Aimia Reports Second Quarter Results


SECOND QUARTER HIGHLIGHTS⁽¹⁾	Three Months Ended June 30,			Three Months Ended June 30,
(in millions of Canadian dollars, except per share amounts)		2014	2013		YoY % Change	YoY % Constant Currency
Gross Billings		648.1	570.6		13.6%	8.1%
Total Revenue⁽²⁾		555.4	(123.3)		**	**
Net Loss ⁽²⁾⁽³⁾		(18.8)	(415.2)		**	**
Loss per Common Share⁽²⁾⁽³⁾		(0.14)	(2.43)		**	**
Adjusted EBITDA⁽²⁾⁽³⁾		58.7	102.0		-42.5%	**
Adjusted Net Earnings per Common Share⁽²⁾⁽³⁾		0.17	0.53		-67.9%	**
Free Cash Flow before Dividends Paid⁽⁴⁾		153.1	88.8		72.4%	**

** Information not meaningful
Please refer to “Notes to Financial Tables” at the end of this release
for details on notations (1) through (11)

MONTREAL, Aug. 13, 2014 /CNW Telbec/ – (TSX: AIM) Aimia today reported
its financial results for the quarter ended June 30, 2014. All
financial information is in Canadian dollars unless otherwise noted.

Highlights:

A strong quarter with a double digit increase in Gross Billings, up
13.6%, boosted by Canadian Gross Billings up 12.4% and a favourable
currency impact driving a 22.6% EMEA increase
Guidance for Free Cash Flow and capital expenditures updated, with Free
Cash Flow of $213.6 million generated in the first six months of 2014
Aeroplan membership up 4% to 5.0 million members since the announcement
of the Aeroplan transformation; gaining in the financial card space
with co-branded credit cardholders now at 1.5 million
New strategic long-term partnership agreement announced with Fractal
Analytics, building on Aimia’s existing capability and global presence
with clients in analytics

Rupert Duchesne, Group Chief Executive said:

“The renewed relationships with our Canadian financial services partners
delivered yet another strong quarter of growth and cash while our
recently announced partnership with Fractal Analytics will allow us to
deepen the sophisticated analytics capabilities we can offer to our
customers around the world.

“Having partners with whom we can work collaboratively to achieve our
strategy and deliver value to consumers remains key to Aimia’s
performance and our longer term returns.”

Consolidated Financial Highlights (Period ended June 30, 2014 versus
period ended June 30, 2013, except where otherwise stated)


Consolidated Highlights⁽¹⁾	Three Months Ended June 30,		Six Months Ended June 30,		Three Months Ended June 30,		Six Months Ended June 30,
(in millions of Canadian dollars)	2014	2013	2014	2013	YoY % Change	YoY % Constant Currency	YoY % Change	YoY % Constant Currency
Gross Billings⁽⁵⁾	648.1	570.6	1,365.3	1,131.7	13.6%	8.1%	20.6%	15.3%
Of which: Gross Billings from Sale of Loyalty Units⁽⁵⁾	491.1	414.3	1,039.8	827.6	18.5%	12.9%	25.6%	20.1%
Of which: Proprietary Loyalty and Other	157.0	156.3	325.5	304.1	0.4%	-4.4%	7.0%	2.2%
Adjusted EBITDA⁽²⁾⁽⁵⁾	58.7	102.0	190.4	184.0	-42.5%	**	3.5%	**
Of which: Distributions from equity-accounted investments	7.4	6.9	7.4	6.9	7.2%	**	7.2%	**
Of which: Impact of VAT	–	26.6	–	24.0	**	**	**	**
Of which: Breakage impact	–	(12.4)	–	–	**	**	**	**
Free Cash Flow before Dividends Paid^(4)(5)(6)	153.1	88.8	213.6	79.2	72.4%	**	**	**
Of which: Cash flow from Operations ^(4)(5)(6)	171.2	100.0	253.3	99.5	71.2%	**	**	**
Of which: Capital Expenditures	(18.1)	(11.2)	(39.7)	(20.3)	61.6%	**	95.6%	**

** Information not meaningful
Please refer to “Notes to Financial Tables” at the end of this release
for details on notations (1) through (11)

Three Months Ended June 30, 2014:

Gross Billings were up 13.6% due to a strong performance from the
Canadian region and a favourable foreign exchange impact. On a constant
currency basis, Gross Billings were up 8.1%.
Gross Billings from the Sale of Loyalty Units were up 18.5%, while
Proprietary Loyalty and Other Gross Billings were up 0.4%.
Adjusted EBITDA was down to $58.7 million, mainly driven by higher cost
of rewards and promotional activities related to the Aeroplan Program,
offset in part by higher Gross Billings; the prior period also included
$26.6 million of VAT benefit and $12.4 million negative impact related
to the change in the Breakage estimate.
Free Cash Flow before Dividends Paid was $153.1 million, with higher
capital expenditures more than offset by higher Cash flow from
Operations which included the benefit of an $83.4 million Canadian
income tax refund.

