Q HIGHLIGHTS. August 12, 2013

Transcription

1

2 Q2 HIGHLIGHTS August 12,

3 FORWARD-LOOKING STATEMENTS Forward-looking statements are included in the following presentations. 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, 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, objectives, goals, aspirations, intentions, 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 forwardlooking statements cannot be relied upon due to, among other things, changing external events and general uncertainties of the business and its corporate structure. Results indicated in forward-looking statements may differ materially from actual results for a number of reasons, including without limitation, dependency on top Accumulation Partners and clients, the effective implementation of Aeroplan Program enhancements and a new financial card partnership and associated cardholder migration, conflicts of interest, greater than expected redemptions for rewards, regulatory matters, retail market/economic conditions, industry competition, Air Canada liquidity issues, Air Canada or travel industry disruptions, airline industry changes and increased airline costs, supply and capacity costs, unfunded future redemption costs, failure to safeguard databases and consumer privacy, changes to coalition loyalty programs, seasonal nature of the business, other factors and prior performance, foreign operations, legal proceedings, reliance on key personnel, labour relations, pension liability, technological disruptions and inability to use third party software, failure to protect intellectual property rights, interest rate and currency fluctuations, leverage and restrictive covenants in current and future indebtedness, uncertainty of dividend payments, managing growth, credit ratings, as well as the other factors identified throughout this presentation and throughout our public disclosure record on file with the Canadian securities regulatory authorities. Slides 20 and 21 of this presentation contain certain forward-looking statements with respect to certain financial metrics in 2014 and 2015, respectively. These statements are not intended to constitute, nor should they be considered as, financial outlook or guidance within the meaning of applicable securities laws. These statements exclude the effects of fluctuations in currency exchange rates and Aimia made a number of general economic and market assumptions in making these statements, 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. In addition, the Corporation has made a number of specific assumptions in making these statements, including (i) that any migration of the Corporation s current financial cardholders will be completed by the end of 2014 within a range that is consistent with past comparable situations in North America, (ii) a level of growth for the Corporation s financial card business that is consistent with the general Canadian premium credit card market, and (iii) growth in the Corporation s non-aeroplan related business consistent with the Corporation s three year plan. The Corporation cautions that the assumptions used to make these statements with respect to 2014 and 2015, although reasonable at the time they were made, may prove to be incorrect or inaccurate. In addition, these statements 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 transactions or the outcome of ongoing discussions between Aimia, TD and CIBC that may or may not result in an agreement relating to the retention by CIBC of a portion of the portfolio and the acquisition by TD of the remainder, that may be announced or that may occur after August 12,. The financial impact of these transactions and non-recurring and other special items can be complex and depends on the facts particular to each of them. We therefore cannot describe the expected impact in a meaningful way or in the same way we present known risks affecting our business. Accordingly, our actual results could differ materially from the statements made at Slides 20 and 21 of this presentation. The forward-looking statements contained herein represent the expectations of Aimia Inc., as of August 12, and are subject to change. 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. For further information, please contact Investor Relations at or karen.keyes@aimia.com. 3

4 RUPERT DUCHESNE GROUP CHIEF EXECUTIVE

5 A LOT HAS HAPPENED SINCE MAY Ground breaking transformation of the Aeroplan program, including: Introduction of Distinction New MarketFare rewards Cancellation of the 7 year redemption policy New financial credit card agreement with TD Bank Group The conclusion of two long running proceedings Competition Tribunal in Canada UK Supreme Court decision with respect to VAT Investments centred on our proprietary loyalty offering Additional investment in Cardlytics Acquisition of Smart Button Impending launch of the new Aimia Loyalty Platform Ongoing EIM Integration 5

6 MAJOR ACCUMULATION PATHS TO DISTINCTION FINANCIAL CARD SPEND Enhanced premium Premium Mid-market FLIGHT-BASED ACCUMULATION Altitude SuperElite 100K Altitude Elite 35K, 50K and 75K Altitude Prestige 25K BOTH AMPLIFIED BY SPEND WITH COALITION PARTNERS diamond Earn 100,000 eligible miles or more in one year and reach our top level, ddiamond black Earn between 50,000 and 99,999 eligible miles and you ll achieve dblack silver When you earn between 25,000 and 49,999 eligible miles in one year, you ll qualify for the first level of Distinction, dsilver 6

