Groupe Aeroplan Inc. Reports 2009 Second Quarter Results



    Business shows resiliency through challenging economic times

    MONTREAL, Aug. 14 /CNW Telbec/ - Groupe Aeroplan Inc. (the "Corporation")
(TSX: AER), today reported its 2009 second quarter results.

    Second Quarter 2009 Operating Highlights

    
    - Gross billings, on a constant currency basis, down by just under 3%
      compared to the second quarter of 2008
    - Redemption activity in all programs within normal seasonal levels and
      redemption costs in Canada in line with annual outlook and historical
      second quarter trends
    - Execution of international expansion plans, as evidenced by the planned
      launch of a coalition loyalty program in Italy in 2010
    

    "While Groupe Aeroplan has shown resiliency in the face of lower consumer
spending, we believe the uncertainty surrounding Air Canada has had an
additional impact on our Canadian business, ultimately influencing the average
per card spend in our financial partner portfolio, which was also impacted,
both by a decline in business travel and the recession," said Rupert Duchesne,
President and Chief Executive Officer. "However, this was partially mitigated
by the fact that members in all of our programs were active in both
accumulation and redemption activities and we continue to execute against our
growth strategy with the announcement of significant milestones, such as the
successful Homebase partnership in the UK and the launch of a coalition
loyalty program in Italy.
    "Assisting Air Canada by loaning the airline $150 million was the right
thing to do, both from a commercial perspective and for the benefit of all of
our stakeholders," added Duchesne. "Now that their liquidity situation has
been stabilized, they can focus on their plans to reposition the airline and
strengthen their customer value proposition. A stronger Air Canada, a key
strategic partner, means our Canadian program will be in a better position
going forward."
    "Groupe Aeroplan has a healthy balance sheet and strong liquidity
position," said David Adams, Executive Vice President and Chief Financial
Officer. "Our strong cash generating ability and underlying fundamentals
enabled us to refinance our $650 million credit facilities and access credit
markets by raising $200 million of series 1 notes in this extremely tight
credit environment, while maintaining our investment-grade credit rating."

    Second Quarter 2009 Financial Highlights

    
    - Gross Billings of $337.8 million, after a negative currency impact of
      $9.3 million
    - Revenue of $333.5 million, after an negative currency impact of
      $8.0 million
    - Operating income of $37.5 million
    - Net earnings of $26.7 million
    - Adjusted EBITDA of $70.6 million(*)
    - Adjusted net earnings of $52.3 million(*)
    

    Financial Performance (compared to Second quarter of 2008)

    
    Gross Billings
    --------------
    
    Consolidated gross billings for the three months ended June 30, 2009, on
a constant currency basis, declined by $10.6 million or just under 3.0%,
compared to the second quarter of 2008. Including the currency impact, gross
billings amounted to $337.8 million compared to $357.9 million, representing a
decrease of $20.1 million or 5.6%, with approximately 47% relating to the
devaluation of the GBP sterling compared to the Canadian $, affecting the
translation of our foreign operations.

    
    Revenue
    -------
    
    Revenue amounted to $333.5 million for the three months ended June 30,
2009 compared to $336.7 million for the three months ended June 30, 2008,
representing a decrease of $3.2 million or just under 1.0%.

    
    Operating Income
    ----------------
    
    For the second quarter, operating income, before amortization of
accumulation partners' contracts and technology, amounted to $58.0 million
compared to $69.5 million for the three months ended June 30, 2008,
representing a reduction of $11.5 million. The variance is mostly attributable
to an increase in the Average Cost of Rewards per Mile redeemed under the
Aeroplan program and a marginal decrease in selling, general and
administrative expenses, compared to the second quarter of 2008.
    The increase in Average Cost of Rewards per Mile redeemed during the
quarter reflects the redemption mix of rewards, including the increase in the
cost of Star Alliance redemptions due to fluctuations of the US$, the
underlying distances of itineraries and more expensive class of service of air
rewards redeemed, and marginally, by unit cost increases related to reductions
in capacity by the airline.

    
    Net Earnings
    ------------
    
    Net earnings of $26.7 million for the quarter reflected reduced margins,
driven by a higher Average Cost of Rewards per Mile redeemed for the quarter,
a higher income tax expense related to the Canadian operations as a result of
the conversion to a corporation in the second quarter of 2008, partially
offset by non-operating items related the Corporation's financial structure
and foreign exchange fluctuations.