Six Months Ended June 30, 2014:

Gross Billings were up 20.6% or 15.3% on a constant currency basis with
the $100 million benefit from the TD contribution received in the first
quarter, a strong performance from the Canadian region and a favourable
foreign exchange impact. Excluding the $100 million benefit from the TD
contribution, Gross Billings were up 11.8%.
The first six months of 2014 saw increases in Gross Billings both from
the Sale of Loyalty Units and Proprietary Loyalty and Other, up 25.6%
and 7.0% respectively.
Adjusted EBITDA was $190.4 million, with the $100 million contribution
received from TD partly offset by higher cost of rewards and
promotional activities related to the Aeroplan Program. The prior year
also benefited from $24.0 million of VAT benefit.
Free Cash Flow before Dividends Paid was $213.6 million, with higher
capital expenditures more than offset by higher Cash flow from
Operations, which included $205.9 million of cash proceeds from the TD
contribution received in the first quarter and Canadian tax refunds.

2014 Guidance*

For the year ending December 31, 2014, Aimia is updating its guidance
(last updated on May 13, 2014) to reflect its expectations of higher
Free Cash Flow and capital expenditures.

Aimia currently expects to report the following:


	2013	Guidance (Updated on May 13, 2014)**	2014 Target (as updated on Aug 13, 2014)
Gross Billings	$2,366.4 million	Between 7% and 9% growth (constant currency)⁽⁵⁾	No Change
Adjusted EBITDA⁽¹⁾	$350.5 million⁽⁷⁾	Adjusted EBITDA margin of approximately 12%⁽⁵⁾	No Change
Free Cash Flow before Dividends Paid⁽¹⁾	$268.1 million⁽⁸⁾	Target range of $250 to $270 million⁽⁵⁾⁽⁹⁾	In excess of $270 million
Capital Expenditures	$54.4 million	To approximate $60 to $70 million	To approximate $70 to $80 million

Please refer to “Notes to Financial Tables” at the end of this release
for details on notations (1) through (11)
*Please refer to “Statement on Guidance Assumptions” at the end of this
release for details on assumptions made in preparing the 2014 guidance.
**Change to original guidance provided on February 26, 2014 which had
expected Free Cash Flow in a range of $230 to $250 million.

Regional Financial Highlights¹


Regional Highlights⁽¹⁾		Three Months Ended June 30,		Six Months Ended June 30,		Three Months Ended June 30,		Six Months Ended June 30,
(in millions of Canadian dollars)		2014	2013	2014	2013	YoY % Change	YoY % Constant Currency	YoY % Change	YoY % Constant Currency
Consolidated Gross Billings^(5)(10)		648.1	570.6	1,365.3	1,131.7	13.6%	8.1%	20.6%	15.3%
Of which: Canada⁽⁵⁾		365.2	324.9	797.9	632.0	12.4%	12.4%	26.3%	26.3%
Of which: EMEA		197.8	161.3	384.8	335.0	22.6%	6.3%	14.9%	-0.5%
Of which: US & APAC		85.2	84.5	182.9	165.1	0.8%	-4.6%	10.8%	5.4%

Consolidated Revenue^(2)(10)		555.4	(123.3)	1,164.3	486.2	**	**	**	**
Of which: Canada⁽²⁾		309.3	(334.7)	664.4	36.9	**	**	**	**
Of which: EMEA		156.0	123.8	314.7	281.2	26.0%	9.4%	11.9%	-2.8%
Of which: US & APAC		90.2	87.7	185.5	168.5	2.9%	-2.7%	10.1%	4.7%

