Stock Name: AIM
Amount: CAD 0.15
Announcement Date: 09/11/2011
Record Date: 14/12/2011
Dividend Detail:
Strong Performance From Aeroplan and Nectar Loyalty Coalition Programs;
New Name and Global Brand Identity Reaffirm Global Leadership Position
in Loyalty Management
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THIRD QUARTER HIGHLIGHTS | Three Months Ended September 30, | Year Over Year | ||
(in millions, except per share amounts) | 2011 | 2010 | % Change | |
| As Reported | % | Constant Currency3 | |
| $ | $ | | |
Gross Billings | 541.8 | 520.5 | 4.1% | 4.7% |
Total Revenue | 501.4 | 461.5 | 8.6% | 9.3% |
Net Earnings (Loss)2 | 25.1 | (13.5) | 286.2% | na |
Earnings (Loss) Per Common Share2 | 0.13 | (0.07) | 285.7% | na |
Adjusted EBITDA1,2 | 104.2 | 56.8 | 83.5% | 84.1% |
Free Cash Flow before Dividends Paid Per Common Share1 | 0.69 | 0.70 | (1.4%) | na |
A non-GAAP measurement, please refer to the Use of Non-GAAP Financial Information section of this news release.
Includes the non-comparable negative impact recorded in the third
quarter of 2010 related to the ECJ VAT Judgment on Net Earnings and
Adjusted EBITDA of $21.0 million, and $0.11 on Earnings Per Common
Share.
Constant Currency excludes the translation effect of foreign operations
on the consolidated results. For more information on Constant Currency,
please refer to the Use of Non-GAAP Financial Information section of this news release.
MONTREAL, Nov. 9, 2011 /CNW Telbec/ - (TSX: AIM) Aimia today reported
its financial results for the third quarter ended September 30, 2011.
All financial information is in Canadian dollars unless otherwise
noted.
"Given the continuing challenges of the global economic environment, I
am extremely pleased with our performance year to date," said Rupert
Duchesne, President and Chief Executive Officer. "Our company is well
positioned to achieve both its current guidance for the year as well as
its long-term growth objectives.
Added Duchesne, "We recently launched our new name and global brand
identity. Aimia is inspired by focus and precision. This new single,
powerful, global brand clearly signals to the market that our company
is fully aligned and ready to mobilize our breadth and depth of
expertise to deliver increased value as well as fuel our growth as the
recognized global leader in loyalty."
Third Quarter Segmented Financial Highlights
Canada
Gross Billings of $320.8 million, an increase of $8.4 million or 2.7 per cent
Adjusted EBITDA of $99.6 million, an increase of $10.7 million or 12.0 per cent
Aeroplan
Seventh consecutive quarter of year-over-year growth in Gross Billings
Solid performance resulting from increased financial partner activity
due to an increase in the number of active cards, an increase in
average consumer spend per active card, an increase in airline partner
activity, continued growth in the retail sector and a recovery in the
travel segment
Improved margins due to reward mix, cost containment and the benefit of
synergies
Aeroplan Miles issued increased by 3.3 per cent
Total Aeroplan Miles redeemed increased by 9.7 per cent driven primarily
by the introduction of a new air redemption product and an increase in
non-air redemptions
Proprietary Loyalty Services (formerly Carlson Marketing Canada)
Gross Billings were slightly behind last year due to some weakness in
the financial vertical, however, margins improved due to mix and the
benefit of synergies. There were $16.8 million of intercompany billings
to Aeroplan in the third quarter 2011
Europe, Middle East & Africa
Gross Billings of $139.8 million, an increase of 13.1 per cent or 15.3 per cent on a constant currency basis
Adjusted EBITDA of $17.1 million, an increase of 237.7 per cent or 245.2 per cent on a constant currency basis (the third quarter of 2010 includes an
additional net cost of $21.0 million related to the impact of an
unfavourable ECJ VAT Judgment, rendered in October 2010)
Nectar UK
Nectar Points issued in the three month period increased by 17.0 per
cent compared to the same period in 2010, driven by strong underlying
growth and greater bonusing activity in the grocery sector, and higher
issuance in the energy sector as a result of British Gas
Redemption activity increased by 7.2 per cent, mainly driven by an
increase in the number of Nectar Points in circulation
Nectar Italia
Gross Billings increased by 9.3 per cent to 12.7 million
Nectar Italia Points issued increased by 10.1 per cent in comparison to
