Aimia reports third quarter 2014 results


HIGHLIGHTS⁽¹⁾	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions of Canadian dollars, except per share amounts)	2014	2013	YoY % Change	YoY % Constant Currency	2014	2013	YoY % Change	YoY % Constant Currency
Gross Billings ⁽⁵⁾	633.2	576.7	9.8%	5.8%	1,998.5	1,708.4	17.0%	12.1%
Total Revenue⁽²⁾	543.4	499.7	8.7%	4.9%	1,707.7	985.9	73.2%	66.2%
Net Earnings (Loss) ⁽²⁾⁽³⁾	(24.1)	2.5	**	**	(59.2)	(367.0)	**	**
Loss per Common Share⁽²⁾⁽³⁾	(0.17)	0.00	**	**	(0.44)	(2.21)	**	**
Adjusted EBITDA ⁽³⁾⁽⁵⁾	63.9	85.7	-25.4%	**	254.2	269.2	-5.6%	**
Adjusted Net Earnings per Common Share⁽³⁾⁽⁵⁾	0.18	0.28	-35.7%	**	0.83	1.08	-23.1%	**
Free Cash Flow before Dividends Paid ^(4)(5)(6)	56.3	68.5	-17.8%	**	269.9	147.7	82.7%	**
** Information not meaningful
Please refer to “Notes to Financial Tables” at the end of this release for details on notations (1) through (11)

MONTREAL, Nov. 12, 2014 /CNW Telbec/ – (TSX: AIM) Aimia today reported
its financial results for the quarter ended September 30, 2014. All
financial information is in Canadian dollars unless otherwise noted.

Highlights:

Gross Billings were up 9.8% in the quarter, boosted by the Canada Gross
Billings increase of 14.8%, which reflected continued momentum in the
refreshed Aeroplan Program and a favourable currency impact.
Free Cash Flow before Dividends Paid generated $56 million in the
quarter and year to date is $270 million year to date.
2014 full year Guidance is confirmed.
Visa and MasterCard announced a reduction in the average interchange
rates by April 2015, which provides some clarity, but the full impact
to Aimia will be tied to the implementation details.

Rupert Duchesne, Group Chief Executive said:

“Continued momentum from financial card partners and the success of the
Aeroplan program drove Aimia’s strong performance in the quarter.
Underlying momentum in EMEA slowed as a result of timing of bonus
activity and the impact of the competitive grocery sector in the UK on
our main grocery partner. Across the business we continued to build
momentum in data analytics with increased customer engagement in all
regions and we’re making steady progress to expand our business in Asia
Pacific working with new and existing customers on coalition,
proprietary and data analytics opportunities.”

“Looking forward, the recent announcement of a reduction in average
interchange rates in Canada provides some clarity on this topic which
has been a significant source of uncertainty regarding our future
performance. We are very pleased there is now some direction and will
work closely with our financial partners to develop an optimal solution
with the focus on ensuring the market-leading value proposition for
Aeroplan members is preserved.”

Consolidated Financial Highlights


Consolidated Highlights⁽¹⁾	Three Months Ended September 30,		Nine Months Ended September 30,		Three Months Ended September 30,		Nine Months Ended September 30,
(in millions of Canadian dollars)	2014	2013	2014	2013	YoY % Change	YoY % Constant Currency	YoY % Change	YoY % Constant Currency
Gross Billings⁽⁵⁾	633.2	576.7	1,998.5	1,708.4	9.8%	5.8%	17.0%	12.1%
Of which: Gross Billings from Sale of Loyalty Units⁽⁵⁾	472.4	419.1	1,512.2	1,246.7	12.7%	8.9%	21.3%	16.3%
Of which: Proprietary Loyalty and Other	160.8	157.6	486.3	461.7	2.0%	-2.3%	5.3%	0.7%
Adjusted EBITDA⁽⁵⁾	63.9	85.7	254.2	269.2	-25.4%	**	-5.6%	**
Of which: Distributions from equity-accounted investments	3.8	3.5	11.2	10.4	8.6%	**	7.7%	**
Of which: Impact of VAT	–	–	–	24.0	**	**	**	**
Free Cash Flow before Dividends Paid^(4)(5)(6)	56.3	68.5	269.9	147.7	-17.8%	**	82.7%	**
Of which: Cash flow from Operations ^(4)(5)(6)	68.1	80.7	321.4	180.2	-15.6%	**	78.4%	**
Of which: Capital Expenditures	(11.8)	(12.2)	(51.5)	(32.5)	-3.3%	**	58.5%	**
** 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 September 30, 2014:

