			80,419		95,229		67,855
Net income	135,747			139,189		164,948		76,256
Less: Net (loss) income attributable to non-controlling interest	(1,648		)	1,745		706		9,044
Net income attributable to Alliance Data Systems Corporation stockholders	$	137,395		$	137,444	$	164,242	$	67,212
Net income attributable to Alliance Data Systems Corporation stockholders per share:
Basic	$	2.59		$	2.54	$	2.84	$	0.87
Diluted	$	2.08		$	2.19	$	2.74	$	0.86

(1)

Included in operating expenses in the quarter ended December 31, 2014 is $105.9 million in additional contingent consideration associated with the Company’s acquisition of a 60% ownership interest in BrandLoyalty.

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

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2014

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

Cash and Cash Equivalents

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

Credit Card and Loan Receivables

Credit card and Loan Receivables Held for Sale

Transfers of Financial Assets

Allowance for Loan Loss

Allowance for Doubtful Accounts

Redemption Settlement Assets, Restricted

Property and Equipment

Cash Collateral, Restricted

Goodwill and Other Intangible Assets

Derivative Instruments

Revenue Recognition

Transaction —The Company earns transaction fees, which are principally based on the number of transactions processed or statements generated and are recognized as such services are performed.

Earnings Per Share

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

	Years Ended December 31,
	2014		2013		2012
	(In thousands, except per share amounts)
Numerator
Net income attributable to Alliance Data Systems Corporation stockholders	$	506,293	$	496,170	$	422,256
Less: Accretion of redeemable non-controlling interest	14,775		—		—
Net income attributable to Alliance Data Systems Corporation stockholders after accretion of redeemable non-controlling interest	$	491,518	$	496,170	$	422,256
Denominator
Weighted average shares, basic	56,378		49,190		50,008
Weighted average effect of dilutive securities:
Shares from assumed conversion of convertible senior notes	2,112		8,516		8,645
Shares from assumed exercise of convertible note warrants	3,421		8,482		4,702
Net effect of dilutive stock options and unvested restricted stock	534		678		788
Denominator for diluted calculation	62,445		66,866		64,143

Net income attributable to Alliance Data Systems Corporation stockholders per share:
Basic	$	8.72	$	10.09	$	8.44
Diluted	$	7.87	$	7.42	$	6.58

Currency Translation

Leases

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

Advertising Costs

Stock Compensation Expense

Management Estimates

Recently Issued and Adopted Accounting Standards

Recently Issued Accounting Standards

Recently Adopted Accounting Standards

ACQUISITION (Tables)

12 Months Ended

Dec. 31, 2014

Brand Loyalty

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

Conversant

Acquisition

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

	As of December 10, 2014
	(In thousands)
Current assets, net of cash acquired	$	180,030
Deferred tax asset	11,905
Property and equipment	25,555
Developed technology	182,500
Other non-current assets	1,744
Intangible assets	755,600
Goodwill	1,650,299
Total assets acquired	2,807,633

Current liabilities	177,585
Deferred tax liability	344,081
Other liabilities	26,933
Total liabilities assumed	548,599

Net assets acquired	$	2,259,034

Schedule of pro forma consolidated revenue and net income

	Years Ended December 31,
	2014		2013
	(In thousands)
Total revenue	$	5,853,501	$	4,892,184
Net income	$	528,870	$	482,221

HMI

Acquisition

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

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

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

Net assets acquired	$	451,803

CREDIT CARD AND LOAN RECEIVABLES (Tables)

12 Months Ended

Dec. 31, 2014

CREDIT CARD AND LOAN RECEIVABLES

Schedule of components of total credit card and loan receivables

	December 31, 2014		December 31, 2013
	(In thousands)
Principal receivables	$	10,762,498	$	8,166,961
Billed and accrued finance charges	422,838		343,521
Other credit card and loan receivables	58,544		62,400
Total credit card and loan receivables	11,243,880		8,572,882
Less credit card receivables — restricted for securitization investors	8,312,291		7,080,014
Other credit card and loan receivables	$	2,931,589	$	1,492,868

Schedule of Company's allowance for loan loss

	Years Ended December 31,
	2014			2013			2012
	(In thousands)
Balance at beginning of period	$	503,169		$	481,958		$	468,321
Provision for loan loss	425,205			345,758			285,479
Change in estimate for uncollectible unpaid interest and fees	12,500			11,000			11,000
Recoveries	178,394			112,538			97,131
Principal charge-offs	(549,097		)	(448,085		)	(379,973		)
Balance at end of period	$	570,171		$	503,169		$	481,958

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

	December 31, 2014		% of Total		December 31, 2013		% of Total
	(In thousands, except percentages)
Receivables outstanding - principal	$	10,762,498	100.0	%	$	8,166,961	100.0	%
Principal receivables balances contractually delinquent:
31 to 60 days	$	157,760	1.4	%	$	114,430	1.4	%
61 to 90 days	93,175		0.9		74,700		0.9
91 or more days	182,945		1.7		150,425		1.9
Total	$	433,880	4.0	%	$	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

	Year Ended December 31, 2014
	Number of Restructurings	Pre-modification Outstanding Balance		Post- modification Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings — credit card and loan receivables	141,137	$	142,260	$	142,141

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

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:

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

	December 31, 2014
Age of Accounts Since Origination	Number of Active Accounts with Balances	Percentage of Active Accounts with Balances		Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding
	(In thousands, except percentages)
0-12 Months	6,029	28.8	%	$	2,710,992	25.2	%
13-24 Months	3,026	14.4		1,549,899		14.4
25-36 Months	2,120	10.1		1,113,755		10.3
37-48 Months	1,548	7.4		866,645		8.1
49-60 Months	1,158	5.5		655,351		6.1
Over 60 Months	7,082	33.8		3,865,856		35.9
Total	20,963	100.0	%	$	10,762,498	100.0	%

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

Schedule of composition of obligor credit quality

	December 31, 2014				December 31, 2013
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months)	Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding		Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding
	(In thousands, except percentages)
No Score	$	227,378	2.1	%	$	162,366	2.0	%
27.1% and higher	499,989		4.6		362,366		4.4
17.1% - 27.0%	967,035		9.0		732,425		9.0
12.6% - 17.0%	1,129,122		10.5		858,721		10.5
3.7% - 12.5%	4,429,399		41.1		3,234,547		39.6
1.9% - 3.6%	2,254,794		21.0		1,748,317		21.4
Lower than 1.9%	1,254,781		11.7		1,068,219		13.1
Total	$	10,762,498	100.0	%	$	8,166,961	100.0	%

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

	December 31, 2014		December 31, 2013
	(In thousands)
Total credit card receivables — restricted for securitization investors	$	8,312,291	$	7,080,014
Principal amount of credit card receivables — restricted for securitization investors, 90 days or more past due	$	145,768	$	131,659

	Years Ended December 31,
	2014		2013		2012
	(In thousands)
Net charge-offs of securitized principal	$	317,877	$	311,111	$	265,305

OTHER INVESTMENTS (Tables)

12 Months Ended

Dec. 31, 2014

OTHER INVESTMENTS

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

	December 31, 2014									December 31, 2013
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(In thousands)
Restricted cash	$	22,611	$	—	$	—		$	22,611	$	25,988	$	—	$	—		$	25,988
Marketable securities	95,669		520		(1,322		)	94,867		77,351		62		(4,180		)	73,233
U.S. Treasury bonds	100,072		66		(33		)	100,105		—		—		—			—
Total	$	218,352	$	586	$	(1,355	)	$	217,583	$	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

	December 31, 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	$	8,757	$	(27	)	$	48,961	$	(1,295	)	$	57,718	$	(1,322	)
U.S. Treasury bonds	75,043		(33		)	—		—			75,043		(33		)
Total	$	83,800	$	(60	)	$	48,961	$	(1,295	)	$	132,761	$	(1,355	)

	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 securities by contractual maturity date

	Amortized Cost		Estimated Fair Value
	(In thousands)
Due in one year or less	$	6,599	$	6,570
Due after one year through five years	100,072		100,105
Due after five years through ten years	4,240		4,439
Due after ten years	84,830		83,858
Total	$	195,741	$	194,972

INTANGIBLE ASSETS AND GOODWILL (Tables)

12 Months Ended

Dec. 31, 2014

INTANGIBLE ASSETS AND GOODWILL

Schedule of intangible assets

	December 31, 2014
	Gross Assets		Accumulated Amortization			Net		Amortization Life and Method
	(In thousands)
Finite Lived Assets
Customer contracts and lists	$	1,328,056	$	(295,263	)	$	1,032,793	4-12 years—straight line
Premium on purchased credit card portfolios	289,173		(114,923		)	174,250		3-10 years—straight line, accelerated
Customer database	210,300		(126,157		)	84,143		3-10 years—straight line
Collector database	60,238		(56,239		)	3,999		30 years—15% declining balance
Publisher networks	140,200		(1,662		)	138,538		5-7 years—straight line
Tradenames	86,934		(29,408		)	57,526		2-15 years—straight line
Purchased data lists	12,335		(6,497		)	5,838		1-5 years—straight line, accelerated
Favorable lease	6,891		(767		)	6,124		3-10 years—straight line
Noncompete agreements	1,300		(867		)	433		3 years—straight line
	$	2,135,427	$	(631,783	)	$	1,503,644
Indefinite Lived Assets
Tradenames	12,350		—			12,350		Indefinite life
Total intangible assets	$	2,147,777	$	(631,783	)	$	1,515,994

	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 databases	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)
2015	$	322,682
2016	303,984
2017	261,644
2018	200,738
2019	167,545
2020 & thereafter	247,051

Schedule of changes in carrying amount of goodwill

	LoyaltyOne			Epsilon			Private Label Services and Credit		Corporate/ Other		Total
	(In thousands)
December 31, 2012	$	248,070		$	1,241,251		$	261,732	$	—	$	1,751,053
Effects of foreign currency translation	(15,621		)	271			—		—		(15,350		)
December 31, 2013	232,449			1,241,522			261,732		—		1,735,703
Goodwill acquired during year	565,015			1,650,299			—		—		2,215,314
Effects of foreign currency translation	(84,007		)	(1,526		)	—		—		(85,533		)
December 31, 2014	$	713,457		$	2,890,295		$	261,732	$	—	$	3,865,484

DEBT (Tables)

12 Months Ended

Dec. 31, 2014

DEBT

Schedule of debt

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

Long-term and other debt:
2013 credit facility	$	—		$	336,000		July 2018 or December 2019	(1)
2013 term loan	2,603,125			1,234,688			July 2018 or December 2019	(1)
BrandLoyalty credit facility	108,789			—			December 2015	(2)
2014 convertible senior notes	—			333,082			—	—
Senior notes due 2017	397,332			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	4,209,246			2,800,281
Less: current portion	(208,164		)	(364,489		)
Long-term portion	$	4,001,082		$	2,435,792

Deposits:
Certificates of deposit	$	3,934,906		$	2,486,533		Various — January 2015 — November 2021	0.30% to 3.25%
Money market deposits	838,635			329,828			On demand	(3)
Total deposits	4,773,541			2,816,361
Less: current portion	(2,645,995		)	(1,544,059		)
Long-term portion	$	2,127,546		$	1,272,302

Non-recourse borrowings of consolidated securitization entities:
Fixed rate asset-backed term note securities	$	3,376,916		$	3,001,916		Various - June 2015 — June 2019	0.61% to 6.75%
Floating rate asset-backed term note securities	450,000			—			February 2016	(4)
Conduit asset-backed securities	1,365,000			1,590,000			Various - September 2015 — May 2016	(5)
Total non-recourse borrowings of consolidated securitization entities	5,191,916			4,591,916
Less: current portion	(1,058,750		)	(1,025,000		)
Long-term portion	$	4,133,166		$	3,566,916

(1)

The interest rate is based upon the London Interbank Offered Rate (“LIBOR”) plus an applicable margin. At December 31, 2014, the weighted average interest rate was 1.91% for the 2013 Term Loan.

(2)

The interest rate is based upon the Euro Interbank Offered Rate (“EURIBOR”) plus an applicable margin. At December 31, 2014, the weighted average interest rate was 2.83%.

(3)

The interest rates are based on the Federal Funds rate. At December 31, 2014, the interest rates ranged from 0.01% to 0.42%.

(4)

The interest rate is based upon LIBOR plus an applicable margin. At December 31, 2014, the interest rate was 0.54%.

(5)

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

	(In millions)

Carrying amount of equity component	$	115.9

Principal amount of liability component	$	345.0
Unamortized discount	(11.9		)
Net carrying value of liability component	$	333.1

If-converted value of common stock	$	1,906.9

Schedule of interest expense on convertible senior notes

	Years Ended December 31,
	2014			2013			2012
	(In thousands, except percentages)
Interest expense calculated on contractual interest rate	$	5,630		$	24,169		$	30,475
Amortization of discount on liability component	11,888			64,900			82,366
Total interest expense on convertible senior notes	$	17,518		$	89,069		$	112,841

Effective interest rate (annualized)	14.2		%	12.4		%	11.0		%

Schedule of maturity of debt

Year	Long-Term and Other Debt			Non-Recourse Borrowings of Consolidated Securitization Entities		Deposits		Total
	(In thousands)
2015	$	208,164		$	1,058,750	$	2,645,995	$	3,912,909
2016	132,500			2,050,000		809,293		2,991,793
2017 (1)	532,500			650,000		532,168		1,714,668
2018	184,911			631,000		386,728		1,202,639
2019	2,053,839			802,166		322,236		3,178,241
Thereafter	1,100,000			—		77,121		1,177,121
Total maturities	4,211,914			5,191,916		4,773,541		14,177,371
Unamortized discount (2)	(2,668		)	—		—		(2,668		)
	$	4,209,246		$	5,191,916	$	4,773,541	$	14,174,703

(1)

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

(2)

Unamortized discount represents the unamortized discount, at December 31, 2014, associated with the Senior Notes due 2017.

