Aimia Announces Groundbreaking Transformation of Aeroplan Program; Signs New 10-year Financial Credit Card Agreement to Commence

Aimia Announces Groundbreaking Transformation of Aeroplan Program; Signs New 
10-year Financial Credit Card Agreement to Commence in 2014 
MONTREAL, June 27, 2013 /CNW Telbec/ - Aimia (TSX: AIM) announced 
groundbreaking changes to the Aeroplan program today. The transformation, 
which is expected to reinforce Aeroplan's position as the leading premium 
coalition loyalty program in Canada, was announced in conjunction with a 
framework for an enhanced ten year financial credit card agreement to become 
effective from January 1, 2014. 
"Today's announcement is about launching an outstanding loyalty experience 
that puts members first and extends Aeroplan's position in the Canadian 
loyalty market" said Rupert Duchesne, Group Chief Executive of Aimia. "We have 
built an Aeroplan program that provides high earning members with the rewards 
and recognition that they deserve and desire, rewarding them for the miles 
they earn - whether it is with our airline, travel, retail or financial card 
partners - while maintaining the fantastic core value that benefits all of our 
The changes announced today are expected to redefine the Canadian loyalty 
space, and reinforce Aeroplan's market leadership in Canada over the next 
decade by providing significantly improved benefits to members through major 
new investments in the Aeroplan value proposition. The changes create a 
paradigm shift for global travel-based loyalty programs, extending access to 
an unrivalled loyalty experience to both top accumulating financial 
cardholders and frequent flyers. Aimia expects these changes to drive 
improved growth and strong free cash flow generation over the longer term for 
Aeroplan Program Enhancements 
In addition to the market leading value of Aeroplan's ClassicFlight rewards 
which will continue to give members access at low fixed mileage levels to Star 
Alliance carriers and to 8% of seat capacity on Air Canada routes, members 
will also start enjoying a range of important and innovative program 
enhancements as of January 1, 2014. These will include: 

    --  The launch of Distinction, a new tiered recognition program
        that rewards top accumulating members with preferential mileage
        levels for redemption. Distinction is a unique member
        recognition program independent from Air Canada's Altitude
        program. Distinction levels are achieved based on total miles
        earned across all coalition partners including airline, travel,
        retail and financial card partners;
    --  New Market Fare Flight Rewards to replace ClassicPlus Flight
        Rewards; offering members significantly improved value, with
        all members able to take advantage of mileage levels reduced by
        up to 20%, and Distinction members enjoying reductions of up to
    --  The cancellation of the seven-year mileage redemption policy,
        with miles no longer expiring for members active in the program
        each year.

"Aeroplan has been driving innovation in customer loyalty since its inception 
in 1984 and we're proud of all we've achieved. Our members' feedback has 
inspired the transformative changes that we will be bringing to the program in 
2014. It is this commitment to delivering the best customer loyalty program in 
Canada that will not only foster continued member engagement, but we are 
confident it will also attract new members to the program," added Duchesne. 
"This is also about getting the right economics in place for the future. New 
investment should deliver growth, ensure alignment for coalition anchor 
partners like Air Canada and deliver significant value for our shareholders 
over the longer term."

A Framework for a Financial Credit Card Partner for the Next Decade

Over the last 18 months, Aimia has run a renewal process for Aeroplan's 
financial card portfolio to define an enhanced partnership aimed at delivering 
growth over the next decade.

The agreement announced today sets out a framework for an enhanced financial 
credit card relationship. The provisions of the new agreement will help fund 
the enhancements to the Aeroplan program being announced today.

TD Bank Group ("TD") will become Aeroplan's new financial credit card partner 
for the 10-year period effective from January 1, 2014, replacing CIBC, unless 
CIBC chooses to exercise its contractual right to match the terms of the 
agreement which expires on or before August 9, 2013.

Aeroplan's current agreement with CIBC will continue until December 31, 2013. 
Members can continue to earn miles as usual on their CIBC Aerogold co-branded 
credit cards and take advantage of any Aeroplan promotions related to these 
cards for the remainder of 2013.

