UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________

FORM 10-Q

(Mark One)

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

	For the quarterly period ended ~~September 30, 2015~~March 31, 2016

OR

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

	For the transition period from to

Commission File Number: 001-15749

________________

ALLIANCE DATA SYSTEMS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	31-1429215
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

7500 Dallas Parkway, Suite 700

Plano, Texas 75024

(Address of principal executive office, including zip code)

(214) 494-3000

(Registrant's telephone number, including area code)

________________

Indicate by check mark whether the registrant: (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes R No £

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes R No £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

	Large accelerated filer R	Accelerated filer £
	Non-accelerated filer £ (Do not check if a smaller reporting company)	Smaller reporting company £

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes £ No R

As of ~~October 31, 2015, 61,138,307~~April 29, 2016, 58,939,771 shares of common stock were outstanding.

ALLIANCE DATA SYSTEMS CORPORATION

INDEX

		Page Number
Part I: FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014~~2015	3
	Condensed Consolidated Statements of Income for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2016 and 2015 ~~and 2014~~	4
	Condensed Consolidated Statements of Comprehensive Income for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2016 and 2015 ~~and 2014~~	5
	Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2016 and 2015 ~~and 2014~~	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3430
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4839
Item 4.	Controls and Procedures	4839
Part II: OTHER INFORMATION
Item 1.	Legal Proceedings	4940
Item 1A.	Risk Factors	4940
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5242
Item 3.	Defaults Upon Senior Securities	5242
Item 4.	Mine Safety Disclosures	5242
Item 5.	Other Information	5242
Item 6.	Exhibits	5343
SIGNATURES		5545

Index

PART I

Item 1.

Financial Statements.

ALLIANCE DATA SYSTEMS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,
2015

December 31,
2014

(In thousands, except per share amounts)
ASSETS
Cash and cash equivalents
$ 977,341 $ 1,077,152
Trade receivables, less allowance for doubtful accounts ($3,643 and $3,811 at September 30, 2015 and December 31, 2014, respectively) 642,681 743,294
Credit card and loan receivables:
Credit card receivables – restricted for securitization investors
8,589,282 8,312,291
Other credit card and loan receivables
3,210,737 2,931,589
Total credit card and loan receivables
11,800,019 11,243,880
Allowance for loan loss
(671,246 ) (570,171 )
Credit card and loan receivables, net
11,128,773 10,673,709
Credit card and loan receivables held for sale
98,709 125,060
Deferred tax asset, net
237,723 218,872
Other current assets
544,069 456,349
Redemption settlement assets, restricted
468,417 520,340
Total current assets
14,097,713 13,814,776
Property and equipment, net
561,300 559,628
Deferred tax asset, net
841 164
Cash collateral, restricted
4,888 22,511
Intangible assets, net
1,268,627 1,515,994
Goodwill
3,835,419 3,865,484
Other non-current assets
531,886 485,420
Total assets
$ 20,300,674 $ 20,263,977
LIABILITIES AND EQUITY
Accounts payable
$ 382,220 $ 455,656
Accrued expenses
395,467 457,472
Contingent consideration
— 326,023
Deposits
2,589,313 2,645,995
Non-recourse borrowings of consolidated securitization entities
1,230,000 1,058,750
Current debt
389,146 208,164
Other current liabilities
280,720 306,123
Deferred revenue
703,774 846,370
Deferred tax liability, net
1,719 930
Total current liabilities
5,972,359 6,305,483
Deferred revenue
148,443 166,807
Deferred tax liability, net
642,069 690,175
Deposits
2,633,109 2,127,546
Non-recourse borrowings of consolidated securitization entities
3,743,166 4,133,166
Long-term and other debt
4,710,032 4,001,082
Other liabilities
266,764 207,772
Total liabilities
18,115,942 17,632,031
Commitments and contingencies (Note 12)
Redeemable non-controlling interest
236,847 235,566
Stockholders' equity:
Common stock, $0.01 par value; authorized, 200,000 shares; issued, 112,072 shares and 111,686 shares at September 30, 2015 and December 31, 2014, respectively 1,121 1,117
Additional paid-in capital
2,956,814 2,905,563
Treasury stock, at cost, 50,949 shares and 47,874 shares at September 30, 2015 and December 31, 2014, respectively (3,840,253 ) (2,975,795 )
Retained earnings
2,948,081 2,540,948
Accumulated other comprehensive loss
(117,878 ) (75,453 )
Total stockholders' equity
1,947,885 2,396,380
Total liabilities and equity
$ 20,300,674 $ 20,263,977

~~See accompanying notes to unaudited condensed consolidated financial statements.~~


	March 31, 2016			December 31, 2015
	(In millions, except per share amounts)
ASSETS
Cash and cash equivalents	$	970.0		$	1,168.0
Trade receivables, less allowance for doubtful accounts ($7.5 and $4.0 at March 31, 2016 and December 31, 2015, respectively)		595.8			706.5
Credit card and loan receivables:
Credit card receivables – restricted for securitization investors		9,509.3			10,592.4
Other credit card and loan receivables		3,980.8			3,207.1
Total credit card and loan receivables		13,490.1			13,799.5
Allowance for loan loss		(727.2	)		(741.6	)
Credit card and loan receivables, net		12,762.9			13,057.9
Credit card and loan receivables held for sale		507.4			95.5
Deferred tax asset, net		—			288.1
Inventories, net		240.1			228.0
Other current assets		658.8			249.8
Redemption settlement assets, restricted		495.2			456.6
Total current assets		16,230.2			16,250.4
Property and equipment, net		574.8			576.7
Deferred tax asset, net		2.0			0.6
Intangible assets, net		1,187.4			1,203.7
Goodwill		3,847.6			3,814.1
Other non-current assets		557.1			504.4
Total assets	$	22,399.1		$	22,349.9
LIABILITIES AND EQUITY
Accounts payable	$	404.0		$	442.4
Accrued expenses		323.3			566.5
Current portion of deposits		3,149.0			2,980.3
Current portion of non-recourse borrowings of consolidated securitization entities		1,389.8			1,049.3
Current portion of long-term and other debt		373.2			369.4
Other current liabilities		290.4			294.5
Deferred revenue		713.4			699.0
Deferred tax liability, net		—			1.7
Total current liabilities		6,643.1			6,403.1
Deferred revenue		151.5			145.9
Deferred tax liability, net		347.0			631.5
Deposits		2,933.6			2,625.6
Non-recourse borrowings of consolidated securitization entities		4,934.3			5,433.4
Long-term and other debt		5,151.0			4,648.0
Other liabilities		305.0			285.0
Total liabilities		20,465.5			20,172.5
Commitments and contingencies (Note 11)
Redeemable non-controlling interest		192.4			167.4
Stockholders' equity:
Common stock, $0.01 par value; authorized, 200.0 shares; issued, 112.3 shares and 112.1 shares at March 31, 2016 and December 31, 2015, respectively		1.1			1.1
Additional paid-in capital		2,975.7			2,981.0
Treasury stock, at cost, 53.3 shares and 51.3 shares at March 31, 2016 and December 31, 2015, respectively		(4,341.1	)		(3,927.3	)
Retained earnings		3,233.7			3,092.5
Accumulated other comprehensive loss		(128.2	)		(137.3	)
Total stockholders' equity		1,741.2			2,010.0
Total liabilities and equity	$	22,399.1		$	22,349.9

~~Index~~

~~ALLIANCE DATA SYSTEMS CORPORATION~~

~~UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME~~

Three Months Ended
September 30,

Nine Months Ended
September 30,

2015 2014 2015 2014
(In thousands, except per share amounts)
Revenues
Transaction
$ 83,126 $ 87,162 $ 263,195 $ 251,390
Redemption
220,922 232,464 747,192 744,658
Finance charges, net
737,918 597,892 2,101,360 1,672,339
Marketing services
498,955 353,525 1,435,520 1,021,813
Other revenue
48,196 48,090 143,625 126,991
Total revenue
1,589,117 1,319,133 4,690,892 3,817,191
Operating expenses
Cost of operations (exclusive of depreciation and amortization disclosed separately below) 901,095 767,415 2,787,501 2,323,210
Provision for loan loss
171,678 114,577    461,944 281,811
General and administrative
40,890 39,169 111,992 101,498
Regulatory settlement
64,563 — 64,563 —
Depreciation and other amortization
36,450 28,070    104,983 79,555
Amortization of purchased intangibles
86,930 48,261    262,131 145,144
Total operating expenses
1,301,606 997,492 3,793,114 2,931,218
Operating income
287,511 321,641    897,778 885,973
Interest expense
Securitization funding costs
23,143 22,763    71,509 67,974
Interest expense on deposits
13,719 9,064    37,099 25,526
Interest expense on long-term and other debt, net
45,236 29,637    132,212 98,643
Total interest expense, net
82,098 61,464    240,820 192,143
Income before income tax
$ 205,413 $ 260,177 $ 656,958 $ 693,830
Provision for income taxes
75,031 95,229 231,705 253,946
Net income
$ 130,382 $ 164,948 $ 425,253 $ 439,884
Less: net income attributable to non-controlling interest
1,952 706    2,927 803
Net income attributable to common stockholders
$ 128,430 $ 164,242 $ 422,326 $ 439,081

Net income attributable to common stockholders per share:
Basic
$ 2.09 $ 2.84 $ 6.55 $ 7.98
Diluted
$ 2.08 $ 2.74 $ 6.51 $ 6.98

Weighted average shares:
Basic
61,430 57,742 62,149 54,998
Diluted
61,796 59,908 62,567 62,887

See accompanying notes to unaudited condensed consolidated financial statements.

Index

ALLIANCE DATA SYSTEMS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

	Three Months Ended March 31,
	2016		2015
	(In millions, except per share amounts)
Revenues
Transaction	$	82.5	$	93.3
Redemption		278.2		308.1
Finance charges, net		808.0		679.5
Marketing services		452.0		471.2
Other revenue		55.4		49.1
Total revenue		1,676.1		1,601.2
Operating expenses
Cost of operations (exclusive of depreciation and amortization disclosed separately below)		1,003.9		990.0
Provision for loan loss		171.9		134.9
General and administrative		27.6		30.2
Depreciation and other amortization		39.8		33.6
Amortization of purchased intangibles		88.6		88.0
Total operating expenses		1,331.8		1,276.7
Operating income		344.3		324.5
Interest expense
Securitization funding costs		30.4		23.8
Interest expense on deposits		17.2		11.7
Interest expense on long-term and other debt, net		51.2		42.5
Total interest expense, net		98.8		78.0
Income before income tax	$	245.5	$	246.5
Provision for income taxes		86.6		81.7
Net income	$	158.9	$	164.8
Less: Net income attributable to non-controlling interest		1.8		2.2
Net income attributable to common stockholders	$	157.1	$	162.6

Net income attributable to common stockholders per share:
Basic	$	2.36	$	2.34
Diluted	$	2.35	$	2.32

Weighted average shares:
Basic		59.8		63.1
Diluted		60.2		63.6

See accompanying notes to unaudited condensed consolidated financial statements.

Index

ALLIANCE DATA SYSTEMS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended
September 30,

Nine Months Ended
September 30,

2015 2014 2015 2014
(In thousands)

Net income
$ 130,382 $ 164,948 $ 425,253 $ 439,884
Other comprehensive income (loss), net of tax:
Net unrealized gain (loss) on securities available-for-sale, net of tax expense (benefit) of $700, $(228), $572 and $688 for the three and nine months ended September 30, 2015 and 2014, respectively 420 (1,991 ) (1,034 ) (1,435 )
Net unrealized gain (loss) on cash flow hedges, net of tax expense (benefit) of $406, $(34), $(510) and $(34) for the three and nine months ended September 30, 2015 and 2014, respectively 1,415 (104 ) (1,466 ) (104 )
Foreign currency translation adjustments
4,633 (37,956 ) (39,925 ) (34,480 )
Other comprehensive income (loss)
6,468 (40,051 ) (42,425 ) (36,019 )
Total comprehensive income, net of tax
$ 136,850 $ 124,897 $ 382,828 $ 403,865
Less: comprehensive income attributable to non-controlling interest
2,363 1,251 3,360 1,514
Comprehensive income attributable to common
stockholders
$ 134,487 $ 123,646 $ 379,468 $ 402,351

	Three Months Ended March 31,
	2016			2015
	(In millions)

Net income	$	158.9		$	164.8

Other comprehensive income (loss):
Unrealized gain on securities available-for-sale		3.0			1.4
Tax expense		(1.1	)		(0.5	)
Unrealized gain on securities available-for-sale, net of tax		1.9			0.9

Unrealized loss on cash flow hedges		(3.3	)		(3.2	)
Tax benefit		0.9			0.8
Unrealized loss on cash flow hedges, net of tax		(2.4	)		(2.4	)

Unrealized loss on net investment hedge		(15.6	)		—

Foreign currency translation adjustments		25.2			(62.6	)

Other comprehensive income (loss), net of tax		9.1			(64.1	)

Total comprehensive income, net of tax	$	168.0		$	100.7
Less: Comprehensive income attributable to non-controlling interest		1.2			2.7
Comprehensive income attributable to common stockholders	$	166.8		$	98.0

See accompanying notes to unaudited condensed consolidated financial statements.