the same period in 2010 as the program entered its second year of
operations
Intelligent Shopper Solutions (formerly LMG Insight & Communication)
Revenue increase of 23.1 per cent driven by increased activity in the UK
and by the ramp-up of new international clients
US & Asia Pacific
Gross Billings of $81.2 million, a 3.9 per cent decrease or 3.3 per cent on a constant currency basis
Adjusted EBITDA of negative $1.4 million vs. negative $5.4 million in 2010
Results continued to be negatively impacted by the phasing out of a
portion of the Visa business in the US ($5.8 million in Gross Billings
for the three months ended September 30, 2011)
Joint Venture with Multiplus in Brazil
On November 8, 2011, Aimia announced that it had entered into an
agreement with Multiplus, Brazil's leading loyalty network, to join
forces to create a new loyalty marketing services company in Brazil,
one of the fastest growing markets for loyalty in the world. The joint
venture, which will focus on the design, development, management of,
and value creation from data analytics and insight for, third party
loyalty and incentive programs, will be owned in equal share
participations by each of the companies. Aimia and Multiplus will be
involved in the continuous support of the business with a focus to
build, grow and transform the loyalty marketing services industry and
may explore a broader relationship over time, should market
opportunities present themselves.
Global Long-term Strategic Alliance with Cardlytics
On September 8, 2011, Aimia announced that it had signed a long-term
global strategic alliance with Cardlytics, a US-based leader in
merchant-funded transaction-driven marketing for electronic banking.
Aimia also acquired a minority equity position in the company for
US$23.4 million. Cardlytics leverages individual financial card
information, captured and secured behind the financial institutions'
own firewalls, to provide consumers with personalized merchant offers.
These highly targeted offers are delivered directly to the consumer via
trusted electronic banking channels including mobile, e-mail and
on-line banking. The transaction provides an important complement to
Aimia's full-suite loyalty services offering.
Cash Flow and Financial Position
At September 30, 2011, Aimia had $255.3 million of cash and cash
equivalents, $14.9 million of restricted cash, $41.7 million of
short-term investments and $276.5 million of long-term investments in
bonds, for a total of $588.4 million.
Aimia's Free Cash Flow (before dividends paid) was $124.8 million for
the third quarter of 2011 compared to $139.4 million for the same
period last year. As anticipated, Free Cash Flow was lower in the
current quarter due to higher redemptions in all loyalty programs,
lower interest income and higher cash taxes.
Normal Course Issuer Bid
On May 12, 2011, Aimia received approval from the Toronto Stock Exchange
and announced the renewal of its Normal Course Issuer Bid (NCIB) to
repurchase up to 18,001,792 of its issued and outstanding common shares
during the period from May 16, 2011 to May 13, 2012. Total common
shares repurchased and cancelled during the period from May 16, 2011 to
September 30, 2011, pursuant to the NCIB, amounted to 6,184,800 for a
total cash consideration of $74.9 million.
Subsequent to September 30, 2011, Aimia repurchased and cancelled 78,000
common shares for total cash consideration of $0.9 million pursuant to
the NCIB.
Dividends Declared
Common Shares
The Board of Directors declared a quarterly dividend of $0.15 per common
share, payable on December 30, 2011 to shareholders of record at the
close of business on December 16, 2011.
Preferred Shares
The Board also declared a quarterly dividend in the amount of $0.40625
per Cumulative Rate Reset Preferred Share, Series 1, payable on
December 30, 2011 to the holders of record at the close of business on
December 16, 2011.
Dividends paid by Aimia to Canadian residents on both its common and
preferred shares are "eligible dividends" for Canadian income tax
purposes.
2011 Outlook
The Corporation confirms the 2011 annual guidance provided in its
February 24, 2011 earnings press release (as updated on August 10, 2011
with respect to the target Gross Billings growth range for the EMEA
region). Based on year-to-date performance, we now expect to achieve
results at the low end of the target range for Gross Billings and at
the high end of the target range for Free Cash Flow.