STOCKHOLDERS' EQUITY (Tables)

12 Months Ended

Dec. 31, 2014

STOCKHOLDERS' EQUITY

Schedule of stock-based compensation expense

	Years Ended December 31,
	2014		2013		2012
	(In thousands)
Cost of operations	$	50,790	$	40,264	$	32,654
General and administrative	21,672		18,919		17,843
Total	$	72,462	$	59,183	$	50,497

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

	Performance- Based		Service- Based		Total		Weighted Average Fair Value
Balance at January 1, 2012	856,572		345,189		1,201,761		$	65.39
Shares granted	527,080		127,646		654,726		110.18
Shares vested	(505,335	)	(130,066	)	(635,401	)	59.06
Shares cancelled	(104,476	)	(27,618	)	(132,094	)	86.13
Balance at December 31, 2012	773,841		315,151		1,088,992		$	93.33
Shares granted	409,575		92,206		501,781		155.31
Shares vested	(448,868	)	(122,931	)	(571,799	)	88.15
Shares cancelled	(49,544	)	(14,915	)	(64,459	)	115.83
Balance at December 31, 2013	685,004		269,511		954,515		$	121.86
Shares granted (1)	271,616		246,867		518,483		282.34
Shares vested	(405,655	)	(99,037	)	(504,692	)	116.07
Shares cancelled	(32,898	)	(16,074	)	(48,972	)	177.14
Balance at December 31, 2014	518,067		401,267		919,334		$	198.85
Outstanding and Expected to Vest					839,110		$	194.82

(1)

During the year ended December 31, 2014, shares granted for service-based restricted stock awards include 181,487 shares exchanged pursuant to the Conversant acquisition.

Summary of stock option activity

	Outstanding				Exercisable
	Options		Weighted Average Exercise Price		Options	Weighted Average Exercise Price
Balance at January 1, 2012	740,017		$	42.87	740,017	$	42.87
Granted	—		—
Exercised	(355,764	)	42.95
Forfeited	—		—
Balance at December 31, 2012	384,253		$	42.80	384,253	$	42.80
Granted	—		—
Exercised	(143,577	)	36.30
Forfeited	(1,000	)	31.38
Balance at December 31, 2013	239,676		$	46.75	239,676	$	46.75
Granted (1)	49,117		41.94
Exercised	(117,260	)	48.68
Forfeited	—		—
Balance at December 31, 2014	171,533		$	44.05	165,745	$	44.62
Vested and Expected to Vest	171,244		$	44.03

(1)

During the year ended December 31, 2014, stock options granted represent those options exchanged pursuant to the Conversant acquisition.

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2014

INCOME TAXES

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

	Years Ended December 31,
	2014			2013			2012
	(In thousands)
Components of income before income taxes:
Domestic	$	667,869		$	547,757		$	481,243
Foreign	170,072			245,655			201,661
Total	$	837,941		$	793,412		$	682,904
Components of income tax expense are as follows:
Current
Federal	$	224,604		$	188,600		$	143,695
State	31,049			33,595			13,991
Foreign	79,539			32,134			696
Total current	335,192			254,329			158,382
Deferred
Federal	(14,250		)	1,477			28,267
State	(18,935		)	(1,485		)	6,176
Foreign	19,794			42,921			67,823
Total deferred	(13,391		)	42,913			102,266
Total provision for income taxes	$	321,801		$	297,242		$	260,648

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

	Years Ended December 31,
	2014			2013			2012
	(In thousands)
Expected expense at statutory rate	$	293,279		$	277,694		$	239,016
Increase (decrease) in income taxes resulting from:
State income taxes, net of federal benefit	7,874			20,871			13,109
Foreign earnings at other than U.S. rates	(8,108		)	(9,225		)	(4,328		)
Canadian tax rate reductions	—			—			(7,128		)
U.S. tax on foreign dividends, net of credits	—			—			15,617
Non-deductible expenses (non-taxable income)	27,347			(742		)	4,282
Other	1,409			8,644			80
Total	$	321,801		$	297,242		$	260,648

Summary of deferred tax assets and liabilities

	December 31,
	2014			2013
	(In thousands)
Deferred tax assets
Deferred revenue	$	7,111		$	42,359
Allowance for doubtful accounts	220,527			192,546
Net operating loss carryforwards and other carryforwards	98,910			53,591
Stock-based compensation and other employee benefits	44,694			28,582
Accrued expenses and other	48,444			50,120
Total deferred tax assets	419,686			367,198
Valuation allowance	(13,013		)	(22,414		)
Deferred tax assets, net of valuation allowance	406,673			344,784
Deferred tax liabilities
Deferred income	$	301,282		$	244,612
Convertible note hedges	—			1,474
Depreciation	19,379			8,440
Intangible assets	558,081			147,366
Total deferred tax liabilities	878,742			401,892

Net deferred tax liability	$	(472,069	)	$	(57,108	)

Amounts recognized in the consolidated balance sheets:
Current assets	$	218,872		$	216,195
Non-current assets	164			2,454
Current liabilities	(930		)	—
Non-current liabilities	(690,175		)	(275,757		)
Total — Net deferred tax liability	$	(472,069	)	$	(57,108	)

Summary of reconciliation of unrecognized tax benefits

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

Balance at December 31, 2011	$	69,544
Increases related to prior years’ tax positions	4,188
Decreases related to prior years’ tax positions	(7,424		)
Increases related to current year tax positions	11,703
Settlements during the period	(1,253		)
Lapses of applicable statutes of limitation	(604		)
Balance at December 31, 2012	$	76,154
Increases related to prior years’ tax positions	4,328
Decreases related to prior years’ tax positions	(1,580		)
Increases related to current year tax positions	23,567
Settlements during the period	(197		)
Lapses of applicable statutes of limitation	(918		)
Balance at December 31, 2013	$	101,354
Increases related to prior years’ tax positions	3,500
Decreases related to prior years’ tax positions	(4,184		)
Increases related to current year tax positions	18,404
Settlements during the period	(1,841		)
Lapses of applicable statutes of limitation	(1,936		)
Increases related to acquisitions	22,253
Balance at December 31, 2014	$	137,550

FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2014

FINANCIAL INSTRUMENTS

Schedule of estimated fair value of Company's financial instruments

	December 31,
	2014				2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In thousands)
Financial assets
Cash and cash equivalents	$	1,077,152	$	1,077,152	$	969,822	$	969,822
Trade receivables, net	743,294		743,294		394,822		394,822
Credit card and loan receivables, net	10,673,709		10,673,709		8,069,713		8,069,713
Credit card and loan receivables held for sale	125,060		125,060		62,082		62,082
Redemption settlement assets, restricted	520,340		520,340		510,349		510,349
Cash collateral, restricted	22,511		22,511		34,124		34,124
Other investments	217,583		217,583		99,221		99,221
Derivative instruments	3,871		3,871		—		—
Financial liabilities
Accounts payable	455,656		455,656		210,019		210,019
Derivative instruments	17,290		17,290		—		—
Deposits	4,773,541		4,801,464		2,816,361		2,836,352
Non-recourse borrowings of consolidated securitization entities	5.191,916		5,225,359		4,591,916		4,618,205
Long-term and other debt	4,209,246		4,227,414		2,800,281		4,404,500
Contingent consideration	326,023		326,023		—		—

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

	Balance at December 31,		Fair Value Measurements at December 31, 2014 Using
	2014		Level 1		Level 2		Level 3
	(In thousands)
Corporate bonds (1)	$	283,213	$	—	$	283,213	$	—
Cash collateral, restricted	22,511		—		—		22,511
Other investments (2)	217,583		127,764		89,819		—
Derivative instruments (3)	3,871		—		3,871		—
Total assets measured at fair value	$	527,178	$	127,764	$	376,903	$	22,511

Derivative instruments (3)	$	17,290	$	—	$	17,290	$	—
Contingent consideration	326,023		—		—		326,023
Total liabilities measured at fair value	$	343,313	$	—	$	17,290	$	326,023

	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 consolidated balance sheets.

(2)

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

(3)

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

	Cash Collateral, Restricted
	Years Ended December 31,
	2014			2013
	(In thousands)
Balance at beginning of period	$	34,124		$	62,660
Total gains (realized or unrealized):
Included in earnings	1,046			1,369
Purchases	—			—
Sales	—			—
Issuances	—			—
Settlements	(12,659		)	(29,905		)
Transfers in or out of Level 3	—			—
Balance at end of period	$	22,511		$	34,124

Gains for the period included in earnings related to asset still held at end of period	$	716		$	971

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

	Contingent Consideration
	Years Ended December 31,
	2014			2013
	(In thousands)
Balance at beginning of period	$	—		$	—
Total losses (realized or unrealized):
Included in earnings	105,944			—
Purchases	248,702			—
Sales	—			—
Issuances	—			—
Settlements	—			—
Foreign currency transaction adjustments	(28,623		)	—
Transfers in or out of Level 3	—			—
Balance at end of period	$	326,023		$	—

Losses for the period included in earnings related to liability still held at end of period	$	77,321		$	—

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

	Fair Value Measurements at December 31, 2014
	Total		Level 1		Level 2		Level 3
	(In thousands)
Financial assets:
Cash and cash equivalents	$	1,077,152	$	1,077,152	$	—	$	—
Credit card and loan receivables, net	10,673,709		—		—		10,673,709
Credit card and loan receivables held for sale	125,060		—		—		125,060
Total	$	11,875,921	$	1,077,152	$	—	$	10,798,769

Financial liabilities:
Deposits	$	4,801,464	$	—	$	4,801,464	$	—
Non-recourse borrowings of consolidated securitization entities	5,225,359		—		5,225,359		—
Long-term and other debt	4,227,414		—		4,227,414		—
Total liabilities	$	14,254,237	$	—	$	14,254,237	$	—

	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
Credit card and 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 liabilities	$	11,859,057	$	—	$	11,859,057	$	—

PARENT-ONLY FINANCIAL STATEMENTS (Tables)

12 Months Ended

Dec. 31, 2014

PARENT-ONLY FINANCIAL STATEMENTS

Schedule of balance sheets

	December 31,
	2014		2013
	(In thousands)
Assets:
Cash and cash equivalents	$	533	$	15,216
Investment in subsidiaries	6,731,287		3,819,760
Intercompany receivables	378,562		399,305
Other assets	148,240		96,039
Total assets	$	7,258,622	$	4,330,320
Liabilities:
Current debt	$	99,375	$	364,489
Long-term debt	4,001,082		2,435,792
Intercompany payables	—		—
Other liabilities	761,785		674,278
Total liabilities	4,862,242		3,474,559
Stockholders’ equity	2,396,380		855,761
Total liabilities and stockholders’ equity	$	7,258,622	$	4,330,320

Schedule of statements of income

	Years Ended December 31,
	2014		2013			2012
	(In thousands)
Interest from loans to subsidiaries	$	9,988	$	10,065		$	10,248
Dividends from subsidiaries	194,441		68,544			464,971
Total revenue	204,429		78,609			475,219
Interest expense, net	129,831		184,727			179,527
Other expenses, net	17,867		1,240			533
Total expenses	147,698		185,967			180,060
Income (loss) before income taxes and equity in undistributed net income of subsidiaries	56,731		(107,358		)	295,159
Benefit for income taxes	36,615		32,909			73,106
Income (loss) before equity in undistributed net income of subsidiaries	93,346		(74,449		)	368,265
Equity in undistributed net income of subsidiaries	422,794		570,619			53,991
Net income	$	516,140	$	496,170		$	422,256

Schedule of statements of cash flows

	Years Ended December 31,
	2014			2013			2012
	(In thousands)
Net cash (used in) provided by operating activities	$	(318,116	)	$	144,841		$	(224,835	)
Investing activities:
Payments for acquired businesses, net of cash acquired	(1,003,237		)	—			—
Repayment of loans to subsidiaries	112,903			—			—
Loans to subsidiaries	—			(112,903		)	—
Investment in subsidiaries	(15,000		)	—			(475,000		)
Dividends received	194,441			68,544			464,971
Net cash used in investing activities	(710,893		)	(44,359		)	(10,029		)
Financing activities:
Borrowings under debt agreements	3,358,000			1,985,000			1,095,148
Repayments of borrowings	(1,725,563		)	(1,300,241		)	(506,214		)
Proceeds from convertible note hedge counterparties	1,519,833			1,056,307			—
Settlement of convertible note borrowings	(1,864,803		)	(1,861,289		)	—
Excess tax benefits from stock-based compensation	34,159			17,267			20,199
Payment of deferred financing costs	(36,269		)	(12,784		)	(21,672		)
Purchase of treasury shares	(286,618		)	(231,085		)	(125,840		)
Proceeds from issuance of common stock	17,063			14,090			20,696
Other	(1,476		)	(9		)	—
Net cash provided by (used in) financing activities	1,014,326			(332,744		)	482,317
(Decrease) increase in cash and cash equivalents	(14,683		)	(232,262		)	247,453
Cash and cash equivalents at beginning of year	15,216			247,478			25
Cash and cash equivalents at end of year	$	533		$	15,216		$	247,478

SEGMENT INFORMATION (Tables)

12 Months Ended

Dec. 31, 2014

SEGMENT INFORMATION

Schedule of segment information

Year Ended December 31, 2014	LoyaltyOne		Epsilon			Private Label Services and Credit		Corporate/ Other			Eliminations			Total
	(In thousands)
Revenues	$	1,406,877	$	1,522,423		$	2,395,076	$	556		$	(21,992	)	$	5,302,940

Income (loss) before income taxes	244,438		126,461			851,843		(384,801		)	—			837,941
Interest expense, net	5,861		(49		)	124,906		129,808			—			260,526
Operating income (loss)	250,299		126,412			976,749		(254,993		)	—			1,098,467
Depreciation and amortization	88,710		157,353			58,884		8,135			—			313,082
Stock compensation expense	11,549		25,335			13,905		21,673			—			72,462
Business acquisition costs	—		—			—		7,301			—			7,301
Earn-out obligation	—		—			—		105,944			—			105,944
Adjusted EBITDA (1)	350,558		309,100			1,049,538		(111,940		)	—			1,597,256
Less: Securitization funding costs	—		—			91,103		—			—			91,103
Less: Interest expense on deposits	—		—			37,543		—			—			37,543
Less: Adjusted EBITDA attributable to non-controlling interest	43,050		—			—		—			—			43,050
Adjusted EBITDA, net (1)	$	307,508	$	309,100		$	920,892	$	(111,940	)	$	—		$	1,425,560

Capital expenditures	$	31,751	$	85,906		$	29,932	$	11,105		$	—		$	158,694
Total assets	$	2,362,722	$	5,014,947		$	12,645,228	$	241,080		$	—		$	20,263,977