Gross Billings were up 9.8% due to a strong performance in the Canada
region and a favourable currency impact. On a constant currency basis,
Gross Billings were up 5.8%.
Gross Billings from the Sale of Loyalty Units were up 12.7%, while
Proprietary Loyalty and Other Gross Billings were up 2.0%.
Adjusted EBITDA was down to $63.9 million from $85.7 million last year,
mainly driven by higher cost of rewards in the Aeroplan Program, lower
Gross Billings in EMEA coalition programs, and higher operating
expenses offset in part by higher Gross Billings in Canada.
Free Cash Flow before Dividends Paid was $56.3 million with lower cash
flow from operations due to higher cost of rewards, a $20.7 million
deposit made to Revenue Quebec related to a 2008 tax assessment and
higher operating expenses, offset in part by increased Gross Billings,
lower capital expenditures and changes in net operating assets.

Nine Months Ended September 30, 2014:

Gross Billings were up 17.0% or 12.1% on a constant currency basis and
included the $100.0 million benefit from the TD contribution received
in the first quarter, a strong performance from the Canada region and a
favourable foreign exchange impact. Excluding the $100.0 million
benefit from the TD contribution, Gross Billings were up 11.1%.
The first nine months of 2014 saw increases in Gross Billings both from
the Sale of Loyalty Units and Proprietary Loyalty and Other, up 21.3%
and 5.3%, respectively.
Adjusted EBITDA was $254.2 million compared to $269.2 million last year
and included the $100.0 million contribution received from TD and
higher Gross Billings, partly offset by higher cost of rewards and
promotional activities related to the transformation of the Aeroplan
Program. Also, the prior year included $24.0 million of VAT benefit
recorded in the second quarter of 2013.
Free Cash Flow before Dividends Paid was $269.9 million, with higher
capital expenditures more than offset by higher cash flow from
operations, which included $100.0 million of cash proceeds from the TD
contribution received in the first quarter, $105.9 million of Canada
tax refunds offset by a $20.7 million deposit made to Revenue Quebec.

2014 Guidance*

For the year ending December 31, 2014, Aimia is maintaining its guidance
(last updated on August 13, 2014).

Aimia currently expects to report the following:


	2013	Guidance (Updated on Aug 13, 2014)**	2014 Target (as updated on Nov 12, 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⁾	In excess of $270 million⁽⁵⁾⁽⁹⁾	No Change
Capital Expenditures	$54.4 million	To approximate $70 to $80 million	No Change

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 Highlights


Regional Highlights⁽¹⁾		Three Months Ended September 30,		Nine Months Ended September 30,		Three Months Ended September 30,		Nine Months Ended September 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)		633.2	576.7	1,998.5	1,708.4	9.8%	5.8%	17.0%	12.1%
Of which: Canada⁽⁵⁾		368.5	321.0	1,166.4	953.0	14.8%	14.8%	22.4%	22.4%
Of which: EMEA		183.1	169.1	567.9	504.1	8.3%	-2.7%	12.7%	-1.2%
Of which: US & APAC		82.0	86.6	264.9	251.7	-5.3%	-10.4%	5.2%	0.0%

Consolidated Revenue^(2)(10)		543.4	499.7	1,707.7	985.9	8.7%	4.9%	73.2%	66.2%
Of which: Canada⁽²⁾		313.5	287.6	977.9	324.5	9.0%	9.0%	**	**
Of which: EMEA		147.2	127.1	461.9	408.3	15.8%	4.2%	13.1%	-0.6%
Of which: US & APAC		83.1	85.0	268.6	253.5	-2.2%	-7.4%	6.0%	0.6%