Negotiations with American Express are proceeding in parallel and are ongoing.

"We entered into this process with a clear objective - to grow the portfolio 
with a bank who is committed to building the Aeroplan program with us. The 
process we have run has confirmed the attractiveness of the Aeroplan 
portfolio. Under the terms of the new agreement, our financial card partner 
will contribute to the funding and support required to transform the program 
and drive increased engagement among premium Canadian consumers," added 
Duchesne. "Recognizing that more than half of Aeroplan Miles accumulated in 
2012 were earned through financial card spend, a successful credit card 
partnership is an important element of our longer term evolution."

Features of New Credit Card Offerings

New Aeroplan co-branded financial credit cards, to be launched in 2014, will 
provide cardholders with more flexible options, better earn rates and new 
recognition features; all of which is in addition to the benefits to be added 
under the Distinction program.

A new enhanced premium card targeted at high net worth Canadian households, 
with a higher earn rate, will be offered, in addition to premium and 
mid-market credit cards.

The launch of two additional co-branded targeted credit cards is expected to 
    --  one aimed at customers travelling frequently between Canada and
        the United States; and
    --  a second specifically for Canadian small business owners, which
        will allow small business owners to choose additional features
        and benefits specifically designed to their needs.

Both the enhanced premium and premium cards will include a suite of unique Air 
Canada features and benefits.

In a number of instances during 2014, annual fees will be waived and bonus 
miles awarded to welcome members to the new cards.

Terms of a New Financial Credit Card Agreement

The terms of a new 10-year financial credit card framework agreement will 
    --  a more than 15% increase in price per mile to align to market
    --  a commitment to minimum miles purchases for the first three
    --  a joint marketing spend of around $140 million over four years
        to support new cards and new program features;
    --  use of Aeroplan bonus miles to drive future member acquisition
        and longer term growth in Gross Billings; and
    --  more comprehensive collaboration around data and customer
        insight analytics.

In addition, the agreement provides for
    --  a $100 million upfront contribution payable in 2014 to Aimia to
        help fund program enhancements; and
    --  an $80 million contractual break fee payable in 2013 by Aimia
        to TD in the event CIBC exercises its contractual right to
        match on or before August 9, 2013.

Should the agreement with TD become effective, Gross Billings growth could be 
dampened through the transition period to a new bank, however the miles 
purchase commitment would guarantee a value equivalent to the Gross Margin 
that would have been generated on approximately 65% of CIBC's 2012 Gross 
Billings in 2014, increasing to a value equivalent to over 90% in 2015 and 
2016. When combined with the upfront program contribution of $100 million and 
tax benefits to be realized, this should also ensure solid cash flow 
generation to maintain the dividend through any transition in 2014.

Higher Gross Billings, combined with new contract economics, are expected to 
offset increased program costs, and generate improving cash flow returns 

2013 Breakage Adjustments to Reflect Aeroplan Program Enhancements

While enhanced Aeroplan benefits will only be launched on January 1, 2014, 
Aimia is making a significant adjustment to its long term breakage rate 
estimate, effective immediately, in accordance with IFRS and to align with our 
current expectations for an increase in member engagement and the cancellation 
of the seven-year mileage redemption policy.

As a result, the estimate of the breakage rate for the Aeroplan program will 
decline from 18% to approximately 11%. 2013 Adjusted EBITDA will be adjusted 
downwards by approximately $50 million to reflect the change in the breakage 

The breakage rate change will also result in a non-cash, after-tax adjustment 
to net earnings of approximately $520 million. Aimia also expects to realize 
the benefit of a taxable loss from this breakage adjustment, which will 
include a substantial loss carryback to be received in 2014. In addition, 
Aimia does not expect to pay cash taxes in Canada for the remainder of 2013 or 
for the next few years.

2013 Outlook

In line with the financial adjustments described above, Aimia is today 
revising its previously provided 2013 annual guidance with respect to Adjusted 
EBITDA, Free Cash Flow before dividends and Income Taxes.