The forecasts assume no further deterioration in the Corporation's key
markets and that the Canadian operations will continue to outperform
our initial plan targets for the full year. Interim operating results
are subject to seasonal variations and are not indicative of our
expectations for the full year.
For the year ending 2011, Aimia expects to report the following on a
consolidated basis:
| | |
| | Target Range |
Gross Billings1 | | Between 4% and 6% |
Adjusted EBITDA2 | | Between $355M and $365M |
Free Cash Flow3,4 | | Between $190M and $210M |
| | |
1. The 2010 results used to calculate the target range growth rate
exclude the $17.4 million positive accounting adjustment relating to
the reclassification of customer deposits to deferred revenue recorded
in the second quarter of 2010.
2. Within the consolidated Adjusted EBITDA target range, Carlson
Marketing (as per old segmentation) is expected to generate Adjusted
EBITDA margins of between 6% to 8% excluding the impact of costs
associated with the phasing out of a portion of the Visa business in
the US and restructuring costs related to the creation of the Aimia
regional structure.
3. Free Cash Flow before dividends and excluding an anticipated net
payment of $81.5 million (50.2 million) related to the ECJ VAT
Judgment, which will reduce cash from operating activities in the
statement of cash flows. Upon settlement of the ECJ VAT Judgment, cash
proceeds from funds held in escrow of $44.0 million (27.1 million) and
related interest of approximately $1.3 million (0.8 million) will be
classified as cash from investing activities in the statement of cash
flows and will partly offset the above payment. The net cash outflow
likely expected in 2012 related to the ECJ VAT Judgment, based on
accrued balances at September 30, 2011, is estimated to be $36.2
million (22.3 million).
4. The Free Cash Flow outlook range of $190 million to $210 million
includes an assumption of planned incremental spend of $45 million to
$65 million when compared to 2010, relating primarily to higher
redemptions expected at Nectar Italia as members start reaching
redemption thresholds and redemption velocity starts to accelerate,
higher redemptions at Aeroplan Canada resulting from program
improvements and investments made to improve member engagement, higher
capital expenditures and increased cash taxes. Note that 2011 Free Cash
Flow will be impacted by an additional interest payment on the Senior
Secured Notes Series 3 ($7 million) and will not have the benefit of
interest proceeds and prepayment charges from the Air Canada Club Loan
($16 million) received in 2010.
Capital expenditures for 2011 are still expected to approximate $55
million. However, given year to date capital spending, some of the
projects planned for 2011 may slip into 2012.
The current income tax rate is anticipated to approximate 30 per cent in
Canada, and the Corporation expects that no significant cash income
taxes will be incurred in the rest of its foreign operations.
For 2011, on a segmented basis, Aimia anticipates the following Gross
Billings growth from its operating segments:
| | | | | |
Region | | Target Growth Range of Gross Billings | |||
| | Issued February 24, 2011 | | Updated August 10, 2011 | |
Canada | | Between 4% and 6% | | No change | |
EMEA5 | | Between 12% and 15% | | Between 9% and 11% | |
US & APAC 5 | | Between negative 10% and negative 7% | | No change | |
| | | | | |
5. Year over year Gross Billings reduction reflects the full year impact
of US$60 million resulting from the phasing out of a portion of the
overall Visa business in the US. The 2010 results used to calculate the
target range growth rate exclude the $0.4 million (EMEA) and $17.0
million (US & APAC) positive accounting adjustments relating to the
reclassification of customer deposits to deferred revenue recorded in
the second quarter of 2010.
The Average Cost of Rewards per Aeroplan Mile Redeemed for 2011 is not
expected to exceed 0.95 cents, with gross margin remaining relatively
stable.
The above excludes the effects of fluctuations in currency exchange
rates. In addition, Aimia made a number of economic and market
assumptions in preparing its 2011 forecasts, including assumptions
regarding the performance of the economies in which the Corporation
operates, market competition and tax laws applicable to the
Corporation's operations. The Corporation cautions that the assumptions
used to prepare the above forecasts for 2011, although reasonable at
the time they were made, may prove to be incorrect or inaccurate.
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.