7 OUR NEW AIR TRAVEL REWARDS WILL BE UNPARALLELED IN THE MARKET Getting members to departures faster Months to North American Long Haul air reward redemption Based on combined average card spend and coalition activity, and average Toronto-Vancouver fare Fixed grid product Market fare product Aeroplan ClassicFlight ~12 Months Vs MarketFare Rewards For Distinction Diamond Member Vs ClassicFlight Rewards Aeroplan MarketFare Aeroplan CLASSICPLUS TD First Class Visa Infinite 1.1x 1.7x CIBC Aventura World Elite MasterCard World Elite 1.2x 1.8x RBC Visa Infinite Avion 1.3x 1.8x Scotiagold Passport Visa 1.8x 2.7x Source: Aimia estimates Notes: 1. Card spend assumed to be the same for all card products, not disclosed due to confidentiality. 2. Additional spend bonuses estimated for competitive cards (e.g., gas, grocery, drug, travel spend). 3. Months required to reach reward exclude impact of welcome bonuses. 4. Fare Source: Average fare observed for Toronto Vancouver ClassicPlus rewards in 2012, confidential. 5. CIBC Aventura World Elite figure may differ depending on grid pricing at the time of redemption; figure displayed assumes points required matches RBC Avion (35K). 7

8 DISTINCTION LAUNCH: JULY 8

9 A LOT HAS HAPPENED SINCE MAY Ground breaking transformation of the Aeroplan program, including: Introduction of Distinction New MarketFare rewards Cancellation of the 7 year redemption policy New financial credit card agreement with TD Bank Group The conclusion of two long running proceedings Competition Tribunal in Canada UK Supreme Court decision with respect to VAT Investments centred on our proprietary loyalty offering Additional investment in Cardlytics Acquisition of Smart Button Impending launch of the new Aimia Loyalty Platform Ongoing EIM Integration 9

10 DAVID ADAMS EXECUTIVE VICE- PRESIDENT AND CFO

11 Q2 CONSOLIDATED FINANCIAL HIGHLIGHTS Three Months Ended June 30, % Change (1) ($ millions) Exluding Noted Items (2) Breakage Adjustment VAT Impact Reported Reported 2012 Year Over Year Constant Currency (6) Gross Billings (3) % 3.1% Gross Billings from sale of Loyalty Units % 0.4% Total Revenue (663.6) - (123.3) % 7.2% Cost of rewards and direct costs (74.9) % 9.2% Gross margin (4) (663.6) 74.9 (353.8) % 4.8% Gross margin (%) 43.5% ** ** ** 44.5% (1.0 pp) (1.0 pp) Depreciation and amortization (5) % 4.2% Operating expenses % 5.9% Operating income (loss) 54.8 (663.6) 26.1 (582.7) % 2.1% Net financial income (costs) (11.0) (9.0) ** ** Share of net earnings (loss) of equity accounted investments (1.9) - - (1.9) 1.6 ** ** Net earnings (loss) 25.2 (483.8) 43.4 (415.2) 35.0 ** ** Adjusted EBITDA (3) (24.8) (1.9%) (1.4%) Adjusted EBITDA margin excluding distributions (as a % of Gross Billings) 16.4% ** ** 16.7% 18.4% (2.0 pp) (2.0 pp) (1) Discrepancies in variances may arise due to rounding. Year over year change has been calculated excluding the VAT and Breakage adjustments recorded in the three months ended June 30,. (2) Reported results excluding the impact of VAT and Breakage adjustments recorded in the three months ended June 30,. (3) Gross Billings and Adjusted EBITDA for the three months ended June 30, 2012 includes $5.5 million of compensation received from Air Canada in relation to transfer of the assets and obligations on pension benefits accrued by contact centre employees prior to 2009, who were transferred to Aeroplan in (4) Before depreciation and amortization. (5) Includes amortization of Accumulation Partners contracts, customer relationships and technology. (6) Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia s August 12, earnings press release. ** information not meaningful 11