The Corporation had previously guided 2013 Adjusted EBITDA to be approximately 
$425 million, which is now being revised to be approximately $375 million. The 
revision is principally due to the $50 million reduction to Adjusted EBITDA, 
reflecting the full year impact of the lower breakage rate described above. 
In the event that CIBC exercises its contractual right to match and is 
confirmed as the program's financial credit card partner, Adjusted EBITDA 
would be revised downwards by a further $80 million due to the contractual 
break fee which would become payable to TD.

The Corporation had previously guided 2013 Free Cash Flow before dividends to 
be between $255 million and $275 million. While our current view on free 
cash flow remains unchanged, in the event that CIBC exercises its contractual 
right to match and is confirmed as the program's financial credit card 
partner, Free Cash Flow before dividends is expected to be revised downwards 
by $80 million due to the contractual break fee which would become payable to 

While Aimia's 2013 tax rate is expected to approximate 27% in Canada, it now 
expects that it will not be required to pay any further cash taxes in 2013 as 
a result of the realization of tax losses from adjustment to net earnings of 
approximately $520 million described above.

A number of other factors, including additional marketing and transition costs 
incurred in the second half of 2013 to ensure the successful introduction of a 
new partner, and the enhanced Aeroplan program could result in the 
Corporation's actual 2013 results differing from its revised 2013 annual 
guidance for Adjusted EBITDA and Free Cash flow before dividends. Aimia is 
unable to reasonably assess these factors until the identity of its credit 
card partner is confirmed on or prior to August 9, 2013 but expects to be in a 
position to provide more precision with respect to the revised 2013 guidance 
ranges following confirmation of the identity of its credit card partner.

The above guidance should be read in conjunction with the more detailed 
guidance provided in earnings releases dated February 27, 2013 and May 13, 
2013. It does not include the one-time benefit in 2013 of $25.7 million 
(£16.7 million) to Adjusted EBITDA and a one-time cash outflow of $7.0 
million (£4.5 million) expected as a result of the UK Supreme Court's ruling 
in Aimia's favour relating to Value Added Tax (VAT) litigation, as announced 
on June 20, 2013. The above guidance excludes the effects of fluctuations in 
currency exchange rates. In addition, Aimia made a number of economic and 
market assumptions in preparing its 2013 forecasts, including assumptions 
regarding the performance of the economies in which the Corporation operates 
and market competition and tax laws applicable to the Corporation's 
operations. The Corporation cautions that the assumptions used to prepare the 
forecasts for 2013, although reasonable at the time they were made, may prove 
to be incorrect or inaccurate. In addition, the above forecasts do not 
reflect the potential impact of any non-recurring or other special items or of 
any new material commercial agreements, dispositions, mergers, acquisitions, 
other business combinations or other transactions that may be announced or 
that may occur after June 27, 2013. The financial impact of these transactions 
and non-recurring and other special items can be complex and depends on the 
facts particular to each of them. We therefore cannot describe the expected 
impact in a meaningful way or in the same way we present known risks affecting 
our business. Accordingly, our actual results could differ materially from our 
expectations as set forth in this news release. The outlook provided 
constitutes forward-looking statements within the meaning of applicable 
securities laws and should be read in conjunction with the "Caution Concerning 
Forward-Looking Statements" section.

Investor and Analyst Call

Aimia will host a conference call to discuss the announcement at 8:00 a.m. ET 
today, Thursday, June 27, 2013. The call can be accessed by dialing 
1-888-231-8191 or 647-427-7450 for the Toronto area. The call will be 
simultaneously audio webcast at:

Further Information about Aeroplan Program Enhancements

For more information on the program enhancements, read the press release and 
FAQs at Consumer questions can also be addressed on 
Twitter (@Aeroplan) or Facebook ( or by contacting 
the Aeroplan Contact Centre at: 1-800-361-5373.

