Aimia Secures Strong Future Positioning of Aeroplan under 10-year Agreements with TD and CIBC

Aimia Secures Strong Future Positioning of Aeroplan under 10-year Agreements 
with TD and CIBC 
MONTREAL, Sept. 16, 2013 /CNW Telbec/ - Aimia confirmed today ten-year 
financial credit card agreements with each of TD Bank Group (TD) and Canadian 
Imperial Bank of Commerce (CIBC), effective from January 1, 2014. TD will 
become Aeroplan's primary financial services partner and credit card issuer, 
under an amended version of the agreement announced previously, while CIBC 
will also continue to be an issuer of Aeroplan credit cards. Aimia also 
announced entering into a purchase agreement with TD and CIBC, under which TD 
will acquire approximately half of the current Aeroplan card portfolio and 
CIBC will retain the balance, comprised of Aeroplan cardholders who have 
broader banking relationships with CIBC. 
Both banks will offer members an enhanced suite of Aeroplan Visa credit cards 
to include more earning options and benefits than ever, including exclusive 
Air Canada benefits, in addition to the ground breaking changes to Aeroplan 
with Distinction benefits to be launched in January 2014 for all Aeroplan 
members. 
"The agreements we are announcing today with TD and CIBC will put real 
momentum behind the transformed Aeroplan program we will launch in January and 
provide a strong and stable platform for growth in the Canadian business," 
said Rupert Duchesne, Group Chief Executive, Aimia. "Having these agreements 
in place will also preserve the financial flexibility to invest in the growth 
opportunities we might see for Aimia over the next few years." 
Terms of the New Financial Credit Card Agreements 
The terms of both the new 10-year financial credit card agreements include: 


    --  a more than 15% increase in price per mile to align to market
        levels; and
    --  more comprehensive collaboration around data and customer
        insight analytics.

As disclosed in June, the TD agreement specifically provides for:
    --  a $100 million upfront contribution payable by TD to Aimia in
        2014 to help fund program enhancements; and
    --  a joint marketing spend commitment of around $140 million
        funded by TD and Aimia over 4 years to support new cards and
        new program features.

The TD minimum miles purchase commitment has been updated to a five-year 
volume commitment based on miles purchases by TD and CIBC. These payments, in 
aggregate, could be up to $95 million.

Features of the new credit card offerings to be introduced by the banks during 
2014 were announced on June 27, 2013. TD will market its cards through a 
wide range of TD, Aeroplan and mass market channels, with CIBC using its 
proprietary channels to market to CIBC customers.

"Partnering with two of Canada's leading financial institutions will be a 
market changing outcome for Aeroplan which will strengthen our leadership 
position," said Vince Timpano, President and CEO, Canada, Aimia. "As a result 
of these unique agreements, Aeroplan members have a lot to look forward to in 
2014 - not only will we be offering an exciting new suite of credit cards, 
January also marks the launch of Distinction, our innovative recognition 
program, and Market Fare Flight Rewards will provide members with even more 
seats at great value. With these ground breaking changes, Aeroplan will 
continue to be able to deliver the fastest path to the flights and experiences 
most valued by premium Canadian consumers."

Aimia, TD and CIBC are committed to ensuring that members stay informed 
throughout this process and that any transition will be easy. A tri-party 
marketing campaign will be launched shortly to provide Aeroplan members and 
cardholders with the information they need to know for the transition to new 
cards in 2014.

Regardless of whether members will transition to a new card, all Aeroplan 
Miles that members accumulate through the end of 2013 are deposited into their 
Aeroplan accounts and are not tied to their current credit card.

Terms of the Purchase Transaction

TD, CIBC and Aimia have also entered into an agreement in connection with the 
purchase by TD of approximately half of the Aeroplan credit card portfolio 
from CIBC. Pursuant to this agreement, CIBC will retain the remaining 
630,000 Aeroplan accounts held by its existing banking customers. At June 30, 
2013, the portfolio to be acquired by TD represented approximately: $20 
billion of purchase volume, 550,000 accounts and $3 billion of credit card 
receivables outstanding.

An aggregate amount of $312.5 million (plus the par value of the related 
credit card receivables outstanding) will be paid to CIBC for the conveyance 
of approximately half of its Aeroplan cards portfolio to TD as well as other 
related arrangements. Pursuant to these agreements, Aimia will fund $150 
million of the payments payable to CIBC.