(in millions of Canadian dollars)		2014	2013	2014	2013	2014 Margin	2013 Margin	2014 Margin	2013 Margin
Consolidated Adjusted EBITDA⁽⁵⁾		63.9	85.7	254.2	269.2	10.1%	14.9%	12.7%	15.8%
Of which: Canada⁽⁵⁾		73.6	87.9	273.3	253.4	20.0%	27.4%	23.4%	26.6%
Of which: EMEA		11.1	20.2	45.5	80.6	6.1%	11.9%	8.0%	16.0%
	Of which: VAT	–	–	–	24.0	–	–	–	4.8%
Of which: US & APAC		(4.2)	(2.4)	(10.2)	(12.3)	-5.1%	-2.8%	-3.9%	-4.9%
Of which: Corporate		(16.6)	(20.0)	(54.4)	(52.5)	**	**	**	**
** 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 maintains Gross Billings momentum

Gross Billings were up 14.8% in the quarter due to strong growth in
Gross Billings from Loyalty Units, driven by higher card acquisitions,
partner program conversions, including a $19.4 million promotion by the
Aeroplan’s main financial partner on the conveyed credit card
portfolio, a moderate increase in the selling price for loyalty units
due to the new financial card agreements and increases in the travel
sector. Other Gross Billings were relatively flat compared to the same
period last year.
Adjusted EBITDA was $73.6 million in the quarter compared to $87.9
million last year. The decrease reflected higher cost of rewards which
were partially offset by higher Gross Billings, reduced marketing and
promotional expenses, and lower professional fees compared to last
year.
Revenue increased 9.0% to $313.5 million in the quarter compared to the
same period last year mainly due to the increase in revenue from
increased redemption volumes.
On a year to date basis Gross Billings increased 22.4% to $1,166.4
million and included the $100.0 million upfront contribution received
from TD in the first quarter, strong momentum at Aeroplan in the
financial sector including a $19.4 million promotion offered by the
program’s main financial partner on the conveyed credit card porfolio,
and increases in travel and retail, offset in part by lower client
activity in Proprietary Loyalty and lower other Gross Billings.
Excluding the $100.0 million upfront TD contribution, Gross Billings
were up 11.9%.
Adjusted EBITDA on a year to date basis increased 7.9% to $273.3 million
reflecting the benefit of the $100.0 million TD contribution, as well
as an increase in Gross Billings offset in part by higher cost of
rewards, the $33.3 million increase in Future Redemption Costs as a
result of higher promotional miles issued with new financial cards
acquired and increased marketing and promotional expenses.
Revenues were $977.9 million on a year to date basis compared to $324.5
million in the same period last year. The increase primarily reflects
the $617.0 million unfavourable impact of the change in Breakage
estimate which occurred in the second quarter of 2013, and increased
redemption volumes in the Aeroplan program.

Europe, Middle East & Africa (EMEA) – Favourable currency impact lifts
Gross Billings

Gross Billings were up 8.3% to $183.1 million in the third quarter due
to a favourable currency impact, growth in analytics and insights, and
in Proprietary Loyalty services. On a constant currency basis, Gross
Billings were down 2.7% with lower Gross billings in the coalition
programs, primarily as a result of the timing of bonus activity in
Nectar UK, challenges in Italy and accumulation changes in the Middle
East.
Adjusted EBITDA declined to $11.1 million in the quarter from $20.2
million last year due to lower Gross Billings from coalition programs,
increased operating expenses related to global product development
costs and a one-time adjustment to pension expense.
Revenue was up 15.8% to $147.2 million in the quarter, primarily due to
a favourable currency impact growth in analytics and insight services,
as well as Proprietary Loyalty services.
On a year to date basis, Gross Billings were up 12.7% to $567.9 million
primarily due to a favourable currency impact. On a constant currency
basis, Gross Billings were down 1.2%, with lower Gross Billings from
Loyalty Units in Air Miles Middle East and Nectar Italia, partially
offset by an increase in Gross Billings from Loyalty Units in the
Nectar UK Program.
Adjusted EBITDA for the year to date period was $45.5 million compared
to $80.6 million last year. The decrease was primarily due to the
$24.0 million favourable impact resulting from the final judgement of
the VAT litigation in the second quarter of 2013, lower Gross Billings
in Air Miles Middle East and Nectar Italia, and increased operating
expenses related mostly to global product development costs and a
one-time adjustment to pension expense.
Revenue for the year to date period increased 13.1% to $461.9 million
due to favourable currency impact, growth in analytics and insights,
increased redemptions in the Nectar UK program and increased client
activity in Proprietary Loyalty services, offset in part by lower
redemptions at both Air Miles Middle East and Nectar Italia and reduced
funding at Air Miles Middle East.

