Groupe Aeroplan Inc. Reports 2009 Year-end and Fourth Quarter Results

Global leader in loyalty management demonstrates resiliency during recessionary times

MONTREAL, March 4 /CNW Telbec/ - Groupe Aeroplan Inc. (the "Corporation") (TSX: AER), today reported its 2009 year-end and fourth quarter results.

2009 Operating Highlights

    
    - Consolidated gross billings in line with management's guidance
    - Further enhancement of coalition programs in Canada and the UK:
      - Added a number of new retail and travel partners to the Aeroplan
        program and expanded Sobeys partnership in British Columbia
      - Launched multi-year partnership with Homebase, the UK's largest home
        improvement retailer and redemption offering with Expedia.co.uk, the
        UK's largest online travel agent
      - Increased engagement with Sainsbury's through 'coupon at till' scheme
        and greater Nectar incentives
    - Execution of international expansion plans including the
      acquisition of loyalty marketing services provider Carlson Marketing
      and the launch of Nectar Italia
    

"Our 2009 results, which are in line with our guidance, highlighted the resiliency of our business model," said Rupert Duchesne, President and Chief Executive Officer. "During one of the toughest economic periods in recent history, Groupe Aeroplan had a remarkable performance. In addition to navigating through the recession, we continued to focus on strategic and operational execution and enhance our position for future growth. Over the last twelve months, we have successfully transformed the business to become a global leader in loyalty management with a substantially diversified revenue base and geographical reach into many G20 countries."

"In 2010, we plan to invest in our core businesses, complete the strategic integration of Carlson Marketing and leverage our capabilities across the company," added Duchesne. "At the same time, we will continue to look at greenfield projects similar to Nectar Italia, the expansion of LMG Insight and Communication, small tuck-in acquisitions and minority investments in frequent flyer programs. These initiatives give us the opportunity to earn significant returns for our shareholders for a relatively small investment."

"During 2009, despite the volatile credit markets, we were able to successfully renegotiate our bank facilities and access debt capital markets," said David Adams, Executive Vice President and Chief Financial Officer. "We continued our refinancing strategy in 2010 with the issuance of two additional instruments: Series 1 Preferred Shares and Series 3 Secured Notes. As a result, we have successfully laddered our debt maturities and significantly reduced refinancing risk, allowing us greater financial flexibility, reducing our exposure to rising interest rates and enabling us to focus on building on our existing leadership advantage in loyalty and fund the initiatives required to appropriately position us for future growth. In addition, we have a solid balance sheet, managed conservatively to deal with any unforeseen eventualities."

2009 Consolidated Financial Highlights

    
    - Gross Billings of $1,363.0 million
    - Revenue of $1,436.8 million
    - Operating income of $163.8 million
    - Net earnings of $89.3 million
    - Cash flows from operations of $288.5 million
    - Adjusted EBITDA of $281.6 million*
    - Adjusted net earnings of $181.8 million*
    - Free Cash Flow of $165.0 million*
    

Financial Performance (compared to 2008 and fourth quarter of 2008)

    
    Gross Billings
    --------------
    

Consolidated Gross Billings for 2009 amounted to $1,363.0 million, compared to $1,420.5 generated during 2008, representing a decrease of 4.1%. During the fourth quarter of 2009, Gross Billings amounted to $363.0 million, compared to $364.4 million for the corresponding quarter of 2008, for a decrease of 0.4%.

    
    Revenue
    -------
    

Revenue for 2009 amounted to $1,436.8 million, compared to $1,458.2 million for 2008, for a reduction of 1.5%. Revenue for the fourth quarter of 2009 amounted to $424.9 million, compared to $430.3 million during the corresponding period of 2008, for a reduction of 1.3%.

