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2. 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 flow, combined with its ability to access external capital, provide sufficient resources to finance its cash requirements in the foreseeable future and to maintain available liquidity. Please refer to Distributable Cash in section 4 – Liquidity and Capital Resources to understand the impact of new tax proposals issued on October 31, 2006 by the Minister of Finance (Canada) on cash flow from operations.
Non-capital Resources
YPG's critical intangible resources are its various brands, its established relationship with customers, its long-term relationship with Bell Canada, TELUS and MTS Allstream Inc., its employees and the culture and values that characterize our organization.
Brands - YPG is the exclusive owner of the Yellow PagesTM, Pages JaunesTM, Walking Fingers & DesignTM, Auto TraderTM, Auto HebdoMC, The Bargain FinderTM and Buy & SellTM trademarks in Canada, which are some of the most highly recognized brands in Canada.
Long-term relationship with Bell Canada, TELUS and MTS Allstream Inc. - We are the official and exclusive publisher of Bell Canada's directories. We are also the official and exclusive publisher of TELUS and MTS Allstream Inc.'s directories. YPG has entered into royalty-free 30-year licenses granting YPG the right to use the Bell Canada, the TELUS and the MTS Allstream Inc.'s trademarks in connection with the publication of print and online telephone directories in any format, subject to certain exceptions. In addition, Bell Canada, TELUS and MTS Allstream Inc. have agreed not to compete with YPG in the creation, publication, distribution or marketing of telephone directories, subject to certain exceptions, for a period of 30 years from respective dates of acquisitions.
Employees - Through the efforts of our employees, we have been successful in improving our operations and achieving constant growth in revenues, profitability and free cash flow generation over the past four years. We have built a track record of delivering against our major objectives through various initiatives. Key initiatives in 2006 included the creation of a second national platform with Vertical Media, strengthening of our online offering to increase the level of online penetration for YPG's existing customers, the launch of our new search engine and consolidation of our supply chain.
Culture and values - YPG's culture and values are built on a performance-based culture which includes a number of competencies that reflect customer focus, competing to win, open communication, teamwork, respect and passion. YPG believes that its culture and values drive the organization and are critical to its success.
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