Year Ended December 31, 2013	LoyaltyOne			Epsilon			Private Label Services and Credit		Corporate/ Other			Eliminations			Total
	(In thousands)
Revenues	$	919,480		$	1,380,344		$	2,034,724	$	82		$	(15,567	)	$	4,319,063

Income (loss) before income taxes	230,992			131,406			730,568		(299,554		)	—			793,412
Interest expense, net	(1,312		)	(56		)	122,159		184,709			—			305,500
Operating income (loss)	229,680			131,350			852,727		(114,845		)	—			1,098,912
Depreciation and amortization	18,057			139,984			52,277		5,801			—			216,119
Stock compensation expense	10,804			18,365			11,095		18,919			—			59,183
Adjusted EBITDA (1)	258,541			289,699			916,099		(90,125		)	—			1,374,214
Less: Securitization funding costs	—			—			95,326		—			—			95,326
Less: Interest expense on deposits	—			—			29,111		—			—			29,111
Adjusted EBITDA, net (1)	$	258,541		$	289,699		$	791,662	$	(90,125	)	$	—		$	1,249,777

Capital expenditures	$	28,713		$	67,024		$	27,909	$	11,730		$	—		$	135,376
Total assets	$	1,100,396		$	2,116,569		$	9,677,651	$	349,641		$	—		$	13,244,257

Year Ended December 31, 2012	LoyaltyOne			Epsilon			Private Label Services and Credit		Corporate/ Other			Eliminations			Total
	(In thousands)
Revenues	$	919,041		$	996,210		$	1,732,160	$	372		$	(6,393	)	$	3,641,390

Income (loss) before income taxes	208,729			106,222			657,654		(289,701		)	—			682,904
Interest expense, net	(1,560		)	(67		)	114,193		178,894			—			291,460
Operating income (loss)	207,169			106,155			771,847		(110,807		)	—			974,364
Depreciation and amortization	19,614			101,684			42,464		3,114			—			166,876
Stock compensation expense	9,311			14,414			8,930		17,842			—			50,497
Adjusted EBITDA (1)	236,094			222,253			823,241		(89,851		)	—			1,191,737
Less: Securitization funding costs	—			—			92,808		—			—			92,808
Less: Interest expense on deposits	—			—			25,181		—			—			25,181
Adjusted EBITDA, net (1)	$	236,094		$	222,253		$	705,252	$	(89,851	)	$	—		$	1,073,748

Capital expenditures	$	19,424		$	60,065		$	28,295	$	8,671		$	—		$	116,455
Total assets	$	1,083,374		$	2,129,796		$	8,171,541	$	615,428		$	—		$	12,000,139

(1)

Schedule of information concerning principal geographic areas

	United States		Canada		Europe, Middle East and Africa		Asia Pacific		Other		Total
	(In thousands)
Revenues
Year Ended December 31, 2014	$	3,867,013	$	851,641	$	463,299	$	101,245	$	19,742	$	5,302,940
Year Ended December 31, 2013	$	3,327,688	$	906,459	$	80,280	$	4,636	$	—	$	4,319,063
Year Ended December 31, 2012	$	2,655,506	$	913,188	$	67,384	$	5,312	$	—	$	3,641,390

Long-Lived Assets
Year Ended December 31, 2014	$	5,295,776	$	282,663	$	865,961	$	4,666	$	135	$	6,449,201
Year Ended December 31, 2013	$	2,371,054	$	313,891	$	158,470	$	—	$	—	$	2,843,415

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Revenue Recognition
Estimated unredeemed percentage of AIR MILES	26.00%				26.00%				26.00%	26.00%	26.00%	27.00%	28.00%
Estimated Life of an AIR MILES reward mile										42 months
Period beyond which interest and fee income accrue on credit card accounts										90 days
Period for which interest and fee income accrue until balance, interest and fees paid or charged off										180 days
Amortization term of direct loan amortization costs										1 year
Unamortized deferred costs related to loan origination	$ 32,000				$ 20,500				$ 32,000	$ 32,000	$ 20,500
Numerator:
Net income attributable to Alliance Data Systems Corporation stockholders	$ 67,212	$ 164,242	$ 137,444	$ 137,395	$ 117,873	$ 132,878	$ 116,440	$ 128,979		506,293	496,170	$ 422,256
Less: Accretion of redeemable non-controlling interest									$ 14,775	14,775
Net income attributable to Alliance Data Systems Corporation stockholders after accretion of redeemable non-controlling interest										$ 491,518	$ 496,170	$ 422,256
Denominator:
Weighted average shares, basic										56,378	49,190	50,008
Weighted average effect of dilutive securities:
Shares from assumed conversion of convertible senior notes										2,112	8,516	8,645
Shares from assumed exercise of convertible note warrants										3,421	8,482	4,702
Net effect of dilutive stock options and unvested restricted stock (in shares)										534	678	788
Denominator for diluted calculation (in shares)										62,445	66,866	64,143
Basic (in dollars per share)	$ 0.87	$ 2.84	$ 2.54	$ 2.59	$ 2.40	$ 2.73	$ 2.37	$ 2.59		$ 8.72	$ 10.09	$ 8.44
Diluted (in dollars per share)	$ 0.86	$ 2.74	$ 2.19	$ 2.08	$ 1.79	$ 2.01	$ 1.71	$ 1.92		$ 7.87	$ 7.42	$ 6.58
Currency Translation
Foreign currency transaction (losses) gains recognized										$ 12,000	$ (1,000)	$ 600
Advertising Costs
Advertising expenses, including advertising on behalf of clients										$ 239,500	$ 206,600	$ 166,100

ACQUISITION (Details) $ in Thousands, € in Millions, shares in Millions							12 Months Ended
	Feb. 10, 2015 EUR (€)	Feb. 10, 2015 USD ($)	Dec. 10, 2014 USD ($) shares	Jan. 02, 2014 USD ($)	Dec. 31, 2012 USD ($)	Nov. 30, 2012 USD ($)	Dec. 31, 2014 EUR (€) shares	Dec. 31, 2014 USD ($) shares	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Jan. 02, 2014 EUR (€)	Jan. 02, 2014 USD ($)
Acquisition
Initial cash consideration								$ 1,195,808		$ 463,964
Fair values of assets acquired and liabilities assumed in acquisition
Goodwill					$ 1,751,053			3,865,484	$ 1,735,703	1,751,053
Redeemable non-controlling interest								235,566
Contingent liability								326,023
Earn-out obligation								$ (105,944)
Brand Loyalty
Acquisition
Ownership interest acquired (as a percent)								60.00%			60.00%	60.00%
Initial cash consideration				$ 259,500
Fair values of assets acquired and liabilities assumed in acquisition
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 liabilities												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
Contingent liability											€ 181.9	248,700
Earn-out obligation							€ 87.6	$ 105,900
Ownership interest that may be acquired over a four-year period (as a percent)							40.00%	40.00%
Period over which remaining ownership interest may be acquired							4 years	4 years
Ownership interest that may be acquired each year (as a percent)							10.00%	10.00%
Additional interest which the entity must acquire if specified annual earnings targets are met (as a percent)							10.00%	10.00%
Ownership interest for which sellers have a put option to sell if specified annual earnings targets are not met (as a percent)							10.00%	10.00%
Total cash paid		$ 305,500
Amount of goodwill deductible for tax purposes												$ 0
Brand Loyalty \| Subsequent event
Acquisition
Ownership interest acquired (as a percent)	10.00%	10.00%
Fair values of assets acquired and liabilities assumed in acquisition
Additional payment associated with acquisition	€ 77.2	$ 87,400
Payments for acquisition related contingent consideration	€ 269.9	$ 305,500
Conversant
Acquisition
Ownership interest acquired (as a percent)			100.00%
Initial cash consideration								$ 936,300
Fair values of assets acquired and liabilities assumed in acquisition
Current assets, net of cash acquired			$ 180,030
Deferred tax asset			11,905
Property and equipment			25,555
Other non-current assets			1,744
Goodwill			1,650,299
Total assets acquired			2,807,633
Current liabilities			177,585
Deferred tax liabilities			344,081
Other liabilities			26,933
Total liabilities assumed			548,599
Net assets acquired			2,259,034
Equity consideration			$ 1,300,000					$ 1,300,000
Equity consideration (in shares) \| shares			4.6				4.6	4.6
Number of consecutive trading days used to determine weighted average value per share							15 days	15 days
Number of days preceeding the day of closing the merger, on which the calculation days for weighted average value shall close							2 days	2 days
Unaudited Pro Forma Information
Total Revenue								$ 5,853,501	4,892,184
Net Income (Loss)								528,870	$ 482,221
Acquisition costs excluded from pro forma information								44,100
Components of consideration
Total consideration								2,300,000
Conversant \| Developed technology
Fair values of assets acquired and liabilities assumed in acquisition
Intangible assets			$ 182,500
Conversant \| Intangible assets
Fair values of assets acquired and liabilities assumed in acquisition
Intangible assets			$ 755,600
HMI
Fair values of assets acquired and liabilities assumed in acquisition
Current assets, net of cash acquired						$ 49,700
Deferred tax asset						12,050
Property and equipment						6,907
Other non-current assets						118
Intangible assets						194,751
Goodwill						291,249
Total assets acquired						554,775
Current liabilities						33,928
Deferred tax liabilities						68,624
Other liabilities						420
Total liabilities assumed						102,972
Net assets acquired						451,803
Amount of goodwill deductible for tax purposes						66,400
Cash and cash equivalents acquired						7,100
Components of consideration
Total consideration						$ 451,800
Advecor
Fair values of assets acquired and liabilities assumed in acquisition
Intangible assets					8,800					8,800
Goodwill					3,000					3,000
Total assets acquired					13,400					13,400
Current liabilities					1,200					1,200
Cash and cash equivalents acquired					400					$ 400
Components of consideration
Total consideration					$ 12,200
Parent company
Acquisition
Initial cash consideration								$ 1,003,237

CREDIT CARD AND LOAN RECEIVABLES (Details) $ in Thousands	12 Months Ended
CREDIT CARD AND LOAN RECEIVABLES (Details) $ in Thousands	Dec. 31, 2014 USD ($) item	Dec. 31, 2013 USD ($) item	Dec. 31, 2012 USD ($)
CREDIT CARD AND LOAN RECEIVABLES
Principal receivables	$ 10,762,498	$ 8,166,961
Billed and accrued finance charges	422,838	343,521
Other credit card and loan receivables	58,544	62,400
Total credit card and loan receivables	11,243,880	8,572,882
Less credit card receivables - restricted for securitization investors	8,312,291	7,080,014
Other credit card and loan receivables	$ 2,931,589	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	$ 302,700	240,800	$ 191,100
Balance at beginning of period	503,169	481,958	468,321
Provision for loan loss	425,205	345,758	285,479
Change in estimate for uncollectible unpaid interest and fees	12,500	11,000	11,000
Recoveries	178,394	112,538	97,131
Principal charge-offs	(549,097)	(448,085)	(379,973)
Balance at end of period	$ 570,171	503,169	$ 481,958
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	$ 10,762,498	8,166,961
Principal receivables balances contractually delinquent:
31 to 60 days	157,760	114,430
61 to 90 days	93,175	74,700
91 or more days	182,945	150,425
Total	$ 433,880	$ 339,555
Percentage Principal receivables balances contractually delinquent :
Receivables outstanding - principal (as a percent)	100.00%	100.00%
Principal receivables balances contractually delinquent:
31 to 60 days (as a percent)	1.40%	1.40%
61 to 90 days (as a percent)	0.90%	0.90%
91 or more days (as a percent)	1.70%	1.90%
Total (as a percent)	4.00%	4.20%
Re-aged accounts as percentage of total credit card and loan receivables	1.20%	1.40%	1.30%
Modified Credit Card and Loan Receivables
Maximum period of time temporary programs' concessions remain in place	12 months
Impaired credit card and loan receivables	$ 134,900	$ 118,100
Allowance for loan loss on impaired credit card and loan receivables	$ 35,200	$ 33,900
Maximum percentage of credit card and loan receivables to total portfolio	2.00%	2.00%
Average recorded investment in impaired credit card and loan receivables	$ 117,900	$ 117,400
Interest income on modified credit card and loan receivables	$ 13,200	$ 12,700	$ 15,500
Troubled debt restructurings - credit card and loan receivables
Modifications related to troubled debt restructurings within credit card and loan receivables
Number of Restructurings \| item	141,137	147,200
Pre-modification Outstanding Balance	$ 142,260	$ 134,892
Post-modification Outstanding Balance	$ 142,141	$ 134,799
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	60,427	63,590
Outstanding Balance	$ 59,862	$ 60,490

OTHER INVESTMENTS (Details) - USD ($) $ in Thousands	12 Months Ended
OTHER INVESTMENTS (Details) - USD ($) $ in Thousands	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Restricted cash
Amortized Cost	$ 22,611	$ 25,988
Fair value	22,611	25,988
Marketable securities
Amortized Cost	95,669	77,351
Unrealized Gains	520	62
Unrealized Losses	(1,322)	(4,180)
Fair Value	94,867	73,233
U.S. Treasury bonds
Amortized Cost	100,072
Unrealized Gains	66
Unrealized Losses	(33)
Fair Value	100,105
Other Investments, Total
Amortized Cost	218,352	103,339
Unrealized Gains	586	62
Unrealized Losses	(1,355)	(4,180)
Fair Value	217,583	99,221
Fair Value, Marketable securities
Less than 12 months	8,757	39,954
12 Months or Greater	48,961	25,785
Total	57,718	65,739
Unrealized Losses, Marketable securities
Less than 12 months	(27)	(2,206)
12 Months or Greater	(1,295)	(1,974)
Total	(1,322)	(4,180)
Fair Value, U.S. Treasury bonds
Less than 12 months	75,043
Total	75,043
Unrealized Losses, U.S. Treasury bonds
Less than 12 months	(33)
Total	(33)
Fair Value, Total
Less than 12 months	83,800
12 Months or Greater	48,961
Total	132,761
Unrealized Losses, Total
Less than 12 months	(60)
12 Months or Greater	(1,295)
Total	(1,355)
Amortized Cost
Due in one year or less	6,599
Due after one year through five years	100,072
Due after five years through ten years	4,240
Due after ten years	84,830
Total	195,741
Fair Value
Due in one year or less	6,570
Due after one year through five years	100,105
Due after five years through ten years	4,439
Due after ten years	83,858
Fair Value	194,972
Realized gains or losses
Realized gains or losses from the sale of investment securities	0	0	$ 0
Fair Value
Fair Value	$ 94,867	$ 73,233

