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2. KEY PERFORMANCE INDICATORS

Each year, we set targets to advance our goals and drive results. The targets below were established through our continuous planning process. They were revised in the second quarter of 2005 in order to reflect increased growth, cost-saving opportunities and other synergies following the acquisition of Advertising Directory Solutions Holdings Inc (“ADS”).

¹On February 15, 2006, YPG announced an increase of 7.3% from the $0.96 per unit previously mentioned to an annualized rate of $1.03 per unit.

Our revised targets for Adjusted Revenue and Adjusted EBITDA growth were adjusted for comparability purposes in order to measure organic growth performance for the corresponding periods in 2004 and 2005.

ADJUSTED REVENUES

We report on our revenue growth, adjusted for comparability purposes (“Adjusted Revenues”) by removing the effects of purchase accounting related to the step-acquisitions of YPG LP and to the acquisition of ADS. Adjusted Revenues are a non-GAAP measure; for a reconciliation with Canadian generally accepted accounting principles (“GAAP”), please refer to the Operating and Financial Results table in section 4.

Adjusted Revenues reflect the level of advertising activity, which is driven mainly by readers' and viewers' usage of our directory products. Advertising revenues are generally billed in accordance with contractual terms with advertisers and recognized on a monthly basis over the estimated life of the print directory or electronic advertising, commencing with the delivery or display date, respectively. Amounts billed up front for the directories are deferred and recognized over the billing period for which the corresponding directories are in circulation. Revenues are recognized and billed over periods not exceeding twelve months, or in the case of certain alphabetical directories, not exceeding twenty-four months.

The Adjusted Revenue growth of 42.7% during 2005 compared with the preceding year reflects the contribution of ADS following its acquisition on May 25, 2005. Excluding the impact of ADS, Adjusted Revenues grew by 6.1%, which is above our revised 2005 target range of 4% to 5% and reflects better than anticipated online growth.

ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA)

We report on our EBITDA, adjusted for comparability purposes (“Adjusted EBITDA”) by removing the effects of purchase accounting related to the step acquisitions of YPG LP and to the acquisition of ADS because it is a key measure used by management to evaluate performance. Adjusted EBITDA is utilized in measuring compliance with debt covenants and in making decisions relating to distributions to unitholders. We believe EBITDA assists investors in comparing a company'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 or non-operating factors such as historical cost.

EBITDA is not a calculation based on GAAP, and is not considered an alternative to operating income or net income in measuring the Company's performance. For a reconciliation with GAAP, please refer to the Operating and Financial Results table in section 4. EBITDA should not be used as an exclusive measure of cash flow since it does not account for the impact of working capital changes, capital expenditures, debt principal reductions and other sources and uses of cash, which are disclosed in the consolidated statements of cash flows.

Adjusted EBITDA increased by 41.1% during the year compared with the preceding year and reflects the contribution of ADS. Excluding the impact of ADS, Adjusted EBITDA improved by 6.3%, which is at the higher-end of our revised 2005 target range of 4% to 7%, reflecting the incremental contribution from higher revenues combined with higher cost containment and increased sales efficiency.

CASH DISTRIBUTIONS PER UNIT

We provide guidance and report on cash distributions per unit because it is a key measure used by investors to value the Company and assess its performance. Cash distributions per unit depend on the distributable cash and YPG's distribution policy.

Distributable cash is a non-GAAP measure generally used by Canadian open-ended trusts as an indicator of financial performance, and it should not be seen as a measurement of liquidity or a substitute for comparable metrics prepared in accordance with GAAP. This measure is commonly used by investors, management and other stakeholders to evaluate the ongoing performance of the Fund. We believe distributable cash reflects cash generated from the ongoing operations of the business on a long-term basis. Distributable cash may differ from similar calculations as reported by other entities and, accordingly, may not be comparable to distributable cash as reported by such entities. For a reconciliation with GAAP, please refer to the Operating and Financial Results table in section 4.

The Fund makes equal monthly cash distributions to unitholders of record on the last business day of each month, after deducting estimated cash amounts required for expenses and other obligations of the Fund, potential cash redemptions of units and any tax liability. We periodically review cash distributions taking into account our current and prospective performance. Some of the factors considered in making decisions related to distributions include cash amounts to service debt obligations, maintenance capital expenditures, taxes and other items considered to be prudent.

Cash distributions per unit grew 4.4% from $0.92 in 2004 to $0.96 in February 2005, which is in line with our 2005 target of 4% prior to the acquisition of ADS (the “Acquisition”). On February 15, 2006, YPG announced an increase of 7.3% from the $0.96 per unit previously mentioned to an annualized rate of $1.03 per unit.