Index

ALLIANCE DATA SYSTEMS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

		Nine Months Ended September 30,							Three Months Ended March 31,
		2015			2014				2016			2015
		(In thousands)							(In millions)
CASH FLOWS FROM OPERATING ACTIVITIES:	CASH FLOWS FROM OPERATING ACTIVITIES:							CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	425,253		$	439,884			$	158.9		$	164.8
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:							Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			367,114			224,699				128.4			121.6
Deferred income tax (benefit) expense			(62,807	)		5,320
Deferred income taxes										(2.7	)		(1.6	)
Provision for loan loss			461,944			281,811				171.9			134.9
Non-cash stock compensation ��			73,343			49,754
Amortization of discount on debt			646			12,499
Non-cash stock compensation										19.9			27.5
Amortization of deferred financing costs			23,489			17,092				8.4			7.8
Change in deferred revenue			(34,168	)		(41,537	)			(32.4	)		(28.0	)
Change in contingent consideration			(99,601	)		—
Change in contingent liability										—			(99.6	)
Change in other operating assets and liabilities, net of acquisitions			(82,996	)		21,786				(236.1	)		(98.6	)
Originations of credit card and loan receivables held for sale			(4,569,806	)		(3,645,315	)			(1,623.0	)		(1,373.2	)
Sales of credit card and loan receivables held for sale			4,556,339			3,636,809				1,621.4			1,343.8
Excess tax benefits from stock-based compensation			(22,952	)		(31,888	)
Other			(4,566	)		(2,935	)			42.7			(24.7	)
Net cash provided by operating activities			1,031,232			967,979				257.4			174.7

CASH FLOWS FROM INVESTING ACTIVITIES:	CASH FLOWS FROM INVESTING ACTIVITIES:							CASH FLOWS FROM INVESTING ACTIVITIES:
Change in redemption settlement assets			(16,374	)		(48,906	)			(8.0	)		(12.6	)
Change in cash collateral, restricted			18,000			(1,582	)
Change in restricted cash			(369	)		(316,071	)			(312.2	)		(0.7	)
Change in credit card and loan receivables			(913,803	)		(633,336	)			383.9			401.8
Purchase of credit card portfolios			—			(379,616	)			(755.3	)		—
Proceeds from the sale of a credit card portfolio			26,900			—
Payment for acquired businesses, net of cash			(45,430	)		(259,514	)
Capital expenditures			(140,091	)		(114,595	)			(54.9	)		(42.4	)
Purchases of other investments			(38,772	)		(109,780	)			(3.8	)		(7.8	)
Maturities/sales of other investments			7,981			4,565				3.7			2.2
Other			(1,011	)		(4,000	)			(1.1	)		(3.2	)
Net cash used in investing activities			(1,102,969	)		(1,862,835	)
Net cash (used in) provided by investing activities										(747.7	)		337.3

CASH FLOWS FROM FINANCING ACTIVITIES:	CASH FLOWS FROM FINANCING ACTIVITIES:							CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under debt agreements			2,426,443			1,920,190				1,712.9			1,001.7
Repayments of borrowings			(1,528,890	)		(1,580,796	)			(1,227.2	)		(334.4	)
Proceeds from convertible note hedge counterparties			—			1,519,833
Settlement of convertible note borrowings			—			(1,864,803	)
Payment of acquisition-related contingent consideration			(205,928	)		—				—			(205.9	)
Acquisition of non-controlling interest			(87,376	)		—				(102.0	)		(87.4	)
Issuances of deposits			2,191,885			2,342,836				1,136.9			406.7
Repayments of deposits			(1,743,004	)		(1,431,392	)			(659.5	)		(669.8	)
Non-recourse borrowings of consolidated securitization entities			2,570,000			1,495,000				880.0			305.0
Repayments/maturities of non-recourse borrowings of consolidated securitization entities			(2,788,750	)		(1,635,000	)			(1,040.0	)		(700.0	)
Payment of deferred financing costs			(16,396	)		(24,470	)			(4.3	)		(1.4	)
Excess tax benefits from stock-based compensation			22,952			31,888
Proceeds from issuance of common stock			8,775			10,439
Purchase of treasury shares			(856,855	)		(217,486	)			(408.8	)		(542.6	)
Other			—			(1,476	)			(1.6	)		16.4
Net cash (used in) provided by financing activities			(7,144	)		564,763
Net cash provided by (used in) financing activities										286.4			(811.7	)

Effect of exchange rate changes on cash and cash equivalents			(20,930	)		(4,905	)			5.9			(17.1	)
Change in cash and cash equivalents			(99,811	)		(334,998	)			(198.0	)		(316.8	)
Cash and cash equivalents at beginning of period			1,077,152			969,822				1,168.0			1,077.2
Cash and cash equivalents at end of period		$	977,341		$	634,824			$	970.0		$	760.4

SUPPLEMENTAL CASH FLOW INFORMATION:	SUPPLEMENTAL CASH FLOW INFORMATION:							SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid		$	223,681		$	153,839			$	84.6		$	70.4
Income taxes paid, net		$	225,913		$	147,927			$	112.7		$	21.7

See accompanying notes to unaudited condensed consolidated financial statements.

Index

ALLIANCE DATA SYSTEMS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The unaudited condensed consolidated financial statements included herein have been prepared by Alliance Data Systems Corporation ("ADSC" or, including its consolidated subsidiaries and variable interest entities ("VIEs"), the "Company"), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's Annual Report filed on Form 10-K for the year ended December 31, ~~2014,~~2015, filed with the SEC on February ~~27, 2015.~~25, 2016.

The unaudited condensed consolidated financial statements included herein reflect all adjustments (consisting of normal, recurring adjustments) which are, in the opinion of management, necessary to state fairly the results for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for any subsequent interim period or for the fiscal year.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (1) the reported amounts of assets; (2) liabilities and disclosure of contingent assets and liabilities at the date of the financial statements; and (3) the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

For purposes of comparability, certain prior period amounts have been reclassified to conform to the current year presentation in accordance with GAAP.

Recently Issued Accounting Standards

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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. Companies may adopt ASU 2014-09 using a full retrospective approach or report the cumulative effect as of the date of adoption. On July 9, 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for interim and annual reporting periods beginning after that date and permitted early adoption of the standard, but not before the original effective date of December 15, 2016. The Company is evaluating the impact that adoption of ASU 2014-09 will have on its consolidated financial statements.

~~In February 2015, the FASB issued ASU 2015-02, "Amendments to the Consolidation Analysis," which amends the consolidation requirements in Accounting Standards Codification~~ ~~("ASC")~~ ~~810, "Consolidation." ASU 2015-02 makes targeted amendments to the current consolidation guidance for~~ ~~VIEs~~, which could change consolidation conclusions. ASU 2015-02 is effective for interim and annual periods beginning after December 15, 2015, with early application permitted. The Company does not expect the adoption of this standard to materially impact its consolidated financial statements.

~~In April 2015, the FASB issued ASU 2015-03,~~ "Simplifying the Presentation of Debt Issuance Costs." ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ~~ASU 2015-03 is effective for interim and annual reporting periods beginning after December 15, 2015, with early application permitted.~~ ~~Under ASU 2015-03, unamortized debt issuance costs of $84.9 million would be reclassified from other non-current assets to a reduction of debt as of September 30, 2015.~~

In April 2015, the FASB issued ASU 2015-05, "Customer's Accounting for Fees Paid in a Cloud Computing Arrangement." ASU 2015-05 provides guidance about whether a cloud computing arrangement includes a software license and is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted. The Company does not expect the adoption of this standard to materially impact its consolidated ~~financial statements.~~

~~Index~~

~~ALLIANCE DATA SYSTEMS CORPORATION~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)~~

In July 2015, the FASB issued ASU 2015-11, "Simplifying the Measurement of Inventory." ASU 2015-11 changes the measurement principle for inventory from the lower of cost or market to lower of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. ASU 2015-11 is effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. The Company does not expect the adoption of this standard to materially impact its consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01 requires that equity investments be measured at fair value with changes in fair value recognized in net income. For equity investments without readily determinable fair values, entities have the option to either measure these investments at fair value or at cost adjusted for changes in observable prices minus impairment. Additionally, ASU 2016-01 requires entities that elect the fair value option for financial liabilities to recognize changes in fair value related to instrument-specific credit risk in other comprehensive income. Finally, entities must assess valuation allowances for deferred tax assets related to available-for-sale debt securities in combination with their other deferred tax assets. ASU 2016-01 is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted. The Company is evaluating the impact that adoption of ASU 2016-01 will have on its consolidated financial statements.

Index

ALLIANCE DATA SYSTEMS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)," that replaces existing lease guidance. The new standard is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet. The new guidance will continue to classify leases as either finance or operating, with classification affecting the pattern of expense recognition in the statement of income. ASU 2016-02 is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The new standard is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients. The Company is evaluating the impact that adoption of ASU 2016-02 will have on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting." ASU 2016-09 simplifies certain aspects of share-based transactions, including income taxes consequences, forfeitures, classification of awards as either equity or liabilities and classification in the statement of cash flows. ASU 2016-09 is effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. The Company is evaluating the impact that adoption of ASU 2016-09 will have on its consolidated financial statements.

Recently Adopted Accounting Standards

In February 2015, the FASB issued ASU 2015-02, "Amendments to the Consolidation Analysis," which amended the consolidation requirements in Accounting Standards Codification ("ASC") 810, "Consolidation." ASU 2015-02 makes targeted amendments to the current consolidation guidance for VIEs. ASU 2015-02 is effective for interim and annual periods beginning after December 15, 2015, with retrospective or modified retrospective application allowed. The Company adopted this standard as of January 1, 2016 with modified retrospective application. The adoption of this standard did not have an impact on the Company's consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, "Simplifying the Presentation of Debt Issuance Costs." ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Subsequently, in August 2015, the FASB issued ASU 2015-15, "Imputation of Interest," which adds SEC staff guidance on the presentation of debt issuance costs related to line-of-credit arrangements, allowing for the deferral and presentation of debt issuance costs as an asset and subsequent amortization of the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company maintained the deferral and presentation of these line-of-credit debt issuance costs as an asset. ASU 2015-03 is effective for interim and annual reporting periods beginning after December 15, 2015, with retrospective application required. The Company adopted this standard as of January 1, 2016 with retrospective application. Under ASU 2015-03 and ASU 2015-15, unamortized debt issuance costs of $72.0 million were reclassified from other non-current assets to a reduction of debt as of December 31, 2015 in the consolidated balance sheets.

In April 2015, the FASB issued ASU 2015-05, "Customer's Accounting for Fees Paid in a Cloud Computing Arrangement." ASU 2015-05 provides guidance about whether a cloud computing arrangement includes a software license and is effective for interim and annual reporting periods beginning after December 15, 2015, with retrospective or prospective application allowed. The Company adopted this standard as of January 1, 2016 with prospective application. The adoption of this standard did not have an impact on the Company's consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, "Balance Sheet Classification of Deferred Taxes." ASU 2015-17 requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. ASU 2015-17 is effective for interim and annual periods beginning after December 15, 2016, with retrospective or prospective application allowed and early adoption permitted. The Company's prospective adoption of this standard resulted in a reduction in current deferred tax assets of $288.1 million, a reduction in current deferred tax liabilities of $1.7 million, an increase in non-current deferred tax assets of $0.2 million and a reduction in non-current deferred tax liabilities of $286.2 million as of January 1, 2016. Prior period amounts were not restated.

