Alliance Data Systems recaps major 2003 achievements

DALLAS, Texas, March 29, 2004, — Alliance Data Systems Corp., a provider of transaction services, credit services and marketing services, announced major milestones for the year ended 2003, including record earnings results, major new client wins, several long-term contract renewals and entry into new market segments.

“Alliance’s success during 2003 is a testament to the effectiveness of our unique business model,” said Mike Parks, chairman and chief executive officer, Alliance Data Systems.

“We are very pleased with our achievements in all of our business lines and believe that Alliance’s 2003 successes validate the company’s broader value proposition – that of helping our clients develop stronger, more profitable relationships with their customers, improving clients’ operational processes and increasing customer loyalty. Moving into 2004, we are excited and very optimistic about keeping the momentum going.”

Alliance had its most successful year, with revenue surpassing the $1 billion mark — an increase of 21 percent from 2002. The company also saw double-digit gains in 2003 across its three growth engines – credit services (25 percent), transaction services (14 percent) and marketing services (25 percent).

Growth in Alliance’s private label credit card business was fueled through major long-term client renewals with companies like Limited Too (seven-year contract) and Brylane, Inc. (10-year contract) and through several new client wins such as Stage Stores, Spiegel and Fortunoff, among others.

Alliance also renewed a long-term transaction processing agreement with top-15 client ConocoPhilips and expanded the relationship to include stores branded as 76.

Other network services agreements were signed with new clients, including women’s apparel retailer BeBe, and Alliance also expanded its relationship with Limited Too to include bankcard authorization services.

Alliance’s utility services business broadened its scope by advancing into new market segments. Alliance entered the submetering services segment through the acquisition of Conservation Billing Services, Inc. (CBSI) and now offers automated meter reading, billing and collecting for clients that manage commercial properties that house multiple tenants, such as malls and multi-family properties.

Alliance also entered the publicly owned municipal utility space by signing the Orlando Utilities Commission (OUC) as a new client; Alliance provides the OUC an outsourced customer information system solution and other related billing processes for its 200,000 regulated residential and commercial electricity accounts.

In December, Alliance acquired customer care and billing solutions provider Orcom, which expanded Alliance’s foothold in the municipal space while adding water utilities to its list of clients. The Loyalty Group, an Alliance subsidiary that operates the Canadian AIR MILES Reward Program, also achieved significant wins in 2003.

Canada Safeway, a top-10 Alliance client and a Sponsor in the Air Miles Reward Program since its inception, renewed a multi-year agreement to continue as a Sponsor in the program. Jean Coutu, a leading pharmacy retailer in Quebec, signed a multi-year agreement to become a Sponsor in the program.

In October, YourShops.ca was launched, providing an online shopping destination that broadens shopping options for consumers participating in the Air Miles Reward Program. Alliance also received notable industry recognition in 2003.

The company was recently awarded the prestigious ‘Best-in-Class’ certification from BenchmarkPortal, an affiliate of Purdue University’s Center for Customer-Driven Quality. Earlier in the year, the Association of Independent Consumer Credit Counseling Agencies (AICCCA) awarded Alliance “Creditor of the Year” for demonstrating commitment to superior customer service.

About Alliance Data Systems

Based in Dallas, Alliance Data Systems (ADS) is a provider of transaction services, credit services and marketing services. The company assists retail, petroleum, utility and financial services clients in managing the critical interactions between them and their customers.

Alliance Data manages over 72 million consumer relationships for some of North America’s most recognizable companies and operates and markets the largest coalition loyalty program in Canada. Alliance Data Systems employs approximately 7,000 associates at more than 20 locations in the United States and Canada. For more information about the company, visit its web site, www.alliancedatasystems.com.

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