Alliance Data : Q2 2021 Slide Presentation

Alliance Data

Second Quarter 2021 Results

Ralph Andretta

President & CEO

Perry Beberman

EVP & CFO

July 29, 2021

© 2021 ADS Alliance Data Systems, Inc.

Forward-Looking Statements

This release 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, and the guidance we give with respect to, our anticipated operating or financial results, initiation or completion of strategic initiatives including the proposed spinoff of our LoyaltyOne segment, future dividend declarations, and future economic conditions, including, but not limited to, fluctuation in currency exchange rates, market conditions and COVID-19 impacts related to relief measures for impacted borrowers and depositors, labor shortages due to quarantine, reduction in demand from clients, supply chain disruption for our reward suppliers and disruptions in the airline or travel industries.

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 release, 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.

© 2021 ADS Alliance Data Systems, Inc.

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Second Quarter 2021 Key Takeaways

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Continued progress on strategic initiatives
	• Bread's strategic relationship with Fiserv active as of June 30
	• New partner signings, renewals, and strong pipeline
	• Modernization and efficiency initiatives on schedule

2	Inflection point for receivables growth
•	Credit sales returned to pre-pandemic levels
	• Improving consumer confidence and mobility
	•	Closely monitoring COVID conditions

3	Credit performance remains strong
•	Reflective of disciplined risk management
	•	Payment rates remain elevated benefiting from economic stimulus

© 2021 ADS Alliance Data Systems, Inc.

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Second Quarter 2021 Financial Highlights

$1.0B $273MM $5.47

Revenue

Net Income

Diluted EPS

• Revenue increased 3% year-over-year, while total expenses excluding provision for loan loss declined 4%
• Net Income of $273 million includes a net reserve release of $208 million
• Credit sales of $7.4 billion were up 54% year-over-year and up 22% compared to 1Q21
• Average receivables were down 5% year-over-year
• Credit metrics remained strong with a net loss rate of 5.1% for the quarter

Strategic Initiatives Update

Bread Distribution Relationship with Fiserv

• Launch of Bread / Fiserv strategic relationship

Enhanced Digital Suite (EDS) & Unified Software Development Kit (SDK)

• Accelerating integration with brand partners

Core Processing & Statement Processing Conversions

• Successfully transitioned statement processing in 2Q21
• Expected completion of core processing conversion to Fiserv in 2022

Proprietary Brand Card

• Exceeded 1 million cardholder activations
• Opportunity to increase cardholder acquisition in 2022

Balance Sheet Management

• Completed ADS debt refinancing / extension
• Spin expected to be completed in 4Q21

© 2021 ADS Alliance Data Systems, Inc.

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