12 Q2 GROSS BILLINGS GROWTH ($ MILLIONS) $18.9 $3.7 ($7.2) (1) (2) US&APAC EMEA Canada Consolidated: +2.9% growth; +3.1% in c.c. (3) US&APAC: +27.5% in c.c. (3). EMEA: +3.4% in c.c. (3). Canada: -2.2% (1) (1) Canada region variance includes $5.5 million in the three month period ended June 30, 2012 of compensation received from Air Canada in relation to transfer of the assets and obligations on pension benefits accrued by contact centre employees prior to 2009, who were transferred to Aeroplan in (2) Variance related to intercompany eliminations of $0.8 million has been excluded from the bridge. (3) Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia s August 12, earnings press release. 12

13 Q2 AEBITDA GROWTH ($ MILLIONS) $26.6 ($24.8) $3.9 ($5.7) (1) $102.1 ($3.8) $6.9 $102.0 VAT Breakage EMEA US&APAC ($3.2) Canada Corporate PLM costs 2012 Reported Reported (1) Canada region variance includes $5.5 million in the three month period ended June 30, 2012 of compensation received from Air Canada in relation to transfer of the assets and obligations on pension benefits accrued by contact centre employees prior to 2009, who were transferred to Aeroplan in

14 YTD FINANCIAL HIGHLIGHTS US & APAC Six Months Ended June 30, % Change (1) ($ millions) Reported Reported 2012 Year Over Year Constant Currency (3) Gross Billings % 12.0% Total revenue % 13.5% Gross margin (2) % 8.5% Gross margin (%) 45.1% 47.1% (2.0 pp) (2.1 pp) Operating income (loss) (11.9) (1.8) ** ** Adjusted EBITDA (9.9) 1.4 ** ** Adjusted EBITDA margin (as a % of Gross Billings) (6.0%) 0.9% ** ** Gross Billings growth reflects the impact of EIM, slightly offset by Qantas impact in the first quarter; ongoing investments included in Adjusted EBITDA (1) Discrepancies in variances may arise due to rounding. (2) Before depreciation and amortization. (3) Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia s August 12, earnings press release. ** information not meaningful 14

15 YTD FINANCIAL HIGHLIGHTS - EMEA Six Months Ended June 30, % Change (1) ($ millions) Exluding VAT VAT Adjustment Reported Reported 2012 Year Over Year Constant Currency (3) Gross Billings % 11.9% Gross Billings from the sale of Loyalty Units % 15.8% Total revenue % 16.3% Gross margin (2) % 29.9% Gross margin (%) 33.0% ** 58.9% 29.5% 3.5 pp 3.4 pp More moderate Q2 EMEA growth with I2C impact and cycling contract terms effective from Q Operating income (loss) (8.3) ** ** Adjusted EBITDA % 130.6% Adjusted EBITDA margin (as a % of Gross Billings) 10.8% ** 18.0% 5.2% ** ** (1) Discrepancies in variances may arise due to rounding. Year over year change has been calculated excluding the VAT impact, recorded in six months ended June 30, (2) Before depreciation and amortization. (3) Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia s August 12, earnings press release. Underlying Adjusted EBITDA +$20 million driven by higher volumes and Q1 promotional funding ** information not meaningful 15

16 YTD FINANCIAL HIGHLIGHTS - CANADA Six Months Ended June 30, % Change (1) ($ millions) **information not meaningful Excluding Breakage Adj. Breakage Adjustment Reported Reported 2012 Year Over Year Gross Billings (2) Aeroplan (3.1%) Proprietary Loyalty % Intercompany eliminations (41.0) - (41.0) (38.1) na (2.1%) Total revenue Aeroplan (663.6) (43.6) % Proprietary Loyalty % Intercompany eliminations (41.0) - (41.0) (38.1) na (663.6) % Gross margin (3) Gross margin (%) 46.4% ** ** 48.4% (2.0 pp) Aeroplan (663.6) (378.0) % Proprietary Loyalty (14.7%) Intercompany eliminations (0.8) - (0.8) (0.9) na (663.6) (338.9) (1.8%) Operating income (loss) Aeroplan (663.6) (497.6) % Proprietary Loyalty (45.5%) (663.6) (494.4) (0.5%) Adjusted EBITDA (2) Adjusted EBITDA margin (as a % of Gross Billings) 30.2% ** 26.3% 31.6% (1.4 pp) Aeroplan (24.8) (5.8%) Proprietary Loyalty (13.9%) (24.8) (6.3%) Gross Billings down 2.1% with continued Air Canada grid change impact; uncertainty around financial cards leading to lower accumulation Underlying margin down slightly to 30.2% as a result of redemption mix and lower margin proprietary loyalty volumes; breakage impact takes it to 26.3% (1) Discrepancies in variances may arise due to rounding. Year over year change has been calculated excluding the Breakage adjustment, recorded in six months ended June 30,. (2) Gross Billings and Adjusted EBITDA for the six months ended June 30, 2012 includes $5.5 million of compensation received from Air Canada in relation to transfer of the assets and obligations on pension benefits accrued by contact centre employees prior to 2009, who were transferred to Aeroplan in (3) Before depreciation and amortization.. 16