    
    Liquidity
    ---------
    
    At the end of the second quarter 2009, the Corporation had $590.0 million
of cash and cash equivalents and $34.6 million of short-term investments, for
a total of $624.6 million including the Aeroplan Canada redemption reserve of
$400 million.

    
    Adjusted EBITDA(*) and Free Cash Flow(*)
    ----------------------------------------
    
    Adjusted EBITDA for the three months ended June 30, 2009 amounted to
$70.6 million, which represents 20.9% of Gross Billings, compared to $81.9
million generated during the second quarter of 2008 or 22.9% of Gross
Billings.
    Free cash flow amounted $90.8 million, compared to $43.6 million for the
three month period ended June 30, 2008, mainly as a result of:

    
    - cash generated from operations of $29.7 million, including the effect
      of the reversal of the temporary acceleration of payment terms, related
      to Air Canada, partially offset by lower net earnings for the quarter
      of $4.7 million;
    - lower capital expenditures of $0.6 million incurred during the second
      quarter of 2009, and
    - a reduced level of dividends of $17.0 million paid during the second
      quarter of 2009 compared to the second quarter of 2008, resulting from
      the conversion to a corporation on June 25, 2008.
    

    Outlook for 2009

    Current market conditions, with reduced consumer expenditures and
business travel, make it difficult to predict 2009 performance. Assuming
current economic conditions prevail and absent out of the ordinary events,
affecting the travel industry in particular, Groupe Aeroplan would expect to
see a decline of 2 - 4% in consolidated gross billings, for the full year
2009, as compared to 2008. In addition, for 2009, the Corporation expects the
Average Cost of Rewards per Mile Redeemed, under the Aeroplan Program, to
remain in the low nineties for the remainder of the year and not to exceed
0.95 cents on an annual basis throughout 2010, with gross margin in the
Canadian segment remaining relatively stable.
    The outlook provided constitutes forward-looking statements within the
meaning of applicable securities laws and should be read in conjunction with
the section below entitled "Caution Concerning Forward-Looking Statements".

    Corporate Developments

    
    Dividend
    --------
    
    The Corporation announced today that the Board of Directors declared a
quarterly dividend of $0.125 per common share, payable on September 14, 2009
to shareholders of record at the close of business on August 28, 2009.

    
    Air Canada Financing
    --------------------
    
    On June 29, 2009 Groupe Aeroplan announced that Aeroplan Canada Inc. and
Air Canada agreed to immediately unwind the acceleration of payment terms in
effect as a result of an agreement entered into in November 2008. Concurrent
with the repayment by Air Canada of all remaining amounts previously
accelerated, Aeroplan agreed on June 29, 2009, to make available to Air
Canada, on a secured basis, a revolving loan to replace the existing
acceleration of payments arrangement. The loan was in an amount equal to the
aggregate of the previous 60 days accumulated purchases by Aeroplan of reward
seats from Air Canada, up to a maximum of $100 million, and was repaid in full
on July 30, 2009.
    On July 30, 2009 Aeroplan Canada Inc. entered into a credit agreement
with Air Canada and other parties pursuant to which it advanced $150 million
of a total of $600 million to the airline for a 5-year term, repayable
starting in August 2010 and ending in July 2014. As part of this credit
agreement, Aeroplan and Air Canada agreed to mutually beneficial commercial
terms, none of which negatively affect the availability of capacity for
redemptions and pricing applicable to the purchase of Aeroplan Miles or reward
travel seats.

    
    Launch of Coalition Loyalty Program in Italy
    --------------------------------------------
    
    On June 30, 2009, Groupe Aeroplan announced that it will launch a
coalition loyalty program in Italy in 2010. The program is modeled on its
successful Nectar program in the UK. Groupe Aeroplan will have a majority
participation of 75% in the new Italian program.

    
    Credit Facilities
    -----------------
    
    On June 12, 2009, the Corporation announced that it concluded a renewal
of its $650 million credit facilities with its lending syndicate. At June 30,
2009, $500 million of the credit facilities were drawn and $150 million
remained committed and available.
    The new secured credit facilities, which consist of a bridge loan of $100
million, with its maturity under certain conditions, extending until June 19,
2010, at the option of Groupe Aeroplan; as well as a term facility of $300
million and a revolving facility of $250 million, both maturing on April 23,
2012, rank pari passu with the Senior Secured Notes Series 1 due in 2012,
issued by the Corporation in April 2009.