Index

ALLIANCE DATA SYSTEMS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

2. EARNINGS PER SHARE

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

Three Months Ended
September 30,

Nine Months Ended
September 30,

2015 2014 2015 2014
(In thousands, except per share amounts)
Numerator:

Net income attributable to common stockholders
$ 128,430 $ 164,242 $ 422,326 $ 439,081
Less: accretion of redeemable non-controlling interest
—    —    15,194    —
Net income attributable to common stockholders after accretion of redeemable non-controlling interest $ 128,430 $ 164,242 $ 407,132 $ 439,081
Denominator:

Weighted average shares, basic
61,430    57,742    62,149    54,998
Weighted average effect of dilutive securities:
Shares from assumed conversion of convertible senior notes
—    —    —    2,816
Shares from assumed exercise of convertible note warrants
—    1,664    —    4,561
Net effect of dilutive stock options and unvested restricted stock
366    502    418    512
Denominator for diluted calculations
61,796    59,908    62,567    62,887

Net income attributable to common stockholders per share:
Basic
$ 2.09 $ 2.84 $ 6.55 $ 7.98
Diluted
$ 2.08 $ 2.74 $ 6.51 $ 6.98

~~3. ACQUISITIONS~~

	Three Months Ended March 31,
		2016	2015
	(In millions, except per share amounts)
Numerator:
Net income attributable to common stockholders	$	157.1	$	162.6
Less: Accretion of redeemable non-controlling interest		15.9		15.2
Net income attributable to common stockholders after accretion of redeemable non-controlling interest	$	141.2	$	147.4

Denominator:
Weighted average shares, basic		59.8		63.1
Weighted average effect of dilutive securities:
Net effect of dilutive stock options and unvested restricted stock		0.4		0.5
Denominator for diluted calculations		60.2		63.6

Net income attributable to common stockholders per share:
Basic	$	2.36	$	2.34
Diluted	$	2.35	$	2.32

~~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.~~

~~Index~~

~~ALLIANCE DATA SYSTEMS CORPORATION~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)~~

The following table summarizes the final 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

As part of the initial purchase price allocation, the Company recorded a liability for the earn-out provision included in the BrandLoyalty share purchase agreement of €181.9 million ($248.7 million as of January 2, 2014). The liability was measured at fair value on the date of purchase and subsequent changes in the fair value of the liability were included in operating expenses in the Company's consolidated statements of income. On February 10, 2015, the Company paid €269.9 million ($305.5 million) to settle the contingent liability.

~~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 the acquisition and are reflected in the Company's Epsilon~~^® ~~segment.~~

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 approximately $1.3 billion through the issuance of approximately 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 goodwill recognized is attributable to expected synergies and an assembled workforce. The goodwill resulting from the acquisition is not deductible for tax purposes.

~~Index~~

~~ALLIANCE DATA SYSTEMS CORPORATION~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)~~

In the first quarter of 2015, the Company finalized the purchase price allocation, with no changes from the preliminary purchase price allocation disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2014. 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 following table presents the Company's unaudited pro forma consolidated revenue and net income for the three and nine months ended September 30, 2014. 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.

Three Months Ended
September 30, 2014

Nine Months Ended
September 30, 2014

(In thousands, except per share amounts)
Total revenue
$ 1,457,446 $ 4,238,797
Net income
$ 151,921 $ 411,476
Net income attributable to common stockholders
$ 151,215 $ 410,673

Net income attributable to common stockholders per share:
Basic
$ 2.43 $ 6.89
Diluted
$ 2.34 $ 6.08

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 three and nine months ended September 30, 2014 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 forFor the three months ended March 31, 2016 and ~~nine months ended September 30, 2014 exclude $6.6 million~~2015, a de minimis amount of ~~acquisition costs consisting primarily~~restricted stock units was excluded from each calculation of ~~advisory, legal and other professional fees.~~

~~Index~~

~~ALLIANCE DATA SYSTEMS CORPORATION~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)~~

~~2015 Acquisition:~~

~~Edison International Concept & Agencies B.V. and Max Holding B.V.~~

~~On August 31, 2015, BrandLoyalty acquired all of~~weighted average dilutive common shares as the stock of Edison International Concept & Agencies B.V. ("Edison") and Max Holding B.V. ("Merison"), two Netherlands-based loyalty marketers, for consideration of approximately $45.4 million, net of $2.2 million of cash and cash equivalents acquired. The acquisition expands BrandLoyalty's short-term loyalty programs into new markets with new brands. Total net assets acquired were $61.4 million, including $6.7 million of intangible assets and $34.7 million of goodwill, with total liabilities assumed of $16.0 million. The goodwill resulting from the acquisition is not deductible for tax purposes. The results of Edison and Merisoneffect would have been ~~included since the date of acquisition and are reflected in the Company's LoyaltyOne segment.~~anti-dilutive.

4.3. 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 credit card and loan receivables is presented in the table below:

	September 30, 2015		December 31, 2014		March 31, 2016		December 31, 2015
	(In thousands)				(In millions)
Principal receivables	$	11,297,882	$	10,762,498	$	12,881.4	$	13,196.4
Billed and accrued finance charges		480,315		422,838		527.4		537.8
Other credit card and loan receivables		21,822		58,544
Other credit card receivables						81.3		65.3
Total credit card and loan receivables		11,800,019		11,243,880		13,490.1		13,799.5
Less credit card receivables – restricted for securitization investors		8,589,282		8,312,291		9,509.3		10,592.4
Other credit card and loan receivables	$	3,210,737	$	2,931,589	$	3,980.8	$	3,207.1

Quantitative measures established by regulations to ensure capital adequacy require Comenity Bank and Comenity Capital Bank to maintain minimum amounts and ratios of Common Equity Tier 1, Tier 1 and total capital to risk weighted assets and of Tier 1 capital to average assets. ~~The~~As of March 31, 2016, Comenity Bank's Common Equity Tier 1 ~~risk-based~~capital ratio was 14.6%, Tier 1 ~~risk-based ratio, total risk-based~~ capital ratio was 14.6%, total capital ratio was 15.9% and ~~Tier 1~~ leverage ratio ~~for~~was 13.7%. As of March 31, 2016, Comenity ~~Bank were 16.5%, 16.5%, 17.8% and 15.6%, respectively, at September 30, 2015. The~~Capital Bank's Common Equity Tier 1 ~~risk-based~~capital ratio was 12.9%, Tier 1 ~~risk-based ratio, total risk-based~~ capital ratio was 12.9%, total capital ratio was 14.2% and ~~Tier 1~~ leverage ratio ~~for Comenity Capital Bank were 13.7%, 13.7%, 15.0% and 13.8%, respectively, at September 30, 2015.~~was 13.3%. Comenity Bank and Comenity Capital Bank are considered well capitalized.

Our primary uses of cash are for ongoing business operations, repayments of our debt, capital expenditures, investments or acquisitions, and stock repurchases.

We may from time to time seek to retire or purchase our outstanding debt through cash purchases or exchanges for other securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

We believe that internally generated funds and other sources of liquidity discussed ~~above~~below will be sufficient to meet working capital needs, capital expenditures, and other business requirements for at least the next 12 months.

Cash Flow Activity

Operating Activities.We generated cash flow from operating activities of $257.4 million and $174.7 million for the three months ended March 31, 2016 and 2015, respectively. The increase in operating cash flows during the quarter ended March 31, 2016 as compared to the prior year period is driven by the settlement of the contingent liability associated with the BrandLoyalty acquisition during the quarter ended March 31, 2015. Changes in the fair value of the contingent liability from the initial valuation are classified as an adjustment to operating cash flows and as such, the adjustment of $99.6 million during the first quarter of 2015 negatively impacted our operating cash flow. This increase in cash flow from operating activities was offset in part by an increase in cash used in working capital during the current year period, due primarily to the reduction of accounts payable and accrued expenses.

Investing Activities. Cash used in investing activities was $747.7 million for the three months ended March 31, 2016, compared to cash provided by investing activities of $337.3 million for the prior year period. Significant components of investing activities are as follows:

Restricted cash. The use of cash increased $312.2 million during the three months ended March 31, 2016 due to the principal accumulation for the repayment of non-recourse borrowings of consolidated securitized debt that matures in May 2016.

Credit card and loan receivables, net. Cash increased $383.9 million and $401.8 million for the three months ended March 31, 2016 and 2015, respectively, due to the seasonal paydown of credit card and loan receivables.

Purchase of credit card portfolios. During the three months ended March 31, 2016, we paid $755.3 million to acquire three private label credit card portfolios.

Financing Activities. Cash provided by financing activities was $286.4 million for the three months ended March 31, 2016, compared to cash used in financing activities of $811.7 million for the three months ended March 31, 2015. For the three months ended March 31, 2016, the primary sources of cash were net borrowings under our debt agreements, including the asset-backed conduit facilities. These sources were partially offset by uses of $408.8 million to acquire treasury shares and $102.0 million to acquire an additional 10% ownership in BrandLoyalty. For the three months ended March 31, 2015, the primary uses of cash were $542.6 million to acquire treasury shares, $205.9 million to settle the BrandLoyalty contingent liability and $87.4 million to acquire an additional 10% ownership in BrandLoyalty.

Index

Debt

Long-term and Other Debt

As of ~~September 30, 2015, we were in compliance with our debt covenants.~~

~~2013 Credit Facility.~~ In September 2015, we amended our credit agreement, or the 2013 Credit Facility, and borrowed incremental term loans in the aggregate principal amount of $200.0 million that mature on September 23, 2016. These term loans bear interest at the same rates and are generally subject to the same terms as the existing term loans under the 2013 Credit Facility. Subsequent to the amendment, our 2013 Credit Facility provides for $2.85 billion in term loans, subject to certain principal repayments, and a $1.3 billion revolving line of credit.

~~As of September 30, 2015,~~March 31, 2016, we had ~~$749.0~~$982.0 million outstanding under ~~the 2013 Credit Facility~~our credit facility and total availability of ~~$551.0~~$318.0 million. Our total leverage ratio, as defined in our credit agreement, was ~~2.7~~2.9 to 1 at ~~September 30, 2015,~~March 31, 2016, as compared to the maximum covenant ratio of 3.5 to 1.

~~BrandLoyalty Credit Agreement.~~In ~~August 2015, BrandLoyalty amended its credit agreement. The BrandLoyalty credit agreement,~~April 2016, we extended the maturity of certain term loans with principal amount of $200.0 million from September 2016 to September 2017 and exercised in part the accordion feature to borrow incremental term loans in the aggregate principal amount of $250.0 million that bear interest at the same rates as, ~~amended, provides for a committed revolving line of credit of €62.5 million~~ and ~~an uncommitted revolving line of credit of €62.5 million, both of which~~ are ~~scheduled~~generally subject to ~~mature on August 25, 2018.~~ the same terms as, the 2013 term loans.

As of ~~September 30, 2015,~~March 31, 2016, we were in compliance with our debt covenants.

Deposits

We utilize money market deposits and certificates of deposit to finance the ~~amount~~operating activities and fund securitization enhancement requirements of our bank subsidiaries, Comenity Bank and Comenity Capital Bank.

As of March 31, 2016, we had $1.6 billion in money market deposits outstanding ~~under~~with interest rates ranging from 0.48% to 0.67%. Money market deposits are redeemable on demand by the ~~BrandLoyalty credit agreement was €103.2 million ($115.3 million).~~customer and, as such, have no scheduled maturity date.

Additionally, as of March 31, 2016, we had $4.5 billion in certificates of deposit outstanding with interest rates ranging from 0.43% to 2.80% and maturities ranging from April 2016 to November 2021. Certificate of deposit borrowings are subject to regulatory capital requirements.