(in millions of Canadian dollars)		2014	2013	2014	2013	2014 Margin	2013 Margin	2014 Margin	2013 Margin
Consolidated Adjusted EBITDA⁽²⁾⁽⁵⁾		58.7	102.0	190.4	184.0	9.1%	17.9%	13.9%	16.3%
Of which: Canada⁽²⁾⁽⁵⁾		59.5	78.0	199.7	166.2	16.3%	24.0%	25.0%	26.3%
	Of which: Breakage	–	(12.4)	–	–	**	-3.8%	**	**
Of which: EMEA		19.9	42.8	34.5	60.2	10.1%	26.5%	9.0%	18.0%
	Of which: VAT	–	26.6	–	24.0	**	16.5%	**	7.2%
Of which: US & APAC		(4.3)	(6.3)	(6.0)	(9.9)	-5.0%	-7.5%	-3.3%	-6.0%
Of which: Corporate		(16.4)	(12.5)	(37.8)	(32.5)	**	**	**	**

** Information not meaningful
Please refer to “Notes to Financial Tables” at the end of this release
for details on notations (1) through (11)

Canada – Aeroplan transformation driving Gross Billings momentum

Gross Billings were up 12.4% in the quarter driven by strong growth in
Gross Billings from Loyalty Units, mainly driven by higher card
acquisitions and partner program conversions at Aeroplan, offset in
part by lower client activity in Proprietary Loyalty.
On a year to date basis, Gross Billings rose 26.3% benefiting from the
$100.0 million upfront contribution received from TD in the first
quarter and strong momentum at Aeroplan, offset in part by lower client
activity in Proprietary Loyalty. Excluding the $100.0 million upfront
TD contribution, Gross Billings were up 10.4%.
Adjusted EBITDA decreased to $59.5 million in the quarter mainly due to
higher cost of rewards, including a $14.2 million increase in Future
Redemption Costs on promotional miles issued with the activation of new
financial cards, increased marketing and promotional spend, offset by
higher Gross Billings and the impact of the change in Breakage estimate
of $12.4 million to the prior period.
On a year to date basis, Adjusted EBITDA increased to $199.7 million
benefiting from the $100.0 million TD contribution offset in part by
the $30.3 million increase in Future Redemption Costs attributable to
higher promotional mileage issued on new financial cards acquired and
increased marketing and promotional spend, offset by higher Gross
Billings.
Revenue in the quarter grew over the comparable period last year mainly
due to the impact from the change in Breakage estimate in the second
quarter of 2013.
The year to date increase in Revenue over last year was largely due to
the impact from the change in Breakage estimate and higher redemption
volumes at Aeroplan, offset by lower client activity in Proprietary
Loyalty.

Europe, Middle East & Africa (EMEA) – Strong second quarter for Gross
Billings from Loyalty Units

Gross Billings were up 22.6% to $197.8 million in the quarter. Strong
Gross Billings from Loyalty Units, growth in analytics and insights and
Proprietary Loyalty services and the benefit of a strengthening pound
sterling were all contributors, with constant currency growth up 6.3%.
On a year to date basis, Gross Billings were up 14.9% to $384.8 million,
mainly benefiting from a favourable currency impact. On a constant
currency basis, Gross Billings were down 0.5%, with lower Gross
Billings from Loyalty Units largely offset by growth in analytics and
insights, including ISS international activities, and Proprietary
Loyalty services.
The decrease in Adjusted EBITDA was mainly due to the $26.6 million
positive impact of the VAT litigation in the second quarter of 2013.
Adjusted EBITDA was $19.9 million in the current quarter, which
compares to Adjusted EBITDA in the second quarter of 2013 of $16.2
million (excluding the positive impact from VAT).
The VAT benefit of $24.0 milllion in the prior year was also the main
variance explaining the year to date decrease in Adjusted EBITDA to
$34.5 million, with the decrease in promotional funding in the Middle
East compared to the first quarter of last year also contributing to
the decline.
Revenue was up 26% to $156.0 million in the quarter, mainly benefiting
from a favorable currency impact. Increased redemptions in Nectar UK
and Air Miles Middle East and growth in analytics and insight services
as well as Proprietary Loyalty services also contributed.
On a year to date basis, revenue rose 11.9% to $314.7 million due to
favourable currency impact, growth in analytics and insights, including
ISS’s international activities and increased client activity in
Proprietary Loyalty services, offset by lower redemptions in our
coalition programs.

US & Asia Pacific – Gross Billings growth driven by timing of new
business in the APAC region

Gross Billings grew by 0.8% to $85.2 million in the quarter but were
down 4.6% on a constant currency basis as lower rewards fulfillment
volumes in the US offset increases from new and existing clients in
APAC.
On a year to date basis, Gross Billings rose by 10.8%, or 5.4% on a
constant currency basis, to $182.9 million explained by a favourable
currency impact and increases from new and existing clients, offset in
part by lower rewards fulfillment volumes in the US.
Adjusted EBITDA improved by $2.0 million in the quarter and $3.9 million
year to date, mainly attributable to a higher gross margin which more
than offset increased operating expenses.
Revenue was up 2.9% to $90.2 million in the quarter and up 10.1% year to
date to $185.5 million, driven by the favourable impact of currency and
down 2.7% on a constant currency basis as lower rewards fulfillment
volume in the US offset a net increase in business.

