SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549


FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported):
March 1, 2017

ALLIANCE DATA SYSTEMS CORPORATION
(Exact Name of Registrant as Specified in Charter)



DELAWARE
 
001-15749
 
31-1429215
(State or Other Jurisdiction
 
(Commission
 
(IRS Employer
of Incorporation)
 
File Number)
 
Identification No.)



7500 DALLAS PARKWAY, SUITE 700
PLANO, TEXAS 75024
(Address and Zip Code of Principal Executive Offices)

(214) 494-3000
(Registrant's Telephone Number, including Area Code)

NOT APPLICABLE
(Former name or former address, if changed since last report)



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

[     ]
 
Written communications pursuant to Rule 425 under the Securities Act
     
[     ]
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
     
[     ]
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
     
[     ]
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act




ITEM 7.01. Regulation FD Disclosure

Attached as Exhibit 99.1 is a presentation to be given to investors and others by senior officers of Alliance Data Systems Corporation. The presentation will first be presented at the Raymond James 38th Annual Institutional Investors Conference at the JW Marriott Grande Lakes Hotel in Orlando, FL on Monday, March 6, 2017.


ITEM 9.01. Financial Statements and Exhibits

(d) Exhibits

Exhibit No.
 
Document Description
     
99.1
 
Investor Presentation Materials.

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



SIGNATURES

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


 
Alliance Data Systems Corporation
       
Date: March 1, 2017
By:
 
/s/ Charles L. Horn
     
Charles L. Horn
     
Executive Vice President and
     
Chief Financial Officer



EXHIBIT INDEX



Exhibit No.
 
Document Description
     
99.1
 
Investor Presentation Materials.

 


 Alliance Data - Who Are We and What Do We Do? - Outlook  Investor Presentation2017  Exhibit 99.1 
 

 2  Marketplace Challenge Today: How to reach the end consumer effectively?Audience fragmentation → traditional channels less effectiveInformation overload → consumers only want what’s relevant to themRise of online → pricing pressure forcing ROI measurement on marketing spendMassive shift from General Marketing spend to Direct (“data driven”) spend.      2009: $350BN  2020e: $650BN  50%Traditional  50% Direct      Today, effective marketing must be:Personalized (1-1)Delivered over the appropriate channel (mobile, email, POS, direct mail)Measurable 
 

 Build Customer Loyalty PlatformsUse Unique Data: SKU (requires client permission)Link SKU with ConsumerAdd Demographic/Psychographic Data  3  Who are we and what do we do?         
 

 On September 14th Mary Smith spent $60 at Ann Taylor Loft, Store #128  She bought a blue dress, size 10 (SKU)Dress was 20 percent offMary is upper middle incomeTends to buy complete wardrobesLooks for value (i.e., sales)Mom who works > busy  Example:  4  Who are we and what do we do? 
 

 Use Data/Insights to Create Specialized Offers ⌵On September 15thMobile offer to MaryShoes & belt would work nicely with dressClick & buy now > 20 percent off sale⌵  We use data to gain insights which drive sales & loyalty for our clients  5  Who are we and what do we do?  “Rinse and repeat” millions of times   
 

 AIR MILES®Coalition loyalty (Canada)  6. Different Platforms/Same Model  6  Card Services Loyalty program with credit component  Epsilon®Single client programs   BrandLoyalty® Grocer loyalty specialist (Int’l)  Who are we and what do we do?    LoyaltyOne® 
 

 Growth CompanyLong track record of consistent performanceStrong free cash flow generationHistory of returning capital (buybacks and recently added dividend)  7  Financial Results  Since IPO in 2001 @ $12/share  Financial Model   Revenue  Includes: 1. network & processing 2. credit 3. US domiciled customer care 4. data-driven marketing - digital & traditional - 500 person “mini-Epsilon”  100%In-house  51%Card Services  19% LoyaltyOne(BrandLoyalty,AIR MILES)  30%Epsilon (Epsilon,Conversant®)      2001  2017e   CAGR  Revenue (mm)  $ 770  $ 7,700  15%  Core EPS  $ 0.52  $ 18.50  25% 
 

 Outlook - LoyaltyOne  Long-term significant contributorCombo organic/M&A2016:BrandLoyalty: strong yearCanada: new law passed by Ontario Parliament upended business modelOne-time charge, pull forward of revenue → lots of noise2017:BrandLoyalty: 10% revenue/adjusted EBITDACanada: revenue flat at $760 million v. 2016 (excluding 1x charge and revenue pull forward) Adjusted EBITDA ↓ $20 million – mid-20 percent margin fully recovered by 2nd half2018: +7% growth  8  (MM)  2007  2017e   CAGR  Revenue   $ 630  $ 1,450  9%  Adjusted EBITDA  $ 132  $ 300  10% 
 