Securitization ~~Program.~~Program

We sell a majority of the credit card receivables originated by Comenity Bank to WFN Credit Company, LLC, which in turn sells them to World Financial Network Credit Card Master Trust, or Master Trust I, World Financial Network Credit Card Master Note Trust and World Financial Network Credit Card Master Trust III, or collectively, the WFN Trusts, as part of our credit card securitization program, which has been in existence since January 1996. We also sell our credit card receivables originated by Comenity Capital Bank to World Financial Capital Credit Company, LLC, which in turn sells them to World Financial Capital Master Note Trust, or the WFC Trust. These securitization programs are the primary vehicle through which we finance Comenity Bank's and Comenity Capital Bank's credit card receivables.

As of ~~September 30, 2015,~~March 31, 2016, the WFN Trusts and the WFC Trust had approximately ~~$8.6~~$9.5 billion of securitized credit card receivables. Securitizations require credit enhancements in the form of cash, spread deposits, additional receivables and subordinated classes. The credit enhancement is principally based on the outstanding balances of the series issued by the WFN Trusts and the WFC Trust and by the performance of the credit card receivables in these credit card securitization trusts.

~~Index~~

At ~~September 30, 2015,~~March 31, 2016, we had ~~$5.0~~$6.3 billion of non-recourse borrowings of consolidated securitization entities, of which ~~$1.2~~$1.4 billion is due within the next 12 months. As of ~~September 30, 2015,~~March 31, 2016, total capacity under the conduit facilities was ~~$2.1~~$3.0 billion, of which ~~$1.0~~$2.5 billion had been drawn and was included in non-recourse borrowings of consolidated securitization entities in the unaudited condensed consolidated balance sheets.

Historically, we have used both public and private term asset-backed securitization transactions as well as private conduit facilities as sources of funding for our credit card receivables. Private conduit facilities have been used to accommodate seasonality needs and to bridge to completion of asset-backed securitization transactions.

We have secured and continue to secure the necessary commitments to fund our portfolio of securitized credit card receivables originated by Comenity Bank and Comenity Capital Bank. However, certain of these commitments are short-term in nature and subject to renewal. There is not a guarantee that these funding sources, when they mature, will be renewed on similar terms or at all as they are dependent on the asset-backed securitization markets at the time.

In April 2015, Master Trust I issued $500.0 million of asset-backed term notes, $140.0 million of which were retained and eliminated from the unaudited condensed consolidated financial statements. These securities mature in April 2018 and have a variable interest rate equal to the ~~London Interbank Offered Rate~~ ~~plus a margin of 0.48%.~~

In April 2015, we amended our 2009-VFN conduit facility, extending the maturity to March 31, 2017. In May 2015, we renewed our 2009-VFC1 conduit facility, increasing its capacity from $440.0 million to $900.0 million and extending the maturity to May 1, 2017.

In June 2015, $450.0 million of Series 2010-A asset-backed term notes, $56.2 million of which were retained by us and eliminated from the unaudited condensed consolidated financial statements, matured and were repaid.

In August 2015, Master Trust I issued $625.0 million of asset-backed term notes, $150.0 million of which were retained and eliminated from the unaudited condensed consolidated financial statements. These securities mature in August 2020 and have a fixed interest rate of 2.55%.

In September 2015, $394.7 million of Series 2014-B asset-backed term notes, $94.7 million of which were retained by us and eliminated from the unaudited condensed consolidated financial statements, matured and were repaid.

In October 2015, Master Trust I issued $389.6 million of asset-backed term notes, $89.6 million of which were retained by us and eliminated from the unaudited condensed consolidated financial statements. These securities mature in May 2017 and have a fixed interest rate of 1.26%.

The following table shows the maturities of borrowing commitments as of ~~September 30, 2015~~March 31, 2016 for the WFN Trusts and the WFC Trust by year:

2015 2016 2017 2018 2019 and Thereafter Total
(In thousands)
Term notes                                     ��
$ — $ 1,050,000 $ 650,000 $ 991,000 $ 1,277,166 $ 3,968,166
Conduit facilities ⁽¹⁾
— 450,000 1,600,000 — — 2,050,000
Total ⁽²⁾
$ — $ 1,500,000 $ 2,250,000 $ 991,000 $
1,277,166
$ 6,018,166

	2016		2017		2018		2019		2020 and Thereafter		Total
	(In millions)
Term notes	$	600.0	$	950.0	$	991.0	$	802.2	$	475.0	$	3,818.2
Conduit facilities⁽¹⁾		—		2,950.0		—		—		—		2,950.0
Total⁽²⁾	$	600.0	$	3,900.0	$	991.0	$	802.2	$	475.0	$	6,768.2

⁽¹⁾	Amount represents borrowing capacity, not outstanding borrowings.

⁽²⁾	Total amounts do not include ~~$1.6~~$2.1 billion of debt issued by the credit card securitization trusts, which was retained by us and has been eliminated in the unaudited condensed consolidated financial statements.

Early amortization events as defined within each asset-backed securitization transaction are generally driven by asset performance. We do not believe it is reasonably likely for an early amortization event to occur due to asset performance. However, if an early amortization event were declared, the trustee of the particular credit card securitization trust would retain the interest in the receivables along with the excess interest income that would otherwise be paid to our bank subsidiary until the credit card securitization investors were fully repaid. The occurrence of an early amortization event would significantly limit or negate our ability to securitize additional credit card receivables.

See Note 9,8, "Debt," of the Notes to Unaudited Condensed Consolidated Financial Statements for additional information regarding our debt.

Index

Stock Repurchase Programs

On January 1, 2016, our Board of ~~Equity Securities~~. Directors authorized a stock repurchase program to acquire up to $500.0 million of our outstanding common stock from January 1, 2016 through December 31, 2016. On February 15, 2016, our Board of Directors authorized an increase to the stock repurchase program originally approved on January 1, 2016 to acquire an additional $500.0 million of our outstanding common stock through December 31, 2016, for a total authorization of $1.0 billion.

During the ~~nine~~three months ended ~~September 30, 2015,~~March 31, 2016, we repurchased approximately ~~3.1~~2.0 million shares of our common stock for an aggregate amount of ~~$864.5~~$413.8 million.

~~Index~~

See Note 13, "Stockholders' Equity," of the Notes to Unaudited Condensed Consolidated Financial Statements for additional information regarding our stock repurchases.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

Market Risk

Market risk is the risk of loss from adverse changes in market prices and rates. Our primary market risks include interest rate risk, credit risk, and foreign currency exchange rate ~~risk and redemption reward~~ risk.

There has been no material change from our Annual Report on Form 10-K for the year ended December 31, ~~2014~~2015 related to our exposure to market risk from interest rate risk, credit risk, and foreign currency exchange rate ~~risk and redemption reward~~ risk.

Item 4.

Controls and Procedures.

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

As of ~~September 30, 2015,~~March 31, 2016, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15 of the Securities Exchange Act of 1934. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of ~~September 30, 2015~~March 31, 2016 (the end of our ~~third~~first fiscal quarter), our disclosure controls and procedures are effective. Disclosure controls and procedures are controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and include controls and procedures designed to ensure that information we are required to disclose in such reports is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~FORWARD-LOOKING STATEMENTS~~Caution Regarding Forward-Looking Statements

This Form 10-Q and the documents incorporated by reference herein contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. ~~Such~~Forward-looking statements ~~may~~give our expectations or forecasts of future events and can generally be identified by the use of words such as ~~"anticipate,"~~ "believe," ~~"continue,~~"expect," ~~"could,~~"anticipate," "estimate," ~~"expect,~~"intend," ~~"intend,~~"project," "plan," "likely," "may," ~~"predict," "project," "would" and~~"should" or other words or phrases of similar ~~expressions as they relate to us~~import. Similarly, statements that describe our business strategy, outlook, objectives, plans, intentions or ~~our management. When we make~~goals also are forward-looking ~~statements, we are basing them on our management's beliefs and assumptions, using information currently available to us. Although we~~statements. We believe that ~~the~~our expectations ~~reflected in the forward-looking~~are based on reasonable assumptions. Forward-looking statements, ~~are reasonable, these 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 report, and ~~assumptions, including those discussed in~~no assurances can be given that our expectations will prove to have been correct. These risks and uncertainties include, but are not limited to, the "Risk Factors" section in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2014, Item 1A of Part II of this Quarterly Report and any subsequent filings we make with the SEC.following:

·	loss of, or reduction in demand for services from, significant clients;

·	increased redemptions by AIR MILES^® Reward Program collectors;

·	increases in the cost of doing business, including market interest rates;

·	loss of active AIR MILES Reward Program collectors;

·	disruptions in the airline or travel industries;

·	failure to identify or successfully integrate business acquisitions;

·	increases in net charge-offs in credit card and loan receivables;

·	inability to access the asset-backed securitization funding market;

·	unfavorable fluctuations in foreign currency exchange rates;

·	limitations on consumer credit, loyalty or marketing services from new legislative or regulatory actions related to consumer protection and consumer privacy;

·	increases in FDIC, Delaware or Utah regulatory capital requirements for banks;

·	failure to maintain exemption from regulation under the Bank Holding Company Act;

·	loss or disruption, due to cyber attack or other service failures, of data center operations or capacity;

·	loss of consumer information due to compromised physical or cyber security; and

·	those factors set forth in the Risk Factors section in our Annual Report on Form 10-K for the most recently ended fiscal year as well as those factors discussed in Item 1A of this Form 10-Q, elsewhere in this Form 10-Q and in the documents incorporated by reference in this Form 10-Q.

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Any forward-looking statements contained in this ~~quarterly report reflect our current views with respect to future events~~Form 10-Q speak only as of the date made, and ~~are subject to these and~~we undertake no obligation, other ~~risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We have no intention, and disclaim any obligation,~~than as required by applicable law, to update or revise any forward-looking statements, whether as a result of new information, ~~future results~~subsequent events, anticipated or ~~otherwise, except as required by law.~~unanticipated circumstances or otherwise.

4839

Index

PART II

Item 1.

Legal Proceedings.

From time to time we are involved in various claims and lawsuits arising in the ordinary course of our business that we believe will not have a material adverse effect on our business or financial condition, including claims and lawsuits alleging breaches of our contractual obligations. See Note ~~12,~~11, "Commitments and Contingencies," of the Notes to Unaudited Condensed Consolidated Financial Statements for additional information.

Item 1A.

Risk Factors.

Other than as set forth below, there have been no material changes to the Risk Factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2014 or our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2015 or June 30,~~ 2015.

Current and proposed regulation and legislation relating to our card services could limit our business activities, product offerings and fees charged and may have a significant impact on our business, results of operations and financial condition.

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") was enacted into law. The Dodd-Frank Act, among other things, includes a sweeping reform of the regulation and supervision of financial institutions, as well as of the regulation of derivatives and capital market activities.

The full impact of the Dodd-Frank Act is difficult to assess because many provisions require federal agencies to adopt implementing regulations, and some of the final implementing regulations have not yet been issued. In addition, the Dodd-Frank Act mandates multiple studies, which could result in future legislative or regulatory action. In particular, the Government Accountability Office issued its study on whether it is necessary, in order to strengthen the safety and soundness of institutions or the stability of the financial system of the United States, to eliminate the exemptions to the definition of "bank" under the Bank Holding Company Act for certain institutions including limited purpose credit card banks and industrial loan companies. The study did not recommend the elimination of these exemptions. However, if legislation were enacted to eliminate these exemptions without any grandfathering of or accommodations for existing institutions, we could be required to become a bank holding company and cease certain of our activities that are not permissible for bank holding companies or divest our credit card bank subsidiary, Comenity Bank, or our industrial bank subsidiary, Comenity Capital Bank.

The Dodd-Frank Act created a Consumer Financial Protection Bureau ("CFPB"), a new federal consumer protection regulator with authority to make further changes to the federal consumer protection laws and regulations. It is unclear what changes will be promulgated by the CFPB and what effect, if any, such changes would have on our business and operations. The CFPB assumed rulemaking authority under the existing federal consumer financial protection laws, and will enforce those laws against and examine certain non-depository institutions and insured depository institutions with total assets greater than $10 billion and their affiliates.