Corporate

Corporate Adjusted EBITDA, was $(16.4) million in the quarter and
$(37.8) million year to date, with the increases mainly attributable to
higher costs to support growth in the global businesses offset in part
by a decrease in consulting and professional fees for the quarter and
year to date.

Operational Highlights


Operational Highlights⁽¹⁾		Three Months Ended June 30,		Six Months Ended June 30,		Three Months Ended June 30,	Six Months Ended June 30,
(in millions of Canadian dollars)		2014	2013	2014	2013	YoY % Change	YoY % Change
Consolidated Gross Billings from the sale of Loyalty Units (76% of total Gross Billings*)⁽⁵⁾		491.1	414.3	1,039.8	827.6	18.5%	25.6%
Of which: Canada (64% of Loyalty Units)⁽⁵⁾*		316.6	270.5	701.2	527.1	17.0%	33.0%
Of which: EMEA (36% of Loyalty Units)*		174.5	143.8	338.6	300.5	21.3%	12.7%

Consolidated Revenue from Loyalty Units⁽²⁾		387.6	-282.5	829.3	178.6	**	**
	Aeroplan Miles Revenue	227.4	225.9	499.9	489.4	0.7%	2.1%
	Aeroplan Breakage Revenue⁽²⁾	27.8	-614.4	61.2	-557.1	**	**
Of which: Canada⁽²⁾		255.2	-388.5	561.1	-67.7	**	**
Of which: EMEA		132.4	106.0	268.2	246.3	24.9%	8.9%

Consolidated Change in Deferred Revenues⁽²⁾⁽⁵⁾		92.7	693.9	201.0	645.5	-86.6%	-68.9%
Of which: Canada⁽²⁾⁽⁵⁾		55.9	659.6	133.5	595.1	-91.5%	-77.6%
Of which: EMEA		41.8	37.5	70.1	53.8	11.5%	30.3%

* The percentage of Gross Billings relates to Q2 2014
** Information not meaningful
Please refer to “Notes to Financial Tables” at the end of this release
for details on notations (1) through (11)

Canadian Gross Billings and Revenue from the sale of Loyalty Units

Canadian Gross Billings from Loyalty Units represented 49% of total
Consolidated Gross Billings and 64% of Consolidated Gross Billings from
Loyalty Units in the quarter.

In the quarter, the 17.0% increase in Gross Billings was mainly
attributable to higher card acquisitions and partner program
conversions in the financial sector and good growth across our partners
in other sectors. These factors, along with the promotional mileage
awarded on new financial cards activation, drove a 17.9% increase in
Aeroplan Miles issued.

Gross Billings from our financial cards partners were up 22.8% in the
quarter mainly resulting from:

A higher number of financial cards in the market driven by higher card
activations, with a lift in co-branded credit cards to 1.5 million at
the end of June and net new cards acquired taking the AMEX base up by
over 35% compared to the same period last year; and
Higher Membership Rewards conversions into Aeroplan Miles from AMEX.

On a year to date basis, the 33.0% increase in Gross Billings included
the $100.0 million TD contribution received in the first quarter of
2014. Gross Billings from financial cards partners were up by 19.3% on
a year to date basis excluding the $100.0 million TD contribution.

Canadian Revenue from Loyalty Units was $255.2 million, up $1.6 million
due to higher redemption volumes, excluding the impact resulting from
the change in the Breakage estimate in the second quarter of 2013
totaling $642.1 million. Rewards issued in the quarter were up 5.7%,
with air rewards up 13.3%, driven mainly by an increase in air
redemptions due to enhanced travel reward offerings under the
Distinction program launched in January 2014. Miles redeemed were up
0.5%. On a year to date basis, the Revenue increase of $11.8 million,
excluding the impact resulting from the change in the Breakage estimate
in the second quarter of 2013 totaling $617.0 million, was mainly due
to higher redemption volumes.

EMEA Gross Billings and Revenue from the sale of Loyalty Units

EMEA Gross Billings from Loyalty Units represented 27% of total
Consolidated Gross Billings and 36% of Gross Billings from Loyalty
Units on a consolidated basis in the quarter. Nectar UK accounted for
83% of EMEA Gross Billings from Loyalty Units.

