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3. CAPABILITY TO DELIVER RESULTS
CAPITAL RESOURCES
YPG generates sufficient cash flow internally to fund cash distributions, capital expenditures and to service its debt obligations. Its internally generated cash flows, combined with its ability to access external capital, provide sufficient resources to finance its cash requirements in the foreseeable future and to maintain appropriate available liquidity, as discussed more fully in section 5 - Liquidity and Capital Resources.
NON-CAPITAL RESOURCES
YPG's critical non-capital resources are its brands, its established relationship with customers, its long-term relationship with Bell Canada and Telus, its employees and the culture and values that characterize the organization.
Brands
YPG is the exclusive owner of the Yellow Pages™, Pages Jaunes™, and Walking Fingers & Design™ trademarks in Canada, which are some of the most highly recognized brands in Canada.
Long-term relationship with Bell Canada and Telus
We are the official and exclusive publisher of Bell Canada's directories. We are also the official and exclusive publisher of Telus' directories. On November 29, 2002, YPG entered into a royalty-free 30-year license granting YPG the right to use the Bell Canada trademark in connection with the publication of print and online telephone directories in any format. In addition, Bell Canada has agreed not to compete with YPG in the creation, publication, distribution or marketing of telephone directories (in any form) for a period of 30 years, ending on November 29, 2032, subject to certain exceptions. On July 31, 2001, ADS and Telus entered into a royalty-free 30-year license granting ADS the right to use the Telus trademark in connection with the publication of print and online telephone directories in any format, subject to certain exceptions. In addition, Telus has agreed not to compete with ADS in the creation, publication, distribution or marketing of telephone directories (in any form) for a period of 30 years, ending on July 31, 2031, subject to certain exceptions.
Employees
Through the efforts of our employees, we have been successful in increasing the profitability of our business over the past three years. YPG's revenues and cash flows have increased every quarter since it became a stand-alone company in November 2002.
We have built a track record of delivering against all major objectives through various initiatives which have increased revenues and contained costs, thereby enhancing productivity. Initiatives include improving our business processes, sharpening our sales messages, strengthening our online offering, improving the published directories, expanding distribution and reinforcing our brand equity.
Culture and values
YPG's culture and values are built on a number of competencies that reflect customer focus, competing to win, open communication, teamwork, respect and passion. YPG believes that its culture and values, which drive the organization, are critical to its success.
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