US & Asia Pacific – Gross Billings fall due to lower fulfillment volumes
in the US

Gross Billings declined 5.3% to $82.0 million in the quarter and were
down 10.4% on a constant currency basis primarily as a result of lower
reward fulfillment volume in the US region.
Adjusted EBITDA declined $1.8 million in the quarter to $(4.2) million
primarily due to lower Gross Billings and increased operating expenses
compared to the same period last year.
Revenue in the third quarter decreased by 2.2% to $83.1 million due to
lower reward fulfillment volume in the US region.
On a year to date basis, Gross Billings increased 5.2% to $264.9 million
largely due to a favourable currency impact. On a constant currency
basis, Gross Billings were flat for the nine month period ending
September 30, 2014 with increases from new and existing clients being
offset by lower reward fulfillment volume in the US.
Adjusted EBITDA improved by $2.1 million to $(10.2) million for the nine
month period ending September 30, 2014, with increased gross margin
partially offset by increased operating expenses.
Revenues were up 6.0% year to date to $268.6 million primarily due to
the favourable impact of currency and a net increase in new business
partially being offset by lower reward fulfillment volume in the US.

Corporate

Corporate Adjusted EBITDA improved $3.4 million in the quarter to
$(16.6) million compared to the same period last year due to lower
share-based compensation expense and reduced consulting and
professional fees offset in part by higher costs to support growth in
global businesses.
On a year to date basis, Corporate Adjusted EBITDA was $(54.4) million
compared to $(52.5) million in the comparable period last year with the
variance being explained by higher costs to support growth in the
global businesses partially offset by a decrease in consulting and
professional fees and share-based compensation expense.

Operational Highlights


Operational Highlights⁽¹⁾		Three Months Ended September 30,		Nine Months Ended September 30,		Three Months Ended September 30,	Nine Months Ended September 30,
(in millions of Canadian dollars)		2014	2013	2014	2013	YoY % Change	YoY % Change
Consolidated Gross Billings from the sale of Loyalty Units (75% of total Gross Billings*)⁽⁵⁾		472.4	419.1	1,512.2	1,246.7	12.7%	21.3%
Of which: Canada (67% of Loyalty Units)⁽⁵⁾*		316.4	269.3	1,017.6	796.4	17.5%	27.8%
Of which: EMEA (33% of Loyalty Units)*		156.0	149.8	494.6	450.3	4.1%	9.8%

Consolidated Revenue from Loyalty Units⁽²⁾		382.4	343.7	1,211.7	522.3	11.3%	**
	Aeroplan Miles Revenue	233.9	210.1	733.8	699.5	11.3%	4.9%
	Aeroplan Breakage Revenue⁽²⁾	28.6	25.7	89.8	(531.4)	11.3%	**
Of which: Canada⁽²⁾		262.5	235.8	823.6	168.1	11.3%	**
Of which: EMEA		119.9	107.9	388.1	354.2	11.1%	9.6%

Consolidated Change in Deferred Revenues⁽²⁾⁽⁵⁾		89.8	77.0	290.8	722.5	16.6%	-59.8%
Of which: Canada⁽²⁾⁽⁵⁾		55.0	33.4	188.5	628.5	64.7%	-70.0%
Of which: EMEA		35.9	42.0	106.0	95.8	-14.5%	10.6%
* The percentage of Gross Billings relates to Q3 2014
** Information not meaningful
Please refer to “Notes to Financial Tables” at the end of this release for details on notations (1) through (11)

Canada Gross Billings and Revenue from the sale of Loyalty Units

Canada Gross Billings from Loyalty Units represented 50% of total
Consolidated Gross Billings and 67% of Consolidated Gross Billings from
Loyalty Units in the quarter.

