YELLOW PAGES INCOME FUND
TSX : YLO.UN

YELLOW PAGES INCOME FUND

November 21, 2006 08:30 ET

'Business as Usual' for Yellow Pages Income Fund Despite Proposed Reforms to Tax Treatment of Income Trusts

MONTREAL, QUEBEC--(CCNMatthews - Nov. 21, 2006) - Yellow Pages Income Fund (TSX:YLO.UN)

- Business model and operating plan re-affirmed

- Cash Distributions per unit increase to $1.09

- Capital structure guidelines maintained

Yellow Pages Income Fund (TSX:YLO.UN) today reports that the recently proposed measures to start taxing most publicly-traded income trusts beginning in 2011 are not expected to impact the operations of its subsidiaries, Yellow Pages Group and Trader Corporation. The Company reiterates that its business model and operating plans remain unchanged.

On October 31, 2006, the Canadian government announced that distributions from existing publicly-traded income trusts, such as Yellow Pages Income Fund, would be taxed beginning in 2011.

"Our mission of finding the best seller for each buyer continues to be the foundation of everything we do," stated Marc P. Tellier, President and Chief Executive Officer. "Our management team is striving to fulfill this mission by executing YPG's print and online strategies and implementing new ways to improve operations. We aim to achieve sustainable growth in revenues and profitability through the pursuit of both organic and external growth opportunities."

In Directories, the priorities are to expand the Company's business with national and local advertisers, continue to focus on customer relationship management and extend the directory category. Management is also in the process of integrating the acquisition of MTS Media which closed on October 2, 2006.

In Vertical Media, Trader Corporation's management has identified strategic imperatives that will enable it to achieve its business objectives. These include growing the vertical category, both print and online, and creating a compelling online experience for users. The priority for the remainder of 2006 and entering into 2007 is the integration of the acquired businesses across the country.

Capital Structure Guidelines Remain Intact

The Fund remains firmly committed to its current corporate credit and stability ratings. Management is also maintaining its financial leverage guidelines between 2.8 to 3.2 times net debt to EBITDA.

"We are confident that our ability to generate free cash flow from operations in excess of cash distributions will provide the necessary flexibility to fund cash income taxes following the four-year transition period," mentioned Christian M. Paupe, Executive Vice President and Chief Financial Officer. "Our strong business fundamentals and solid capital structure position us well to maximize returns for unitholders."

Increase in Cash Distributions

The Fund provides guidance annually and reports on cash distributions per unit on a quarterly basis. Based on the assessment of year-to-date performance in 2006 and the expectation of continuing strong momentum in operating and financial metrics in 2007, the Fund is increasing cash distributions to unitholders by 6% to the level of $1.09 annually from $1.03 currently. This increase is effective January 15, 2007 to unitholders of record on December 31, 2006.

"Our decision to increase cash distributions at this time is a clear indication of the confidence we have in our future," stated President and CEO Marc P. Tellier.

The Fund periodically reviews cash distributions taking into account current and prospective performance. Some of the factors considered in making decisions related to cash distributions include cash amounts to service debt obligations, maintenance capital expenditures, taxes and other items considered to be prudent. The Fund's distribution policy has been consistent since the IPO in August 2003. The Fund will closely monitor its payout ratio over the period 2007-2010 to take into account future expected cash income taxes.

Existing and prospective unitholders should consult tax and financial advisors with respect to the Canadian tax treatment of cash distributions received from an investment in the Fund's units.

About Yellow Pages Income Fund

Yellow Pages Income Fund indirectly holds an approximate 96% ownership interest in Yellow Pages Group and Trader Corporation. Yellow Pages Group is Canada's largest telephone directories publisher. It publishes annually more than 340 Yellow Pages™ and residential directories. The Company owns and manages Canada's most visited online directories, YellowPages.ca™ and Canada411.ca, as well as CanadaPlus.ca™, a network of seven local city sites. Trader Corporation is a Canadian leader in print and online vertical media with approximately 200 publications and 20 web sites covering four product verticals: automotive, real estate, general merchandise and employment. Its main brands include Auto Trader™, Auto Hebdo™, The Bargain Finder™, Buy&Sell™, Renters News™ and Home Renters' Guide™. For more information about the Fund, visit www.ypg.com.

Caution Concerning Forward-Looking Statements

This press release contains forward-looking statements. These statements are forward-looking as they are based on our current expectations, as at November 21, 2006, about our business and the markets we operate in, and on various estimates and assumptions, including the assumption that the positive economic trend will continue in the markets in which Yellow Pages Group and Trader Corporation operate. These estimates and assumptions, although considered reasonable by the Fund at the time of preparation, may not materialize. Our actual results could materially differ from our expectations if known or unknown risks affect our business, or if our estimates or assumptions turn out to be inaccurate. As a result, there is no assurance that any forward-looking statements will materialize. Risks that could cause our results to differ materially from our current expectations include, but are not limited to, competition with other directory and classified advertising businesses and other forms of advertising media, decline in overall usage of directories and vertical media, prolonged economic downturn in Yellow Pages Group and Trader Corporation markets, advances in communication technology, integration of Trader Corporation and other risks detailed from time to time in reports filed by the Fund with Canadian securities regulators. Reference should be made to the Fund's 2006 Annual Information Form filed with Canadian securities regulators, its 2005 Audited Consolidated Financial Statements and Notes thereto and Management's Discussion and Analysis (MD&A), as well as its 2006 quarterly consolidated financial statements and MD&A, for a summary of major risks. We disclaim any intention or obligation to update any forward-looking statements even if new information becomes available, as a result of future events or for any other reason.

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