17 FREE CASH FLOW Free Cash Flow (1) ($ millions) $81.5 $74.2 $88.7 $60.4 $92.5 $79.1 $51.8 $43.8 $56.6 $33.3 Q Q Q2 Free Cash Flow Dividends $16.6 $4.8 YTD 2011 YTD 2012 YTD Free Cash Flow Dividends Free Cash Flow/ Common Share (2) $0.44 $0.41 $0.50 $0.50 $0.43 $0.30 Q Q Q2 YTD 2011 YTD 2012 YTD (1) Free Cash Flow before common and preferred dividends paid. (2) Calculated as: (Free Cash Flow before common and preferred dividends paid, less preferred dividends paid)/ weighted average common shares outstanding. 17

18 OUTLOOK* Key Financial Metric 2012 Actual Original Guidance (as provided on February 27, ) Revised Target Range Consolidated Outlook Gross Billings $2,243.0 million Growth of between 3% and 5% No change Adjusted EBITDA $402.6 million To approximate $425 million To approximate $375 million This update reflects: A $50 million reduction which reflects the full year impact of the lower Breakage rate outlined on June 27, A $25 million reduction related to: timing of new business rollout in the US & APAC business, lower Canadian Gross Billings and marketing costs now expected to be advanced into second half of to promote the introduction of the Distinction program. Offset by: A benefit of approximately $25 million from the outcome of the VAT ruling in the UK. Free Cash Flow before dividends paid $299.5 million Between $255 and $275 million No change Capital Expenditures $58 million To approximate $70 million No change Income Taxes Canadian income tax rate of 26.2% Current income tax rate is anticipated to approximate 27% in Canada. The Corporation expects no significant cash income taxes will be incurred in the rest of its foreign operations. While Aimia s tax rate is expected to approximate 27% in Canada, Aimia does not expect to be required to pay any further cash tax installments in as a result of the realization of tax losses from the Breakage adjustment of $664 million. The Corporation expects no significant cash income tax will be incurred in the rest of its foreign operations. Business Segment Gross Billings Growth Outlook Canada $1,292.6 million Growth of between 1% and 3% At the lower end of the range of between 1% and 3% EMEA $639.9 million Growth of between 5% and 7% No change US & APAC $315.2 million Above 5% No change * Please refer to the August 12, Earnings Press Release for a description of the assumptions made and risks related to the forecasts. As disclosed in the press release of August 12,, updating on our financial card agreement, Aimia is currently in ongoing active discussions with TD and CIBC about a broad framework that would see CIBC retain cards held by their existing banking customers. There can be no assurances that an agreement will be reached. Aimia does not expect a significant change in outlook for as a result of a deal but will provide additional disclosure if an arrangement is reached which results in any changes to outlook. 18