DEBT (Details) € in Thousands, $ in Thousands			1 Months Ended					3 Months Ended	12 Months Ended
DEBT (Details) € in Thousands, $ in Thousands	Dec. 08, 2014 USD ($)	Aug. 01, 2013 USD ($)	Nov. 30, 2014 USD ($)	Oct. 31, 2014 USD ($)	Jul. 31, 2014 USD ($)	Feb. 28, 2014 USD ($)	Jul. 31, 2013 USD ($)	Jun. 30, 2009 USD ($)	Dec. 31, 2014 EUR (€) item shares	Dec. 31, 2014 USD ($) item shares	Dec. 31, 2013 USD ($) shares	Dec. 31, 2012 USD ($)	Dec. 31, 2014 USD ($)	May 31, 2014 USD ($)	May 15, 2014 USD ($)	Nov. 30, 2012 USD ($)	Mar. 31, 2012 USD ($)
Debt
Less current portion											$ (364,489)		$ (208,164)
Long-term and other debt											2,435,792		4,001,082
Less: current portion											(1,544,059)		(2,645,995)
Long-term portion											1,272,302		2,127,546
Less: current portion											(1,025,000)		(1,058,750)
Long-term portion											3,566,916		4,133,166
Components of the notes
Principal amount of liability component													4,773,541
Net carrying value of liability component													4,773,541
Interest expense on debt recognized
Amortization of discount on liability component										$ 12,709	65,677	$ 82,452
Maturities Of Deposits
2015													208,164
2016													132,500
2017													532,500
2018													184,911
2019													2,053,839
Thereafter													1,100,000
Total maturities													4,211,914
Unamortized discount													2,668
Total Deposits													4,209,246
Maturities Of Non Recourse Borrowings Of Consolidated Securitization Entities
2015													1,058,750
2016													2,050,000
2017													650,000
2018													631,000
2019													802,166
Total maturities													5,191,916
Total non-recourse borrowings of consolidated securitization entities													5,191,916
Maturities of long-term and other debt
2015													2,645,995
2016													809,293
2017													532,168
2018													386,728
2019													322,236
Thereafter													77,121
Total maturities													4,773,541
Net carrying value of liability component													4,773,541
Maturities of long-term and other debt and non-recourse borrowings of consolidated securitization entities and deposits
2015													3,912,909
2016													2,991,793
2017													1,714,668
2018													1,202,639
2019													3,178,241
Thereafter													1,177,121
Total maturities													14,177,371
Unamortized discount on convertible senior notes													(2,668)
Total long-term debt and non-recourse borrowings of consolidated securitization entities and deposits													14,174,703
Federal funds rate
Debt
Interest Rate - minimum (as a percent)									0.01%	0.01%
Interest Rate - maximum (as a percent)									0.42%	0.42%
Total deposits
Debt
Deposits											2,816,361		4,773,541
Less: current portion											(1,544,059)		(2,645,995)
Long-term portion											1,272,302		2,127,546
Certificates of deposit
Debt
Deposits											$ 2,486,533		$ 3,934,906
Interest Rate - minimum (as a percent)									0.30%	0.30%	0.15%
Interest Rate - maximum (as a percent)									3.25%	3.25%	3.55%
Weighted average interest rate (as a percent)									1.27%		1.07%		1.27%
Certificates of deposit \| Maximum
Interest expense on debt recognized
Maturity term									7 years	7 years
Certificates of deposit \| Minimum
Interest expense on debt recognized
Maturity term									3 months	3 months
Money market deposits
Debt
Deposits											$ 329,828		$ 838,635
Interest Rate - minimum (as a percent)									(3.00%)	(3.00%)
Money market deposits \| Comenity Bank and Comenity Capital Bank
Debt
Deposits											$ 329,800		$ 838,600
Interest Rate - minimum (as a percent)									0.01%	0.01%	0.01%
Interest Rate - maximum (as a percent)									0.42%	0.42%	0.12%
Weighted average interest rate (as a percent)									0.23%		0.04%		0.23%
Non-recourse borrowings of consolidated securitization entities
Debt
Total non-recourse borrowings of consolidated securitization											$ 4,591,916		$ 5,191,916
Less: current portion											(1,025,000)		(1,058,750)
Long-term portion											3,566,916		4,133,166
Fixed rate asset-backed term note securities
Debt
Total non-recourse borrowings of consolidated securitization											3,001,916		$ 3,376,916
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)									0.54%				0.54%
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											1,590,000		1,365,000
Interest Rate - minimum (as a percent)									1.05%	1.05%
Interest Rate - maximum (as a percent)									1.71%	1.71%
Maximum borrowing capacity													$ 1,600
Debt instrument description of Variable rate basis									LIBOR	LIBOR
Interest expense on debt recognized
Number of facilities \| item									3	3
Conduit asset-backed securities \| Maximum
Interest expense on debt recognized
Variable interest rates (as a percent)									1.71%				1.71%
Conduit asset-backed securities \| Minimum
Interest expense on debt recognized
Variable interest rates (as a percent)									1.05%				1.05%
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
Amount borrowed						625,000
Retained amount of subordinated class of notes						$ 175,000
Master Trust I \| February 2014 issuance \| LIBOR
Debt
Debt instrument description of Variable rate basis						LIBOR
Basis spread on variable rate (as a percent)						0.38%
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 \| October 2014 Issuance
Debt
Amount borrowed				$ 316,500
Retained amount of subordinated class of notes				$ 66,500
Master Trust I \| November 2014 Issuance
Debt
Interest Rate (as a percent)			1.54%
Amount borrowed			$ 427,600
Retained amount of subordinated class of notes			$ 102,600
Long-term and other debt
Debt
Total long-term and other debt											2,800,281		$ 4,209,246
Less current portion											(364,489)		(208,164)
Long-term and other debt											2,435,792		4,001,082
2013 Credit Facility
Debt
Total long-term and other debt											336,000
Maximum borrowing capacity							$ 1,250,000						1,300,000
Total availability under Credit Facility													1,300
Increase in Credit Facility										$ 50,000
2013 Credit Agreement, U.S. sublimit for Canadian Dollar Borrowings \| Canadian dollars
Debt
Maximum borrowing capacity							65,000
2013 Credit Agreement, sublimit for swing line loans \| U.S. dollars
Debt
Maximum borrowing capacity							65,000
2013 Credit Agreement, uncommitted accordion feature
Debt
Maximum borrowing capacity							500,000
2013 Term Loan
Debt
Total long-term and other debt											1,234,688		$ 2,603,125
Weighted average interest rate (as a percent)									1.91%				1.91%
Total borrowings							$ 1,250,000
Aggregate principal payments as a percentage of the initial term loan amount in each of the first and second year payable in equal quarterly installments							2.50%
Aggregate principal payments as a percentage of the initial term loan amount in each of the third, fourth and fifth year of the term loan equal quarterly installments							5.00%
Debt instrument description of Variable rate basis									LIBOR	LIBOR
2014 Incremental Term Loan
Debt
Total borrowings	$ 1,400,000
Interest expense on debt recognized
Maturity term	5 years
Base rate loans \| Canadian dollars \| Prime rate
Debt
Debt instrument description of Variable rate basis							prime rate
Base rate loans \| Canadian dollars \| CDOR
Debt
Debt instrument description of Variable rate basis							Canadian Dollar Offered Rate
Basis spread on variable rate (as a percent)							1.00%
Base rate loans \| Canadian dollars \| Maximum \| CDOR
Debt
Applicable margin over variable rate (as a percent)							1.00%
Base rate loans \| Canadian dollars \| Minimum \| CDOR
Debt
Applicable margin over variable rate (as a percent)							0.25%
Base rate loans \| U.S. dollars \| LIBOR
Debt
Debt instrument description of Variable rate basis							LIBOR
Basis spread on variable rate (as a percent)							1.00%
Base rate loans \| U.S. dollars \| Prime rate
Debt
Debt instrument description of Variable rate basis							prime rate
Base rate loans \| U.S. dollars \| Federal funds rate
Debt
Debt instrument description of Variable rate basis							Federal funds rate
Basis spread on variable rate (as a percent)							0.50%
Base rate loans \| U.S. dollars \| Maximum \| LIBOR
Debt
Applicable margin over variable rate (as a percent)							1.00%
Base rate loans \| U.S. dollars \| Minimum \| LIBOR
Debt
Applicable margin over variable rate (as a percent)							0.25%
Eurodollar loans \| U.S. dollars \| LIBOR
Debt
Debt instrument description of Variable rate basis							London interbank market
Eurodollar loans \| U.S. dollars \| Maximum \| LIBOR
Debt
Applicable margin over variable rate (as a percent)							2.00%
Eurodollar loans \| U.S. dollars \| Minimum \| LIBOR
Debt
Applicable margin over variable rate (as a percent)							1.25%
2011 Term Loan
Debt
Total long-term and other debt													$ 108,789
Senior Notes due 2017
Debt
Total long-term and other debt											396,511		$ 397,332			$ 400,000
Interest Rate (as a percent)									5.25%				5.25%			5.25%
Components of the notes
Unamortized discount											3,500		$ (2,700)
Period over which discount will be amortized as interest expense									2 years 10 months 24 days	2 years 10 months 24 days
Interest expense on debt recognized
Issue price as a percentage of the aggregate principal amount																98.912%
Effective annual interest rate (as a percent)									5.50%				5.50%
Maturities of long-term and other debt
Unamortized discount											3,500		$ (2,700)
Senior Notes Due 2020
Debt
Total long-term and other debt											500,000		$ 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%
Convertible Senior Notes
Components of the notes
Carrying amount of equity component											115,900
Principal amount of liability component											345,000
Unamortized discount											(11,900)
Net carrying value of liability component											333,100
If-converted value of common stock											1,906,900
Interest expense on debt recognized
Interest expense calculated on contractual interest rate										$ 5,630	24,169	30,475
Amortization of discount on liability component										11,888	64,900	82,366
Total interest expense on convertible senior notes										$ 17,518	$ 89,069	$ 112,841
Effective interest rate (annualized) (as a percent)									14.20%	14.20%	12.40%	11.00%
Maturities of long-term and other debt
Total maturities											$ 345,000
Unamortized discount											(11,900)
Net carrying value of liability component											$ 333,100
Convertible senior notes due 2013
Debt
Amount borrowed		$ 805,000
Number of warrants net settled by issuing shares of common stock \| shares									10,200,000	10,200,000
Shares of common stock issued to net settle warrants \| shares									2,900,000	2,900,000	2,800,000
Convertible senior notes due 2014
Debt
Total long-term and other debt											$ 333,082
Amount borrowed								$ 345,000
Conversion amount															$ 1,864,800
Amount received from convertible note hedge counterparties															1,519,800
Number of warrants net settled by issuing shares of common stock \| shares									7,300,000	7,300,000
Shares of common stock issued to net settle warrants \| shares									5,400,000	5,400,000
Number of shares purchased under prepaid forwards \| shares									1,857,400	1,857,400
Price of shares purchased under prepaid forwards										$ 74,900
Interest expense on debt recognized
Conversion amount															1,864,800
Amount applied from convertible note hedge counterparties															$ 1,519,800
BrandLoyalty credit facility
Debt
Weighted average interest rate (as a percent)									2.83%				2.83%
Debt instrument description of Variable rate basis									EURIBOR	EURIBOR
Revolving Facility \| Brand Loyalty
Debt
Total long-term and other debt									€ 51,900				$ 62,800
Loan amount \| €									87,000
Term Facility \| Brand Loyalty
Debt
Total long-term and other debt									38,000				$ 46,000
Loan amount \| €									63,000
Quarterly principal payments \| €									€ 6,250

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
AIR MILES Reward Program
Letters of credit and other assurances	$ 172,100
Leases
Lease expense	91,800	$ 80,500	$ 71,500
Future Minimum Rental Payments
2015	101,910
2016	85,425
2017	74,782
2018	62,487
2019	58,805
Thereafter	397,062
Total	$ 780,471
Regulatory Matters
Tier 1 capital ratio for well capitalized institutions (as a percent)	6.00%
Total capital ratio for well capitalized institutions (as a percent)	10.00%
Leverage ratio for well capitalized institutions (as a percent)	5.00%
Tier 1 capital ratio for adequately capitalized institutions (as a percent)	4.00%
Total capital ratio for adequately capitalized institutions (as a percent)	8.00%
Leverage ratio for adequately capitalized institutions (as a percent)	4.00%
Leverage ratio for adequately capitalized institutions, allowed in some cases (as a percent)	3.00%
Comenity Capital Bank
Regulatory Matters
Tier 1 capital ratio (as a percent)	14.10%
Total capital ratio (as a percent)	14.60%
Leverage ratio (as a percent)	15.40%
Comenity Bank
Regulatory Matters
Tier 1 capital ratio (as a percent)	13.90%
Total capital ratio (as a percent)	14.20%
Leverage ratio (as a percent)	15.20%