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, which
are non-cash in nature and can vary significantly depending on
accounting methods and non-operating factors such as historical cost.
Adjusted EBITDA is not a measurement based on GAAP, is not considered an
alternative to operating income or net income in measuring performance,
and is not comparable to similar measures used by other issuers. For a
reconciliation to GAAP, please refer to the Summary of Consolidated
Operating Results and Reconciliation of EBITDA, Adjusted EBITDA,
Adjusted Net Earnings and Free Cash Flow included in the attached schedule. Adjusted EBITDA should not be used as
an exclusive measure of cash flow because it does not account for the
impact of working capital growth, capital expenditures, debt repayments
and other sources and uses of cash, which are disclosed in the
statements of cash flows.
Adjusted Net Earnings
Net earnings attributable to equity holders of the Corporation adjusted
for Amortization of Accumulation Partners' contracts, customer
relationships and technology, Change in deferred revenue, Change in
Future Redemption Costs and the income tax effect thereon calculated at
the effective income tax rate as reflected in the statement of
operations, provides a measurement of profitability calculated on a
basis consistent with Adjusted EBITDA.
Adjusted Net Earnings is not a measurement based on GAAP, is not
considered an alternative to net earnings in measuring profitability,
and is not comparable to similar measures used by other issuers. For a
reconciliation to GAAP, please refer to the Summary of Consolidated
Operating Results and Reconciliation of EBITDA, Adjusted EBITDA,
Adjusted Net Earnings and Free Cash Flow included in the attached
schedule.
Standardized Free Cash Flow ("Free Cash Flow")
Free Cash Flow is a non-GAAP measure recommended by the CICA in order to
provide a consistent and comparable measurement of free cash flow
across entities of cash generated from operations and is used as an
indicator of financial strength and performance.
Free Cash Flow is defined as cash flows from operating activities, as
reported in accordance with GAAP, less adjustments for:
(a)total capital expenditures as reported in accordance with GAAP;
and
(b)dividends, when stipulated, unless deducted in arriving at cash
flows from operating activities.
For a reconciliation to cash flows from operations please refer to the
Summary of Consolidated Operating Results and Reconciliation of EBITDA,
Adjusted EBITDA, Adjusted Net Earnings and Free Cash Flow included in
the attached schedule.
EBITDA and Free Cash Flow are non-GAAP measurements recommended by the
CICA in accordance with the draft recommendations provided in their
February 2008 publication, Improved Communications with Non-GAAP Financial Measures - General
Principles and Guidance for Reporting EBITDA and Free Cash Flow.
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 isderived bycalculatingcurrent-year
results usingprior-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.
Q3 2011 Conference Call / Audio Webcast
Aimia will host a conference call to discuss its third quarter 2011
financial results at 8:00a.m. ET on Thursday November 10, 2011. The
call can be accessed by dialling 1-800-731-5319 or 416-644-3426 for the
Toronto area. The call will be simultaneously audio webcast at: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3365120 .
Supporting slides for the call will also be available the evening of
November 9, 2011. An archive of the audio webcast and a copy of the
slides will be available at: http://www.aimia.com/English/Investors/Presentations-and-Events/Presentations/default.aspx for ninety days following the original broadcast.
The unaudited interim consolidated financial statements, the MD&A and a
financial highlights presentation will be accessible on the investor
relations website at: http://www.aimia.com/English/Investors/Financial-Reports/Quarterly-Reports/default.aspx.
About Aimia
Groupe Aeroplan Inc., doing business as Aimia ("Aimia"), isaglobal
leader in loyalty management. Aimia's unique capabilities include
proven expertise in delivering proprietary loyalty services, launching
and managing coalition loyalty programs, creating value through loyalty
analytics and driving innovation in the emerging digital and mobile
spaces. Aimia owns and operates Aeroplan, Canada's premier coalition
loyalty program andNectar, the United Kingdom's largest coalition
loyalty program. In addition,Aimia has majority equity positions in
Air Miles Middle East and Nectar Italia as well as a minority position
in Club Premier, Mexico's leading coalition loyalty program, and
Cardlytics, a US-based private company operating in merchant-funded
transaction-driven marketing for electronic banking.