Cardholders in the CIBC portfolio may choose to migrate to TD and vice 
versa. Depending on the net migration of Aeroplan-branded credit card 
accounts between CIBC and TD over the next five years, TD, Aimia, and CIBC 
have agreed to make additional payments of up to $400 million. Aimia will be 
responsible for - or entitled to receive - up to $100 million of these 
payments.

CIBC will also work with TD under an interim servicing agreement to effect a 
smooth transition of the customers moving to TD, allowing members to keep 
accumulating Aeroplan Miles.

Legal and Closing Conditions

In conjunction with the agreements being announced today, CIBC has also agreed 
that, upon closing of the transaction contemplated by the purchase agreement, 
CIBC will fully release Aimia and TD from any potential claims in connection 
with TD becoming Aeroplan's primary financial credit card issuer.

The Aimia and CIBC financial credit card agreement includes an option for 
either party for an early termination after the third year of the agreement if 
certain conditions related to the migration of Aeroplan credit cards in CIBC's 
retained portfolio to other CIBC credit cards are met.

The parties currently anticipate that the purchase transaction will close 
before the end of 2013, subject to obtaining certain regulatory approvals and 
satisfaction of other closing conditions customary in transactions of this 
nature.

2013 Outlook

Our 2013 reported Adjusted EBITDA and Free Cash Flow before dividends is being 
revised mainly as a result of one-time payments being announced today, on the 
expectation that the purchase transaction will close before the end of 2013, 
and additional marketing costs to be incurred in 2013 in connection with the 
transaction.

Our current expectation is for 2013 Adjusted EBITDA on an underlying basis to 
be around $350 million, with a $25 million reduction mainly due to incremental 
marketing expenses related to the financial card agreements and weaker than 
expected market conditions in the latter part of 2013. The $150 million 
closing payment to CIBC and a possible provision of up to $100 million for the 
potential net migration payments described above could take 2013 reported 
Adjusted EBITDA to around $100 million. The value of the possible provision 
to be recorded will be confirmed with the release of our year end results. 
Any actual cash impact for these potential migration payments would not occur 
until 2015 at the earliest.

On an underlying basis, 2013 Free Cash Flow before dividends is now expected 
to be between a revised range of $230 million and $250 million after 
accounting for the $25 million reduction described above. The $150 million 
closing payment in 2013 would further revise 2013 Free Cash Flow before 
dividends to between $80 million and $100 million.

The above guidance should be read in conjunction with the more detailed 
guidance provided in the earnings release dated February 27, 2013 and August 
12, 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 September 16, 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, Monday, September 16, 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: 
http://www.newswire.ca/en/webcast/detail/1224041/1347997.

Member Information about Aeroplan Program Enhancements and Credit Card 
Agreement
For more information visit www.aeroplan.com/new. Consumer questions can also 
be addressed on Twitter (@Aeroplan) or Facebook (www.facebook.com/Aeroplan) 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 financial 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, 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 in the attached schedule. 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 in the attached schedule.

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; and 
(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 in the attached 
schedule.

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 is 
derived by calculating current-year results using prior-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, 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 September 16, 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.

AboutAimia
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, Nectar, theUnited Kingdom'slargest coalition loyalty program and 
Nectar Italia. In addition,Aimia owns stakes in Air Miles Middle 
East,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 atwww.aimia.com.



SOURCE  AIMIA 
Media JoAnne Hayes 416-352-3706 joanne.hayes@aimia.com 
Analysts Karen Keyes 416-352-3728 karen.keyes@aimia.com  
Image with caption: "Ed Clark, Group President and CEO, TD Bank Group; Rupert 
Duchesne, Group Chief Executive, Aimia; and Gerry McCaughey, President and 
CEO, CIBC; announce the confirmed agreements between TD, Aimia and CIBC 
regarding Aeroplan-branded Visa credit cards. (CNW Group/AIMIA)". Image 
available at:  
http://photos.newswire.ca/images/download/20130916_C7362_PHOTO_EN_30865.jpg 
To view this news release in HTML formatting, please use the following URL: 
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CO: AIMIA
ST: Quebec
NI: ADV LEI ORDER FIN CONF  
-0- Sep/16/2013 10:30 GMT
 
 
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