STOCKHOLDERS' EQUITY (Details 3) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Restricted Stock Unit Awards
Number of Shares
Balance at the beginning of the period (in shares)	954,515	1,088,992	1,201,761
Shares granted	518,483	501,781	654,726
Shares vested	(504,692)	(571,799)	(635,401)
Shares cancelled	(48,972)	(64,459)	(132,094)
Balance at the end of the period (in shares)	919,334	954,515	1,088,992
Outstanding and Expected to Vest (in shares)	839,110
Weighted Average Fair Value
Balance at the beginning of the period (in dollars per share)	$ 121.86	$ 93.33	$ 65.39
Shares granted (in dollars per share)	282.34	155.31	110.18
Shares vested (in dollars per share)	116.07	88.15	59.06
Shares cancelled (in dollars per share)	177.14	115.83	86.13
Balance at the end of the period (in dollars per share)	198.85	$ 121.86	$ 93.33
Outstanding and Expected to Vest (in dollars per share)	$ 194.82
Total fair value of units vested	$ 58.6	$ 50.4	$ 37.5
Aggregate intrinsic value of units outstanding and expected to vest	$ 240.0
Weighted-average remaining contractual life	1 year 2 months 12 days
Performance-based restricted stock unit awards
Number of Shares
Balance at the beginning of the period (in shares)	685,004	773,841	856,572
Shares granted	271,616	409,575	527,080
Shares vested	(405,655)	(448,868)	(505,335)
Shares cancelled	(32,898)	(49,544)	(104,476)
Balance at the end of the period (in shares)	518,067	685,004	773,841
Stock Compensation Plans, Additional Disclosures
Award vesting period	3 years
Performance-based restricted stock unit awards \| Conversant
Number of Shares
Shares granted	181,487
Service-based restricted stock unit awards
Number of Shares
Balance at the beginning of the period (in shares)	269,511	315,151	345,189
Shares granted	246,867	92,206	127,646
Shares vested	(99,037)	(122,931)	(130,066)
Shares cancelled	(16,074)	(14,915)	(27,618)
Balance at the end of the period (in shares)	401,267	269,511	315,151
Stock Compensation Plans, Additional Disclosures
Award vesting period	3 years
Employee Stock Options
Stock Compensation Plans, Additional Disclosures
Award vesting period	3 years
Expiration period for awards granted	10 years
Stock option activity
Balance at the beginning of the period (in shares)	239,676	384,253	740,017
Granted (in shares)	49,117
Exercised (in shares)	(117,260)	(143,577)	(355,764)
Forfeited (in shares)		(1,000)
Balance at the end of the period (in shares)	171,533	239,676	384,253
Vested and expected to vest (in shares)	171,244
Outstanding, Weighted Average Exercise Price, Beginning of Period (in dollars per share)	$ 46.75	$ 42.80	$ 42.87
Granted, Weighted Average Exercise Price (in dollars per share)	41.94
Exercised, Weighted Average Exercise Price (in dollars per share)	48.68	36.30	42.95
Forfeited, Weighted Average Exercise Price (in dollars per share)		31.38
Outstanding, Weighted Average Exercise Price, End of Period (in dollars per share)	44.05	$ 46.75	$ 42.80
Vested and expected to vest, Weighted Average Exercise Price (in dollars per share)	$ 44.03
Exercisable, options (in shares)	165,745	239,676	384,253	740,017
Exercisable, weighted average exercise price (in dollars per share)	$ 44.62	$ 46.75	$ 42.80	$ 42.87
Stock options activity, additional disclosures
Total intrinsic value of stock options exercised	$ 25.9	$ 25.7	$ 31.0
Granted (in shares)	49,117
Aggregate intrinsic value of stock options oustanding	$ 41.5
Aggregate intrinsic value of stock options exercisable	$ 40.0
Weighted average remaining contractual life of stock options vested and exercisable	1 year 10 months 24 days
Cash proceeds from stock options exercised	$ 5.7

EMPLOYEE BENEFIT PLANS (Details) - USD ($)		12 Months Ended
EMPLOYEE BENEFIT PLANS (Details) - USD ($)	Aug. 22, 2001	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Jul. 20, 2001
Employee Stock Purchase Plan
Maximum amount of common stock permitted to be purchased annually per employee		$ 25,000
Maximum percentage of voting power after purchase of common stock under ESPP		5.00%
Offering period under ESPP		6 months
Purchase price of common stock as a percentage of fair market value of shares		85.00%
Maximum number of shares reserved for issuance under the ESPP		1,500,000
Holding period for shares purchased under ESPP		180 days
Number of shares registered for issuance	1,500,000
Number of shares issued under the ESPP		47,250
Weighted-average issue price of shares issued under the ESPP (in dollars per share)		$ 240.30
Number of shares issued under the ESPP since the inception of the plan		1,058,673
2010 Omnibus Incentive Plan
Maximum cash amount that may be awarded to any single participant		$ 7,500,000
Retirement Savings Plan [Member]
Defined Contribution Plan Disclosure [Line Items]
Service period after which employees begin receiving employer matching contribution		180 days
Minimum age limit of employees covered by the plan		18 years
Service period after which seasonal employees begin receiving employer matching contribution		12 months
Percentage of employees' contribution matched by dollar-to-dollar contribution by employer		5.00%	3.00%
Additional employer matching contribution per dollar of employee's contribution for savings more than 3% and up to 5%			$ 0.50
Lower limit that the percentage must exceed, additionally matched by employer for each dollar of employee's contribution			3.00%
Maximum percentage additionally matched by employer for each dollar of employee's contribution			5.00%
Age of employees, contributions vest immediately		65 years
Company's matching and discretionary contributions		$ 37,400,000	$ 28,100,000	$ 22,000,000
Number of shares registered for issuance					1,500,000
Number of shares available for issuance		712,210
Group Retirement Savings Plan And Deferred Profit Sharing Plan [Member] \| LoyaltyOne
Defined Contribution Plan Disclosure [Line Items]
Company's matching and discretionary contributions			$ 2,100,000	$ 2,000,000
Group Retirement Savings Plan [Member] \| LoyaltyOne
Defined Contribution Plan Disclosure [Line Items]
Service period after which full-time employees begin receiving company matching contribution		3 months
Service period after which part-time employees begin receiving company matching contribution		6 months
Deferred Profit Sharing Plan [Member] \| LoyaltyOne
Defined Contribution Plan Disclosure [Line Items]
Service period after which employees begin receiving employer matching contribution		12 months
Percentage of employees' contribution matched by dollar-to-dollar contribution by employer		5.00%
Service period after which contributions vest		1 year

INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
INCOME TAXES (Details) - USD ($) $ in Thousands	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Components of income before income taxes:
Domestic									$ 667,869	$ 547,757	$ 481,243
Foreign									170,072	245,655	201,661
Income before income tax	$ 144,111	$ 260,177	$ 219,608	$ 214,045	$ 184,264	$ 214,753	$ 185,714	$ 208,681	837,941	793,412	682,904
Current
Federal									224,604	188,600	143,695
State									31,049	33,595	13,991
Foreign									79,539	32,134	696
Total current									335,192	254,329	158,382
Deferred
Federal									(14,250)	1,477	28,267
State									(18,935)	(1,485)	6,176
Foreign									19,794	42,921	67,823
Total deferred									(13,391)	42,913	102,266
Total provision for income taxes	67,855	95,229	80,419	78,298	66,391	81,875	69,274	79,702	$ 321,801	$ 297,242	$ 260,648
Federal statutory rate (as a percent)									35.00%	35.00%	35.00%
Reconciliation of recorded federal provision for income taxes to the expected amount computed by applying the federal statutory rate
Expected expense at statutory rate									$ 293,279	$ 277,694	$ 239,016
Increase (decrease) in income taxes resulting from:
State income taxes, net of federal benefit									7,874	20,871	13,109
Foreign earnings at other than U.S. rates									(8,108)	(9,225)	(4,328)
Canadian tax rate reductions											(7,128)
U.S. tax on foreign dividends, net of credits											15,617
Non-deductible expenses (non-taxable)									27,347	(742)	4,282
Other									1,409	8,644	80
Total provision for income taxes	67,855	$ 95,229	$ 80,419	$ 78,298	66,391	$ 81,875	$ 69,274	$ 79,702	321,801	297,242	$ 260,648
Deferred tax assets
Deferred revenue	7,111				42,359				7,111	42,359
Allowance for doubtful accounts	220,527				192,546				220,527	192,546
Net operating loss carryforwards and other carryforwards	98,910				53,591				98,910	53,591
Stock-based compensation and other employee benefits	44,694				28,582				44,694	28,582
Accrued expenses and other	48,444				50,120				48,444	50,120
Total deferred tax assets	419,686				367,198				419,686	367,198
Valuation allowance	(13,013)				(22,414)				(13,013)	(22,414)
Deferred tax assets, net of valuation allowance	406,673				344,784				406,673	344,784
Deferred tax liabilities
Deferred income	301,282				244,612				301,282	244,612
Convertible note hedges					1,474					1,474
Depreciation	19,379				8,440				19,379	8,440
Intangible assets	558,081				147,366				558,081	147,366
Total deferred tax liabilities	878,742				401,892				878,742	401,892
Total - Net deferred tax liability	(472,069)				(57,108)				(472,069)	(57,108)
Amounts recognized in the consolidated balance sheets:
Current assets	218,872				216,195				218,872	216,195
Non-current assets	164				2,454				164	2,454
Current liabilities	930								930
Non-current liabilities	(690,175)				(275,757)				(690,175)	(275,757)
Total - Net deferred tax liability	$ (472,069)				$ (57,108)				$ (472,069)	$ (57,108)

INCOME TAXES (Details 2) - USD ($) $ in Thousands	12 Months Ended
INCOME TAXES (Details 2) - USD ($) $ in Thousands	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Operating Loss, Carryforwards
Foreign net operating loss carryforwards	$ 17,900
Income taxes not provided on unremitted earnings of certain foreign subsidiaries	55,000
Tax impact resulting from exercise of employee stock options and other employee stock program	34,200	$ 17,300	$ 21,400
Income tax expenses (benefit) related to foreign rate changes	(7,100)
Reconciliation of unrecognized tax benefits
Balance at the beginning of the period	101,354	76,154	69,544
Increases related to prior years' tax positions	3,500	4,328	4,188
Decreases related to prior years' tax positions	(4,184)	(1,580)	(7,424)
Increases related to current year tax positions	18,404	23,567	11,703
Settlements during the period	(1,841)	(197)	(1,253)
Lapses of applicable statutes of limitation	(1,936)	(918)	(604)
Increases related to acquisitions	22,253
Balance at the end of the period	137,550	101,354	76,154
Cumulative interest and penalties with respect to unrecognized tax benefits	25,200	18,500	15,500
Potential interest and penalties with respect to unrecognized tax benefits	1,400	2,100	(300)
Unrecognized tax benefits, if recognized, would impact effective tax rate	88,900	$ 56,000	$ 37,500
Federal
Operating Loss, Carryforwards
Net operating loss carryovers	33,800
Federal \| Capital losses
Operating Loss, Carryforwards
Net operating loss carryovers	8,500
Foreign
Operating Loss, Carryforwards
Tax credits	57,900
Foreign tax credit carryforwards	57,100
State
Operating Loss, Carryforwards
Net operating loss carryovers	447,800
Tax credits	7,500
State \| Capital losses
Operating Loss, Carryforwards
Net operating loss carryovers	$ 8,500

FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	Dec. 31, 2014	Dec. 31, 2013
Financial assets
Cash and cash equivalents	$ 1,077,152	$ 969,822
Credit card and loan receivables held for sale	125,060	62,082
Credit card and loan receivables, net	10,673,709	8,069,713
Redemption settlement assets, restricted	520,340	510,349
Cash collateral, restricted	22,511	34,124
Restricted cash, fair value	22,611	25,988
Other investments	217,583	99,221
Financial liabilities
Deposits	4,801,464	2,836,352
Non-recourse borrowings of consolidated securitization entities	5,225,359	4,618,205
Long-term and other debt	4,227,414	4,404,500
Restricted cash
Cost	22,611	25,988
Fair value	22,611	25,988
Estimated Fair Value
Fair Value	94,867	73,233
Carrying Amount
Financial assets
Cash and cash equivalents	1,077,152	969,822
Trade receivables, net	743,294	394,822
Credit card and loan receivables held for sale	125,060	62,082
Credit card and loan receivables, net	10,673,709	8,069,713
Redemption settlement assets, restricted	520,340	510,349
Cash collateral, restricted	22,511	34,124
Other investments	217,583	99,221
Derivative instruments	3,871
Financial liabilities
Accounts payable	455,656	210,019
Derivative instruments	17,290
Deposits	4,773,541	2,816,361
Non-recourse borrowings of consolidated securitization entities	5,191,916	4,591,916
Long-term and other debt	4,209,246	2,800,281
Contingent consideration	326,023
Fair Value.
Financial assets
Cash and cash equivalents	1,077,152	969,822
Trade receivables, net	743,294	394,822
Credit card and loan receivables held for sale	125,060	62,082
Credit card and loan receivables, net	10,673,709	8,069,713
Redemption settlement assets, restricted	520,340	510,349
Cash collateral, restricted	22,511	34,124
Other investments	217,583	99,221
Derivative instruments	3,871
Financial liabilities
Accounts payable	455,656	210,019
Derivative instruments	17,290
Deposits	4,801,464	2,836,352
Non-recourse borrowings of consolidated securitization entities	5,225,359	4,618,205
Long-term and other debt	4,227,414	$ 4,404,500
Contingent consideration	$ 326,023