Aimia is a Canadian public company listed on the Toronto Stock Exchange
(TSX:AIM) and has over 3,800 employees in more than 20 countries around
the world. For more information about Aimia, please visit www.aimia.com.
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
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, 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, consumer privacy legislation, changes to 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 in this news release
and throughout Aimia's public disclosure record on file with the
Canadian securities regulatory authorities.
The forward-looking statements contained herein represent Aimia's
expectations as of November 9, 2011, 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.
SUMMARY OF CONSOLIDATED OPERATING RESULTS AND RECONCILIATION OF EBITDA, ADJUSTED EBITDA, ADJUSTED NET EARNINGS AND FREE CASH FLOW | ||||||||||||
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(in thousands, except share and per share information) | Three months ended September 30, | | Nine months ended September 30, | | % | |||||||
| | | | | | | | | ||||
| 2011 | | 2010 | | 2011 | | 2010 | | Q3 | YTD | ||
| $ | | $ | | $ | | $ | | | | ||
Gross Billings | 541,819 | | 520,455 | | 1,612,117 | | 1,594,136 | (h) | 4.1 | 1.1 | ||
Gross Billings from the sale of Loyalty Units | 384,651 | | 360,062 | | 1,135,593 | | 1,063,053 | | 6.8 | 6.8 | ||
Revenue from Loyalty Units | 345,150 | | 304,445 | | 1,069,389 | | 925,803 | | 13.4 | 15.5 | ||
Revenue from proprietary loyalty services | 128,549 | | 133,107 | | 404,994 | | 443,778 | | (3.4) | (8.7) | ||
Other revenue | 27,713 | | 23,960 | | 80,839 | | 68,075 | | 15.7 | 18.7 | ||
Total revenue | 501,412 | | 461,512 | | 1,555,222 | | 1,437,656 | | 8.6 | 8.2 | ||
Cost of rewards and direct costs | (283,733) | | (322,938) | (a)(i) | (909,086) | | (902,934) | (a) | (12.1) | 0.7 | ||
Gross margin before depreciation and amortization(b) | 217,679 | | 138,574 | | 646,136 | | 534,722 | | 57.1 | 20.8 | ||
Depreciation and amortization | (8,419) | | (7,403) | | (24,335) | | (22,196) | | 13.7 | 9.6 | ||
Amortization of Accumulation Partners' contracts, customer relationships and technology | (23,109) | | (23,228) | | (69,331) | | (70,008) | | (0.5) | (1.0) | ||
Gross margin | 186,151 | | 107,943 | (a)(i) | 552,470 | | 442,518 | (a) | 72.5 | 24.8 | ||
Operating expenses | (130,867) | | (107,297) | (a) | (408,332) | | (395,987) | (a) | 22.0 | 3.1 | ||
Amortization of Accumulation Partners' contracts, customer relationships and technology | 23,109 | | 23,228 | | 69,331 | | 70,008 | | (0.5) | (1.0) | ||
Operating income before amortization of Accumulation Partners' contracts, customer relationships and technology | 78,393 | | 23,874 | (a)(i) | 213,469 | | 116,539 | (a) | 228.4 | 83.2 | ||
Depreciation and amortization | 8,419 | | 7,403 | | 24,335 | | 22,196 | | 13.7 | 9.6 | ||
EBITDA(b)(d) | 86,812 | | 31,277 | (a)(i) | 237,804 | | 138,735 | (a) | 177.6 | 71.4 | ||
Adjustments: | | | | | | | | | | | ||
| Change in deferred revenue | | | | | | | | | | | |
| | Gross Billings | 541,819 | | 520,455 | | 1,612,117 | | 1,594,136 | (h) | | |
| | Revenue | (501,412) | | (461,512) | | (1,555,222) | | (1,437,656) | | | |
| Change in Future Redemption Costs(c) | (23,000) | | (33,423) | | (42,042) | | (94,440) | | | | |
| | (Change in Net Loyalty Units outstanding x Average Cost of Rewards per Loyalty Unit for the period) | | | | | | | | | | |
Subtotal of Adjustments | 17,407 | | 25,520 | | 14,853 | | 62,040 | | | | ||