While the CFPB does not examine Comenity Bank and Comenity Capital Bank, it will receive information from their primary federal regulator. In addition, the CFPB's broad rulemaking authority is expected to impact their operations. For example, the CFPB's rulemaking authority may allow it to change regulations adopted in the past by other regulators including regulations issued under the Truth in Lending Act or the Credit Card Accountability Responsibility and Disclosure Act of 2009 (the "CARD Act") by the Board of Governors of the Federal Reserve System. The CFPB's ability to rescind, modify or interpret past regulatory guidance could increase our compliance costs and litigation exposure. Furthermore, the CFPB has broad authority to prevent "unfair, deceptive or abusive" acts or practices and has taken enforcement action against other credit card issuers and financial services companies. Evolution of these standards could result in changes to pricing, practices, procedures and other activities relating to our credit card accounts in ways that could reduce the associated return. It is unclear what changes would be promulgated by the CFPB and what effect, if any, such changes would have on our credit accounts.

The Dodd-Frank Act authorizes certain state officials to enforce regulations issued by the CFPB and to enforce the Dodd-Frank Act's general prohibition against unfair, deceptive or abusive practices. To the extent that states enact requirements that differ from federal standards or courts adopt interpretations of federal consumer laws that differ from those adopted by the federal banking agencies, we may be required to alter products or services offered in some jurisdictions or cease offering products, which will increase compliance costs and reduce our ability to offer the same products and services to consumers nationwide.

~~Index~~

Various federal and state laws and regulations significantly limit the retail credit card services activities in which we are permitted to engage. Such laws and regulations, among other things, limit the fees and other charges that we can impose on consumers, limit or proscribe certain other terms of our products and services, require specified disclosures to consumers, or require that we maintain certain licenses, qualifications and minimum capital levels. In some cases, the precise application of these statutes and regulations is not clear. In addition, numerous legislative and regulatory proposals are advanced each year which, if adopted, could have a material adverse effect on our profitability or further restrict the manner in which we conduct our activities. The CARD Act, which was enacted in May 2009 and together with its implementing rules, became effective in 2010, acts to limit or modify certain credit card practices and require increased disclosures to consumers. The credit card practices addressed by the rules include, but are not limited to, restrictions on the application of rate increases to existing and new balances, payment allocation, default pricing, imposition of late fees and two-cycle billing. The failure to comply with, or adverse changes in, the laws or regulations to which our business is subject, or adverse changes in their interpretation, could have a material adverse effect on our ability to collect our receivables and generate fees on the receivables, thereby adversely affecting our profitability.

In the normal course of business, from time to time, Comenity Bank and Comenity Capital Bank have been named as defendants in various legal actions, including arbitrations, class actions and other litigation arising in connection with their business activities. While historically the arbitration provision in each bank's customer agreement has generally limited such bank's exposure to consumer class action litigation, there can be no assurance that the banks will be successful in enforcing the arbitration clause in the future. There may also be legislative, administrative or regulatory efforts to directly or indirectly prohibit the use of pre-dispute arbitration clauses. Recently, the CFPB publicly announced that it is considering proposing rules that would ban consumer financial companies from using arbitration clauses that limit a consumer's right to participate in class action litigation.

Comenity Bank and Comenity Capital Bank are also involved, from time to time, in reviews, investigations, and proceedings (both formal and informal) by governmental agencies regarding the bank's business, which could subject the bank to significant fines, penalties, obligations to change its business practices or other requirements. For example, in September 2015, each bank entered into a consent order with the FDIC agreeing to collectively provide restitution of approximately $61.5 million to eligible customers, to pay $2.5 million in civil money penalties to the FDIC and to make further enhancements to their compliance and other processes related to the marketing, promotion and sale of add-on products.

The effect of the Dodd-Frank Act on our business and operations could be significant, depending upon final implementing regulations, the actions of our competitors and the behavior of other marketplace participants. In addition, we may be required to invest significant management time and resources to address the various provisions of the Dodd-Frank Act and the numerous regulations that are required to be issued under it. The Dodd-Frank Act and any related legislation or regulations may have a material impact on our business, results of operations and financial condition.

Legislation relating to consumer privacy may affect our ability to collect data that we use in providing our loyalty and marketing services, which, among other things, could negatively affect our ability to satisfy our clients' needs.

The enactment of new or amended legislation or industry regulations pertaining to consumer or private sector privacy issues could have a material adverse impact on our marketing services. Legislation or industry regulations regarding consumer or private sector privacy issues could place restrictions upon the collection, sharing and use of information that is currently legally available, which could materially increase our cost of collecting some data. These types of legislation or industry regulations could also prohibit us from collecting or disseminating certain types of data, which could adversely affect our ability to meet our clients' requirements and our profitability and cash flow targets. While 48 states and the District of Columbia have enacted data breach notification laws, there is no such federal law generally applicable to our businesses. Data breach notification legislation has been proposed widely and exists in specific countries and jurisdictions in which we conduct business. If enacted, these legislative measures could impose strict requirements on reporting time frames for providing notice, as well as the contents of such notices. In addition to the United States, Canadian and European Union regulations discussed below, we have expanded our marketing services through the acquisition of companies formed and operating in foreign jurisdictions that may be subject to additional or more stringent legislation and regulations regarding consumer or private sector privacy.

~~Index~~

In the United States, federal and state laws such as the federal Gramm-Leach-Bliley Act and the Fair Credit Reporting Act, as amended by the Fair and Accurate Credit Transactions Act of 2003, make it more difficult to collect, share and use information that has previously been legally available and may increase our costs of collecting some data. Regulations under these acts give cardholders the ability to "opt out" of having information generated by their credit card purchases shared with other affiliated and unaffiliated parties or the public. Our ability to gather, share and utilize this data will be adversely affected if a significant percentage of the consumers whose purchasing behavior we track elect to "opt out," thereby precluding us and our affiliates from using their data.

In the United States, the federal Do-Not-Call Implementation Act makes it more difficult to telephonically communicate with prospective and existing customers. Similar measures were implemented in Canada beginning September 1, 2008. Regulations in both the United States and Canada give consumers the ability to "opt out," through a national do-not-call registry and state do-not-call registries of having telephone solicitations placed to them by companies that do not have an existing business relationship with the consumer. In addition, regulations require companies to maintain an internal do-not-call list for those who do not want the companies to solicit them through telemarketing. These regulations could limit our ability to provide services and information to our clients. Failure to comply with these regulations could have a negative impact on our reputation and subject us to significant penalties. Further, the Federal Communications Commission has approved interpretations of rules related to the Telephone Consumer Protection Act defining robo-calls, which may affect our ability to contact customers and may increase our litigation exposure.

In the United States, the federal Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 restricts our ability to send commercial electronic mail messages, the primary purpose of which is advertising or promoting a commercial product or service, to our customers and prospective customers. The act requires that a commercial electronic mail message provide the customers with an opportunity to opt-out from receiving future commercial electronic mail messages from the sender. Failure to comply with the terms of this act could have a negative impact on our reputation and subject us to significant penalties.

Index

In Canada, the Personal Information Protection and Electronic Documents Act requires an organization to obtain a consumer's consent to collect, use or disclose personal information. Under this act, consumer personal information may be used only for the purposes for which it was collected. We allow our customers to voluntarily "opt out" from receiving either one or both promotional and marketing mail or promotional and marketing electronic mail. Heightened consumer awareness of, and concern about, privacy may result in customers "opting out" at higher rates than they have historically. This would mean that a reduced number of customers would receive bonus and promotional offers and therefore those customers may collect fewer AIR MILES reward miles.

Canada's Anti-Spam Legislation may restrict our ability to send commercial "electronic messages," defined to include text, sound, voice and image messages to email, or similar accounts, where the primary purpose is advertising or promoting a commercial product or service to our customers and prospective customers. The Act requires, in part, that a sender have consent to send a commercial electronic message, and provide the customers with an opportunity to opt out from receiving future commercial electronic email messages from the sender. Failure to comply with the terms of this Act or any proposed regulations that may be adopted in the future could have a negative impact on our reputation and subject us to significant monetary penalties.

In the European Union, the Directive 95/46/EC of the ~~European~~EU Parliament and of the Council of 24 October 1995 requires member states to implement and enforce a comprehensive data protection law that is based on principles designed to safeguard personal data, defined as any information relating to an identified or identifiable natural person. The Directive frames certain requirements for transfer outside of the European Economic Area and individual rights such as consent requirements. ~~The Directive may be superseded by~~In January 2012, the European Commission proposed the General Data Protection Regulation, ~~proposed~~or GDPR, a new European Union-wide legal framework to govern data sharing and collection and related consumer privacy rights. In December 2015, the EU Parliament and the EU Council reached informal agreement on the text of the GDPR, and in ~~January 2012 which would create one standard for~~April 2016 both the EU Council and the EU Parliament adopted the GDPR. The new rules will take effect two years following the publication of the official texts in the Official Journal of the European Union ~~member states but~~in all official languages. The GDPR will replace the Directive and, because it is a regulation rather than a directive, will directly apply to and bind the 28 EU Member States. Compared to the Directive, the GDPR includes a strengthened notion of consent, the development of a 'one stop shop' mechanism for the jurisdiction of EU regulators and increased compliance and accountability requirements on data controllers and data processors. These and other terms of the GDPR could limit our ability to provide services and information to our customers. In addition, the GDPR includes significant new penalties for non-compliance, with fines up to the higher of €20 million ($23 million as of March 31, 2016) or 4% of total annual worldwide revenue.

In October 2015, the European Court of Justice of the European Union ruled that the EU-U.S. Safe Harbor Framework, ~~enabling~~an agreement setting forth standards by which U.S. companies could legally transfer personal data from the EU to the U.S., was invalid. Although reliance on the Safe Harbor was not the exclusive method by which such transfers of personal data ~~between~~could be legally made, the ~~EU and~~loss of the ~~U.S. is invalid, which may~~Safe Harbor could adversely affect our ability to transfer such data out of the EU and into the U.S. in providing service for our customers. The Privacy Shield, a proposed replacement for the invalidated Safe Harbor, has been announced by the European Commission but has not yet been finalized. Any failure to comply with our ongoing obligations with respect to data transfers previously made under the Safe Harbor, or, when and if effective, the Privacy Shield, could expose us to enforcement actions by the FTC or other regulatory authorities.

There is also rapid development of new privacy laws and regulations in the Asia Pacific region and elsewhere around the globe, including amendments of existing data protection laws to the scope of such laws and penalties for noncompliance. Failure to comply with these international data protection laws and regulations could have a negative impact on our reputation and subject us to significant penalties.

5141

Index

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

The following table presents information with respect to purchases of our common stock made during the three months ended ~~September 30, 2015:~~March 31, 2016:

Period
Total Number of Shares Purchased ⁽¹⁾
Average Price Paid per Share
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans or Programs

Approximate Dollar
Value of Shares that
May Yet Be Purchased
Under the Plans or Programs ⁽²⁾

(Dollars in millions)
During 2015:
July 1-31
306,940 $ 278.39 300,907 $ 217.6
August 1-31
120,205 261.60 115,000 187.5
September 1-30
207,852 253.49 205,000 135.5
Total
634,997 $ 267.06 620,907 $ 135.5

Period	Total Number of Shares Purchased⁽¹⁾		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs⁽²⁾
							(Dollars in millions)
During 2016:
January 1-31		465,757	$	231.44		458,606	$	893.9
February 1-29		1,282,381		197.06		1,268,250		644.0
March 1-31		279,468		211.74		273,144		586.2
Total		2,027,606	$	206.98		2,000,000	$	586.2

⁽¹⁾	During the period represented by the table, ~~14,090~~27,606 shares of our common stock were purchased by the administrator of our 401(k) and Retirement Savings Plan for the benefit of the employees who participated in that portion of the plan.

⁽²⁾

On January 1, ~~2015,~~2016, our Board of Directors authorized a stock repurchase program to acquire up to ~~$600.0~~$500.0 million of our outstanding common stock from January 1, ~~2015~~2016 through December 31, ~~2015.~~2016. On ~~April~~February 15, ~~2015,~~2016, our Board of Directors authorized an increase to the stock repurchase program originally approved on January 1, ~~2015~~2016 to acquire ~~up to $1.0 billion~~an additional $500.0 million of our outstanding common stock through December 31, ~~2015. The stock repurchase plan is~~2016, for a total authorization of $1.0 billion. Both authorizations are subject to any restrictions pursuant to the terms of our credit agreements, indentures, applicable securities laws or otherwise.