 Outlook- Epsilon  Long-term significant contributorCombination of organic/M&A2016: Disappointing year (revenue flat, adjusted EBITDA declined)Technology Platform business (26% of Epsilon) dragged down growthPrice point too high, time to market too slow2017: Return to modest growth (+4% revenue/adjusted EBITDA)Technology Platform businessPrice point fixed via large office in IndiaTime to market: fixed by mid-yearDecline → flat by second halfRemaining 80% of Epsilon → 6-7% growth2018: +7% growth  9  (MM)  2007  2017e   CAGR  Revenue   $ 460  $ 2,240  17%  Adjusted EBITDA  $ 118  $ 500  16% 
 

 Outlook – Card Services  Riding secular trend favoring SKU-driven Private Label programs2016:Double-digit revenue & adjusted EBITDA, netIncluded absorbing $165 million drag from credit losses “normalizing” Cut 12 points off of core EPS growth2017:Strong growth to continue: double-digit revenue & adjusted EBITDA, netIncludes absorbing the final leg of losses normalizing Cuts 12 points off of core EPS growthDelinquencies (best predictor of losses) flatten out v 20162018:Strong business growth + flat loss rate → slingshot to earning’s growth  10 
 

 Outlook - Consolidated  Tracking to ‘17 guidance: $7.7BN revenue, $18.50 core EPS1st half muted -Retool AIR MILES modelComplete Technology Platform product at EpsilonProgress on Card Services’ wedge narrowing2nd half –Acceleration begins2018: all businesses at full run rate + transition from increasing credit loss provision to flat loss dynamic “slingshot” (i.e., double growth rate or more) through 2018  11       
 

 Forward Looking Statements  12  This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give our expectations or forecasts of future events and can generally be identified by the use of words such as “believe,” “expect,” “anticipate,” “estimate,” “intend,” “project,” “plan,” “likely,” “may,” “should” or other words or phrases of similar import. Similarly, statements that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements we make regarding our expected operating results, future economic conditions including currency exchange rates, future dividend declarations and the guidance we give with respect to our anticipated financial performance. We believe that our expectations are based on reasonable assumptions. Forward-looking statements, however, are subject to a number of risks and uncertainties that could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this presentation, and no assurances can be given that our expectations will prove to have been correct. These risks and uncertainties include, but are not limited to, factors set forth in the Risk Factors section in our Annual Report on Form 10-K for the most recently ended fiscal year, which may be updated in item 1A of, or elsewhere in, our Quarterly Reports on Form 10-Q filed for periods subsequent to such Form 10-K.  Our forward-looking statements speak only as of the date made, and we undertake no obligation, other than as required by applicable law, to update or revise any forward-looking statements, whether as a result of new information, subsequent events, anticipated or unanticipated circumstances or otherwise. 
 

 13  Financial Measures  In addition to the results presented in accordance with generally accepted accounting principles, or GAAP, the Company may present financial measures that are non-GAAP measures, such as constant currency financial measures, adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA, net of funding costs and non-controlling interest, core earnings and core earnings per diluted share (core EPS). Constant currency excludes the impact of fluctuations in foreign exchange rates. The Company calculates constant currency by converting our current period local currency financial results using the prior period exchange rates. The Company uses adjusted EBITDA and adjusted EBITDA, net as an integral part of internal reporting to measure the performance and operational strength of reportable segments and to evaluate the performance of senior management. Adjusted EBITDA eliminates the uneven effect across all reportable segments of non-cash depreciation of tangible assets and amortization of intangible assets, including certain intangible assets that were recognized in business combinations, and the non-cash effect of stock compensation expense. Similarly, core earnings and core EPS eliminate non-cash or non-operating items, including, but not limited to, stock compensation expense, amortization of purchased intangibles, amortization of debt issuance costs, mark-to-market gains or losses on interest rate derivatives, changes to the expiry policy and regulatory settlements. The Company believes that these non-GAAP financial measures, viewed in addition to and not in lieu of the Company’s reported GAAP results, provide useful information to investors regarding the Company’s performance and overall results of operations. Reconciliations to comparable GAAP financial measures are available in the Company’s earnings release, which is posted in both the News and Investors sections on the Company’s website (www.alliancedata.com). The financial measures presented are consistent with the Company’s historical financial reporting practices. Core earnings and core EPS represent performance measures and are not intended to represent liquidity measures. The non-GAAP financial measures presented herein may not be comparable to similarly titled measures presented by other companies, and are not identical to corresponding measures used in other various agreements or public filings.