19 2014 UPDATE * FINANCIAL IMPLICATIONS RELATED TO PROGRAM CHANGES Approximately 6 percentage point reduction in Consolidated Adjusted EBITDA margin expected for 2014 to reflect: Breakage rate adjustment Investment in value proposition FINANCIAL IMPLICATIONS RELATED TO FINANCIAL CARD FRAMEWORK A more than 15% increase in selling price per mile under new financial card framework Elevated Redemption for flight rewards expected to drive free cash flow reduction $100 million upfront program contribution payable to Aimia Expected cash tax benefit related to loss carryback Marketing expense budgeted will be aimed at maximizing transfer of existing financial credit card holders to TD, with miles purchase commitment representing a value equivalent to the Gross Margin which would have been generated on approximately 65% of 2012 Gross Billings from CIBC in 2014 (and increasing to a value equivalent to over 90% in 2015 and 2016) protecting against downside transition risk * Please refer to Forward-Looking Statements on slide 2 of this presentation for a view of the assumptions related to forward-looking statements. 19

20 A STRONGER LONGER TERM INVESTMENT THESIS ATTRACTIVE BUSINESS MODEL FOCUSED ON GROWTH OPPORTUNITIES SOLID FINANCIAL CHARACTERISTICS STRONG FREE CASH FLOW GENERATION Premium Canadian consumers are loyal to Aeroplan. By enhancing the value the program delivers to members and our largest partners - including Air Canada, we will extend our leadership of the Canadian loyalty industry We will be targeting Consolidated Gross Billings in excess of $2.6 billion in 2015* with an enhanced program delivered in partnership with a strong and committed card issuer New financial card economics to help fund increased member engagement ; program changes expected to affect margin profile and deliver longer term growth The increased long term sustainability of the program aimed at driving consolidated free cash flow back to approximately $250 million by the end of 2015* and supporting continued dividends * Please refer to Forward-Looking Statements on slide 2 of this presentation for a view of the assumptions related to forward-looking statements

21 THANK YOU

22 APPENDIX

23 YTD CONSOLIDATED FINANCIAL HIGHLIGHTS Six Months Ended June 30, % Change (1) ($ millions) Exluding Noted Items (2) Breakage Adjustment VAT Impact Reported Reported 2012 Year Over Year Constant Currency (6) Gross Billings (3) 1, , , % 3.9% Gross Billings from sale of Loyalty Units % 3.7% Total Revenue 1,149.8 (663.6) , % 7.3% Cost of rewards and direct costs (72.8) % 9.2% Gross margin (4) (663.6) 72.8 (97.7) % 4.9% Gross margin (%) 42.9% ** ** (20.1%) 43.8% (0.9 pp) (1.0 pp) Depreciation and amortization (5) % 4.5% Operating expenses % 7.4% Operating income (loss) (663.6) 24.0 (510.5) (0.2%) (0.3%) Net financial income (costs) (17.6) (1.4) (18.4) ** ** Share of net earnings (loss) of equity accounted investments (3.6) - - (3.6) 2.7 ** ** Net earnings (loss) 74.1 (483.8) 40.2 (369.5) 79.7 ** ** Adjusted EBITDA (3) (24.8) (2.9%) (2.8%) Adjusted EBITDA margin excluding distributions (as a % of Gross Billings) 15.7% ** ** 15.7% 17.4% (1.7 pp) (1.7 pp) (1) Discrepancies in variances may arise due to rounding. Year over year change has been calculated excluding the VAT and Breakage adjustments recorded in six months ended June 30, (2) Reported results excluding the impact of VAT and Breakage adjustments recorded in the six months ended June 30,. (3) Gross Billings and Adjusted EBITDA for the six months ended June 30, 2012 includes $5.5 million of compensation received from Air Canada in relation to transfer of the assets and obligations on pension benefits. (4) Before depreciation and amortization. (5) Includes amortization of Accumulation Partners contracts, customer relationships and technology. (6) Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia s August 12, earnings press release. ** information not meaningful 23

24 BALANCE SHEET AT JUNE 30, IMPACT OF BREAKAGE AND VAT ADJUSTMENTS ($ millions) Excluding Noted Items Breakage Adjustment VAT Impact Reported ASSETS Accounts receivable (67.7) Income taxes receivable Total Assets 5, (67.7) 5,282.6 LIABILITIES & EQUITY Accounts payable and accrued liabilities Income taxes payable 23.9 (23.9) - - Provisions (161.7) - Deferred revenue 2, ,899.7 Deferred income taxes (44.4) Total Liabilities 3, (111.2) 4,374.2 Total Equity 1,348.7 (483.8) Note: The difference between the net earnings impact of the VAT adjustment and net equity adjustment is related to foreign currency translation rates applied to the adjustments in the income statement and balance sheet. 24