    
    Operating Income
    ----------------
    

Operating income for 2009, before amortization of accumulation partners' contracts and technology, amounted to $244.0 million, compared to $306.9 million for 2008, representing a decrease of 20.5%. During the fourth quarter of 2009, operating income before amortization of accumulation partners' contracts and technology, amounted to $65.2 million, compared to $105.2 million for the corresponding quarter of 2008, representing a decrease of 38.0%.

    
    Net Earnings
    ------------
    

Net earnings for 2009 amounted to $89.3 million, compared to a net loss for 2008 of $965.2 million, after the recognition during the fourth quarter of an impairment charge of $1,160.7 million. During the fourth quarter of 2009, net earnings amounted to $20.5 million, compared to a net loss of $1,073.8 million for the comparative period of 2008.

    
    Cash flows from operations
    --------------------------
    

Cash flows from operations generated during the 2009 year amounted to $288.5 million, compared to $323.1 million generated during the 2008 year, for a reduction of 10.7%. During the fourth quarter, cash flows from operations reached $107.5 million, compared to $65.4 million generated during the corresponding quarter of 2008, for an increase of 64.4%.

    
    Liquidity
    ---------
    

At the end of 2009, the Corporation had $609.8 million of cash and cash equivalents, $4.2 million of restricted cash and $14.4 million of short-term investments, for a total of $628.4 million, including the Aeroplan Canada redemption reserve of $400.0 million.

    
    Adjusted EBITDA* and Free Cash Flow*
    ----------------------------------------
    

Adjusted EBITDA for the year ended December 31, 2009, amounted to $281.6 million, which represents 20.7% of Gross Billings, compared to $319.2 million generated during the prior year or 22.5 % of Gross Billings.

Adjusted EBITDA for the fourth quarter of 2009, amounted to $69.6 million, compared to $80.6 million for the fourth quarter of 2008, or 19.2% and 22.1% of Gross Billings, respectively.

Free Cash Flow for the year amounted to $165.0 million, compared to $177.5 million for 2008, for a decrease of 7.0%. During the quarter Free Cash Flow generated amounted to $79.2 million, compared to $42.5 million for the fourth quarter of 2008.

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

Outlook for 2010

For 2010, excluding the effect of currency fluctuations, Groupe Aeroplan anticipates modest organic growth in Gross Billings in its legacy businesses, and with the acquisition of Carlson Marketing, in consolidated Adjusted EBITDA as well. However, Free Cash Flow levels are expected to be reduced, as a result of investments required to support future growth and the effect of non-recurring favourable items, which occurred in 2009.

In Aeroplan Canada, the Average Cost of Rewards per Aeroplan Mile Redeemed is not expected to exceed 0.95 cents on an annual basis throughout 2010, with gross margin remaining relatively stable.

Gross Billings from Carlson Marketing are expected to approximate US$600 million, with Adjusted EBITDA in the 6% to 8% range, before one time transition costs, which are estimated at US$15 million. The successful transition of the technology solutions in the US, out of the vendor's platforms, represents both, the biggest opportunity and risk associated to Carlson Marketing's 2010 performance. These costs could increase by up to US$2 million per month, should the transition be delayed from the original timetable.

Groupe Aeroplan's portion of the funding requirements for the launch of the Nectar Italia program, which will affect consolidated Adjusted EBITDA, is expected to be in the range of (euro)15 million over 2010. Nectar Italia is expected to generate annual Gross Billings in the range of (euro)60 million to (euro)80 million within three years.

The current income tax rate is anticipated to approximate 30% in Canada, and there is an expectation that no significant cash income taxes will be incurred in the rest of the Corporation's foreign operations.

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

    
    Dividends
    ---------
    

The Corporation also announced today that the Board of Directors declared a quarterly dividend of $0.125 per common share, payable on March 31, 2010 to shareholders of record at the close of business on March 17, 2010.

In addition, the Board declared an initial quarterly dividend for the period from January 20, 2010 to March 31, 2010 in the amount of $0.31164 per Cumulative Rate Reset Preferred Share, Series 1, payable on March 31, 2010 to the holders of record at the close of business on March 17, 2010.