EMEA Gross Billings were up 21.3% in the quarter, including a favourable
benefit from currency. The timing of Easter in the UK and significant
increase in promotional activity at Sainsbury’s were the main drivers
of the increase in Gross Billings from Loyalty Units relative to the
comparative period. Partially offsetting growth in the region were
lower Gross Billings from Nectar Italia due to difficult economic
conditions and from the Air Miles Middle East program due to a
reduction in offering to members related to a main Accumulation Partner
product.

A favourable currency impact was also a significant factor in the 12.7%
year to date increase in Gross Billings, with the Nectar UK increase
offset by the first quarter decrease in the Middle East and lower
Nectar Italia Gross Billings.

Nectar UK points issuance was up 10.4% in the quarter, benefiting from
the timing of the Easter holiday and partner promotional activity,
while Middle East and Nectar Italia points issuance were down 7.1% and
11.6%, respectively.

Revenue from Loyalty Units grew by 24.9% to $132.4 million in the
quarter, benefiting from a favourable currency impact. Nectar UK and
Middle East redemptions increased by 12.2% and 3.7%, respectively, but
this was offset by lower Nectar Italia redemptions, down 9.6% due to
lower promotional activity and difficult economic conditions. On a year
to date basis, Revenue was up due to a favourable currency impact,
increases in Nectar UK and lower Middle East and Nectar Italia
redemptions.

Cost of Rewards and Direct Costs


Cost of Rewards and Direct Costs		Three Months Ended June 30,		Six Months Ended June 30,		Three Months Ended June 30,		Six Months Ended June 30,
(in millions of Canadian dollars)		2014	2013	2014	2013	YoY % Change	YoY % Constant Currency	YoY % Change	YoY % Constant Currency
Consolidated cost of rewards and direct costs		354.5	230.6	759.0	584.0	53.7%	46.4%	30.0%	24.3%
	Of which: Canada	202.2	173.0	443.7	375.8	16.9%	16.9%	18.1%	18.1%
	Of which: EMEA	106.7	84.2	215.5	188.5	26.7%	9.6%	14.3%	-0.9%
	Of which: Impact of VAT	–	(74.9)	–	(72.8)	**	**	**	**
	Of which: US & APAC	45.6	48.3	99.8	92.5	-5.6%	-11.0%	7.9%	3.1%

Please refer to “Notes to Financial Tables” at the end of this release
for details on notations (1) through (11)

In the quarter, cost of rewards and direct costs represented 63.8% of
revenue (65.2% year to date), resulting in a gross margin before
depreciation and amortization of 36.2% (34.8% year to date).

Cost of rewards and direct costs were up 53.7% to $354.5 million in the
quarter, including the $74.9 million favourable impact resulting from
the final judgment of the VAT litigation in the second quarter of 2013,
with remaining variance explained by significant increases in Canada
and EMEA cost of rewards offsetting a 5.6% decline in the US & APAC.

Canada contributed $29.2 million of the increase, up 16.9%. The elevated
cost of rewards in Canada mainly resulted from a higher redemption cost
per Mile due to the enhanced travel reward offerings in the second
quarter under the newly launched Distinction program.

In EMEA, cost of rewards and direct costs increased by $97.4 million in
the quarter largely due to the $74.9 million favourable VAT impact
included in the second quarter of 2013, as well as unfavourable
currency impact on costs. In addition, the increase is explained by
higher redemption activity at Nectar, growth in activity in analytics
and insights services and Proprietary Loyalty, offset in part by a
decrease in redemption activity at Nectar Italia.

On a year to date basis, cost of rewards increased in all regions, with
the higher redemption cost per Mile at Aeroplan driving the Canadian
increase, the prior year VAT impact and current year currency impact
lifting EMEA costs, and currency impact raising US & APAC direct costs.