25 A BALANCE SHEET TO SUPPORT TRANSITION AVAILABLE CASH $ millions June 30, DEBT $ millions Annual Interest Rate Maturing June 30, Cash and cash equivalents Restricted cash 30.6 Short-term investments 23.1 Long-term investments in bonds Cash and Investments Aeroplan reserves (300.0) Revolving Facility (1) Apr. 23, Senior Secured Notes 2 7.9% Sept. 2, Senior Secured Notes % Jan. 26, Senior Secured Notes 4 5.6% May 17, Senior Secured Notes % Jan. 22, Long Term Debt Other loyalty programs reserves (148.8) Restricted cash ( 30.6) Available cash (1) As of June 30,, Aimia held a $300 million revolving credit facility which comes to term on April 23, Interest rates on this facility are tied to the Corporation s credit ratings and range between Canadian prime rate plus 0.20% to 1.50% and Bankers Acceptance and LIBOR rates plus 1.20% to 2.50%. As of June 30,, Aimia had issued irrevocable letters of credit in the aggregate amount of $20 million. This amount reduces the available credit under the revolving facility. 25

26 YTD GROSS BILLINGS GROWTH ($ MILLIONS) $1,090.9 $33.6 EMEA $18.5 US&APAC ($13.3) Canada (1) $1,131.7 (2) Consolidated: +3.7% growth; +3.9% in c.c. (3) EMEA: +11.9% in c.c. (3). US&APAC: +12.0% in c.c. (3). Canada: -2.1% (1) 2012 Reported Reported (1) Canada region variance includes $5.5 million in the six month period ended June 30, 2012 of compensation received from Air Canada in relation to transfer of the assets and obligations on pension benefits accrued by contact centre employees prior to 2009, who were transferred to Aeroplan in (2) Variance related to intercompany eliminations of $2.0 million has been excluded from the bridge. (3) Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia s August 12, earnings press release. 26

27 YTD AEBITDA GROWTH ($ MILLIONS) $190.3 $24.0 VAT ($24.8) Breakage $20.4 EMEA ($11.2) US&APAC ($12.8) (1) Canada ($8.8) Corporate $6.9 PLM $ Reported Reported (1) Canada region variance includes $5.5 million in the six month period ended June 30, 2012 of compensation received from Air Canada in relation to transfer of the assets and obligations on pension benefits. 27

28 BRIDGING AEBITDA TO FREE CASH FLOW ($ MILLIONS) Q2 $24.8 ($26.6) $22.4 ($17.2) $102.0 $3.8 ($1.5) ($7.7) ($11.3) $88.7 Adjusted EBITDA Stock Based Change in FRC Compensation ex Items Breakage VAT Working Capital and Other Net Cash Interest Cash Taxes Capital Expenditures Free Cash Flow ex Dividends Q2 2012: $102.1 $3.8 $ ($26.4) ($6.2) ($19.1) ($11.3) $

29 Q2 FINANCIAL HIGHLIGHTS US & APAC Three Months Ended June 30, % Change (1) ($ millions) Reported Reported 2012 Year Over Year Constant Currency (3) Gross Billings % 27.5% Total revenue % 27.1% Gross margin (2) % 14.3% Gross margin (%) 45.0% 49.9% (4.9 pp) (5.0 pp) Operating income (loss) (5.7) 0.1 ** ** Adjusted EBITDA (6.2) (0.5) ** ** Adjusted EBITDA margin (as a % of Gross Billings) (7.3%) (0.7%) (6.6 pp) (6.7 pp) Q2 Gross Billings growth reflects impact of EIM acquisition as well as some growth across the rest of the business. (1) Discrepancies in variances may arise due to rounding. (2) Before depreciation and amortization. (3) Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia s August 12, earnings press release. Adjusted EBITDA impacted by EIM integration and further investment in the business ** information not meaningful 29