    
    Labour Relations
    ----------------
    
    On May 22, 2009, Groupe Aeroplan announced that following the outcome of
mediation at the Canada Industrial Relations Board, Aeroplan Canada Inc., Air
Canada and the CAW Local 2002 reached an agreement on the transition of
contact centre agents to Aeroplan. The transfer of the 805 contact centre
employees was fully effected on June 14, 2009.

    
    Issuance of Senior Secured Notes
    --------------------------------
    
    In April 2009, the Corporation issued an aggregate of $200 million
principal amount of 9% Series 1, Senior Secured Notes (the "Notes"), maturing
on April 23, 2012.
    The proceeds from the Notes issued were used to repay the $200 million
current portion of the bridge facility entered into at the time of the
acquisition of Loyalty Management Group.

    Recent Developments

    Partnerships

    
    Katz Group Canada
    -----------------
    
    As announced yesterday, Aeroplan has signed a multi-year agreement with
Katz Group Canada that will enable members of the Aeroplan Program to earn
miles on purchases at select Rexall and Rexall Pharma Plus locations in
Western Canada, Thunder Bay, Ontario and the North West Territories.

    
    Expedia
    -------
    
    On June 15, 2009, Nectar announced its new redemption offering with
Expedia.co.uk., the UK's largest online travel agent and the only travel
company which offers its customers the ability to collect and spend their
Nectar points on travel deals around the world.

    
    Homebase
    --------
    
    On May 18, 2009, Homebase, the UK's second largest home improvement
retailer, became Nectar's do-it-yourself partner allowing Nectar members to
earn Nectar Points at Homebase's 330 stores. More than 400,000 new Nectar
members signed up and over 3 million members collected points at Homebase
within ten weeks.

    
    TAM Airlines
    ------------
    
    On April 27, 2009, Aeroplan announced the addition of Air Canada's
partner TAM Airlines (TAM) to its growing roster of travel partners.

    Non-GAAP Measures

    In order to provide a better understanding of the results, the following
terms 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 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

    Net earnings in accordance with GAAP adjusted for Amortization of
Accumulation Partners' contracts and technology; Change in deferred revenue,
Change in Future Redemption Costs and the income tax effect thereon calculated
at the effective income tax rate as reflected in the statement of operations,
provides a measurement of profitability calculated on a basis consistent with
Adjusted EBITDA.
    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 draft recommendations provided in their February
2008 publication, Improved Communications with Non-GAAP Financial Measures -
General Principles and Guidance for Reporting EBITDA and Free Cash Flow.

    Quarterly Investor Conference Call / Audio Webcast

    Groupe Aeroplan Inc. will hold an analyst call at 1:00 p.m. ET on Friday
August 14, 2009 to discuss its 2009 second quarter results. The call may be
accessed by dialing toll free: 1-800-731-6941 or 416-644-3424 for the Toronto
area. The call will be simultaneously audio webcast at:
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2732400.
    An archive of the audio webcast will be available at:
http://www.groupeaeroplan.com/pages/invEvents.php for ninety days following
the original broadcast.
    The unaudited consolidated financial statements. the MD&A and analysis
and a slide presentation will be accessible on the investor relations website
at www.groupeaeroplan.com under Financial Results.

    About Groupe Aeroplan Inc.

    Groupe Aeroplan Inc. is a leading international loyalty management
corporation. Groupe Aeroplan owns Aeroplan, Canada's premier loyalty program
and Nectar, the United Kingdom's leading coalition loyalty program. In the
Gulf Region, Groupe Aeroplan owns 60 per cent of Rewards Management Middle
East, the operator of Air Miles programs in the United Arab Emirates, Qatar
and Bahrain. Groupe Aeroplan also operates LMG Insight & Communication, a
customer-driven insight and data analytics business offering international
services to retailers and their suppliers.

    For more information about Groupe Aeroplan, please visit
www.groupeaeroplan.com.