    
    Executive appointments
    ----------------------
    

On March 1, 2010, the Corporation announced the addition of a renowned loyalty thought leader to its executive management team with the appointment of Rick Ferguson, the former Editorial Director of the loyalty publication COLLOQUY. Ferguson, in his new role as Vice President, Knowledge Development, will assume overall direction for the dissemination of loyalty marketing thought-leadership, research and best practices.

    
    Senior Secured Notes Offering
    -----------------------------
    

On January 26, 2010, Groupe Aeroplan issued Senior Secured Notes Series 3 in the principal amount of $200.0 million. These notes bear interest at 6.95%, payable semi-annually in arrears, mature on January 26, 2017, and are secured by substantially all the present and future assets of Groupe Aeroplan and certain of its subsidiaries. The proceeds from the notes issued were used to repay a portion of the term facility.

    
    Issuance of Preferred Shares
    ----------------------------
    

On January 20, 2010 and January 26, 2010, pursuant to a prospectus supplement dated January 13, 2010, Groupe Aeroplan issued a total of 6,900,000 Preferred Shares Series 1 with a 6.5% annual cumulative, quarterly dividend subject to a rate reset on March 31, 2015 and every five years thereafter at a rate equal to the 5-year Government of Canada bond yield plus 3.75%, for total cash consideration of $167.3 million, net of issue costs of $5.2 million. The Preferred Shares, Series 1 will be redeemable by Groupe Aeroplan Inc. on March 31, 2015, and every five years thereafter in accordance with their terms.

Recent Developments

Partnerships

    
    ASK - Nectar UK
    ---------------
    

On March 2, 2010, Nectar announced that it was revamping its rewards with the addition of a number of big brand household names joining the program this year. The first of these new partnerships is with ASK, a nationwide chain of 120 contemporary Italian restaurants.

    
    Nestlé - Aeroplan Canada
    ------------------------
    

On February 25, 2010, Aeroplan announced the signing of a multi-year agreement with Nestlé in Canada that will enable members to earn Aeroplan Miles on more than 60 Nestlé and Nestlé Purina PetCare products starting March 1, 2010.

    
    Octopus Travel - Air Miles Middle East
    --------------------------------------
    

On January 26, 2010, Air Miles Middle East announced Octopus Travel as its first online partner across the region to offer its members the chance to earn Air Miles when booking online from a portfolio of over 30,000 hotels worldwide.

    
    Avis and Hertz - Aeroplan Canada
    --------------------------------
    

On December 22, 2009, Aeroplan announced the renewal of multi-year agreements with its car rental partners of choice - Avis and Hertz, which will enable members to continue to earn and redeem Aeroplan Miles on all car rentals across North America and Europe.

    
    Brussels Airlines - Aeroplan Canada
    -----------------------------------
    

On December 9, 2009, Aeroplan announced the addition of Brussels Airlines to its growing roster of 33 travel partners flying to more than 1,000 destinations worldwide.

    
    MSC Cruises - Aeroplan Canada
    -----------------------------
    

On December 7, 2009, Aeroplan and MSC Cruises announced a new partnership by which Aeroplan Members can earn miles on select cruises offered throughout the Mediterranean, Northern Europe, Transatlantic, the Caribbean, New England and Canada in addition to transatlantic and positioning cruises.

Corporate Social Responsibility

    
    Relief Efforts in Chile
    -----------------------
    

On March 2, 2010, Aeroplan announced a donation of 1 million Aeroplan Miles to the Canadian Red Cross to support the emergency relief efforts in the aftermath of the massive earthquake in Southern Chile. Aeroplan also invited its members who wish to support the Chilean community to donate their Aeroplan Miles online at www.aeroplan.com.

In addition, Groupe Aeroplan will match employee donations from all its business units around the world until March 15, 2010.

