Laura BoyetteTrinity RogersAlexis Williams

Sierra BrownChasity YoungBarbara Smith

THE COMPANY Public company that began as a merger in 1996

CEO/President - Ed Heffernan

Headquartered in Plano, Texas – serving the U.S. & Canada

3 subsidiaries – Private Label Services & Credit, Epsilon, LoyaltyOne

Since 1998 – Alliance Data & their subsidiaries have acquired 14 companies

CURRENT STATUS VALUATION MEASURESMarket Cap $13.21

BEnterprise Value $31.24

BTrailing P/E 24.17Forward P/E 12.22PEG Ratio 1.15Price/Sales 1.87Price/Book 7.41Enterprise Value/Revenue

4.43

Enterprise Value/EBDITDA

18.69

STOCK PRICE HISTORYBeta 1.81

52 Week Change -19.11%

S&P 500 52 Week Change

5.83%

52 Week High 290.30

52 Week Low 176.62

50 Day Moving Average

210.55

200 Day Moving Average

211.57

PROFITABILITY

Profit Margin 9.62%Operating Margin

17.79%

WHAT THEY DO

LoyaltyOne• AIR MILES Reward

Program• Short-term Loyalty

Programs• Loyalty Services

• Consulting • Customer analytics• Creative services• Mobile solutions

EpsilonMarketing Services• Agency services• Database design &

management• Data services• Analytical services• Tradition & digital

marketing

Private Label Services & Credit

Receivables Financing • Underwriting & risk

management• Receivables funding Processing Servicing• New account processing• Bill processing• Remittance processing• Customer careMarketing Services

VISION Making data actionable Doing good things that matter Using technology to save lives Strengthening their clients’ brands

1,946,341

2,791,421 3,173,287

3,641,390

4,319,063

5,302,940

6,439,746

Revenue Growth

2009 2010 2011 2012 2013 2104 2015

Transaction5% Re-

demption16%

Finance charges

45%

Market-ing ser-

vices31%

Other revenue 3%

Sources of revenueREVENUE

EXPENSES & INCOME Increase in operating expenses

each year due to: Stock compensation Acquisitions Credit sales Payroll & benefits

Increase in net income each year:

2009 2010 2011 2012 2013 2014 2015$0.00

$1,000,000.00

$2,000,000.00

$3,000,000.00

$4,000,000.00

$5,000,000.00

$6,000,000.00

$7,000,000.00

$8,000,000.00

Income vs Expenses

Total operating expenses Operating income Total interest expense, netNet income

ASSETS, LIABILITIES & SHAREHOLDER’S EQUITY

50%46%

4%

Total Assets Total LiabilitiesTotal Stockholders Equity

Assets:• Credit Card Receivables• Understated

Debt• accumulated by the borrowing of

money to fund operations• Understated

Stockholder’s Equity• Retained earnings & additional

paid-in-capital• Understated

CASH FLOWSHow much cash went into and out of a company during a specific time

Very important to investorsYear ending 2015 - Net Cash from:

Operating activities: $1,705,841 Investing activities: - $3,362,448 Financing activities: $1,772,901

IMPORTANT RATIOS

Ratio 2009 2010 2011 2012 2013 2014 2015Current ratio 1.1077 1.5871 1.7138 1.8145 2.3187 2.1909 2.5369Quick ratio 0.2059 0.1036 0.1341 0.2510 0.3024 0.2887 0.2926Cash ratio 0.1002 0.0360 0.0561 0.1775 0.2149 0.1708 0.1823Debt-to-equity ratio 6.5341 80.9570 12.4084 5.4019 3.2723 1.7565 2.5186Accounts payable turnover 13.0342 12.6820 12.0943 9.7768 12.1377 7.0640 8.6220AR turnover 8.7220 10.6973 10.5462 9.8387 10.9394 7.1344 9.1150

• Current ratio steadily increases• Quick and cash ratios fluctuates over the 7 years • Debt-to-Equity is high from 2009-2011 and then decreases until 2015

• Highest in 2010 at 80.0%• Account payable turnover stays between 7% and 13%• Accounts receivables turnover stays between 7% and 10%

GROWTH

2010 2011 2012 2013 2014 20150.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

Earnings growth Sales growth Assets growth

ROE & ROA

2009 2010 2011 2012 2013 2014 2015

52.69%

838.85%

179.17%

79.90%57.98%

19.61%27.80%

35.76%

30.45%

45.64%

45.74%48.70%

33.11%35.10%

ROE ROA

• High return on equity• CEO, Ed Heffernan does a

good job at utilizing the equity

• Increasing return on assets• Using less assets for

greater return

FORECASTED FUTURE SALES

2017 2018 2019 2020 2021 2022

SALES12,365,515 13,973,032 15,649,796 17,371,274 19,108,401 20,828,157

NET INCOME 721,701 814,125 910,255 1,008,646 1,107,599 1,205,200EQUITY

3,433,174 3,845,155 4,268,122 4,694,934 5,117,478 5,526,876ASSETS

9,536,594 10,680,986 11,855,894 13,041,484 14,215,217 15,352,435CAPITAL

9,536,594 10,680,986 11,855,894 13,041,484 14,215,217 15,352,435

• Increases in:• Sales• Net Income• Equity• Assets• Capital

CONCLUSIONGood company to invest in

Programs and services they offer is exiting for investmentGrowth will continue to increaseRevenue will also continue to increaseCredit cards in high demandOur company dominates the industry