Alliance Data Systems (ADS) Provides Sept. Update on Card Services Performance

For the

month ended

September 30, 2017

For the nine

months ended

September 30, 2017

(dollars in thousands)

Average receivables

$

16,005,018

$

15,791,723

Year over year change in average receivables

12%

15%

Net charge-offs

$

54,395

$

711,512

Net charge-offs as a percentage of average receivables(1)(2)

4.1%

6.0%

(1)

Gross loss rates are tracking slightly better than Management's expectations of an approximate 50 basis point increase for full year 2017 as compared to 2016. In the first half of 2017, gross loss rates increased approximately 75 basis points, which narrowed to essentially flat in the third quarter, and which are expected to improve in the fourth quarter, all as compared to the prior year.

Net loss rates were 6.3% in the first quarter, 6.2% in the second quarter, 5.5% in the third quarter, and are expected to be below 6% in the fourth quarter. Net loss rates are consistent with the Company's full year 2017 and 2018 consolidated guidance as provided in the Company's second quarter earnings release issued July 20, 2017.

(2)

Compares to 4.7% and 5.0% for the month and nine months ended September 30, 2016, respectively.

(1)

The delinquency rate as of September 30, 2017 was slightly elevated from Management's expectations due to assistance provided for cardholders in FEMA-designated disaster areas from recent hurricanes. Management expects this negative impact to dissipate in the fourth quarter.