Use of Non-GAAP Financial Information

In order to provide a better understanding of the results, the following 
indicators are used:

Adjusted Earnings before Interest, Taxes, Depreciation and Amortization
EBITDA adjusted for certain factors particular to the business, such as 
changes in deferred revenue and Future Redemption Costs ("Adjusted EBITDA"), 
is used by management to evaluate performance, and to measure compliance with 
debt covenants. Management believes Adjusted EBITDA assists investors in 
comparing the Corporation's performance on a consistent basis without regard 
to depreciation and amortization and impairment charges, which are non-cash in 
nature and can vary significantly depending on accounting methods and 
non-operating factors such as historical cost. Adjusted EBITDA also includes 
distributions and dividends received from equity-accounted investments.

Adjusted EBITDA is not a measurement based on GAAP, is not considered an 
alternative to operating income or net income in measuring performance, and is 
not comparable to similar measures used by other issuers. For a reconciliation 
to GAAP, please refer to the Summary of Consolidated Operating Results and 
Reconciliation of EBITDA, Adjusted EBITDA, Adjusted Net Earnings and Free Cash 
Flow included with the financial results dated February 27, 2013 and May 13, 
2013. Adjusted EBITDA should not be used as an exclusive measure of cash flow 
because it does not account for the impact of working capital growth, capital 
expenditures, debt repayments and other sources and uses of cash, which are 
disclosed in the statements of cash flows.

Adjusted Net Earnings
Adjusted Net Earnings provides a measurement of profitability calculated on a 
basis consistent with Adjusted EBITDA. Net earnings attributable to equity 
holders of the Corporation are adjusted to exclude Amortization of 
Accumulation Partners' contracts, customer relationships and technology, share 
of net earnings (loss) of equity accounted investments and impairment charges. 
Adjusted Net Earnings includes the Change in deferred revenue and Change in 
Future Redemption Costs, net of the income tax effect and non-controlling 
interest effect (where applicable) on these items at an entity level basis. 
Adjusted Net Earnings also includes distributions and dividends received from 
equity-accounted investments.

Adjusted Net Earnings is not a measurement based on GAAP, is not considered an 
alternative to net earnings in measuring profitability, and is not comparable 
to similar measures used by other issuers. For a reconciliation to GAAP, 
please refer to the Summary of Consolidated Operating Results and 
Reconciliation of EBITDA, Adjusted EBITDA, Adjusted Net Earnings and Free Cash 
Flow included with the financial results dated February 27, 2013 and May 13, 

Standardized Free Cash Flow ("Free Cash Flow")
Free Cash Flow is a non-GAAP measure recommended by the CICA in order to 
provide a consistent and comparable measurement of free cash flow across 
entities of cash generated from operations and is used as an indicator of 
financial strength and performance.

Free Cash Flow is defined as cash flows from operating activities, as reported 
in accordance with GAAP, less adjustments for:

(a)total capital expenditures as reported in accordance with GAAP; 
(b)dividends, when stipulated, unless deducted in arriving at cash 
flows from operating activities.

For a reconciliation to cash flows from operations please refer to the Summary 
of Consolidated Operating Results and Reconciliation of EBITDA, Adjusted 
EBITDA, Adjusted Net Earnings and Free Cash Flow included with the financial 
results dated February 27, 2013 and May 13, 2013.

EBITDA and Free Cash Flow are non-GAAP measurements recommended by the CICA in 
accordance with the recommendations provided in their October 2008 
publication, Improved Communications with Non-GAAP Financial Measures - 
General Principles and Guidance for Reporting EBITDA and Free Cash Flow.

Constant Currency

Because exchange rates are an important factor in understanding period to 
period comparisons, the presentation of various financial metrics on a 
constant currency basis or after giving effect to foreign exchange 
translation, in addition to the reported metrics, helps improve the ability to 
understand operating results and evaluate performance in comparison to prior 
periods. Constant currency information compares results between periods as if 
exchange rates had remained constant over the periods. Constant currency 
isderived bycalculatingcurrent-year results usingprior-year foreign 
currency exchange rates. Results calculated on a constant currency basis 
should be considered in addition to, not as a substitute for, results reported 
in accordance with GAAP and may not be comparable to similarly titled measures 
used by other companies.