    Caution Concerning Forward-Looking Statements

    Certain statements in this news release may contain forward-looking
statements. Forward-looking statements, by their nature, are based on
assumptions and are subject to important risks and uncertainties. Any
forecasts or forward-looking predictions or statements cannot be relied upon
due to, amongst 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, risks related to the business
and the industry, Air Canada liquidity issues, dependency on top Accumulation
Partners, Air Canada or travel industry disruptions, Airline industry changes
and increased airline costs, reduction in activity, usage and accumulation of
Aeroplan Miles, retail market/economic downturn, greater than expected
redemptions for rewards, industry competition, supply and capacity costs,
unfunded Future Redemption Costs, failure to safeguard databases and consumer
privacy, consumer privacy legislation, changes to the Aeroplan and Nectar
Programs, seasonal nature of the business, other factors and prior
performance, regulatory matters, VAT appeal, reliance on key personnel, labour
relations and pension liability, technological disruptions and inability to
use third party software, failure to protect intellectual property rights,
currency fluctuations, interest rate and currency fluctuations, leverage and
restrictive covenants in current and future indebtedness, dilution of Groupe
Aeroplan shareholders, uncertainty of dividend payments, level of indebtedness
- refinancing risk, managing growth as well as the other factors identified
throughout the MD&A. The forward-looking statements contained herein represent
Groupe Aeroplan's expectations as of August 13, 2009, and are subject to
change after that date. However, Groupe Aeroplan 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.

    
    -------------------------------
    (*) See Non-GAAP measures below.



     SUMMARY OF CONSOLIDATED OPERATING RESULTS AND RECONCILIATION OF EBITDA,
          ADJUSTED EBITDA, ADJUSTED NET EARNINGS AND FREE CASH FLOW

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (in thousands,
     except miles,
     share and per           Three months ended          Six months ended
     share information)            June 30,                  June 30,
                       ------------------------------------------------------
                       ------------------------------------------------------
                              2009         2008         2009         2008
                       ------------------------------------------------------
                                 $            $            $            $
    -------------------------------------------------------------------------
    Gross Billings
     from the sale of
     Aeroplan Miles        337,832      357,858      664,080      700,508
    -------------------------------------------------------------------------
    Aeroplan Miles
     revenue               312,400      317,579      648,144      654,865
    Other revenue           21,115       19,149       41,195       38,078
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total revenue          333,515      336,728      689,339      692,943
    Cost of rewards       (201,728)    (192,593)    (428,090)    (415,820)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Gross margin           131,787      144,135      261,249      277,123
    Selling, general
     and administrative
     expenses              (68,626)     (69,627)    (134,767)    (134,138)
    Depreciation and
     amortization           (5,127)      (4,998)     (10,064)      (9,670)
    -------------------------------------------------------------------------
    Operating income
     before
     amortization of
     Accumulation
     Partners'
     contracts and
     technology             58,034       69,510      116,418      133,315
    -------------------------------------------------------------------------
    Depreciation and
     amortization            5,127        4,998       10,064        9,670
    -------------------------------------------------------------------------
    EBITDA(1)               63,161       74,508      126,482      142,985
    -------------------------------------------------------------------------
    Adjustments:
      Change in
       deferred
       revenue
        Gross billings
         from the sale
         of Aeroplan
         Miles             337,832      357,858      664,080      700,508
        Aeroplan Miles
         revenue          (312,400)    (317,579)    (648,144)    (654,865)
      Change in Future
       Redemption
       Costs(2)            (18,029)     (32,931)      (7,101)     (32,501)
        (Change in
         Net Aeroplan
         Miles
         outstanding x
         Average Cost
         of Rewards
         per Mile for
         the period)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Subtotal of
     Adjustments             7,403        7,348        8,835       13,142
    -------------------------------------------------------------------------
    Adjusted EBITDA(1)      70,564       81,856      135,317      156,127
    -------------------------------------------------------------------------
    Net earnings in
     accordance with
     GAAP                   26,746       31,454       49,974       73,586
    Weighted average
     number of shares  199,462,480  199,402,234  199,423,366  199,402,426
    Earnings per
     share                    0.13         0.16         0.25         0.37
    -------------------------------------------------------------------------
    Net earnings in
     accordance with
     GAAP                   26,746       31,454       49,974       73,586
    Amortization of
     accumulation
     partners'
     contracts and
     technology             20,485       22,688       40,200       45,366
    Subtotal of
     Adjustments
     (from above)            7,403        7,348        8,835       13,142
    Effective tax
     rate(3)                 32.15%        9.09%       25.38%        0.15%
    Tax on
     adjustments at
     the effective
     rate                   (2,380)        (668)      (2,242)         (20)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Adjusted net
     earnings(4)            52,254       60,822       96,767      132,074
    Adjusted net
     earnings per
     share                    0.26         0.31         0.49         0.66
    -------------------------------------------------------------------------
    Cash flow from
     operations            121,843       92,188      105,831      116,591
    Maintenance
     Capital
     Expenditures           (6,005)      (6,558)     (13,987)     (13,423)
    Dividends              (24,997)     (41,994)     (49,994)     (83,988)
    -------------------------------------------------------------------------
    Free cash flow(4)       90,841       43,636       41,850       19,180
    -------------------------------------------------------------------------
    Total dividends
     declared               24,997       41,994       49,994       83,988
    Total dividends
     declared/share          0.125         0.21         0.25         0.42
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (in thousands,
     except miles,
     share and per
     share information)                                    % Variation
                       ------------------------------------------------------
                       ------------------------------------------------------
                                                          Q2          YTD
                       ------------------------------------------------------

