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,
. 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
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

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

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
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:

Member Information about Aeroplan Program Enhancements and Credit Card

For more information visit  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 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

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
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.

About Aimia
Aimia Inc. (“Aimia” or the “Corporation”) is a global leader in loyalty
management. Employing more than 4,000 people in over 20 countries
worldwide, Aimia offers 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.

Aimia owns and operates Aeroplan, Canada’s premier coalition loyalty
program, Nectar, the United Kingdom’s largest coalition loyalty program
and Nectar Italia. In addition, Aimia owns stakes in Air Miles Middle
East, Mexico’s leading coalition loyalty program Club Premier,
Brazil’s Prismah Fidelidade, and i2c, a joint venture
with Sainsbury’s offering insight and data analytics services in
the UK to retailers and suppliers. Aimia also holds a minority position
in Cardlytics, a US-based private company operating in
transaction-driven marketing for electronic banking. Aimia is listed on
the Toronto Stock Exchange (TSX: AIM). For more information, visit us


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:



JoAnne Hayes

Karen Keyes

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