Adjusted EBITDA(d) | 104,219 | | 56,797 | (a)(i) | 252,657 | | 200,775 | (a)(h) | 83.5 | 25.8 | ||
Net earnings attributable to equity holders of the Corporation | 26,066 | (f) | (11,546) | (a)(f)(i) | 66,589 | (f) | 18,109 | (a)(f) | | | ||
Weighted average number of shares | 177,253,111 | | 195,481,856 | | 180,956,779 | | 197,343,155 | | | | ||
Earnings per common share(e) | 0.13 | (f) | (0.07) | (a)(f)(i) | 0.32 | (f) | 0.05 | (a)(f) | | | ||
Net earnings attributable to equity holders of the Corporation | 26,066 | (f) | (11,546) | (a)(f)(i) | 66,589 | (f) | 18,109 | (a)(f) | 325.8 | 267.7 | ||
Amortization of Accumulation Partners' contracts, customer relationships and technology | 23,109 | | 23,228 | | 69,331 | | 70,008 | | | | ||
Subtotal of Adjustments (from above) | 17,407 | | 25,520 | | 14,853 | | 62,040 | | | | ||
Effective tax rate (%)(g) | -42.20% | | 8.11% | | -42.49% | | -31.70% | | | | ||
Tax on adjustments at the effective rate | (7,346) | | 2,070 | | (6,311) | | (19,668) | | | | ||
Adjusted net earnings(d) | 59,236 | (f) | 39,272 | (a)(f)(i) | 144,462 | (f) | 130,489 | (a)(f)(h) | 50.8 | 10.7 | ||
Adjusted net earnings per common share(e) | 0.32 | (f) | 0.19 | (a)(f)(i) | 0.75 | (f) | 0.62 | (a)(f)(h) | | | ||
Net earnings attributable to equity holders of the Corporation | 26,066 | (f) | (11,546) | (a)(f)(i) | 66,589 | (f) | 18,109 | (a)(f) | | | ||
Earnings per common share(e) | 0.13 | (f) | (0.07) | (a)(f)(i) | 0.32 | (f) | 0.05 | (a)(f) | | | ||
Cash flow from operations | 138,604 | | 152,340 | | 214,918 | | 170,750 | | (9.0) | 25.9 | ||
Capital Expenditures | (13,779) | | (12,947) | | (29,734) | | (31,016) | | | | ||
Dividends | (29,056) | | (26,686) | | (84,581) | | (81,402) | | | | ||
Free cash flow(d) | 95,769 | | 112,707 | | 100,603 | | 58,332 | | (15.0) | 72.5 | ||
Total assets | 4,997,980 | | 5,178,480 | | 4,997,980 | | 5,178,480 | | | | ||
Total long-term liabilities | 1,335,740 | | 1,648,794 | | 1,335,740 | | 1,648,794 | | | | ||
Total dividends | 29,056 | | 26,686 | | 84,581 | | 81,402 | | | | ||
Total dividends per preferred share | 0.406 | | 0.406 | | 1.219 | | 1.124 | | | | ||
Total dividends per common share | 0.150 | | 0.125 | | 0.425 | | 0.375 | | | | ||
(a) | Includes the non comparable effect of a $17.4 million (10.9 million) net charge to earnings recognized as a result of the ECJ VAT Judgment for the three and nine month periods ended September 30, 2010. Of this amount, $53.1 million (33.4 million), representing input tax credits attributable to the period from 2002 to 2009, was charged to cost of rewards and $1.6 million (1.0 million) to operating expenses. Operating expenses were also reduced by the reversal of a provision of $7.2 million (4.5 million) payable to certain employees in the event of a favourable VAT outcome and by the release of the contingent consideration of $30.1 million (19.0 million) related to the LMG acquisition following the unfavourable ECJ VAT Judgment. |
(b) | Excludes depreciation and amortization as well as amortization of Accumulation Partners' contracts, customer relationships and technology. |
(c) | The per unit cost derived from this calculation is retroactively applied to all prior periods with the effect of revaluing the Future Redemption Cost liability on the basis of the latest available average unit cost. |
(d) | A non-GAAP measurement. |
(e) | After deducting dividends paid on preferred shares. |
(f) | Interest expense for the period includes the effect of a net charge recognized as a result of the ECJ VAT Judgment amounting to $1.3 million (0.8 million) and $3.4 million (2.1 million) for the three and nine month periods ended September 30, 2011, respectively, compared to $6.4 million (4.0 million) for the three and nine month periods ended September 30, 2010. |