30 Q2 FINANCIAL HIGHLIGHTS - EMEA ($ millions) Exluding VAT VAT Adjustment Reported Reported 2012 Year Over Year Constant Currency (3) Gross Billings % 3.4% Gross Billings from the sale of Loyalty Units Three Months Ended June 30, % Change (1) % 6.0% Total revenue (1.6%) (0.7%) Gross margin (2) % 4.1% Gross margin (%) 32.0% ** 92.5% 30.7% 1.3 pp 1.5 pp Gross Billings growth during the quarter driven by Nectar UK and Air Miles Middle East Operating income (loss) (1.8) ** ** Adjusted EBITDA % 35.1% Adjusted EBITDA margin (as a % of Gross Billings) 10.0% ** 26.5% 7.8% 2.2 pp 2.4 pp (1) Discrepancies in variances may arise due to rounding. Year over year change has been calculated excluding the VAT impact, recorded in three months ended June 30, (2) Before depreciation and amortization. (3) Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia s August 12, earnings press release. Adjusted EBITDA +$3.9 million excluding the VAT impact, driven by improved operating leverage and redemption mix ** information not meaningful 30

31 Q2 FINANCIAL HIGHLIGHTS - CANADA Three Months Ended June 30, % Change (1) ($ millions) Excluding Breakage Adj. Breakage Adjustment Reported Reported 2012 Year Over Year Gross Billings (2) Aeroplan (4.2%) Proprietary Loyalty % Intercompany eliminations (21.3) - (21.3) (19.2) na (2.2%) Total revenue Aeroplan (663.6) (376.5) % Proprietary Loyalty % Intercompany eliminations (21.3) - (21.3) (19.2) na (663.6) (334.8) % Gross margin (3) Gross margin (%) 47.4% ** ** 49.0% (1.6 pp) Aeroplan (663.6) (526.6) % Proprietary Loyalty (14.0%) Intercompany eliminations (0.4) - (0.4) (0.5) na (663.6) (507.8) % Operating income (loss) Aeroplan 76.8 (663.6) (586.8) % Proprietary Loyalty % 78.5 (663.6) (585.1) % Adjusted EBITDA (2) Adjusted EBITDA margin 31.6% (as a % of Gross Billings) ** 24.0% 32.1% (0.5 pp) Aeroplan 97.0 (24.8) (4.6%) Proprietary Loyalty % (24.8) (3.5%) Growth in Gross Billings from the Proprietary Loyalty business were offset by softness in Aeroplan business Solid margins despite lower Gross Billings (1) Discrepancies in variances may arise due to rounding. Year over year change has been calculated excluding the Breakage adjustment, recorded in the three months ended June 30, (2) Gross Billings and Adjusted EBITDA for the three months ended June 30, 2012 includes $5.5 million of compensation received from Air Canada in relation to transfer of the assets and obligations on pension benefits. (3) Before depreciation and amortization.. **information not meaningful 31

32 AEROPLAN REVENUE BREAKDOWN Three Months Ended June 30, (in $ millions) 2012 Change % Change Miles revenue % Breakage revenue (614.4) 46.7 (661.1) ***** Other (0.3) (2.4%) Total Revenue (376.5) ***** **information not meaningful 32

33 AEROPLAN KEY METRICS Aeroplan Miles Issued & Redeemed (billions) Average Selling Price & Cost (cents / mile) Aeroplan Miles Redeemed Q Q2 Aeroplan Miles Issued Average Selling Price Average Cost/ Aeroplan Mile Redeemed Q Q2 33

34 GROSS BILLINGS FROM SALE OF LOYALTY UNITS BY MAJOR PARTNER Q2 Gross Billings from sale of Loyalty Units Q Gross Billings from sale of Loyalty Units 24.8% 22.8% $414.2M 33.7% $414.0M 34.4% 14.1% 15.2% 10.2% 17.2% 10.7% 16.9% Partner A Partner B Partner C Air Canada Other 34

35 FOREIGN EXCHANGE RATES Period Rates Q2 Q Change % Change Period end rate to $ (0.0010) (0.1%) Average quarter to $ (0.0273) (1.7%) Average YTD to $ (0.0179) (1.1%) Period end rate AED to $ % Average quarter AED to $ % Average YTD AED to $ % Period end rate USD to $ % Average quarter USD to $ % Average YTD USD to $ % Period end rate to $ % Average quarter to $ % Average YTD to $ % 35