On June 19, 2008, unitholders of Aeroplan Income Fund (the "Fund") voted, and approved, the reorganization of the Fund, by way of a plan of arrangement under the Canada Business Corporations Act (the “CBCA”), into a corporation pursuant to an arrangement agreement dated May 8, 2008 between Groupe Aeroplan and the Fund. The Arrangement was completed and effective June 25, 2008. The purpose of the Arrangement was to convert the Fund’s income trust structure into a corporate structure.

The Arrangement resulted in unitholders receiving Groupe Aeroplan common shares in exchange for Fund units on a one-for-one basis and has been accounted for as a continuity of interests of Aeroplan Income Fund since Groupe Aeroplan will continue to operate the business of the Fund and there have been no ownership changes. The comparative figures are those of the Fund.

In addition, and also approved pursuant to the Arrangement, Groupe Aeroplan reduced its capital maintained in respect of its common shares by an amount of $1,500,000,000. This reduction has been applied to the accumulated deficit.

As a corporation, Groupe Aeroplan is subject to Canadian federal and provincial corporate income tax on its taxable income for the period beginning on the effective date of the Arrangement. Groupe Aeroplan intends to utilize its current tax attributes to partially offset its taxable income post-conversion and expects to become entitled to scientific research and experimental development tax incentives relating to qualifying expenditures incurred in connection with information technologies going forward, which should reduce the impact of the corporate income tax exposure. It is anticipated that Groupe Aeroplan will pay cash taxes at an effective cash tax rate of approximately 16-19% on its consolidated earnings before tax for its 2008 taxation year, which reflects the impact from the effective date of the Arrangement, and 22-26% for the 2009 taxation year. In addition, Groupe Aeroplan will also become liable for provincial capital tax which is expected to range between $1.5 million – $2.5 million per year until 2011 when the provincial capital tax rate will be eliminated.

The dividend policy of Groupe Aeroplan is $0.125 per common share per quarter, with the first dividend to be declared payable in respect of the quarter ended September 30, 2008. Dividends payable by Groupe Aeroplan to its shareholders are recorded when declared. The dividend policy is subject to the discretion of the board of directors of Groupe Aeroplan and may vary depending on, amount other things, Groupe Aeroplan’s earnings, financial requirements, debt covenants, the satisfaction of solvency tests imposed by the CBCA for the declaration of dividends and other conditions existing at such future time.

For information on distributions declared to unitholders up to the end of June 30, 2008, please click here.