    
    New Global Environmental Partner
    --------------------------------
    

On January 18, 2010, the Corporation announced a new strategic partnership with Offsetters, the first Official Supplier of Carbon Offsets to Olympic Games and Official Carbon Offset provider to the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games (VANOC). Offsetters will provide high quality carbon offsets for Groupe Aeroplan's total global carbon footprint and for member-driven programs and initiatives such as Aeroplan Canada's offset program. In 2009, Aeroplan Members redeemed more than 32 million miles for carbon offsets, equivalent to reducing 14,000 tonnes of greenhouse gas emissions or removing 2,545 cars from the road.

Offsetters will also help the Corporation expand its environmental commitment beyond Canada.

    
    Relief Efforts in Haiti
    -----------------------
    

On January 14, 2010, Aeroplan announced a donation of 1 million Aeroplan Miles to the Canadian Red Cross to support the emergency relief efforts in the aftermath of the earthquake in Haiti. An additional 1 million miles was given to Aeroplan's Beyond Miles partner Médecins Sans Frontières who run both a maternity and a surgical hospital in Haiti. Aeroplan also invited its members to donate their Aeroplan Miles to either of these Canadian emergency relief organizations. To date more than 7 million miles have been donated.

In addition, Groupe Aeroplan employees from around the world have united to show their support for the Red Cross's relief aid in Haiti and, together with Groupe Aeroplan's dollar for dollar match, made a significant contribution to the Red Cross.

    
    Aeroplan Match Days
    -------------------
    

On December 10, 2009, Aeroplan announced that its members donated more than 6 million miles as part of "Aeroplan Match Days" with the following Aeroplan Beyond Miles partners: Médecins Sans Frontières, Schools Without Borders, the Stephen Lewis Foundation and Veterinarians Without Borders. Aeroplan matched member donations to bring the total amount to 12 million miles that have gone directly to these Canadian charities. This is equivalent to approximately 100 international flights, 800 hotel stays or 2,400 daily car rentals.

In 2009, Aeroplan Members donated more than 30 million Aeroplan Miles to the Beyond Miles program.

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 Thursday March 4, 2010 to discuss its 2009 year-end and fourth quarter results. The call may be accessed by dialing toll free: 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/viewEvent.cgi?eventID=2949540.

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 audited consolidated financial statements, the MD&A and a financial highlights presentation will be accessible on the investor relations website at www.groupeaeroplan.com under Financial Results.

About Groupe Aeroplan Inc.

Groupe Aeroplan Inc. a global leader in loyalty management, owns Aeroplan, Canada's premier coalition loyalty program, Carlson Marketing, an international loyalty marketing services, engagement and events provider headquartered in the U.S., as well as Nectar, the United Kingdom's leading coalition loyalty program. In the Gulf Region, Groupe Aeroplan holds a 60% interest in the Air Miles Middle East 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, and it has a majority 75% ownership position in Nectar Italia, the first independent loyalty coalition program uniting leading retailers in Italy.

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 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 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 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 and clients, conflicts of interest, Air Canada or travel industry disruptions, airlines industry changes and increased airline costs, retail market/economic downturn, greater than expected redemptions for rewards, industry competition, integration of Carlson Marketing, supply and capacity costs, unfunded future redemption costs, failure to safeguard databases and consumer privacy, consumer privacy legislation, changes to loyalty programs, seasonal nature of the business, other factors and prior performance, regulatory matters, 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, dilution of shareholders, uncertainty of dividend payments, level of indebtedness-refinancing risk, managing growth, credit ratings, as well as the other factors identified throughout the MD&A. The forward-looking statements contained herein represent Groupe Aeroplan's expectations as of March 3, 2010, 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.