Free Cash Flow


Free Cash Flow⁽¹⁾	Three Months Ended June 30,		Six Months Ended June 30,		Three Months Ended June 30,	Six Months Ended June 30,
(in millions of Canadian dollars)	2014	2013	2014	2013	YoY % Change	YoY % Change
Cash flow from Operations^(4)(5)(6)	171.2	100.0	253.3	99.5	71.2%	**
Capex	(18.1)	(11.2)	(39.7)	(20.3)	61.6%	95.6%
Free Cash Flow before Dividends Paid^(4)(5)(6)	153.1	88.8	213.6	79.2	72.4%	**
Free Cash Flow before Dividends Paid per common share^{(4)(5)(6)(11)}	0.85	0.50	1.18	0.43	70.8%	**
Dividends Paid (Common and Preferred)	(36.5)	(32.1)	(70.7)	(62.5)	13.7%	13.1%
Free Cash Flow^(4)(5)(6)	116.6	56.7	142.9	16.7	**	**

** Information not meaningful
Please refer to “Notes to Financial Tables” at the end of this release
for details on notations (1) through (11)

Free Cash Flow before Dividends Paid was $153.1 million, or $0.85 per
common share. On a year to date basis, Free Cash Flow before Dividends
Paid was $213.6 million.

The $64.3 million increase in the quarter was largely attributable to an
increase in Cash Flow from Operations, resulting from higher Gross
Billings in the quarter and the receipt of $83.4 million income tax
refund of loss carry back applied in Canada, offset by higher cost of
rewards, operating expenses and capital expenditures as well as changes
in net operating assets.

On a year to date basis, Free Cash Flow before Dividends Paid increased
by $134.4 million to $213.6 million. The increase was mainly due to
increased Cash Flow from Operations, which includes the $100.0 million
TD contribution, the receipt of income tax refund of $83.4 million, the
receipt of $22.5 million harmonized sales tax related to the CIBC
Payment, offset in part by higher cost of rewards, operating expenses
and capital expenditures as well as changes in net operating assets.

Higher capital expenditures in the quarter and year to date were mainly
related to information technology investments and real estate
expenditures, including the relocation of our headquarters to the new
Tour Aimia in Montreal at the end of April.

Dividends paid in the quarter were $36.5 million ($70.7 million year to
date), of which $31.3 million were related to quarterly dividends paid
to common shareholders ($60.8 million year to date).

Dividend and Share Information


	Amount of Dividend
Date of Dividend Declaration	Per Common Share	Per Series 1 Preferred Share	Per Series 3 Preferred Share
13-May-2013	$0.170	$0.406250	–
12-Aug-2013	$0.170	$0.406250	–
13-Nov-2013	$0.170	$0.406250	–
26-Feb-2014	$0.170	$0.406250	$0.321100
13-May-2014	$0.180	$0.406250	$0.390625
13-Aug-2014	$0.180	$0.406250	$0.390625

Common Shares
The Board of Directors have declared a quarterly dividend of $0.18 per
common share, payable on September 30, 2014 to shareholders of record
at the close of business on September 16, 2014, an increase of 5.9%
over last year.

At June 30, 2014, the number of common shares outstanding was
173,976,454. The weighted average number of basic and diluted common
shares for the three months ended June 30, 2014, was 173,612,917.

Preferred Shares
The Board also declared a quarterly dividend in the amount of $0.40625
per Cumulative Rate Reset Preferred Share, Series 1 and a quarterly
dividend in the amount of $0.390625 per Cumulative Rate Reset Preferred
Share, Series 3, in each case payable on September 30, 2014 to the
holders of record at the close of business on September 16, 2014.

At June 30, 2014, the number of Series 1 Cumulative Rate Reset Preferred
Shares outstanding was 6,900,000 and the number of Series 3 Cumulative
Rate Reset Preferred Shares outstanding was 6,000,000.

Dividends paid by Aimia to Canadian residents on both its common and
preferred shares are “eligible dividends” for Canadian income tax
purposes.

Distributions and Investments

Distributions
A $7.4 million distribution from PLM was received in the second quarter
of 2014, compared to a distribution of $6.9 million received in the
second quarter of 2013. A further $1.8 million of cash was received
in the quarter related to the i2c dividend declared at the end of 2013.

Investments
Since the end of the first quarter, Aimia has announced the following
new investments:

Travel Club
On April 10, 2014, Aimia acquired a 25% equity stake in Travel Club,
Spain’s largest coalition loyalty program, becoming a shareholder
alongside Iberia, Repsol and Eroski. Travel Club has 6 million members
and 30 business partners. Aimia will draw on its international
experience to grow Travel Club’s member base, deliver more value to
members and attract partners from new sectors including finance,
fashion, insurance and telecoms.

Fractal Analytics
On August 12, 2014, Aimia announced an exclusive commercial agreement
and a small minority equity investment in Fractal Analytics, a leading
provider of advanced analytics services. The partnership expands
Aimia’s analytics operations, giving it access to best-in-class
analytics experts to enhance its core capabilities and the opportunity
to embed some of Fractal’s existing predictive analytics tools and
solutions into Aimia’s loyalty solutions.