PARENT-ONLY FINANCIAL STATEMENTS (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Assets:
Cash and cash equivalents	$ 1,077,152			$ 969,822	$ 969,822			$ 893,352	$ 969,822	$ 893,352	$ 216,213	$ 1,077,152	$ 969,822	$ 893,352	$ 216,213
Total assets												20,263,977	13,244,257	12,000,139
Liabilities:
Current debt												208,164	364,489
Total liabilities												17,632,031	12,388,496
Stockholders' equity												2,396,380	855,761	528,487	175,966
Total liabilities and stockholders' equity												20,263,977	13,244,257
Statements of Income
Total revenue	1,485,749	$ 1,319,133	$ 1,265,158	1,232,900	1,141,087	$ 1,096,447	$ 1,028,092	1,053,437	5,302,940	4,319,063	3,641,390
Interest expense, net	68,383	61,464	62,932	67,747	65,475	74,015	83,466	82,544	260,526	305,500	291,460
Income (loss) before income taxes and equity in undistributed net income of subsidiaries	144,111	260,177	219,608	214,045	184,264	214,753	185,714	208,681	837,941	793,412	682,904
Benefit for income taxes	(67,855)	(95,229)	(80,419)	(78,298)	(66,391)	(81,875)	(69,274)	(79,702)	(321,801)	(297,242)	(260,648)
Net income	76,256	$ 164,948	$ 139,189	135,747	117,873	$ 132,878	$ 116,440	128,979	516,140	496,170	422,256
Statements of Cash Flows
Net cash (used in) provided by operating activities									1,344,159	1,003,492	1,134,190
Investing activities:
Payments for acquired businesses, net of cash acquired									(1,195,808)		(463,964)
Net cash used in investing activities									(4,737,121)	(1,619,416)	(2,671,350)
Financing activities:
Borrowings under debt agreements									3,431,087	1,985,000	1,095,148
Repayments of borrowings									(1,835,161)	(1,300,241)	(506,214)
Proceeds from Convertible Note Hedge Counterparties									1,519,833	1,056,307
Settlement of convertible note borrowings									(1,864,803)	(1,861,289)
Excess tax benefits from stock-based compensation									34,159	17,267	20,199
Payment of deferred financing costs									(55,119)	(24,772)	(40,267)
Purchase of treasury shares									(286,618)	(231,085)	(125,840)
Proceeds from Issuance of Common Stock									17,063	14,090	20,696
Other									(1,476)	(22)	(22)
Net cash provided by financing activities									3,516,146	704,152	2,209,019
Change in cash and cash equivalents									107,330	76,470	677,139
Cash and cash equivalents at beginning of year				969,822				893,352	969,822	893,352	216,213
Cash and cash equivalents at end of year	1,077,152				969,822				1,077,152	969,822	893,352
Parent company
Assets:
Cash and cash equivalents	533			15,216	15,216			247,478	15,216	247,478	25	533	15,216	$ 247,478	$ 25
Investment in subsidiaries												6,731,287	3,819,760
Intercompany receivables												378,562	399,305
Other assets												148,240	96,039
Total assets												7,258,622	4,330,320
Liabilities:
Current debt												99,375	364,489
Long-term debt												4,001,082	2,435,792
Other liabilities												761,785	674,278
Total liabilities												4,862,242	3,474,559
Stockholders' equity												2,396,380	855,761
Total liabilities and stockholders' equity												$ 7,258,622	$ 4,330,320
Statements of Income
Interest from loans to subsidiaries									9,988	10,065	10,248
Dividends from subsidiaries									194,441	68,544	464,971
Total revenue									204,429	78,609	475,219
Interest expense, net									129,831	184,727	179,527
Other expenses, net									17,867	1,240	533
Total expenses									147,698	185,967	180,060
Income (loss) before income taxes and equity in undistributed net income of subsidiaries									56,731	(107,358)	295,159
Benefit for income taxes									36,615	32,909	73,106
Income (loss) before equity in undistributed net income of subsidiaries									93,346	(74,449)	368,265
Equity in undistributed net income of subsidiaries									422,794	570,619	53,991
Net income									516,140	496,170	422,256
Statements of Cash Flows
Net cash (used in) provided by operating activities									(318,116)	144,841	(224,835)
Investing activities:
Payments for acquired businesses, net of cash acquired									(1,003,237)
Repayment of loans to subsidiaries									112,903
Loans to subsidiaries										(112,903)
Investment in subsidiaries									(15,000)		(475,000)
Dividends received									194,441	68,544	464,971
Net cash used in investing activities									(710,893)	(44,359)	(10,029)
Financing activities:
Borrowings under debt agreements									3,358,000	1,985,000	1,095,148
Repayments of borrowings									(1,725,563)	(1,300,241)	(506,214)
Proceeds from Convertible Note Hedge Counterparties									1,519,833	1,056,307
Settlement of convertible note borrowings									(1,864,803)	(1,861,289)
Excess tax benefits from stock-based compensation									34,159	17,267	20,199
Payment of deferred financing costs									(36,269)	(12,784)	(21,672)
Purchase of treasury shares									(286,618)	(231,085)	(125,840)
Proceeds from Issuance of Common Stock									17,063	14,090	20,696
Other									(1,476)	(9)
Net cash provided by financing activities									1,014,326	(332,744)	482,317
Change in cash and cash equivalents									(14,683)	(232,262)	247,453
Cash and cash equivalents at beginning of year				$ 15,216				$ 247,478	15,216	247,478	25
Cash and cash equivalents at end of year	$ 533				$ 15,216				$ 533	$ 15,216	$ 247,478

SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Segment information
Revenues	$ 1,485,749	$ 1,319,133	$ 1,265,158	$ 1,232,900	$ 1,141,087	$ 1,096,447	$ 1,028,092	$ 1,053,437	$ 5,302,940	$ 4,319,063	$ 3,641,390
Income (loss) before income taxes and equity in undistributed net income of subsidiaries	144,111	260,177	219,608	214,045	184,264	214,753	185,714	208,681	837,941	793,412	682,904
Interest expense, net	68,383	61,464	62,932	67,747	65,475	74,015	83,466	82,544	260,526	305,500	291,460
Operating income	212,494	$ 321,641	$ 282,540	$ 281,792	249,739	$ 288,768	$ 269,180	$ 291,225	1,098,467	1,098,912	974,364
Depreciation and amortization									313,082	216,119	166,876
Stock compensation expense									72,462	59,183	50,497
Business acquisition									7,301
Earn-out obligation									105,944
Adjusted EBITDA									1,597,256	1,374,214	1,191,737
Less: Securitization funding costs									91,103	95,326	92,808
Less: Interest expense on deposits									37,543	29,111	25,181
Less: Adjusted EBITDA attributable to non-controlling interest									43,050
Adjusted EBITDA, net									1,425,560	1,249,777	1,073,748
Capital expenditures									158,694	135,376	116,455
Total assets	20,263,977				13,244,257				20,263,977	13,244,257	12,000,139
Operating segment \| LoyaltyOne
Segment information
Revenues									1,406,877	919,480	919,041
Income (loss) before income taxes and equity in undistributed net income of subsidiaries									244,438	230,992	208,729
Interest expense, net									5,861	(1,312)	(1,560)
Operating income									250,299	229,680	207,169
Depreciation and amortization									88,710	18,057	19,614
Stock compensation expense									11,549	10,804	9,311
Adjusted EBITDA									350,558	258,541	236,094
Less: Adjusted EBITDA attributable to non-controlling interest									43,050
Adjusted EBITDA, net									307,508	258,541	236,094
Capital expenditures									31,751	28,713	19,424
Total assets	2,362,722				1,100,396				2,362,722	1,100,396	1,083,374
Operating segment \| Epsilon
Segment information
Revenues									1,522,423	1,380,344	996,210
Income (loss) before income taxes and equity in undistributed net income of subsidiaries									126,461	131,406	106,222
Interest expense, net									(49)	(56)	(67)
Operating income									126,412	131,350	106,155
Depreciation and amortization									157,353	139,984	101,684
Stock compensation expense									25,335	18,365	14,414
Adjusted EBITDA									309,100	289,699	222,253
Adjusted EBITDA, net									309,100	289,699	222,253
Capital expenditures									85,906	67,024	60,065
Total assets	5,014,947				2,116,569				5,014,947	2,116,569	2,129,796
Operating segment \| Private Label Services and Credit
Segment information
Revenues									2,395,076	2,034,724	1,732,160
Income (loss) before income taxes and equity in undistributed net income of subsidiaries									851,843	730,568	657,654
Interest expense, net									124,906	122,159	114,193
Operating income									976,749	852,727	771,847
Depreciation and amortization									58,884	52,277	42,464
Stock compensation expense									13,905	11,095	8,930
Adjusted EBITDA									1,049,538	916,099	823,241
Less: Securitization funding costs									91,103	95,326	92,808
Less: Interest expense on deposits									37,543	29,111	25,181
Adjusted EBITDA, net									920,892	791,662	705,252
Capital expenditures									29,932	27,909	28,295
Total assets	12,645,228				9,677,651				12,645,228	9,677,651	8,171,541
Corporate/Other.
Segment information
Revenues									556	82	372
Income (loss) before income taxes and equity in undistributed net income of subsidiaries									(384,801)	(299,554)	(289,701)
Interest expense, net									129,808	184,709	178,894
Operating income									(254,993)	(114,845)	(110,807)
Depreciation and amortization									8,135	5,801	3,114
Stock compensation expense									21,673	18,919	17,842
Business acquisition									7,301
Earn-out obligation									105,944
Adjusted EBITDA									(111,940)	(90,125)	(89,851)
Adjusted EBITDA, net									(111,940)	(90,125)	(89,851)
Capital expenditures									11,105	11,730	8,671
Total assets	$ 241,080				$ 349,641				241,080	349,641	615,428
Eliminations
Segment information
Revenues									$ (21,992)	$ (15,567)	$ (6,393)

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Details) $ / shares in Units, $ in Thousands, € in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2014 USD ($) $ / shares	Sep. 30, 2014 USD ($) $ / shares	Jun. 30, 2014 USD ($) $ / shares	Mar. 31, 2014 USD ($) $ / shares	Dec. 31, 2013 USD ($) $ / shares	Sep. 30, 2013 USD ($) $ / shares	Jun. 30, 2013 USD ($) $ / shares	Mar. 31, 2013 USD ($) $ / shares	Dec. 31, 2014 EUR (€)	Dec. 31, 2014 USD ($) $ / shares	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($) $ / shares	Dec. 31, 2012 USD ($) $ / shares	Jan. 02, 2014
Revenues	$ 1,485,749	$ 1,319,133	$ 1,265,158	$ 1,232,900	$ 1,141,087	$ 1,096,447	$ 1,028,092	$ 1,053,437		$ 5,302,940		$ 4,319,063	$ 3,641,390
Operating expenses	1,273,255	997,492	982,618	951,108	891,348	807,679	758,912	762,212		4,204,473		3,220,151	2,667,026
Operating income	212,494	321,641	282,540	281,792	249,739	288,768	269,180	291,225		1,098,467		1,098,912	974,364
Interest expense, net	68,383	61,464	62,932	67,747	65,475	74,015	83,466	82,544		260,526		305,500	291,460
Income before income tax	144,111	260,177	219,608	214,045	184,264	214,753	185,714	208,681		837,941		793,412	682,904
Provision for income taxes	67,855	95,229	80,419	78,298	66,391	81,875	69,274	79,702		321,801		297,242	260,648
Net income	76,256	164,948	139,189	135,747	117,873	132,878	116,440	128,979		516,140		496,170	422,256
Less: Net income attributable to non-controlling interest	9,044	706	1,745	(1,648)						9,847	$ 9,847
Net Income (Loss) Available to Common Stockholders, Basic	$ 67,212	$ 164,242	$ 137,444	$ 137,395	$ 117,873	$ 132,878	$ 116,440	$ 128,979		$ 506,293		$ 496,170	$ 422,256
Basic (in dollars per share) \| $ / shares	$ 0.87	$ 2.84	$ 2.54	$ 2.59	$ 2.40	$ 2.73	$ 2.37	$ 2.59		$ 8.72		$ 10.09	$ 8.44
Diluted (in dollars per share) \| $ / shares	$ 0.86	$ 2.74	$ 2.19	$ 2.08	$ 1.79	$ 2.01	$ 1.71	$ 1.92		$ 7.87		$ 7.42	$ 6.58
Additional contingent consideration										$ (105,944)
Brand Loyalty
Additional contingent consideration									€ 87.6	$ 105,900
Ownership interest acquired (as a percent)	60.00%								60.00%	60.00%	60.00%			60.00%

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Dec. 31, 2014	Dec. 31, 2013
CONSOLIDATED BALANCE SHEETS
Trade receivables, allowance for doubtful accounts (in dollars)	$ 3,811	$ 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	111,686	98,302
Treasury stock, shares	47,874	46,752

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 516,140	$ 496,170	$ 422,256
Other comprehensive income, net of tax:
Net unrealized (loss) gain on securities, available-for-sale, net of tax expense (benefit) of $1,271 $(1,460) and $(377) for the years ended December 31, 2014, 2013 and 2012, respectively	(1,535)	(6,132)	3,368
Net unrealized loss on cash flow hedges, net of tax expense of $952 for the years ended December 31, 2014, 2013 and 2012, respectively	2,350
Foreign currency translation adjustments	(58,041)	9,766	(2,173)
Other comprehensive (loss) income	(57,226)	3,634	1,195
Total comprehensive income, net of tax	458,914	499,804	423,451
Less: Comprehensive income attributable to non-controlling interest	11,766
Comprehensive income attributable to Alliance Data Systems Corporation stockholders	$ 470,680	$ 499,804	$ 423,451

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net unrealized (loss) gain on securities, tax expense (benefit)	$ 1,271	$ (1,460)	$ (377)
Net unrealized loss on cash flow hedges, tax expense	$ 952

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	12 Months Ended
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	Dec. 31, 2014
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of the Business—Alliance Data Systems Corporation (“ADSC” or, including its consolidated subsidiaries and variable interest entities, the “Company”) is a leading global provider of data-driven marketing and loyalty solutions serving large, consumer-based businesses in a variety of industries. The Company offers a comprehensive portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services and private label and co-brand retail credit card programs. The Company focuses on facilitating and managing interactions between its clients and their customers through all consumer marketing channels, including in-store, online, email, social media, mobile, direct mail and telephone. The Company captures and analyzes data created during each customer interaction, leveraging the insight derived from that data to enable clients to identify and acquire new customers and enhance customer loyalty. The Company operates in the following reportable segments: LoyaltyOne®, Epsilon®, and Private Label Services and Credit. LoyaltyOne includes the Company’s Canadian AIR MILES® Reward Program 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. Private Label Services and Credit encompasses credit card processing, billing and payment processing, customer care and collections services for private label retailers as well as private label retail credit card and loan receivables financing, including securitization of the credit card receivables that it underwrites from its private label and co-brand retail credit card programs. For purposes of comparability, certain prior period amounts have been reclassified to conform to the current year presentation in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

INVENTORIES	12 Months Ended
INVENTORIES	Dec. 31, 2014
INVENTORIES
INVENTORIES	5. INVENTORIES Inventories of $220.5 million and $14.6 million at December 31, 2014 and 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 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.