In the quarter, the 17.5% increase in Gross Billings from Loyalty Units
was mainly attributable to higher card acquisitions, partner program
conversions in the financial sector, including a $19.4 million
promotion by the program’s main financial partner on the conveyed
credit card portfolio, as well as a moderate increase in the selling
price per loyalty unit due to the new financial card agreements, and
increased performance in the travel sector. These factors excluding the
price increase, along with the promotional mileage awarded on new
financial cards acquired drove a 14.8% increase in Aeroplan Miles
issued.

Gross Billings from the financial sector were up 25.2% in the quarter,
as a result of the reasons noted above.

Following an exceptional period of growth in Aeroplan active members in
the first half of the year, total active co-branded credit cards is
holding steady. The focus has shifted to engaging the new card base to
spend. Net new cards acquired taking the AMEX member base up by over
52% compared to the same period last year; and
Moderate increase in selling price of a loyalty unit due to the new
financial card agreements.

On a year to date basis, the 27.8% increase in Gross Billings from
Loyalty Units included the $100.0 million TD contribution received in
the first quarter of 2014, a 21.3% increase in the financial sector
resulting from higher card acquisitions, partner program conversions,
and a $19.4 million promotion with the main financial partner, and
increased performance in the travel and retail sectors.

Canada Revenue from Loyalty Units increased 11.3% to $262.5 million in
the quarter due to higher redemption volumes. Rewards issued in the
quarter were up 17.2% with air rewards up 24.0%, driven mainly by an
increase in air redemptions as a result of enhanced travel reward
offerings under the Distinction program launched in January 2014.
Miles redeemed were up 11.0% in the third quarter. On a year to date
basis and excluding the impact resulting from the change in the
Breakage estimate in the second quarter of 2013 totaling $617.0
million. Revenue from Loyalty Units increased $38.5 million to $206.6
million which 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 24.6% of total
Consolidated Gross Billings and 33.0% of Gross Billings from Loyalty
Units on a consolidated basis in the quarter. Nectar UK accounted for
83.7% of EMEA Gross Billings from Loyalty Units.

EMEA Gross Billings from Loyalty Units were up 4.1% in the quarter
primarily reflecting a favourable currency benefit. On a constant
currency basis, EMEA Gross Billings from Loyalty Units were down 6.6%
compared to the same period last year mostly due to the timing of
bonusing activity at Nectar UK, lower accumulation, including a
reduction in offering to members related to a main Accumulation Partner
product at Air Miles Middle East, and difficult economic conditions at
Nectar Italia.

Nectar UK points issuances were down 3.4% in the quarter and Air Miles
Middle East and Nectar Italia loyalty units issuances were down 7.4%
and 4.8%, respectively.

On a year to date basis Gross Billings from Loyalty Units increased 9.8%
to $494.6 million primarily due to a favourable currency impact.
Excluding the currency impact, the operational decrease was mostly
explained by lower funding provided by the program’s main Accumulation
Partner and a reduction in offering to members at Air Miles Middle
East, difficult economic conditions at Nectar Italia offset in part by
higher bonusing activity by the program’s main Accumulation Partner at
Nectar UK.

Revenue from Loyalty Units grew by 11.1% to $119.9 million in the third
quarter primarily due to a favourable currency impact. Nectar UK and
Middle East redemptions increased by 1.9% and 2.0%, respectively,
which was offset by lower Nectar Italia redemptions, down 8.7% due to
lower promotional activity and difficult economic conditions.

On a year to date basis, Revenue from Loyalty Units increased by 9.6% to
$388.1 million due to a favourable currency impact and increases in
Nectar UK redemptions, offset in part by lower redemption activity at
Air Miles Middle East and Nectar Italia, and additional funding
provided by the Air Miles Middle East program’s main Accumulation
Partner to support enhanced member engagement in the same period of
2013. Compared to the same nine month period in the prior year,
redemption activity in the Nectar Program increased by 6.4% while
redemption activities were down by 12.4% and 38.7% at Nectar Italia and
Air Miles Middle East, respectively.