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

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (in thousands, except
     share/unit and                                                 Year
     per share/per unit                                          over year
     information)                                                % change
                         ----------------------------------------------------
                         ----------------------------------------------------
                                                                2009    2008
                                                                over    over
                           2009         2008         2007 (g)   2008    2007
                         ----------------------------------------------------
                              $            $            $
    -------------------------------------------------------------------------
    Gross Billings
     from the sale
     of GALUs         1,363,010    1,420,548      952,165       (4.1)   49.2
    -------------------------------------------------------------------------
    GALUs revenue     1,352,527    1,377,736      848,665       (1.8)   62.3
    Other revenue        84,312       80,493       57,750        4.7    39.4
    -------------------------------------------------------------------------
    Total revenue     1,436,839    1,458,229      906,415       (1.5)   60.9
    Cost of rewards    (893,415)    (859,082)    (540,061)       4.0    59.1
    -------------------------------------------------------------------------
    Gross margin        543,424      599,147      366,354       (9.3)   63.5
    Selling, general
     and
     administrative
     expenses          (280,134)    (271,591)    (164,841)       3.1    64.8
    Depreciation and
     amortization       (19,280)     (20,636)     (11,804)      (6.6)   74.8
    -------------------------------------------------------------------------
    Operating income
     before
     amortization of
     Accumulation
     Partners'
     contracts and
     technology         244,010      306,920      189,709      (20.5)   61.8
    -------------------------------------------------------------------------
    Depreciation and
     amortization        19,280       20,636       11,804       (6.6)   74.8
    -------------------------------------------------------------------------
    EBITDA (a)          263,290      327,556      201,513      (19.6)   62.5
    -------------------------------------------------------------------------
    Adjustments:
      Change in
       deferred
       revenue
        Gross
         Billings
         from the
         sale of
         GALUs        1,363,010    1,420,548      952,165
        GALUs
         revenue     (1,352,527)  (1,377,736)    (848,665)
      Change in
       Future
       Redemption
       Costs (b)          7,861      (51,202)     (52,916)
        (Change in
         Net GALUs
         outstanding x
         Average Cost
         of Rewards
         per GALUs for
         the period)
    -------------------------------------------------------------------------
    Subtotal of
     Adjustments         18,344       (8,390)      50,584
    -------------------------------------------------------------------------
    Adjusted
     EBITDA (a)         281,634      319,166      251,737      (11.8)   26.8
    -------------------------------------------------------------------------
    Net earnings
     (loss) in
     accordance
     with GAAP           89,275     (965,210)      (4,819)
    Weighted
     average
     number of
     shares
     (units)        199,443,084  199,392,420  190,023,236 (e)
    Earnings
     (loss) per
     share (unit)          0.45        (4.84)       (0.03)
    -------------------------------------------------------------------------
    Net earnings
     (loss) in
     accordance
     with GAAP           89,275     (965,210)      (4,819)
    Amortization of
     Accumulation
     Partners'
     contracts and
     technology          80,246       87,838            -
    Subtotal of
     Adjustments
     (from above)        18,344       (8,390)      50,584
    Effective tax
     rate (c)             -33.1%       -0.38%           -
    Tax on
     adjustments at
     the effective
     rate                (6,077)          32            -
    -------------------------------------------------------------------------
    Adjusted net
     earnings (d)       181,788      274,970 (h)   45,765
    Adjusted net
     earnings per
     share (unit)          0.91         1.38 (h)     0.24
    -------------------------------------------------------------------------
    Net earnings
     (loss)              89,275      195,490 (h)   (4,819)
    Earnings (loss)
     per share (unit)      0.45         0.98 (h)    (0.03)
    -------------------------------------------------------------------------
    Cash flow from
     operations         288,489      323,079      308,245
    Maintenance
     Capital
     Expenditures       (23,469)     (22,558)     (16,325)
    Dividends/
     distributions      (99,988)    (122,981)    (173,000) (f)
    -------------------------------------------------------------------------
    Free cash
     flow (d)           165,032      177,540      118,920       (7.0)   49.3
    -------------------------------------------------------------------------
    Total assets      5,217,992    5,017,720    6,118,340
    Total long-term
     liabilities      1,618,201    1,428,503    1,579,297
    Total dividends/
     distributions
     declared            99,988      108,983      168,000 (f)
    Total dividends
     per share/
     distributions
     declared per
     unit                  0.50         0.55         0.84
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (a) 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.
    (b) 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.
    (c) Effective tax rate calculated as follows: income tax expense per the
        statement of operations/earnings before income taxes for the period.
    (d) A non-GAAP measurement.
    (e) Represents the weighted average number of units of the Fund.
    (f) Distributions paid and declared in 2007 are those of the Partnership.
    (g) Has been derived by adding the results of the Partnership prior to
        March 14, 2007 to the results of the Fund for the year.
    (h) Excluding impairment charge.