EMPLOYEE BENEFIT PLANS	12 Months Ended
EMPLOYEE BENEFIT PLANS	Dec. 31, 2014
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS	17. EMPLOYEE BENEFIT PLANS Employee Stock Purchase Plan On June 7, 2005, at the annual meeting of stockholders, the stockholders approved and adopted the Amended and Restated Employee Stock Purchase Plan (the “ESPP”), effective on July 1, 2005. No employee may purchase more than $25,000 in stock under the ESPP in any calendar year, and no employee may purchase stock under the ESPP if such purchase would cause the employee to own more than 5% of the voting power or value of the Company’s common stock. The Company amended its ESPP effective June 1, 2014. The ESPP, as amended, provides for six month offering periods, commencing on the first trading day of the first and third calendar quarter of each year and ending on the last trading day of each subsequent calendar quarter. The purchase price of the common stock upon exercise shall be 85% of the fair market value of shares on the applicable purchase date as determined by averaging the high and low trading prices of the last trading day of the six-month period. An employee may elect to pay the purchase price of such common stock through payroll deductions. The maximum number of shares reserved for issuance under the ESPP is 1,500,000 shares, subject to adjustment as provided in the ESPP. Employees are required to hold any stock purchased through the ESPP for 180 days prior to any sale or withdrawal of shares. On August 22, 2001, the Company registered 1,500,000 shares of its common stock for issuance in accordance with the ESPP pursuant to a Registration Statement on Form S-8, File No. 333-68134. During the year ended December 31, 2014, the Company issued 47,250 shares of common stock under the ESPP at a weighted-average issue price of $240.30. Since its adoption, 1,058,673 shares of common stock have been issued under the ESPP. 2010 Omnibus Incentive Plan At the June 8, 2010 annual meeting of stockholders, the Company’s stockholders approved the 2010 Omnibus Incentive Plan. The 2010 plan authorizes the compensation committee to grant cash-based and other equity-based or equity-related awards, including deferred stock units and fully-vested shares. The maximum cash amount that may be awarded to any single participant in any one calendar year may not exceed $7.5 million. 401(k) Retirement Savings Plan The Alliance Data Systems 401(k) and Retirement Savings Plan is a defined contribution plan that is qualified under Section 401(k) of the Internal Revenue Code of 1986. The Company amended its 401(k) and Retirement Savings Plan effective December 10, 2014. The 401(k) and Retirement Savings Plan is an IRS-approved safe harbor plan design that eliminates the need for most discrimination testing. Eligible employees can participate in the 401(k) and Retirement Savings Plan immediately upon joining the Company and after 180 days of employment begin receiving company matching contributions. In addition, “seasonal” or “on-call” employees must complete a year of eligibility service before they may participate in the 401(k) and Retirement Savings Plan. The 401(k) and Retirement Savings Plan permits eligible employees to make Roth elective deferrals, effective November 1, 2012, which are included in the employee’s taxable income at the time of contribution, but not when distributed. Regular, or Non-Roth, elective deferrals made by employees, together with contributions by the Company to the 401(k) and Retirement Savings Plan, and income earned on these contributions, are not taxable to employees until withdrawn from the 401(k) and Retirement Savings Plan. The 401(k) and Retirement Savings Plan covers U.S. employees, who are at least 18 years old, of ADS Alliance Data Systems, Inc., one of the Company’s wholly-owned subsidiaries, and any other subsidiary or affiliated organization that adopts this 401(k) and Retirement Savings Plan. The Company, and all of its U.S. subsidiaries, are currently covered under the 401(k) and Retirement Savings Plan. Through December 31, 2013, the Company matched dollar-for-dollar on the first three percent of savings, and an additional fifty cents for each dollar an employee contributed for savings of more than three percent and up to five percent of pay. Effective January 1, 2014, the Company matched dollar-for-dollar up to five percent of savings. All company matching contributions are immediately vested. In addition to the company match, the Company may make an additional annual discretionary contribution based on the Company’s profitability. This contribution, subject to Board of Director approval, is based on a percentage of pay and is subject to a separate three-year cliff vesting schedule. The discretionary contribution vests in full upon achieving three years of service for participants with less than three years of service. All of these contributions vest immediately if the participating employee has more than three years of service, attains age 65, becomes disabled, dies or if the 401(k) and Retirement Savings Plan terminates. Company matching and discretionary contributions for the years ended December 31, 2014, 2013 and 2012 were $37.4 million, $28.1 million and $22.0 million, respectively. The participants in the plan can direct their contributions and the Company’s matching contribution to numerous investment options, including the Company’s common stock. On July 20, 2001, the Company registered 1,500,000 shares of its common stock for issuance in accordance with its 401(k) and Retirement Savings Plan pursuant to a Registration Statement on Form S-8, File No. 333-65556. As of December 31, 2014, 712,210 of such shares remain available for issuance. Group Retirement Savings Plan and Deferred Profit Sharing Plan (LoyaltyOne) The Company provides for its Canadian employees the Group Retirement Savings Plan of the Loyalty Group (“GRSP”), which is a group retirement savings plan registered with the Canada Revenue Agency. Contributions made by Canadian employees on their behalf or on behalf of their spouse to the GRSP, and income earned on these contributions, are not taxable to employees until withdrawn from the GRSP. Employee contributions eligible for company match may not exceed the overall maximum allowed by the Income Tax Act (Canada); the maximum tax-deductible GRSP contribution is set by the Canada Revenue Agency each year. The Deferred Profit Sharing Plan (“DPSP”) is a legal trust registered with the Canada Revenue Agency. Eligible full-time employees can participate in the GRSP after three months of employment and eligible part-time employees after six months of employment. Employees become eligible to receive company matching contributions into the DPSP on the first day of the calendar quarter following twelve months of employment. Based on the eligibility guidelines, the Company matches up to 5% of contributions dollar-for-dollar. Contributions made to the DPSP reduce an employee’s maximum contribution amounts to the GRSP under the Income Tax Act (Canada) for the following year. All company matching contributions into the DPSP vest after receipt of one continuous year of DPSP contributions. LoyaltyOne matching and discretionary contributions for each of the years ended December 31, 2014 and 2013 was $2.1 million, and $2.0 million for the year ended December 31, 2012. Executive Deferred Compensation Plan and the Canadian Supplemental Executive Retirement Plan The Company also maintains an Executive Deferred Compensation Plan (“EDCP”). The EDCP provides an opportunity for a defined group of management and highly compensated employees to defer on a pre-tax basis a portion of their regular compensation and bonuses payable for services rendered and to receive certain employer contributions. The Company provides a Canadian Supplemental Executive Retirement Plan (“SERP”) for a defined group of management and highly compensated employees of LoyaltyOne, Co., one of the Company’s wholly-owned subsidiaries. Similar to the EDCP, participants may defer on a pre-tax basis a portion of their compensation and bonuses payable for services rendered and to receive certain employer contributions.

NON-CASH FINANCING AND INVESTING ACTIVITIES	12 Months Ended
NON-CASH FINANCING AND INVESTING ACTIVITIES	Dec. 31, 2014
NON-CASH FINANCING AND INVESTING ACTIVITIES
NON-CASH FINANCING AND INVESTING ACTIVITIES	24. NON-CASH FINANCING AND INVESTING ACTIVITIES As discussed in Note 3, “Acquisitions,” on December 10, 2014, the Company completed the acquisition of 100% of the common stock of Conversant, Inc. Consideration for the acquisition included the issuance of 4.6 million shares of the Company’s common stock to former stockholders of Conversant. Total value of the equity consideration paid and issued, based on the volume weighted average price per share of the Company’s common stock for the consecutive period of 15 trading days ending on the close of trading on the second trading day preceding the close of the merger, was $1.3 billion. In December 2012, the Company purchased 0.1 million of treasury shares for an aggregate amount of $11.6 million that had not settled on December 31, 2012 and was included in accounts payable. As part of the BrandLoyalty acquisition on January 2, 2014, the Company recorded a liability of €181.9 million ($248.7 million as of January 2, 2014) for the earn-out provisions included in the BrandLoyalty share purchase agreement. See Note 3, “Acquisitions,” for additional information. In addition, the Company assumed the debt outstanding under the BrandLoyalty Credit Agreement, consisting of term loans of €56.8 million and a revolving line of credit of €60.6 million ($77.6 million and $82.9 million, respectively, on January 2, 2014). See Note 11, “Debt,” for additional information.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - Purchased data lists	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Maximum
Goodwill and Other Intangible Assets
Useful life	5 years	5 years
Minimum
Goodwill and Other Intangible Assets
Useful life	1 year	1 year

CREDIT CARD AND LOAN RECEIVABLES (Details 2) item in Thousands, $ in Thousands	Dec. 31, 2014 USD ($) item	Dec. 31, 2013 USD ($) item
Age of Accounts Since Origination
Number of Active Accounts with Balances \| item	20,963	18,548
Percentage of Active Accounts with Balances	100.00%	100.00%
Principal Receivables Outstanding \| $	$ 10,762,498	$ 8,166,961
Percentage of Principal Receivables Outstanding	100.00%	100.00%
0-12 Months
Age of Accounts Since Origination
Number of Active Accounts with Balances \| item	6,029	5,048
Percentage of Active Accounts with Balances	28.80%	27.20%
Principal Receivables Outstanding \| $	$ 2,710,992	$ 1,962,153
Percentage of Principal Receivables Outstanding	25.20%	24.10%
13-24 Months
Age of Accounts Since Origination
Number of Active Accounts with Balances \| item	3,026	2,550
Percentage of Active Accounts with Balances	14.40%	13.70%
Principal Receivables Outstanding \| $	$ 1,549,899	$ 1,072,648
Percentage of Principal Receivables Outstanding	14.40%	13.10%
25-36 Months
Age of Accounts Since Origination
Number of Active Accounts with Balances \| item	2,120	1,799
Percentage of Active Accounts with Balances	10.10%	9.70%
Principal Receivables Outstanding \| $	$ 1,113,755	$ 826,911
Percentage of Principal Receivables Outstanding	10.30%	10.10%
37-48 Months
Age of Accounts Since Origination
Number of Active Accounts with Balances \| item	1,548	1,318
Percentage of Active Accounts with Balances	7.40%	7.10%
Principal Receivables Outstanding \| $	$ 866,645	$ 622,766
Percentage of Principal Receivables Outstanding	8.10%	7.60%
49-60 Months
Age of Accounts Since Origination
Number of Active Accounts with Balances \| item	1,158	1,104
Percentage of Active Accounts with Balances	5.50%	6.00%
Principal Receivables Outstanding \| $	$ 655,351	$ 557,407
Percentage of Principal Receivables Outstanding	6.10%	6.80%
Over 60 Months
Age of Accounts Since Origination
Number of Active Accounts with Balances \| item	7,082	6,729
Percentage of Active Accounts with Balances	33.80%	36.30%
Principal Receivables Outstanding \| $	$ 3,865,856	$ 3,125,076
Percentage of Principal Receivables Outstanding	35.90%	38.30%

CREDIT CARD AND LOAN RECEIVABLES (Details 3) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months)
Principal Receivables Outstanding	$ 10,762,498	$ 8,166,961
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	$ 48,900	$ 62,100
Purchase of loan receivables generated in the program	263,800	80,100
Program receivables	160,600	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	$ 227,378	$ 162,366
Percentage of Principal Receivables Outstanding	2.10%	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	$ 499,989	$ 362,366
Percentage of Principal Receivables Outstanding	4.60%	4.40%
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	$ 967,035	$ 732,425
Percentage of Principal Receivables Outstanding	9.00%	9.00%
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	$ 1,129,122	$ 858,721
Percentage of Principal Receivables Outstanding	10.50%	10.50%
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	$ 4,429,399	$ 3,234,547
Percentage of Principal Receivables Outstanding	41.10%	39.60%
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	$ 2,254,794	$ 1,748,317
Percentage of Principal Receivables Outstanding	21.00%	21.40%
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	$ 1,254,781	$ 1,068,219
Percentage of Principal Receivables Outstanding	11.70%	13.10%

INVENTORIES (Details) - USD ($) $ in Millions	Dec. 31, 2014	Jan. 02, 2014	Dec. 31, 2013
INVENTORIES
Inventories	$ 220.5		$ 14.6
Amount of finished goods inventory acquired in the BrandLoyalty acquisition		$ 198.9

PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	12 Months Ended
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Property and equipment
Total	$ 1,016,721	$ 792,902
Accumulated depreciation	(457,093)	(493,714)
Property and equipment, net	559,628	299,188
Depreciation
Depreciation and other amortization	67,100	53,700	$ 46,600
Amortization of capitalized software development	48,200	33,900	$ 30,000
Computer software and development
Property and equipment
Total	608,224	373,844
Furniture and equipment
Property and equipment
Total	259,129	263,373
Land, buildings and leasehold improvements
Property and equipment
Total	104,631	106,197
Construction in progress
Property and equipment
Total	$ 44,737	$ 49,488

INTANGIBLE ASSETS AND GOODWILL (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Schedule of Finite and Indefinite-lived Intangible Assets
Finite lived assets, gross	$ 2,135,427	$ 964,561
Accumulated Amortization	(631,783)	(516,507)
Finite lived assets, net	1,503,644	448,054
Total Intangible Assets
Intangible Assets, Gross (Excluding Goodwill), Total	2,147,777	976,911
Accumulated Amortization	(631,783)	(516,507)
Net	1,515,994	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	1,328,056	440,200
Accumulated Amortization	(295,263)	(187,350)
Finite lived assets, net	$ 1,032,793	252,850
Amortization Life and Method
Useful life	12 years
Total Intangible Assets
Accumulated Amortization	$ (295,263)	$ (187,350)
Customer contracts and lists \| Minimum
Amortization Life and Method
Useful life	4 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	$ 289,173	$ 216,041
Accumulated Amortization	(114,923)	(118,006)
Finite lived assets, net	$ 174,250	98,035
Amortization Life and Method
Useful life	10 years
Total Intangible Assets
Accumulated Amortization	$ (114,923)	$ (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	$ 210,300	$ 161,700
Accumulated Amortization	(126,157)	(122,230)
Finite lived assets, net	$ 84,143	39,470
Amortization Life and Method
Useful life	10 years
Total Intangible Assets
Accumulated Amortization	$ (126,157)	$ (122,230)
Customer database \| Minimum
Amortization Life and Method
Useful life	3 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	$ 60,238	$ 65,895
Accumulated Amortization	(56,239)	(60,711)
Finite lived assets, net	$ 3,999	$ 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	$ (56,239)	$ (60,711)
Publisher Networks
Schedule of Finite and Indefinite-lived Intangible Assets
Finite lived assets, gross	140,200
Accumulated Amortization	(1,662)
Finite lived assets, net	138,538
Total Intangible Assets
Accumulated Amortization	$ (1,662)
Publisher Networks \| Minimum
Amortization Life and Method
Useful life	5 years
Publisher Networks \| Maximum
Amortization Life and Method
Useful life	7 years
Tradenames
Schedule of Finite and Indefinite-lived Intangible Assets
Finite lived assets, gross	$ 86,934	58,567
Accumulated Amortization	(29,408)	(15,443)
Finite lived assets, net	$ 57,526	43,124
Amortization Life and Method
Useful life	15 years
Total Intangible Assets
Accumulated Amortization	$ (29,408)	$ (15,443)
Tradenames \| Minimum
Amortization Life and Method
Useful life	2 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	$ 12,335	$ 17,567
Accumulated Amortization	(6,497)	(11,959)
Finite lived assets, net	5,838	5,608
Total Intangible Assets
Accumulated Amortization	$ (6,497)	$ (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	$ 6,891	$ 3,291
Accumulated Amortization	(767)	(375)
Finite lived assets, net	$ 6,124	$ 2,916
Amortization Life and Method
Useful life	10 years	10 years
Total Intangible Assets
Accumulated Amortization	$ (767)	$ (375)
Favorable lease \| Minimum
Amortization Life and Method
Useful life	3 years
Favorable lease \| Maximum
Amortization Life and Method
Useful life	10 years
Noncompete agreements
Schedule of Finite and Indefinite-lived Intangible Assets
Finite lived assets, gross	$ 1,300	1,300
Accumulated Amortization	(867)	(433)
Finite lived assets, net	$ 433	$ 867
Amortization Life and Method
Useful life	3 years	3 years
Total Intangible Assets
Accumulated Amortization	$ (867)	$ (433)