Current investments include:


Investments
Name	Country	% Aimia holds
Investments in Joint Arrangements
PLM Premier S.A.P.I. de CV	Mexico	48.9%
Prismah Fidelidade S.A.	Brazil	50.0%
Insight 2 Communications LLP	UK	50.0%
Think Big	Malaysia	nd
Investments in Associates and Other
China Rewards	China	nd
Cardlytics	US	nd
Travel Club	Spain	25.0%
Fractal Analytics	India	nd
nd: Not disclosed

Balance Sheet and Financial Position

Aimia’s commitments under its long term debt facilities (including
interest) totaled $955.5 million at the end of June 2014, with $174.6
million coming due in 2014.


Long-Term Debt contractual obligations (in millions of Canadian Dollars)
	Total	2014	2015	2016	2017	2018	Thereafter
Long-Term Debt	800.0	150.0	0.0	0.0	200.0	200.0	250.0
Interest	155.5	24.6	37.4	37.4	30.5	18.6	7.0
Total Long-Term Debt and Interest	955.5	174.6	37.4	37.4	230.5	218.6	257.0

At June 30, 2014, Aimia had Senior Secured Notes outstanding in the
amount of $800.0 million maturing at various dates through May 17,
2019. The Senior Secured Notes Series 2 of $150.0 million, maturing on
September 2, 2014, are expected to be repaid with cash on hand.

Aimia also had an authorized and available revolving credit facility of
$300.0 million, maturing on April 23, 2018. The continued availability
of the credit facility is subject to Aimia’s ability to maintain
certain leverage, debt service and interest coverage covenants, as well
as other affirmative and negative covenants, including certain
limitations of distributions in the form of dividends or equity
repayments in any given fiscal year, as set out in the credit
agreement. At June 30, 2014, Aimia complied with all such covenants.

At June 30, 2014, Aimia had net debt of $(285.7) million, consisting of
short term debt of $150.0 million and long term debt of $650.0 million
less $748.1 million of cash and $337.6 million in long term investments
in bonds, short term investments and restricted cash.

Available cash, which includes cash and cash equivalents, short term
investments and long term investments in bonds, totaled $584.5 million,
after accounting for $472.6 million of redemption reserves related to
our Canadian and UK programs.

Quarterly Conference Call and Audio Webcast Information

Aimia will host a conference call to discuss its second quarter 2014
financial results at 8:00 a.m. ET on Thursday, August 14, 2014. The
call can be accessed by dialing 1-888-231-8191 or 647-427-7450 for the
Toronto area. The call will be simultaneously audio webcast at: http://www.newswire.ca/en/webcast/detail/1281425/1413765

A slide presentation intended for simultaneous viewing with the
conference call will be available the evening of August 13, 2014, at: https://aimia.com/en/investors/presentations.html and an archived audio webcast will be available at: https://aimia.com/content/aimiawebsite/global/en/investors/events.html for ninety days following the original broadcast.

The audited consolidated financial statements and the MD&A will be
accessible on the investor relations website at: https://aimia.com/en/investors/quarterly-reports.html

Explanatory Notes to Financial Tables

Non-GAAP measures (Adjusted EBITDA, Adjusted Net Earnings per common
share and Free Cash Flow before Dividends Paid) and constant currency
are explained in the section entitled Use of Non-GAAP Financial
Information. Discrepancies in variances may arise due to rounding.
Total Revenue for the three and six months ended June 30, 2013 includes
the non-comparable impact of the change in Breakage estimate in the
Aeroplan Program which resulted in a reduction to revenue from Loyalty
Units of $642.1 million and $617.0 million, respectively. Net Loss and
Loss per Common Share for the three and six months ended June 30, 2013
also include the non-comparable impact of the change in Breakage
estimate of $468.0 million and $449.5 million, respectively, net of
income tax recoveries of $174.1 million and $167.5 million,
respectively. Adjusted EBITDA and Adjusted Net Earnings for the three
months ended June 30, 2013 include the unfavourable impact on the
Change in Future Redemption Costs related to the change in Breakage
estimate attributable to the first quarter of 2013 of $12.4 million and
$9.2 million, net of an income tax recovery of $3.2 million,
respectively.
Net Loss, Adjusted EBITDA and Adjusted Net Earnings for the three months
ended June 30, 2013 includes the favourable impact resulting from the
final judgment of the VAT litigation of $43.4 million, $26.6 million
and $43.9 million, respectively. Refer to the Management Discussion and
Analysis for the three and six months ended June 30, 2014 for
additional information.
Includes an amount of $83.4 million received in the second quarter of
2014 from the Canadian Revenue Agency related to the income tax refund
of loss carry back applied in Canada.
Includes the $100.0 million contribution received from TD during the six
months ended June 30, 2014.
Includes a $22.5 million harmonized sales tax credit received during the
six months ended June 30, 2014.
Represents reported figures excluding the $150.0 million payment to CIBC
and $50.0 million card migration provision.
Represents reported figures excluding the $150.0 million payment to CIBC
and $22.5 million of related harmonized sales tax.
Includes $100.0 million related to income tax refund of loss carry back
applied in Canada and $22.5 million input tax credit on harmonized
sales tax payment made in 2013.
The variance between the consolidated total and regional sub-totals is
due to intercompany eliminations.
Calculated as: (Free cash flow before common and preferred dividends
paid) / weighted average common shares outstanding.