                         SUMMARY OF QUARTERLY RESULTS
    

This section includes sequential quarterly data for the eight quarters ended December 31, 2009.

    
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (in thousands, except
     per share amounts)                           2009
    -------------------------------------------------------------------------
                                   Q4          Q3          Q2          Q1
                                    $           $           $           $
    -------------------------------------------------------------------------
    Gross Billings            363,048     335,882     337,832     326,248
    -------------------------------------------------------------------------
    GALUs revenue             401,202     303,181     312,400     335,744
    Other revenue              23,650      19,467      21,115      20,080
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total revenue             424,852     322,648     333,515     355,824
    Cost of rewards          (277,331)   (187,994)   (201,728)   (226,362)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Gross margin              147,521     134,654     131,787     129,462
    Selling, general
     and administrative
     expenses                 (77,606)    (67,761)    (68,626)    (66,141)
    Depreciation and
     amortization              (4,722)     (4,494)     (5,127)     (4,937)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Operating income
     before amortization
     of Accumulation
     Partners' contracts
     and technology            65,193      62,399      58,034      58,384

    Amortization of
     Accumulation
     Partners' contracts
     and technology           (19,967)    (20,079)    (20,485)    (19,715)
    -------------------------------------------------------------------------
    Operating income           45,226      42,320      37,549      38,669
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net earnings (loss)        20,545      18,756      26,746      23,228
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Adjusted EBITDA (a)        69,553      76,706      70,564      65,228 (d)
    -------------------------------------------------------------------------
    Adjusted net
     earnings (a)              40,319      45,405      52,254      44,551
    -------------------------------------------------------------------------
    Net earnings               20,545      18,756      26,746      23,228
    Earnings per share/unit      0.10        0.09        0.13        0.12
    -------------------------------------------------------------------------
    Free cash flow (a)         79,168      44,014      90,841     (48,991)
    -------------------------------------------------------------------------
    Earnings per share
     (unit), in accordance
     with GAAP - Groupe
     Aeroplan/Fund               0.10        0.09        0.13        0.12
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (in thousands, except
     per share amounts)                           2008
    -------------------------------------------------------------------------
                                   Q4          Q3          Q2          Q1
                                    $           $           $           $
    -------------------------------------------------------------------------
    Gross Billings            364,437     355,603     357,858     342,650
    -------------------------------------------------------------------------
    GALUs 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)(b)  34,956      31,454      42,132
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Adjusted EBITDA (a)        80,559 (d)  79,366 (d)  81,856 (d)  73,267 (d)
    -------------------------------------------------------------------------
    Adjusted net
     earnings (a)              84,661 (c)  63,229      60,822      69,971
    -------------------------------------------------------------------------
    Net earnings               86,948 (c)  34,956      31,454      42,132
    Earnings per share/unit      0.44 (c)    0.18        0.16        0.21
    -------------------------------------------------------------------------
    Free cash flow (a)         42,492     115,868      43,636     (24,456)
    -------------------------------------------------------------------------
    Earnings per share
     (unit), in accordance
     with GAAP - Groupe
     Aeroplan/Fund              (5.39)       0.18        0.16        0.21
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (a) A non-GAAP measurement.
    (b) Includes impairment charge.
    (c) Excludes impairment charge.
    (d) 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.
    

SOURCE AIMIA

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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