Cost of Rewards and Direct Costs


Cost of Rewards and Direct Costs		Three Months Ended September 30,		Nine Months Ended September 30,		Three Months Ended September 30,		Nine Months Ended September 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		353.2	290.4	1,112.2	874.4	21.6%	17.2%	27.2%	21.9%
	Of which: Canada	210.2	157.6	653.9	533.4	33.4%	33.4%	22.6%	22.6%
	Of which: EMEA	98.5	84.9	314.0	273.4	16.0%	4.0%	14.9%	0.6%
	Of which: Impact of VAT	–	–	–	(72.8)	**	**	**	**
	Of which: US & APAC	44.5	47.9	144.3	140.4	-7.1%	-12.5%	2.8%	-2.2%
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 65.0% of
revenue (65.1% year to date), resulting in a gross margin before
depreciation and amortization of 35.0% (34.9% year to date).

Cost of rewards and direct costs were up 21.6% to $353.2 million in the
quarter primarily due to higher cost of rewards and increased
redemptions in Canada, an unfavourable currency impact, offset in part
by lower direct costs in the US & APAC region.

Canada contributed $52.6 million of the increase, up 33.4% in the third
quarter compared to the same period last year. The elevated cost of
rewards in Canada was the result of a higher redemption cost per
Aeroplan Mile up $35.9 million due to the enhanced travel reward
offerings under the newly launched Distinction program and higher
volume of redemptions representing $15.3 million.

In EMEA, cost of rewards and direct costs increased by $13.6 million in
the quarter mostly due to unfavourable currency impact. In addition,
the increase is explained by higher redemption activity at Nectar UK,
growth in activity in analytics and insights services and Proprietary
Loyalty, which was partially offset by a decrease in redemption
activity at Nectar Italia.

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

Free Cash Flow


Free Cash Flow⁽¹⁾	Three Months Ended September 30,		Nine Months Ended September 30,		Three Months Ended September 30,	Nine Months Ended September 30,
(in millions of Canadian dollars)	2014	2013	2014	2013	YoY % Change	YoY % Change
Cash flow from Operations^(4)(5)(6)	68.1	80.7	321.4	180.2	-15.6%	78.4%
Capex	(11.8)	(12.2)	(51.5)	(32.5)	-3.3%	58.5%
Free Cash Flow before Dividends Paid^(4)(5)(6)	56.3	68.5	269.9	147.7	-17.8%	82.7%
Free Cash Flow before Dividends Paid per common share^{(4)(5)(6)(11)}	0.29	0.38	1.47	0.81	-23.7%	81.5%
Dividends Paid (Common and Preferred)	(36.4)	(32.2)	(107.1)	(94.7)	13.0%	13.1%
Free Cash Flow^(4)(5)(6)	19.9	36.3	162.8	53.0	-45.2%	**
** 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 $56.3 million, or $0.29 per
common share in the third quarter of 2014. On a year to date basis Free
Cash Flow before Dividends Paid was $269.9 million or $1.47 per common
share.

The $12.2 million decrease in the quarter compared to last year was
largely attributable to a decrease in Cash Flow from Operations
resulting from higher cost of rewards and direct costs, the $20.7
million deposit made to Revenue Quebec, and higher operating expenses
partially offset by increased Gross Billings, lower capital
expenditures and changes to the net operating assets.

On a year to date basis, Free Cash Flow before Dividends Paid increased
by $122.2 million to $269.9 million. The increase was mainly due to
increased Cash Flow from Operations which includes the $100.0 million
TD contribution, an income tax refund of $83.4 million and the receipt
of $22.5 million harmonized sales tax related to the CIBC Payment. This
was offset in part by higher cost of rewards and direct costs, higher
operating expenses, the $20.7 million deposit made to Revenue Quebec
and increased capital expenditures.

Capital expenditures of $11.8 million in the quarter and $51.5 million
year to date 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 2014.