Currency Sensitivity and Constant Currency

Currency Sensitivity
Aimia is exposed to currency risk on its foreign operations which are
denominated in a currency other than the Canadian dollar, mainly the
pound sterling, and as such, is subject to fluctuations as a result of
foreign exchange rate variations.

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.

Use of Non-GAAP Financial Information
In order to provide a better understanding of the results, the following
indicators are used:

Adjusted Earnings before Interest, Taxes, Depreciation and Amortization
EBITDA adjusted for certain factors particular to the business, such as
changes in deferred revenue and Future Redemption Costs (“Adjusted
EBITDA”), is used by management to evaluate performance, and to measure
compliance with debt covenants. Management believes Adjusted EBITDA
assists investors in comparing the Corporation’s performance on a
consistent basis without regard to depreciation and amortization and
goodwill impairment, 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 or receivable 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 on page 14 of the Management
Discussion & Analysis for the three and six months ended June 30,
2014. 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 or
receivable 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 on page 14 of the Management
Discussion & Analysis for the three and six months ended June 30, 2014.

Adjusted Net Earnings per Common Share
Adjusted Net Earnings per Common Share provides a measurement of
profitability per Common Share on a basis consistent with Adjusted Net
Earnings. Calculated as Adjusted Net Earnings less dividends declared
on preferred shares divided by the number of weighted average number of
basic and diluted common shares.

Adjusted Net Earnings per Common Share is not a measurement based on
GAAP, is not considered an alternative to Net Earnings per Common Share
in measuring profitability per Common Share 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 on page 14 of the Management Discussion & Analysis for
the three and six months ended June 30, 2014.

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 on page 14 of
the Management Discussion & Analysis for the three and six months
ended June 30, 2014.

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

Free Cash Flow before Dividends paid per Common Share
Free Cash Flow before Dividends Paid per Common Share is a measurement
of cash flow generated from operations on a per share basis. It is
calculated as follows, Free Cash Flow before dividends paid less
preferred dividends paid over the weighted average number of common
shares outstanding.

Please refer to the Summary of Consolidated Operating Results and
Reconciliation of EBITDA, Adjusted EBITDA, Adjusted Net Earnings and
Free Cash Flow on page 14 of the Management Discussion & Analysis for
the three and six months ended June 30, 2014.

Statement on Guidance Assumptions

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 2014 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 2014, 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 August 13, 2014. 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 presently
know about the 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.

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, changes to the Aeroplan Program,
failure to safeguard databases and consumer privacy, 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, 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 throughout Aimia’s
public disclosure records on file with the Canadian securities
regulatory authorities.

The forward-looking statements contained herein represent Aimia’s
expectations as of August 13, 2014, 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 Aimia

Aimia Inc. (“Aimia”) is a global leader in loyalty management. Employing
more than 4,300 people in 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, Nectar Italia, Italy’s largest coalition program and Smart
Button, a leading provider of SaaS loyalty solutions. In addition,
Aimia owns stakes in Air Miles Middle East, Travel Club, Spain’s
leading coalition loyalty program, Club Premier, Mexico’s leading
coalition loyalty program, China Rewards, the first coalition loyalty
program in China that enables members to earn and redeem a common
currency, Think Big, the owner and operator of BIG – AirAsia and Tune
Group’s loyalty program, 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
card-linked marketing. Aimia is listed on the Toronto Stock Exchange
(TSX: AIM). For more information, visit us at www.aimia.com.

SOURCE AIMIA

Contact:

Please contact:
Media, Analysts and Investors
Karen Keyes
416-352-3728
karen.keyes@aimia.com

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