(g) | Effective tax rate calculated as follows: income tax expense per statement of operations / earnings before income taxes for the period. |
(h) | Includes the positive effect of a $17.4 million adjustment, as a result of a reclassification of deferred revenue amounts previously included in customer deposits. |
(i) | Cost of rewards for the three months ended September 30, 2010 includes a non-comparable charge of $3.6 million (2.3 million) representing input tax credits attributable to the six month period ended June 30, 2010. |
SEGMENTED INFORMATION | ||||||||||||||||||||
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(in thousands) | Three months ended September 30, | |||||||||||||||||||
| 2011 | 2010 (k) | 2011 | 2010 (k) | 2011 | 2010 (k) | 2011 | 2010 (k) | 2011 | 2010 (k) | ||||||||||
Operating segments | Canada | EMEA | US & APAC | Corporate (c) | Consolidated | |||||||||||||||
| $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | |
Gross Billings | 320,839 | | 312,424 | | 139,783 | (d) | 123,542 | (d) | 81,197 | (d) | 84,489 | (d) | - | | - | | 541,819 | (d) | 520,455 | (d) |
Gross Billings from the sale of Loyalty Units | 265,798 | | 256,971 | | 118,853 | | 103,091 | | - | | - | | - | | - | | 384,651 | | 360,062 | |
Revenue from Loyalty Units | 253,315 | | 230,453 | | 91,835 | | 73,991 | | - | | - | | - | | - | | 345,150 | | 304,444 | |
Revenue from proprietary loyalty services | 42,488 | | 40,929 | | 5,739 | | 6,557 | | 80,322 | | 85,622 | | - | | - | | 128,549 | | 133,108 | |
Other revenue | 12,393 | | 11,378 | | 15,320 | | 12,582 | | - | | - | | - | | - | | 27,713 | | 23,960 | |
Total revenue | 308,196 | | 282,760 | | 112,894 | | 93,130 | | 80,322 | | 85,622 | | - | | - | | 501,412 | | 461,512 | |
Cost of rewards and direct costs | 162,034 | | 158,819 | | 72,241 | | 119,251 | (g) | 49,458 | | 44,868 | | - | | - | | 283,733 | | 322,938 | (g) |
Gross margin before depreciation and amortization(a) | 146,162 | | 123,941 | | 40,653 | | (26,121) | (g) | 30,864 | | 40,754 | | - | | - | | 217,679 | | 138,574 | (g) |
Depreciation and amortization(b) | 25,297 | | 25,057 | | 3,423 | | 3,447 | | 2,808 | | 2,127 | | - | | - | | 31,528 | | 30,631 | |
Gross margin | 120,865 | | 98,884 | | 37,230 | | (29,568) | (g) | 28,056 | | 38,627 | | - | | - | | 186,151 | | 107,943 | (g) |
Operating expenses before share-based compensation | 54,458 | | 51,861 | | 32,187 | | (3,800) | (g) | 33,091 | | 45,046 | | 9,477 | | 10,280 | | 129,213 | | 103,387 | (g) |
Share -based compensation | - | | - | | - | | - | | - | | - | | 1,654 | | 3,910 | | 1,654 | | 3,910 | |
Total operating expenses | 54,458 | | 51,861 | | 32,187 | | (3,800) | (g) | 33,091 | | 45,046 | | 11,131 | | 14,190 | | 130,867 | | 107,297 | (g) |
Operating income (loss) | 66,407 | | 47,023 | | 5,043 | | (25,768) | (g) | (5,035) | | (6,419) | | (11,131) | | (14,190) | | 55,284 | | 646 | (g) |
Financial expenses | - | | 829 | | 1,392 | (h) | 6,480 | (h) | (9) | | - | | 11,952 | | 12,905 | | 13,335 | (h) | 20,214 | (h) |
Financial income | 1,061 | (i) | 6,017 | (i) | 1,012 | | 926 | | 129 | | 139 | | - | | - | | 2,202 | (i) | 7,082 | (i) |
Share of net loss of PLM | - | | - | | - | | - | | - | | - | | (669) | | - | | (669) | | - | |
Earnings (loss) before income taxes | 67,468 | (i) | 52,211 | (i) | 4,663 | (h) | (31,322) | (g)(h) | (4,897) | | (6,280) | | (23,752) | | (27,095) | | 43,482 | (h)(i) | (12,486) | (g)(h)(i) |