INTANGIBLE ASSETS AND GOODWILL (Details 2) - USD ($) $ in Thousands			12 Months Ended
	Dec. 10, 2014	Jan. 02, 2014	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Intangible assets
Amortization expense			$ 197,800	$ 128,500	$ 90,300
Estimated amortization expense related to intangible assets for the next five years and thereafter
2014			322,682
2015			303,984
2016			261,644
2017			200,738
2018			167,545
2019 & thereafter			247,051
Brand Loyalty
Intangible assets
Acquired intangible assets		$ 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
Conversant
Intangible assets
Acquired intangible assets	$ 755,600
Conversant \| Customer contracts and lists
Intangible assets
Acquired intangible assets	$ 544,000
Weighted average life	7 years 3 months 18 days
Conversant \| Customer relationships
Intangible assets
Acquired intangible assets	$ 63,600
Weighted average life	3 years
Conversant \| Publisher Networks
Intangible assets
Acquired intangible assets	$ 140,200
Weighted average life	5 years 3 months 18 days
Conversant \| Trade names
Intangible assets
Acquired intangible assets	$ 4,200
Weighted average life	1 year 8 months 12 days
Conversant \| Favorable lease
Intangible assets
Acquired intangible assets	$ 3,600
Weighted average life	5 years 4 months 24 days
Credit card portfolio
Intangible assets
Acquired intangible assets			114,100	3,500
Credit card portfolio \| Customer relationships
Intangible assets
Acquired intangible assets			$ 82,500	$ 2,000
Weighted average life			3 years 7 months 6 days	5 years
Credit card portfolio \| Marketing relationships
Intangible assets
Acquired intangible assets			$ 31,600	$ 1,500
Weighted average life			6 years 1 month 6 days	9 years 2 months 12 days

INTANGIBLE ASSETS AND GOODWILL (Details 3) - USD ($) $ in Thousands	1 Months Ended		12 Months Ended
	Dec. 31, 2014	Jan. 31, 2014	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Goodwill
Goodwill acquired during year			$ 2,215,314
Goodwill
Beginning Balance		$ 1,735,703	1,735,703	$ 1,751,053
Goodwill acquired during year			2,215,314
Effects of foreign currency translation			(85,533)	(15,350)
Ending Balance	$ 3,865,484		3,865,484	1,735,703	$ 1,751,053
Goodwill impairment			0	0	0
Brand Loyalty
Goodwill
Goodwill acquired during year		565,000
Goodwill
Goodwill acquired during year		565,000
Advecor
Goodwill
Beginning Balance				3,000
Ending Balance					3,000
Conversant
Goodwill
Goodwill acquired during year	1,600,000
Goodwill
Goodwill acquired during year	1,600,000
LoyaltyOne
Goodwill
Goodwill acquired during year			565,015
Goodwill
Beginning Balance		232,449	232,449	248,070
Goodwill acquired during year			565,015
Effects of foreign currency translation			(84,007)	(15,621)
Ending Balance	713,457		713,457	232,449	248,070
Epsilon
Goodwill
Goodwill acquired during year			1,650,299
Goodwill
Beginning Balance		1,241,522	1,241,522	1,241,251
Goodwill acquired during year			1,650,299
Effects of foreign currency translation			(1,526)	271
Ending Balance	2,890,295		2,890,295	1,241,522	1,241,251
Private Label Services and Credit
Goodwill
Beginning Balance		$ 261,732	261,732	261,732
Ending Balance	$ 261,732		$ 261,732	$ 261,732	$ 261,732

ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Dec. 31, 2014	Dec. 31, 2013
ACCRUED EXPENSES
Accrued payroll and benefits	$ 182,148	$ 137,982
Accrued taxes	34,461	18,178
Accrued other liabilities	240,863	106,147
Accrued expenses	$ 457,472	$ 262,307

DERIVATIVE INSTRUMENTS (Details) $ in Thousands	Dec. 31, 2014 USD ($)
Designated as hedging instrument \| Foreign currency exchange hedges \| Other current assets
Notional amount, fair value and classification of the company's outstanding derivative contracts
Notional Amount	$ 50,908
Fair value	3,528
Not designated as hedging instrument \| Foreign currency exchange hedges \| Other current assets
Notional amount, fair value and classification of the company's outstanding derivative contracts
Notional Amount	3,125
Fair Value	343
Not designated as hedging instrument \| Foreign currency exchange forward contract \| Other current liabilities
Notional amount, fair value and classification of the company's outstanding derivative contracts
Notional Amount	236,578
Fair Value	16,990
Not designated as hedging instrument \| Interest rate derivatives \| Other current liabilities
Notional amount, fair value and classification of the company's outstanding derivative contracts
Notional Amount	79,429
Fair Value	$ 330

DERIVATIVE INSTRUMENTS (Details 2) - USD ($) $ in Thousands	12 Months Ended
DERIVATIVE INSTRUMENTS (Details 2) - USD ($) $ in Thousands	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Activity related to company's outstanding derivative contracts and location
Gains related to foreign exchange hedges designated as effective	$ 2,350
Reclassifications out of accumulated other comprehensive income (loss) into net income	300
Forecast
Activity related to company's outstanding derivative contracts and location
Reclassification from accumulated other comprehensive income	2,400
Foreign currency exchange forward contract \| General and administrative
Activity related to company's outstanding derivative contracts and location
Gains (losses) on derivative instruments	(16,990)
Foreign currency exchange hedges
Activity related to company's outstanding derivative contracts and location
Gains related to foreign exchange hedges designated as effective	2,400
Foreign currency exchange hedges \| Cost of operations
Activity related to company's outstanding derivative contracts and location
Gains (losses) on derivative instruments	257
Interest rate derivatives \| Interest expense
Activity related to company's outstanding derivative contracts and location
Gains (losses) on derivative instruments	$ 297
Interest rate derivatives \| Securitization funding costs
Activity related to company's outstanding derivative contracts and location
Gains (losses) on derivative instruments		$ 8,511	$ 29,592

DEFERRED REVENUE (Details) - USD ($) $ in Thousands	12 Months Ended
DEFERRED REVENUE (Details) - USD ($) $ in Thousands	Dec. 31, 2014	Dec. 31, 2013
Movement in deferred revenue
Beginning balance	$ 1,137,186	$ 1,249,061
Cash proceeds	656,507	732,209
Revenue recognized	(684,405)	(762,878)
Other	85	276
Effects of foreign currency translation	(96,196)	(81,482)
Ending balance	1,013,177	1,137,186
Amounts recognized in the consolidated balance sheets:
Current liabilities	846,370	966,438
Non-current liabilities	166,807	170,748
Service
Movement in deferred revenue
Beginning balance	346,631	380,013
Cash proceeds	219,124	203,735
Revenue recognized	(202,828)	(212,301)
Effects of foreign currency translation	(30,559)	(24,816)
Ending balance	332,368	346,631
Amounts recognized in the consolidated balance sheets:
Current liabilities	165,561
Non-current liabilities	166,807
Redemption
Movement in deferred revenue
Beginning balance	790,555	869,048
Cash proceeds	437,383	528,474
Revenue recognized	(481,577)	(550,577)
Other	85	276
Effects of foreign currency translation	(65,637)	(56,666)
Ending balance	680,809	$ 790,555
Amounts recognized in the consolidated balance sheets:
Current liabilities	$ 680,809

COMMITMENTS AND CONTINGENCIES (Details 2) item in Millions	Dec. 31, 2014 USD ($) item
Cardholders
Approximate number of cardholders \| item	54.7
Average unused lines of credit per account \| $	$ 1,634
Number of accounts owned by the entity through agreements with one of the clients \| item	11.3
Average unused lines of credit per account owned by the entity through agreements with one of the clients \| $	$ 1,790

STOCKHOLDERS' EQUITY (Details) - USD ($) $ in Millions	12 Months Ended
STOCKHOLDERS' EQUITY (Details) - USD ($) $ in Millions	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Jan. 01, 2015	Dec. 05, 2013	Jan. 02, 2013	Dec. 13, 2011	Jul. 01, 2010
Stock Repurchase Programs
Amount of company's outstanding common stock authorized to be repurchased				$ 600.0	$ 400.0	$ 400.0	$ 400.0
Stock acquired (in shares)	1,100,000	1,400,000	1,000,000
Total cost of shares repurchased	$ 286.6	$ 231.1	$ 137.4
Unused balance under stock repurchase program	$ 113.4
2010 Omnibus Incentive Plan
Stock Compensation Plans
Shares of common stock reserved for grant								3,000,000

STOCKHOLDERS' EQUITY (Details 2) - USD ($) $ in Thousands	12 Months Ended
STOCKHOLDERS' EQUITY (Details 2) - USD ($) $ in Thousands	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Stock-based compensation expense	$ 72,462	$ 59,183	$ 50,497
Forfeiture rate (as a percent)	5.00%	5.00%	5.00%
Unrecognized expenses	$ 112,700
Approximate weighted average period for recognizing expenses	1 year 10 months 24 days
Cost of operations
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Stock-based compensation expense	$ 50,790	$ 40,264	$ 32,654
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Stock-based compensation expense	$ 21,672	$ 18,919	$ 17,843

FINANCIAL INSTRUMENTS (Details 2) - USD ($) $ in Thousands	Dec. 31, 2014	Dec. 31, 2013
Assets disclosed at fair value
Cash collateral, restricted	$ 22,511	$ 34,124
Other investments	217,583	99,221
Total assets measured at fair value	11,875,921	9,101,617
Liabilities disclosed at fair value
Total liabilities measured at fair value	14,254,237	11,859,057
Level 1
Assets disclosed at fair value
Total assets measured at fair value	1,077,152	969,822
Level 2
Liabilities disclosed at fair value
Total liabilities measured at fair value	14,254,237	11,859,057
Level 3
Assets disclosed at fair value
Total assets measured at fair value	10,798,769	8,131,795
Recurring
Assets disclosed at fair value
Government bonds	283,213
Corporate bonds		436,365
Cash collateral, restricted	22,511	34,124
Other investments	217,583	99,221
Derivative instruments	3,871
Total assets measured at fair value	527,178	569,710
Liabilities disclosed at fair value
Derivative instruments	17,290
Contingent consideration	326,023
Total liabilities measured at fair value	343,313
Recurring \| Level 1
Assets disclosed at fair value
Other investments	127,764	30,888
Total assets measured at fair value	127,764	30,888
Recurring \| Level 2
Assets disclosed at fair value
Government bonds	283,213
Corporate bonds		436,365
Other investments	89,819	68,333
Derivative instruments	3,871
Total assets measured at fair value	376,903	504,698
Liabilities disclosed at fair value
Derivative instruments	17,290
Total liabilities measured at fair value	17,290
Recurring \| Level 3
Assets disclosed at fair value
Cash collateral, restricted	22,511	34,124
Total assets measured at fair value	22,511	$ 34,124
Liabilities disclosed at fair value
Contingent consideration	326,023
Total liabilities measured at fair value	$ 326,023

SEGMENT INFORMATION (Details 2) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
SEGMENT INFORMATION (Details 2) - USD ($) $ in Thousands	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Information concerning principal geographic areas
Revenues	$ 1,485,749	$ 1,319,133	$ 1,265,158	$ 1,232,900	$ 1,141,087	$ 1,096,447	$ 1,028,092	$ 1,053,437	$ 5,302,940	$ 4,319,063	$ 3,641,390
Long-lived assets	6,449,201				2,843,415				6,449,201	2,843,415
United States
Information concerning principal geographic areas
Revenues									3,867,013	3,327,688	2,655,506
Long-lived assets	5,295,776				2,371,054				5,295,776	2,371,054
Canada
Information concerning principal geographic areas
Revenues									851,641	906,459	913,188
Long-lived assets	282,663				313,891				282,663	313,891
EMEA
Information concerning principal geographic areas
Revenues									463,299	80,280	67,384
Long-lived assets	865,961				$ 158,470				865,961	158,470
Asia Pacific
Information concerning principal geographic areas
Revenues									101,245	4,636	5,312
Long-lived assets	4,666								4,666
Other
Information concerning principal geographic areas
Revenues									19,742
Long-lived assets	$ 135								135
Parent company
Information concerning principal geographic areas
Revenues									$ 204,429	$ 78,609	$ 475,219

NON-CASH FINANCING AND INVESTING ACTIVITIES (Details) $ in Thousands, € in Millions, shares in Millions		1 Months Ended	12 Months Ended
	Dec. 10, 2014 USD ($) shares	Dec. 31, 2012 USD ($) shares	Dec. 31, 2014 USD ($) shares	Jan. 02, 2014 EUR (€)	Jan. 02, 2014 USD ($)
Treasury shares purchased (in shares) \| shares		0.1
Treasury shares purchased		$ 11,600
Contingent liability			$ 326,023
Brand Loyalty
Business Acquisition, Ownership Interest Acquired			60.00%	60.00%	60.00%
Long term debt assumed on acquisition					$ 126,323
Contingent liability				€ 181.9	248,700
Conversant
Business Acquisition, Ownership Interest Acquired	100.00%
Equity consideration	$ 1,300,000		$ 1,300,000
Equity consideration (in shares) \| shares	4.6		4.6
Number of consecutive trading days used to determine weighted average value per share	15 days
Number of days preceeding the day of closing the merger, on which the calculation days for weighted average value shall close	2 days
Secured Debt \| Brand Loyalty
Long term debt assumed on acquisition				56.8	77,600
Revolving Facility \| Brand Loyalty
Long term debt assumed on acquisition				€ 60.6	$ 82,900