Item 3.

Defaults Upon Senior Securities.

None

Item 4.

Mine Safety Disclosures.

Not applicable.

Item 5.

Other Information.

(a) ~~Dismissal of Delaware Litigation; Fee and Expense Application Hearing~~

The Company, as well as Conversant and the former directors of Conversant, was named as a defendant in In Re Conversant, Inc. Stockholder Litigation, C.A. No. 10174-VCL, the Court of Chancery of the State of Delaware. In November of 2014, the parties entered into a memorandum of understanding to preliminarily resolve the Delaware litigation. The plaintiffs in this consolidated action, who had sued on behalf of a putative class of Conversant shareholders (the "Class"), have elected not to seek final approval of that settlement, dismissed their claims against all defendants (which the Court granted with prejudice as to the Delaware plaintiffs on October 22, 2015), and have indicated that they intend to submit an application for an award of attorney's fees and reimbursement of expenses (the "Fee and Expense Application") in connection with certain disclosure claims that they believe plaintiffs caused to be mooted through certain disclosures made by the Company and Conversant in connection with the preliminary settlement. The Court has scheduled a hearing (the "Fee and Expense Application Hearing") to be held on February 10, 2016 at 2:00 p.m. in the New Castle County Courthouse, located at 500 North King Street, Wilmington, DE 19801 to: (a) consider the application by the plaintiffs' counsel for attorneys' fees and expenses; (b) hear and determine any objections to the Fee and Expense Application; and (c) rule on such other matters as the Court may deem appropriate. The defendants have reserved all rights to oppose any such Fee and Expense Application.

Any member of the Class who objects to the Fee and Expense Application, or who otherwise, wishes to be heard may appear in person or by such member's attorney at the Fee and Expense Application Hearing and present evidence or argument that may be proper and relevant; provided, however, that except for good cause shown, no person shall be heard and no papers, briefs, pleadings or other documents submitted by any person shall be considered by the Court unless not later than fourteen (14) calendar days prior to the Fee and Expense Application Hearing such person files with the Court and serves upon counsel listed below: (a) a written notice of intention to appear; (b) a statement of such person's objections to any matters before the Court; and (c) the grounds for such objections and the reasons that such person desires to appear and be heard, documentation evidencing membership in the Class as well as documents or writings such person desires the Court to consider. Such filings shall be filed with the Court and served upon the following counsel:

~~Raymond J. DiCamillo, Esq.~~

~~RICHARDS, LAYTON & FINGER, P.A.~~

~~920 North King Street~~

~~Wilmington, Delaware 19801~~

-	~~and to~~-

~~Frank A. Bottini, Esq.~~

~~BOTTINI & BOTTINI, INC.~~

~~7817 Ivanhoe Ave., Suite 102~~

~~La Jolla, CA 92037~~

Unless the Court otherwise directs, no person shall be entitled to object to the approval of the Fee and Expense Application, any judgment entered thereon, or otherwise be heard, except by serving and filing a written objection and supporting papers and documents as described in the preceding paragraph. Any person who fails to object in the manner described above shall be deemed to have waived the right to object (including any right of appeal) and shall be forever barred from raising such objection in this or any other action or proceeding.None

(b) None

5242

Index

Item 6.

Exhibits.

~~(a)~~ ~~Exhibits:~~

(a)

Exhibits:

EXHIBIT INDEX

Incorporated by Reference
Exhibit No. Filer Description Form Exhibit Filing Date

3.1 (a) Second Amended and Restated Certificate of Incorporation of the Registrant. S-1 3.1 3/3/00

3.2 (a) Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Registrant. 8-K 3.1 6/7/13

3.3 (a) Fourth Amended and Restated Bylaws of the Registrant. 8-K 3.2 6/7/13

4 (a) Specimen Certificate for shares of Common Stock of the Registrant. 10-Q 4 8/8/03

10.1
(b)
(c)
(d)
Series 2015-B Indenture Supplement, dated as of August 21, 2015, between World Financial Network Credit Card Master Note Trust and MUFG Union Bank, N.A. 8-K 4.1 8/25/15

10.2
(a)

Amendment and Restatement Agreement, dated as of August 25, 2015, including Amended and Restated Facilities Agreement, as amended, by and among Brand Loyalty Group B.V. and certain subsidiaries parties thereto, as borrowers and guarantors, Deutsche Bank Nederland N.V. (as Arranger) and ING Bank N.V. (as Arranger, Agent and Security Agent). 8-K 10.1 8/28/15

10.3
(a)

Second Amendment to Credit Agreement, dated as of September 25, 2015, by and among Alliance Data Systems Corporation, as borrower, and certain of its subsidiaries as guarantors, Wells Fargo Bank, N.A., as Administrative Agent and Letter of Credit Issuer, and various other lenders.

8-K 10.1 9/29/15

10.4
(b)
(c)
(d)
Series 2015-C Indenture Supplement, dated as of October 27, 2015, between World Financial Network Credit Card Master Note Trust and MUFG Union Bank, N.A. 8-K 4.1 10/29/15

*31.1 (a) Certification of Chief Executive Officer of Alliance Data Systems Corporation pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

*31.2 (a) Certification of Chief Financial Officer of Alliance Data Systems Corporation pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

*32.1 (a) Certification of Chief Executive Officer of Alliance Data Systems Corporation pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.

~~Index~~

						Incorporated by Reference
Exhibit No.		Filer		Description		Form		Exhibit		Filing Date


3.1	(a)	Second Amended and Restated Certificate of Incorporation of the Registrant.	S-1	3.1	3/3/00

3.2	(a)	Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Registrant.	8-K	3.1	6/7/13

3.3	(a)	Certificate of Retirement of Series A Preferred Stock of the Registrant dated March 23, 2016.	8-K	3.1	3/25/16

3.4	(a)	Fifth Amended and Restated Bylaws of the Registrant.	8-K	3.1	2/1/16

4	(a)	Specimen Certificate for shares of Common Stock of the Registrant.	10-Q	4	8/8/03

10.1	(a)	Form of Time-Based Restricted Stock Unit Award Agreement under the Alliance Data Systems Corporation 2015 Omnibus Incentive Plan.	8-K	10.1	2/17/16

10.2	(a)	Form of Performance-Based Restricted Stock Unit Award Agreement under the Alliance Data Systems Corporation 2015 Omnibus Incentive Plan (2016 grant).	8-K	10.2	2/17/16

10.3	(a)	Incremental Term Loan Extension Request, dated as of April 15, 2016, by and among Alliance Data Systems Corporation, Wells Fargo Bank, N.A., as Administrative Agent, and Bank of America, N.A.	8-K	10.1	4/21/16

*31.1	(a)	Certification of Chief Executive Officer of Alliance Data Systems Corporation pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

*31.2	(a)	Certification of Chief Financial Officer of Alliance Data Systems Corporation pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

*32.1	(a)	Certification of Chief Executive Officer of Alliance Data Systems Corporation pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.

*32.2	(a)	Certification of Chief Financial Officer of Alliance Data Systems Corporation pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Incorporated by Reference

*32.2Exhibit No.

~~(a)~~Filer

Certification of Chief Financial Officer of Alliance Data Systems Corporation pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.Description

Form

Exhibit

Filing Date


*101.INS	(a)	XBRL Instance Document

*101.SCH	(a)	XBRL Taxonomy Extension Schema Document

*101.CAL	(a)	XBRL Taxonomy Extension Calculation Linkbase Document

*101.DEF	(a)	XBRL Taxonomy Extension Definition Linkbase Document

*101.LAB	(a)	XBRL Taxonomy Extension Label Linkbase Document

*101.PRE	(a)	XBRL Taxonomy Extension Presentation Linkbase Document

*		Filed herewith

+		Management contract, compensatory plan or arrangement


(a)		Alliance Data Systems Corporation

~~(b)~~		~~WFN Credit Company~~

~~(c)~~		~~World Financial Network Credit Card Master Trust~~

~~(d)~~		~~World Financial Network Credit Card Master Note Trust~~

5444

Index

SIGNATURES

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

ALLIANCE DATA SYSTEMS CORPORATION

	By:	/s/ Edward J. Heffernan
		Edward J. Heffernan
		President and Chief Executive Officer

Date: ~~November~~May 5, ~~2015~~2016

	By:	/s/ Charles L. Horn
		Charles L. Horn
		Executive Vice President and Chief Financial Officer

Date: ~~November~~May 5, ~~2015~~2016

5545

	Three Months Ended March 31,
	2016			2015
	(In millions)
Balance at beginning of period	$	741.6		$	570.2
Provision for loan loss		171.9			134.9
Allowance associated with credit card and loan receivables transferred to held for sale		(15.0	)		—
Change in estimate for uncollectible unpaid interest and fees		5.0			1.5
Recoveries		56.9			39.5
Principal charge-offs		(233.2	)		(159.4	)
Balance at end of period	$	727.2		$	586.7

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(In thousands)
Balance at beginning of period	$	623,316		$	483,580		$	570,171		$	503,169
Provision for loan loss		171,678			114,577			461,944			281,811
Change in estimate for uncollectible unpaid interest and fees		—			1,000			4,500			1,500
Recoveries		48,767			39,074			129,623			115,548
Principal charge-offs		(172,515	)		(126,877	)		(494,992	)		(390,674	)
Balance at end of period	$	671,246		$	511,354		$	671,246		$	511,354

	September 30, 2015		% of Total			December 31, 2014		% of Total			March 31, 2016		% of Total			December 31, 2015		% of Total
			(In thousands, except percentages)										(In millions, except percentages)
Receivables outstanding – principal	$	11,297,882		100.0	%	$	10,762,498		100.0	%	$	12,881.4		100.0	%	$	13,196.4		100.0	%
Principal receivables balances contractually delinquent:
31 to 60 days		175,018		1.5	%		157,760		1.4	%		174.5		1.4	%		178.5		1.4	%
61 to 90 days		113,360		1.0			93,175		0.9			125.5		1.0			124.1		0.9
91 or more days		225,553		2.0			182,945		1.7			247.9		1.9			257.0		1.9
Total	$	513,931		4.5	%	$	433,880		4.0	%	$	547.9		4.3	%	$	559.6		4.2	%

	Three Months Ended September 30, 2015						Nine Months Ended September 30, 2015
	Number of Restructurings		Pre-modification Outstanding Balance		Post-modification Outstanding Balance		Number of Restructurings		Pre-modification Outstanding Balance		Post-modification Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings – credit card receivables		44,955	$	48,088	$	48,048		120,074	$	129,775	$	129,661

	Three Months Ended September 30, 2014						Nine Months Ended September 30, 2014
	Number of Restructurings		Pre-modification Outstanding Balance		Post-modification Outstanding Balance		Number of Restructurings		Pre-modification Outstanding Balance		Post-modification Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings – credit card receivables		36,846	$	37,130	$	37,100		102,000	$	101,837	$	101,750

	Three Months Ended March 31, 2016						Three Months Ended March 31, 2015
	Number of Restructurings		Pre-modification Outstanding Balance		Post-modification Outstanding Balance		Number of Restructurings		Pre-modification Outstanding Balance		Post-modification Outstanding Balance
	(Dollars in millions)
Troubled debt restructurings – credit card receivables		50,761	$	60.6	$	60.5		39,014	$	42.5	$	42.4