    -------------------------------------------------------------------------
    Gross Billings
     from the sale of
     Aeroplan Miles                                     (5.6)        (5.2)
    -------------------------------------------------------------------------
    Aeroplan Miles
     revenue                                            (1.6)        (1.0)
    Other revenue                                       10.3          8.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total revenue                                       (1.0)        (0.5)
    Cost of rewards                                      4.7          3.0
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Gross margin                                        (8.6)        (5.7)
    Selling, general
     and administrative
     expenses                                           (1.4)         0.5
    Depreciation and
     amortization                                        2.6          4.1
    -------------------------------------------------------------------------
    Operating income
     before
     amortization of
     Accumulation
     Partners'
     contracts and
     technology                                        (16.5)       (12.7)
    -------------------------------------------------------------------------
    Depreciation and
     amortization                                        2.6          4.1
    -------------------------------------------------------------------------
    EBITDA(1)                                          (15.2)       (11.5)
    -------------------------------------------------------------------------
    Adjustments:
      Change in
       deferred
       revenue
        Gross billings
         from the sale
         of Aeroplan
         Miles
        Aeroplan Miles
         revenue
      Change in Future
       Redemption
       Costs(2)
        (Change in
         Net Aeroplan
         Miles
         outstanding x
         Average Cost
         of Rewards
         per Mile for
         the period)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Subtotal of
     Adjustments
    -------------------------------------------------------------------------
    Adjusted EBITDA(1)                                 (13.8)       (13.3)
    -------------------------------------------------------------------------
    Net earnings in
     accordance with
     GAAP                                              (15.0)       (32.1)
    Weighted average
     number of shares
    Earnings per
     share
    -------------------------------------------------------------------------
    Net earnings in
     accordance with
     GAAP
    Amortization of
     accumulation
     partners'
     contracts and
     technology
    Subtotal of
     Adjustments
     (from above)
    Effective tax
     rate(3)
    Tax on
     adjustments at
     the effective
     rate
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Adjusted net                                       (14.1)       (26.7)
     earnings(4)
    Adjusted net
     earnings per
     share
    -------------------------------------------------------------------------
    Cash flow from                                      32.2        (9.2)
     operations
    Maintenance
     Capital
     Expenditures
    Dividends
    -------------------------------------------------------------------------
    Free cash flow(4)                                  108.2        118.2
    -------------------------------------------------------------------------
    Total dividends
     declared
    Total dividends
     declared/share
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) A non-GAAP measurement, excluding the effect of the "Foreign
        Exchange" line of the Statement of Operations, as it reflects the
        impact of the currency SWAP.
    (2) The per unit cost derived from this calculation is retroactively
        applied to all prior periods with the effect of revaluing the Future
        Redemption Cost liability on the basis of the latest available
        average unit cost.
    (3) Effective tax rate calculated as follows: income tax expense per
        statement of operations / earnings before income taxes for the
        period.
    (4) A non-GAAP measurement.


