Yellow Pages Income Fund Reports Continued Strong Financial and Operational Performance in Q1 2008

Yellow Pages Income Fund (TSX: YLO.UN) reported strong first quarter 2008 results coincident with its Annual Meeting held in Montreal today. The company's financial and operational performance continued to build on solid gains in 2007 and was highlighted by growth in both EBITDA(1) and EBITDA margins. First quarter results were driven by operational efficiencies, organic revenue growth and additional revenue contribution from recent business acquisitions.

For the quarter ending March 31, 2008, consolidated net earnings amounted to $127 million compared to $121 million for the same period in 2007. Income from operations increased 7.5% to $171.4 million versus $159.4 million for the same quarter in the prior year.

Consolidated Adjusted Revenues(1) increased by 7.8% to $415.1 million compared to the first quarter 2007, and Consolidated Adjusted EBITDA(1) grew by 11.7% to $227.4 million. The company's performance continues to benefit from both organic growth and the contribution of new acquisitions notably Aliant Directory Services acquired in April, 2007.

Online revenues for Directories and Vertical Media combined reached $53.5 million for the quarter. This represents a 47.7% organic growth over the first quarter of 2007. On an annualized basis, YPG's online revenues reached $214 million.

"Our first quarter performance underlines the overall confidence we have in the company, its strategic positioning and in its business fundamentals," said Marc P. Tellier, President and Chief Executive Officer of Yellow Pages Group. "We ended 2007 by confirming our expectations for sustained growth and profitability for our operations in 2008, and we continue to deliver on those expectations. We expect to generate additional efficiencies in our operations, while continuing to lead the industry in creating new revenue-generating opportunities."

In the first quarter, YPG posted double-digit growth in distributable cash, which increased by 11.6% over the same quarter in the previous year to reach $183 million. Distributable cash per unit grew by 12.9% to reach $0.35 in the first quarter this year, compared to $0.31 reported in the first quarter of 2007.

Directories

For the first quarter, Adjusted Revenues in Directories reached $338 million, an increase of 9.1% over the same period in 2007. Adjusted EBITDA increased by 11.2% to reach $203.4 million. The Directories segment posted an Adjusted EBITDA margin of 60.2%, an increase of 100 basis points over comparable margin performance in the first quarter of 2007 and a record high for the company. This margin and underlying operating efficiencies are predicated on further productivity gains that were realized and the growing cash flow potential the company is achieving by monetizing revenues from its online platform.

On a comparable basis, Adjusted Revenues increased by 4.2% and Adjusted EBITDA was up 5.9%. In both instances these growth metrics were consistent with the company's expectations and guidance for 2008.

To further expand its directories footprint, YPG acquired the directory business of TBayTel, a leading telecommunications company serving the City of Thunder Bay and other areas of Northern Ontario. YPG has been selling and producing the TBayTel directory for the past 25 years and knows the business and the local community very well.

Vertical Media

For the first quarter of 2008, Trader's revenues reached $77.1 million, an increase of 2.5%. We expect our investment in people and systems will enable us to support national offers, the roll-out of Trader Dealer Showroom and new online product offerings - all of which are expected to generate new revenues. EBITDA increased by 16.1% to reach $23.2 million, reflecting our realized operating efficiencies and our efforts to contain costs and increase profitability. Trader's EBITDA margin was 30.1% in the quarter compared with 26.6% for the same period in 2007.

During the quarter, in the automotive sector, we announced the addition of a new publication, Auto Trader(TM) New Car, and a complete new section devoted to new cars on Autotrader.ca(TM). Our goal is to become the car destination of choice for our growing audience of shoppers looking for used and new vehicles.

Normal Course Issuer Bid

On March 28, 2008, YPG announced plans to repurchase up to 25 million units - or approximately five per cent of its outstanding units - through a normal course issuer bid. The company believes that the current trading price of units does not adequately reflect the strong fundamentals and future prospects of the business. This unit repurchase confirms the company's confidence in its ability to continue its trajectory of growth and profitability.

The unit repurchase will be financed through cash flow in excess of cash distributions throughout 2008 and 2009 and will be immediately accretive to distributable cash per unit. Concurrent with the ongoing momentum in the business, the repurchase will accelerate the reduction in the payout ratio during the transition period to a traditional corporate structure to be completed in late 2010. During the month of April 2008, the Fund repurchased 2.8 million units for cancellation for an amount of approximately $31 million.