	September 30, 2015			December 31, 2014
	(In thousands, except per share amounts)
ASSETS
Cash and cash equivalents	$	977,341		$	1,077,152
Trade receivables, less allowance for doubtful accounts ($3,643 and $3,811 at September 30, 2015 and December 31, 2014, respectively)		642,681			743,294
Credit card and loan receivables:
Credit card receivables – restricted for securitization investors		8,589,282			8,312,291
Other credit card and loan receivables		3,210,737			2,931,589
Total credit card and loan receivables		11,800,019			11,243,880
Allowance for loan loss		(671,246	)		(570,171	)
Credit card and loan receivables, net		11,128,773			10,673,709
Credit card and loan receivables held for sale		98,709			125,060
Deferred tax asset, net		237,723			218,872
Other current assets		544,069			456,349
Redemption settlement assets, restricted		468,417			520,340
Total current assets		14,097,713			13,814,776
Property and equipment, net		561,300			559,628
Deferred tax asset, net		841			164
Cash collateral, restricted		4,888			22,511
Intangible assets, net		1,268,627			1,515,994
Goodwill		3,835,419			3,865,484
Other non-current assets		531,886			485,420
Total assets	$	20,300,674		$	20,263,977
LIABILITIES AND EQUITY
Accounts payable	$	382,220		$	455,656
Accrued expenses		395,467			457,472
Contingent consideration		—			326,023
Deposits		2,589,313			2,645,995
Non-recourse borrowings of consolidated securitization entities		1,230,000			1,058,750
Current debt		389,146			208,164
Other current liabilities		280,720			306,123
Deferred revenue		703,774			846,370
Deferred tax liability, net		1,719			930
Total current liabilities		5,972,359			6,305,483
Deferred revenue		148,443			166,807
Deferred tax liability, net		642,069			690,175
Deposits		2,633,109			2,127,546
Non-recourse borrowings of consolidated securitization entities		3,743,166			4,133,166
Long-term and other debt		4,710,032			4,001,082
Other liabilities		266,764			207,772
Total liabilities		18,115,942			17,632,031
Commitments and contingencies (Note 12)
Redeemable non-controlling interest		236,847			235,566
Stockholders' equity:
Common stock, $0.01 par value; authorized, 200,000 shares; issued, 112,072 shares and 111,686 shares at September 30, 2015 and December 31, 2014, respectively		1,121			1,117
Additional paid-in capital		2,956,814			2,905,563
Treasury stock, at cost, 50,949 shares and 47,874 shares at September 30, 2015 and December 31, 2014, respectively		(3,840,253	)		(2,975,795	)
Retained earnings		2,948,081			2,540,948
Accumulated other comprehensive loss		(117,878	)		(75,453	)
Total stockholders' equity		1,947,885			2,396,380
Total liabilities and equity	$	20,300,674		$	20,263,977

	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

	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

	Three Months Ended September 30, 2014		Nine Months Ended September 30, 2014
	(In thousands, except per share amounts)
Total revenue	$	1,457,446	$	4,238,797
Net income	$	151,921	$	411,476
Net income attributable to common stockholders	$	151,215	$	410,673

Net income attributable to common stockholders per share:
Basic	$	2.43	$	6.89
Diluted	$	2.34	$	6.08

	Three Months Ended September 30, 2015				Nine Months Ended September 30, 2015
	Number of Restructurings		Outstanding Balance		Number of Restructurings		Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings that subsequently defaulted – credit card receivables		20,212	$	21,436		55,940	$	57,995

	Three Months Ended March 31, 2016				Three Months Ended March 31, 2015
	Number of Restructurings		Outstanding Balance		Number of Restructurings		Outstanding Balance
	(Dollars in millions)
Troubled debt restructurings that subsequently defaulted – credit card receivables		23,693	$	25.4		18,393	$	18.3

	September 30, 2015										March 31, 2016
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			Number of Active Accounts with Balances		Percentage of Active Accounts with Balances			Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding
	(In thousands, except percentages)										(In millions, except percentages)
0-12 Months		5,881		29.8	%	$	2,994,083		26.5	%		5.9		27.2	%	$	3,354.8		26.0	%
13-24 Months		3,014		15.3			1,783,846		15.8			3.5		16.1			2,219.2		17.2
25-36 Months		2,085		10.6			1,266,628		11.2			2.3		10.7			1,521.4		11.8
37-48 Months		1,509		7.6			917,319		8.1			1.7		7.9			1,037.8		8.1
49-60 Months		1,107		5.6			676,015		6.0			1.3		6.2			742.9		5.8
Over 60 Months		6,148		31.1			3,659,991		32.4			6.9		31.9			4,005.3		31.1
Total		19,744		100.0	%	$	11,297,882		100.0	%		21.6		100.0	%	$	12,881.4		100.0	%

	September 30, 2014										March 31, 2015
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			Number of Active Accounts with Balances		Percentage of Active Accounts with Balances			Principal Receivables Outstanding		Percentage of Principal Receivables Outstanding
	(In thousands, except percentages)										(In millions, except percentages)
0-12 Months		4,869		28.2	%	$	2,220,148		25.1	%		5.6		29.7	%	$	2,635.4		25.7	%
13-24 Months		2,554		14.8			1,282,695		14.5			2.8		14.8			1,542.4		15.0
25-36 Months		1,781		10.3			937,043		10.6			1.9		10.3			1,089.6		10.6
37-48 Months		1,283		7.4			701,808		7.9			1.4		7.4			815.9		8.0
49-60 Months		969		5.6			557,911		6.3			1.0		5.5			611.0		6.0
Over 60 Months		5,828		33.7			3,149,984		35.6			6.0		32.3			3,552.1		34.7
Total		17,284		100.0	%	$	8,849,589		100.0	%		18.7		100.0	%	$	10,246.4		100.0	%

	September 30, 2015									December 31, 2014									March 31, 2016									December 31, 2015
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(In thousands)																		(In millions)
Restricted cash	$	23,414	$	—	$	—		$	23,414	$	22,611	$	—	$	—		$	22,611
Marketable securities		125,672		851		(1,007	)		125,516		95,669		520		(1,322	)		94,867	$	121.5	$	1.3	$	(0.6	)	$	122.2	$	121.5	$	0.4	$	(1.7	)	$	120.2
U.S. Treasury bonds		100,051		893		—			100,944		100,072		66		(33	)		100,105		100.0		1.0		—			101.0		100.1		0.2		(0.1	)		100.2
Total	$	249,137	$	1,744	$	(1,007	)	$	249,874	$	218,352	$	586	$	(1,355	)	$	217,583	$	221.5	$	2.3	$	(0.6	)	$	223.2	$	221.6	$	0.6	$	(1.8	)	$	220.4

	September 30, 2015															March 31, 2016
	Less than 12 months					12 Months or Greater					Total					Less than 12 months					12 Months or Greater					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(In thousands)															(In millions)
Marketable securities	$	18,913	$	(153	)	$	35,783	$	(854	)	$	54,696	$	(1,007	)	$	10.3	$	(0.2	)	$	39.0	$	(0.4	)	$	49.3	$	(0.6	)
Total	$	18,913	$	(153	)	$	35,783	$	(854	)	$	54,696	$	(1,007	)	$	10.3	$	(0.2	)	$	39.0	$	(0.4	)	$	49.3	$	(0.6	)

	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)				(In millions)
Due in one year or less	$	31,638	$	31,672	$	31.8	$	31.8
Due after one year through five years		75,042		75,901		75.0		76.0
Due after five years through ten years		15,331		15,606		3.7		3.8
Due after ten years		103,712		103,281		111.0		111.6
Total	$	225,723	$	226,460	$	221.5	$	223.2

	September 30, 2015								March 31, 2016
	Gross Assets		Accumulated Amortization			Net		Amortization Life and Method	Gross Assets		Accumulated Amortization			Net		Amortization Life and Method
	(In thousands)								(In millions)
Finite Lived Assets
Customer contracts and lists	$	1,204,572	$	(319,976	)	$	884,596	3-12 years—straight line	$	1,210.6	$	(410.4	)	$	800.2	3-12 years—straight line
Premium on purchased credit card portfolios		249,743		(110,995	)		138,748	3-10 years—straight line, accelerated		310.3		(127.7	)		182.6	3-10 years—straight line
Customer database		210,300		(153,887	)		56,413	3-10 years—straight line		210.3		(172.4	)		37.9	3-10 years—straight line
Collector database		52,572		(49,507	)		3,065	30 years—15% declining balance		53.8		(50.9	)		2.9	30 years—15% declining balance
Publisher networks		140,200		(22,344	)		117,856	5-7 years—straight line		140.2		(36.1	)		104.1	5-7 years—straight line
Tradenames		85,077		(40,586	)		44,491	2-15 years—straight line		85.9		(48.8	)		37.1	2-15 years—straight line
Purchased data lists		11,944		(6,238	)		5,706	1-5 years—straight line, accelerated		11.8		(6.3	)		5.5	1-5 years—straight line, accelerated
Favorable lease		6,891		(1,597	)		5,294	3-10 years—straight line		6.9		(2.2	)		4.7	3-10 years—straight line
Noncompete agreements		1,300		(1,192	)		108	3 years—straight line
	$	1,962,599	$	(706,322	)	$	1,256,277		$	2,029.8	$	(854.8	)	$	1,175.0
Indefinite Lived Assets
Tradenames		12,350		—			12,350	Indefinite life		12.4		—			12.4	Indefinite life
Total intangible assets	$	1,974,949	$	(706,322	)	$	1,268,627		$	2,042.2	$	(854.8	)	$	1,187.4

	For the Years Ending December 31,		For the Years Ending December 31,
	(In thousands)		(In millions)
2015 (excluding the nine months ended September 30, 2015)	$	81,064
2016		306,826
2016 (excluding the three months ended March 31, 2016)			$	235.9
2017		267,469		279.7
2018		208,967		226.7
2019		171,248		180.3
2020 & thereafter		220,703
2020				126.6
2021 & thereafter				125.8

	LoyaltyOne			Epsilon			Card Services		Corporate/Other		Total			LoyaltyOne^®			Epsilon^®			Card Services		Corporate/Other		Total
	(In thousands)													(In millions)
December 31, 2014	$	713,457		$	2,890,295		$	261,732	$	—	$	3,865,484
January 1, 2015														$	713.5		$	2,890.3		$	261.7	$	—	$	3,865.5
Goodwill acquired during the year		34,712			—			—		—		34,712			34.7			—			—		—		34.7
Effects of foreign currency translation		(63,923	)		(854	)		—		—		(64,777	)		(84.7	)		(1.4	)		—		—		(86.1	)
September 30, 2015	$	684,246		$	2,889,441		$	261,732	$	—	$	3,835,419
December 31, 2015															663.5			2,888.9			261.7		—		3,814.1
Effects of foreign currency translation															34.0			(0.5	)		—		—		33.5
March 31, 2016														$	697.5		$	2,888.4		$	261.7	$	—	$	3,847.6

	September 30, 2015						March 31, 2016
	Notional Amount		Fair Value		Balance Sheet Location	Maturity	Notional Amount		Fair Value		Balance Sheet Location	Maturity
	(In thousands)						(In millions)
Designated as hedging instruments:
Foreign currency exchange hedges	$	25,208	$	1,454	Other current assets	October 2015 to September 2016	$	3.8	$	0.2	Other current assets	April 2016
Foreign currency exchange hedges	$	34,675	$	352	Other current liabilities	October 2015 to May 2016	$	77.5	$	1.9	Other current liabilities	April 2016 to March 2017
Net investment hedge							$	341.4	$	19.4	Long-term and other debt	November 2023

Not designated as hedging instruments:
Foreign currency exchange hedges	$	4,610	$	29	Other current liabilities	October 2015
Interest rate derivatives	$	43,590	$	62	Other current liabilities	December 2015

	2015				2014
For the nine months ended September 30,	Income Statement Location	Gain (Loss) on Derivative Instruments			Income Statement Location	Gain (Loss) on Derivative Instruments
	(In thousands)
Interest rate derivatives	Interest expense on long-term and other debt, net	$	213		Interest expense on long-term and other debt, net	$	244
Foreign currency exchange forward contract	General and administrative	$	(13,724	)	General and administrative	$	(7,310	)
Foreign currency exchange hedges	Cost of operations	$	376		Cost of operations	$	—