                            SUMMARY OF QUARTERLY RESULTS

    This section includes sequential quarterly data for the six quarters
    ended June 30, 2009.
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (in thousands,
     except per
     share amounts)                                           2009
    -------------------------------------------------------------------------
    (unaudited)                                           Q2           Q1
    -------------------------------------------------------------------------
                                                           $            $
    -------------------------------------------------------------------------
    Gross Billings                                   337,832      326,248
    -------------------------------------------------------------------------
    Aeroplan Miles
     revenue                                         312,400      335,744
    Other revenue                                     21,115       20,080
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total revenue                                    333,515      355,824
    Cost of rewards                                  201,728      226,362
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Gross margin                                     131,787      129,462
    Selling, general
     and administrative
     expenses                                         68,626       66,141
    Depreciation and
     amortization                                      5,127        4,937
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Operating income
     before
     amortization of
     Accumulation
     Partners'
     contracts and
     technology                                       58,034       58,384
    Amortization of
     Accumulation
     Partners'
     contracts and
     technology                                       20,485       19,715
    -------------------------------------------------------------------------
    Operating income                                  37,549       38,669
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net earnings
     (loss)                                           26,746       23,228
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Adjusted
     EBITDA(1)                                        70,564       65,228 (4)
    -------------------------------------------------------------------------
    Adjusted net
     earnings(1)                                      52,254       44,551
    -------------------------------------------------------------------------
    Net earnings                                      26,746       23,228
    Earnings per
     share                                              0.13         0.12
    -------------------------------------------------------------------------
    Free cash flow(1)                                 90,841      (48,991)
    -------------------------------------------------------------------------
    Earnings per
     share, in
     accordance with
     GAAP                                               0.13         0.12
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (in thousands,
     except per
     share amounts)                              2008
    -------------------------------------------------------------------------
    (unaudited)                 Q4           Q3           Q2           Q1
    -------------------------------------------------------------------------
                                 $            $            $            $
    -------------------------------------------------------------------------
    Gross Billings         364,437      355,603      357,858      342,650
    -------------------------------------------------------------------------
    Aeroplan Miles
     revenue               409,552      313,319      317,579      337,286
    Other revenue           20,780       21,635       19,149       18,929
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total revenue          430,332      334,954      336,728      356,215
    Cost of rewards        252,229      191,033      192,593      223,227
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Gross margin           178,103      143,921      144,135      132,988
    Selling, general
     and administrative
     expenses               66,426       71,027       69,627       64,511
    Depreciation and
     amortization            6,494        4,472        4,998        4,672
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Operating income
     before
     amortization of
     Accumulation
     Partners'
     contracts and
     technology            105,183       68,422       69,510       63,805
    Amortization of
     Accumulation
     Partners'
     contracts and
     technology             19,836       22,636       22,688       22,678
    -------------------------------------------------------------------------
    Operating income        85,347       45,786       46,822       41,127
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net earnings
     (loss)             (1,073,752)(2)   34,956       31,454       42,132
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Adjusted
     EBITDA(1)              80,559 (4)   79,366 (4)   81,856 (4)   73,267 (4)
    -------------------------------------------------------------------------
    Adjusted net
     earnings(1)            84,661 (3)   63,229       60,822       69,971
    -------------------------------------------------------------------------
    Net earnings            86,948 (3)   34,956       31,454       42,132
    Earnings per
     share                    0.44 (3)     0.18         0.16         0.21
    -------------------------------------------------------------------------
    Free cash flow(1)       42,492      115,868       43,636      (24,456)
    -------------------------------------------------------------------------
    Earnings per
     share, in
     accordance with
     GAAP                    (5.39)        0.18         0.16         0.21
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) A non-GAAP measurement.
    (2) Includes impairment charge.
    (3) Excludes impairment charge.
    (4) A non-GAAP measurement, excluding the effect of the "Foreign
        Exchange" line of the Statement of Operations, as it reflects the
        impact of the currency SWAP.
    




For further information:

For further information: Media: Michele Meier, (514) 205-7028,
michele.meier@aeroplan.com; JoAnne Hayes, (416) 352-3706,
joanne.hayes@aeroplan.com; Analysts: Trish Moran, (416) 352-3728,
trish.moran@aeroplan.com


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