Dividends paid in the quarter were $36.4 million ($107.1 million year to
date), of which $31.3 million were related to quarterly dividends paid
to common shareholders ($92.1 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
27-Feb-2013	$0.160	$0.406250	–
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
12-Nov-2014	$0.180	$0.406250	$0.390625

Common Shares
The Board of Directors has declared a quarterly dividend of $0.18 per
common share, payable on December 31, 2014 to shareholders of record at
the close of business on December 17, 2014.

At September 30, 2014, the number of common shares outstanding was
174,026,383. The weighted average number of basic and diluted common
shares for the three months ended September 30, 2014, was 173,992,899.

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 December 31, 2014 to the
holders of record at the close of business on December 17, 2014.

At September 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 $3.8 million distribution from PLM was received in the third quarter
of 2014, compared to a distribution of $3.5 million received in the
third quarter of 2013.

Investments
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 $788.1 million at the end of September 2014, with
$7.2 million coming due in the balance of 2014.


Long-Term Debt Contractual Obligations (in millions of Canadian Dollars)
	Total	2014	2015	2016	2017	2018	Thereafter
Long-Term Debt	650.0	–	–	–	200.0	200.0	250.0
Interest	138.1	7.2	37.4	37.4	30.5	18.6	7.0
Total Long-Term Debt and Interest	788.1	7.2	37.4	37.4	230.5	218.6	257.0

At September 30, 2014, Aimia had Senior Secured Notes outstanding in the
amount of $650.0 million maturing at various dates through May 17,
2019. The Senior Secured Notes Series 2 of $150.0 million matured on
September 2, 2014 and were repaid with cash on hand.

Aimia also had an authorized revolving credit facility of $300.0
million, maturing on April 23, 2018, and irrevocable letters of credit
in the aggregate amount of $51.2 million which reduces the available
credit under this facility. 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 September 30,
2014, Aimia complied with all such covenants.

At September 30, 2014, Aimia had net debt of $(299.7) million,
consisting of long-term debt of $650.0 million less $615.2 million of
cash and $334.5 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 $436.0 million,
after accounting for $487.9 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 third quarter 2014
financial results at 8:00 a.m. ET on Thursday, November 13, 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/1281433/1413777

A slide presentation intended for simultaneous viewing with the
conference call will be available the evening of November 12, 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 “Currency Sensitivity and
Constant Currency” “Use of Non-GAAP Financial Information”.
Discrepancies in variances may arise due to rounding.
Total Revenue for the nine months ended September 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 $617.0 million. Net Loss and Loss per Common Share for the
nine months ended September 30, 2013 also include the non-comparable
impact of the change in Breakage estimate of $449.5 million, net of
income tax recovery of $167.5 million.
Adjusted EBITDA, Net Loss and Adjusted Net Earnings for the nine months
ended September 30, 2013 includes the favourable impact resulting from
the final judgment of the VAT litigation of $24.0 million, $40.2
million and $40.2 million, respectively. Refer to the Management
Discussion and Analysis for the three and nine months ended September
30, 2014 for additional information.
Includes an amount of $83.4 million received during the nine months
ended September 30, 2014 from the Canadian Revenue Agency related to
the income tax refund of loss carry back applied in Canada.
Gross Billings and Adjusted EBITDA include the $100.0 million
contribution received from TD during the nine months ended September
30, 2014. Adjusted Net Earnings per Common Share includes the
contribution received from TD during the nine months ended September
30, 2014 of $73.4 million, net of an income tax expense of $26.6
million.
Includes a $22.5 million harmonized sales tax credit received during the
nine months ended September 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 Dividends Paid less preferred
dividends paid) / weighted average number of 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 nine months ended September
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 nine months ended September 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 nine months ended September 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 nine months
ended September 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 nine months ended September 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 November 12, 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 November 12, 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 and Fractal Analytics, a provider of advanced
analytics. Aimia is listed on the Toronto Stock Exchange (TSX: AIM).
For more information, visit us at www.aimia.com.

SOURCE AIMIA

Contact:

Analysts and Investors
Angela McMonagle
647-428-5280
angela.mcmonagle@aimia.com

Media
Krista Pawley
416-737-8413
krista.pawley@aimia.com

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