Adjusted EBITDA(j) | 99,562 | | 88,860 | | 17,140 | | (12,448) | (g) | (1,352) | | (5,425) | | (11,131) | | (14,190) | | 104,219 | | 56,797 | (g) |
Additions to non-current assets(e) | 7,301 | | 6,676 | | 4,818 | | 1,999 | | 1,660 | | 4,272 | | N/A | | N/A | | 13,779 | | 12,947 | |
Non-current assets(e) | 3,272,133 | | 3,355,792 | | 469,715 | (f) | 469,361 | (f) | 106,229 | (f) | 109,343 | (f) | N/A | | N/A | | 3,848,077 | (f) | 3,934,496 | (f) |
Deferred revenue | 1,828,179 | | 1,809,984 | | 357,446 | | 341,685 | | 14,146 | | 15,789 | | N/A | | N/A | | 2,199,771 | | 2,167,458 | |
Total assets | 3,789,354 | | 4,025,244 | | 941,639 | | 917,635 | | 202,279 | | 211,498 | | 64,708 | | 24,103 | | 4,997,980 | | 5,178,480 | |
(a) | Excludes depreciation and amortization as well as amortization of Accumulation Partners' contracts, customer relationships and technology. |
(b) | Includes depreciation and amortization as well as amortization of Accumulation Partners' contracts, customer relationships and technology. |
(c) | Includes expenses that are not directly attributable to any specific operating segment. Corporate also includes the investments in PLM and Cardlytics and Aimia's share of PLM's net earnings (loss). |
(d) | Includes Gross Billings of $116.1 million in the UK and $43.9 million in the US for the three months ended September 30, 2011, compared to Gross Billings of $102.2 million in the UK and $46.7 million in the US for the three months ended September 30, 2010. |
(e) | Non-current assets includes amounts relating to goodwill, Accumulation Partners' contracts, trade names, customer relationships, other intangibles, software and technology and property and equipment. |
(f) | Includes non-current assets of $417.0 million in the UK and $100.0 million in the US as of September 30, 2011, compared to non-current assets of $415.9 million in the UK and $103.0 million in the US as of September 30, 2010. |
(g) | Includes the non-comparable effect of a $21.0 million (13.2 million) net charge to earnings recognized as a result of the ECJ VAT Judgment. Of this amount, $53.1 million (33.4 million) and $3.6 million (2.3 million), representing input tax credits attributable to the period from 2002 to 2009 and the six months ended June 30, 2010, respectively, was charged to cost of rewards and $1.6 million (1.0 million) to operating expenses. Operating expenses were also reduced by the reversal of a provision of $7.2 million (4.5 million) payable to certain employees in the event of a favourable VAT outcome and by the release of the contingent consideration of $30.1 million (19.0 million) related to the LMG acquisition following the unfavourable ECJ VAT Judgment. |
(h) | Includes the effect of a $1.3 million (0.8 million) net charge to interest expense recognized as a result of the ECJ VAT Judgment for the three months ended September 30, 2011, compared to a $6.4 million (4.0 million) net charge to interest expense recognized during the three months ended September 30, 2010. |
(i) | Includes a loss of $1.4 million relating to the fair value adjustment of the Air Canada warrants for the three months ended September 30, 2011, compared to a gain of $1.8 million for the three months ended September 30, 2010. |
(j) | A non-GAAP measurement. |
(k) | Comparative figures have been reclassified to conform with the new segmentation. |
For further information:
| Media Michele Meier 514-205-7028 michele.meier@aimia.com | | Analysts & Investors Trish Moran 416-352-3728 trish.moran@aimia.com |
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