Caution Concerning Forward Looking Statements

Forward-looking statements are included in this news release. These 
forward-looking statements are identified by the use of terms and phrases such 
as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", 
"plan", "predict", "project", "will", "would", and "should" and similar terms 
and phrases, including references to assumptions. Such statements may involve 
but are not limited to comments with respect to strategies, expectations, 
planned operations or future actions.

Forward-looking statements, by their nature, are based on assumptions and are 
subject to important risks and uncertainties. Any forecasts, predictions or 
forward-looking statements cannot be relied upon due to, among other things, 
changing external events and general uncertainties of the business and its 
corporate structure. Results indicated in forward-looking statements may 
differ materially from actual results for a number of reasons, including 
without limitation, dependency on top accumulation partners and clients, the 
effective implementation of Aeroplan program enhancements and a new financial 
card partnership and associated cardholder migration, conflicts of interest, 
greater than expected redemptions for rewards, regulatory matters, retail 
market/economic conditions, industry competition, Air Canada liquidity issues, 
Air Canada or travel industry disruptions, airline industry changes and 
increased airline costs, supply and capacity costs, unfunded future redemption 
costs, failure to safeguard databases and consumer privacy, changes to 
coalition loyalty programs, seasonal nature of the business, other factors and 
prior performance, foreign operations, legal proceedings, reliance on key 
personnel, labour relations, pension liability, technological disruptions and 
inability to use third party software, failure to protect intellectual 
property rights, interest rate and currency fluctuations, leverage and 
restrictive covenants in current and future indebtedness, uncertainty of 
dividend payments, managing growth, credit ratings, as well as the other 
factors identified in this news release and throughout Aimia's public 
disclosure record on file with the Canadian securities regulatory authorities.

The forward-looking statements contained herein represent Aimia's expectations 
as of June 27, 2013, and are subject to change after such date. However, Aimia 
disclaims any intention or obligation to update or revise any forward-looking 
statements whether as a result of new information, future events or otherwise, 
except as required under applicable securities regulations.

About Aeroplan
Aeroplan, Canada's premier coalition loyalty program, is owned by Aimia Inc., 
a global leader in loyalty management. Aeroplan's millions of members earn 
Aeroplan Miles with its growing network of over 75 world-class partners, 
representing more than 150 brands in the financial, retail, and travel sectors.

In 2012, approximately 2.3 million rewards were issued to members including 
more than 1.6 million flights on Air Canada and Star Alliance carriers which 
offer travel to more than 1,000 destinations worldwide. In addition to 
flights, members also have access to over 1,000 exciting specialty, 
merchandise, hotel, car rental and experiential rewards.

Aimia Inc.("Aimia" or the "Corporation") isaglobal leader in loyalty 
management.Employing more than 4,000 people in over 20 countries 
worldwide,Aimiaoffers clients, partners and members proven expertise in 
launching and managing coalition loyalty programs, delivering proprietary 
loyalty services, creating value through loyalty analytics and driving 
innovation in the emerging digital, mobile and social communications spaces.

Aimiaowns and operates Aeroplan,Canada'spremier coalition loyalty 
program andNectar, theUnited Kingdom'slargest coalition loyalty program. 
In addition,Aimia owns stakes in Air Miles Middle East, Nectar 
Italia,Mexico'sleading coalition loyalty program Club 
Premier,Brazil'sPrismah Fidelidade, and i2c, a joint venture 
withSainsbury'soffering insight and data analytics services in theUKto 
retailers and suppliers.Aimiaalso holds a minority position in Cardlytics, 
a US-based private company operating in transaction-driven marketing for 
electronic banking.Aimiais listed on theToronto Stock Exchange(TSX: 
AIM). For more information, visit us

Media JoAnne Hayes 416-352-3706  Analysts Karen Keyes 


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