	Deferred Revenue									Deferred Revenue
	Service			Redemption			Total			Service			Redemption			Total
	(In thousands)									(In millions)
December 31, 2014	$	332,368		$	680,809		$	1,013,177
December 31, 2015										$	292.3		$	552.6		$	844.9
Cash proceeds		146,928			278,466			425,394			41.4			78.5			119.9
Revenue recognized		(140,018	)		(319,382	)		(459,400	)		(44.0	)		(108.2	)		(152.2	)
Other		—			15			15			—			(0.1	)		(0.1	)
Effects of foreign currency translation		(42,680	)		(84,289	)		(126,969	)		18.6			33.8			52.4
September 30, 2015	$	296,598		$	555,619		$	852,217
March 31, 2016										$	308.3		$	556.6		$	864.9
Amounts recognized in the unaudited condensed consolidated balance sheets:
Current liabilities	$	148,155		$	555,619		$	703,774		$	156.8		$	556.6		$	713.4
Non-current liabilities	$	148,443		$	—		$	148,443		$	151.5		$	—		$	151.5

	Redeemable Non- Controlling Interest
	(In thousands)
Balance at January 2, 2014	$	341,907
Net income attributable to non-controlling interest		9,847
Other comprehensive income attributable to non-controlling interest		1,988
Adjustment to redemption value		14,775
Foreign currency translation adjustments		(39,654	)
Reclassification to accrued expenses		(93,297	)
Balance at December 31, 2014		235,566
Net income attributable to non-controlling interest		2,927
Other comprehensive income attributable to non-controlling interest		433
Adjustment to redemption value		15,194
Foreign currency translation adjustments		(17,273	)
Balance at September 30, 2015	$	236,847

	Redeemable Non-Controlling Interest
	(In millions)
Balance at January 1, 2015	$	235.6
Net income attributable to non-controlling interest		8.9
Other comprehensive income attributable to non-controlling interest		0.9
Adjustment to redemption value		45.0
Foreign currency translation adjustments		(24.1	)
Reclassification to accrued expenses		(98.9	)
Balance at December 31, 2015	$	167.4
Net income attributable to non-controlling interest		1.8
Other comprehensive loss attributable to non-controlling interest		(0.7	)
Adjustment to redemption value		15.9
Foreign currency translation adjustments		8.0
Balance at March 31, 2016	$	192.4

Three Months Ended September 30, 2015	Net Unrealized Gains (Losses) on Securities		Unrealized Gains (Losses) on Cash Flow Hedges			Foreign Currency Translation Adjustments ⁽¹⁾			Accumulated Other Comprehensive Income (Loss)
Three Months Ended March 31, 2016												Net Unrealized Gains on Securities			Unrealized Gains (Losses) on Cash Flow Hedges			Unrealized Gains (Losses) on Net Investment Hedge			Foreign Currency Translation Adjustments⁽¹⁾			Accumulated Other Comprehensive Income (Loss)
	(In thousands)											(In millions)
Balance at June 30, 2015	$	1,200	$	(531	)	$	(125,015	)	$	(124,346	)
Balance at December 31, 2015												$	(0.1	)	$	1.3		$	(3.8	)	$	(134.7	)	$	(137.3	)
Changes in other comprehensive income (loss) before reclassifications		420		2,073			4,633			7,126			1.9			(2.9	)		(15.6	)		25.2			8.6
Amounts reclassified from other comprehensive income (loss)		—		(658	)		—			(658	)		—			0.5			—			—			0.5
Changes in other comprehensive income (loss)		420		1,415			4,633			6,468			1.9			(2.4	)		(15.6	)		25.2			9.1
Balance as of September 30, 2015	$	1,620	$	884		$	(120,382	)	$	(117,878	)

Balance at March 31, 2016												$	1.8		$	(1.1	)	$	(19.4	)	$	(109.5	)	$	(128.2	)

Nine Months Ended September 30, 2015	Net Unrealized Gains (Losses) on Securities			Unrealized Gains (Losses) on Cash Flow Hedges			Foreign Currency Translation Adjustments ⁽¹⁾			Accumulated Other Comprehensive Income (Loss)
	(In thousands)
Balance at December 31, 2014	$	2,654		$	2,350		$	(80,457	)	$	(75,453	)
Changes in other comprehensive income (loss) before reclassifications		(1,034	)		(1,813	)		(39,925	)		(42,772	)
Amounts reclassified from other comprehensive income (loss)		—			347			—			347
Changes in other comprehensive income (loss)		(1,034	)		(1,466	)		(39,925	)		(42,425	)
Balance as of September 30, 2015	$	1,620		$	884		$	(120,382	)	$	(117,878	)

	September 30, 2015				December 31, 2014
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In thousands)
Financial assets
Cash and cash equivalents	$	977,341	$	977,341	$	1,077,152	$	1,077,152
Trade receivables, net		642,681		642,681		743,294		743,294
Credit card and loan receivables, net		11,128,773		11,128,773		10,673,709		10,673,709
Credit card and loan receivables held for sale		98,709		98,709		125,060		125,060
Redemption settlement assets, restricted		468,417		468,417		520,340		520,340
Cash collateral, restricted		4,888		4,888		22,511		22,511
Derivative instruments		1,454		1,454		3,871		3,871
Other investments		249,874		249,874		217,583		217,583
Financial liabilities
Accounts payable		382,220		382,220		455,656		455,656
Derivative instruments		443		443		17,290		17,290
Deposits		5,222,422		5,269,310		4,773,541		4,801,464
Non-recourse borrowings of consolidated securitization entities		4,973,166		5,018,393		5,191,916		5,225,359
Long-term and other debt		5,099,178		5,110,950		4,209,246		4,227,414
Contingent consideration		—		—		326,023		326,023

			Fair Value Measurements at September 30, 2015 Using								Fair Value Measurements at March 31, 2016 Using
	Balance at September 30, 2015		Level 1		Level 2		Level 3		Balance at March 31, 2016		Level 1		Level 2		Level 3
	(In thousands)								(In millions)
Mutual funds ⁽¹⁾									$	26.7	$	26.7	$	—	$	—
Corporate bonds ⁽¹⁾	$	169,723	$	—	$	169,723	$	—		243.6		—		243.6		—
Mutual funds ⁽¹⁾		26,045		26,045		—		—
Cash collateral, restricted		4,888		—		—		4,888
Other investments ⁽²⁾		249,874		129,443		120,431		—
Derivative instruments ⁽³⁾		1,454		—		1,454		—
Marketable securities ⁽²⁾										122.2		5.0		117.2		—
U.S. Treasury bonds ⁽²⁾										101.0		101.0		—		—
Cash collateral, restricted ⁽³⁾										8.3		3.3		—		5.0
Derivative instruments ⁽⁴⁾										0.2		—		0.2		—
Total assets measured at fair value	$	451,984	$	155,488	$	291,608	$	4,888	$	502.0	$	136.0	$	361.0	$	5.0

Derivative instruments ⁽³⁾	$	443	$	—	$	443	$	—
Derivative instruments ⁽⁴⁾									$	1.9	$	—	$	1.9	$	—
Total liabilities measured at fair value	$	443	$	—	$	443	$	—	$	1.9	$	—	$	1.9	$	—

			Fair Value Measurements at December 31, 2014 Using
	Balance at December 31, 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

			Fair Value Measurements at December 31, 2015 Using
	Balance at December 31, 2015		Level 1		Level 2		Level 3
	(In millions)
Mutual funds ⁽¹⁾	$	24.9	$	24.9	$	—	$	—
Corporate bonds ⁽¹⁾		161.4		—		161.4		—
Marketable securities ⁽²⁾		120.2		4.8		115.4		—
U.S. Treasury bonds ⁽²⁾		100.2		100.2		—		—
Cash collateral, restricted ⁽³⁾		7.2		2.3		—		4.9
Derivative instruments ⁽⁴⁾		2.7		—		2.7		—
Total assets measured at fair value	$	416.6	$	132.2	$	279.5	$	4.9

Derivative instruments ⁽⁴⁾	$	1.7	$	—	$	1.7	$	—
Total liabilities measured at fair value	$	1.7	$	—	$	1.7	$	—

	Three Months Ended September 30,				% Change			Three Months Ended March 31,				% Change
	2015		2014		2015 to 2014			2016		2015		2016 to 2015
Revenues	(In thousands, except percentages)							(In millions, except percentages)
Transaction	$	83,126	$	87,162		(5	)%	$	82.5	$	93.3		(12	)%
Redemption		220,922		232,464		(5	)		278.2		308.1		(10	)
Finance charges, net		737,918		597,892		23			808.0		679.5		19
Marketing services		498,955		353,525		41			452.0		471.2		(4	)
Other revenue		48,196		48,090		—			55.4		49.1		13
Total revenue		1,589,117		1,319,133		20	%		1,676.1		1,601.2		5	%
Operating expenses
Cost of operations (exclusive of depreciation and amortization disclosed separately below)		901,095		767,415		17			1,003.9		990.0		1
Provision for loan loss		171,678		114,577		50			171.9		134.9		27
General and administrative		40,890		39,169		4			27.6		30.2		(9	)
Regulatory settlement		64,563		—		100
Depreciation and other amortization		36,450		28,070		30			39.8		33.6		18
Amortization of purchased intangibles		86,930		48,261		80			88.6		88.0		1
Total operating expenses		1,301,606		997,492		30	%		1,331.8		1,276.7		4	%
Operating income		287,511		321,641		(11	)%		344.3		324.5		6	%
Interest expense
Securitization funding costs		23,143		22,763		2			30.4		23.8		28
Interest expense on deposits		13,719		9,064		51			17.2		11.7		46
Interest expense on long-term and other debt, net		45,236		29,637		53			51.2		42.5		21
Total interest expense, net		82,098		61,464		34			98.8		78.0		27
Income before income tax	$	205,413	$	260,177		(21	)%	$	245.5	$	246.5		—	%
Provision for income taxes		75,031		95,229		(21	)		86.6		81.7		6
Net income	$	130,382	$	164,948		(21	)%	$	158.9	$	164.8		(4	)%

Key Operating Metrics:
Credit card statements generated		60,025		52,319		15	%		65.5		58.7		12	%
Credit sales	$	6,000,355	$	4,479,375		34	%	$	6,178.2	$	4,959.8		25	%
Average credit card and loan receivables	$	11,369,434	$	8,736,664		30	%	$	13,536.7	$	10,677.3		27	%
AIR MILES reward miles issued		1,355,744		1,286,668		5	%		1,286.3		1,228.9		5	%
AIR MILES reward miles redeemed		1,061,336		992,761		7	%		1,283.9		1,212.6		6	%

	Nine Months Ended September 30,				% Change
	2015		2014		2015 to 2014
Revenues	(In thousands, except percentages)
Transaction	$	263,195	$	251,390		5	%
Redemption		747,192		744,658		—
Finance charges, net		2,101,360		1,672,339		26
Marketing services		1,435,520		1,021,813		40
Other revenue		143,625		126,991		13
Total revenue		4,690,892		3,817,191		23	%
Operating expenses
Cost of operations (exclusive of depreciation and amortization disclosed separately below)		2,787,501		2,323,210		20
Provision for loan loss		461,944		281,811		64
General and administrative		111,992		101,498		10
Regulatory settlement		64,563		—		100
Depreciation and other amortization		104,983		79,555		32
Amortization of purchased intangibles		262,131		145,144		81
Total operating expenses		3,793,114		2,931,218		29	%
Operating income		897,778		885,973		1	%
Interest expense
Securitization funding costs		71,509		67,974		5
Interest expense on deposits		37,099		25,526		45
Interest expense on long-term and other debt, net		132,212		98,643		34
Total interest expense, net		240,820		192,143		25
Income before income tax		656,958		693,830		(5	)%
Provision for income taxes		231,705		253,946		(9	)
Net income	$	425,253	$	439,884		(3	)%

Key Operating Metrics:
Credit card statements generated		177,920		154,448		15	%
Credit sales	$	16,968,812	$	12,591,188		35	%
Average credit card and loan receivables	$	10,970,979	$	8,309,963		32	%
AIR MILES reward miles issued		4,066,816		3,680,226		11	%
AIR MILES reward miles redeemed		3,416,116		3,087,839		11	%

Period	Total Number of Shares Purchased ⁽¹⁾		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs ⁽²⁾
							(Dollars in millions)
During 2015:
July 1-31		306,940	$	278.39		300,907	$	217.6
August 1-31		120,205		261.60		115,000		187.5
September 1-30		207,852		253.49		205,000		135.5
Total		634,997	$	267.06		620,907	$	135.5