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Since becoming a public company six years ago, we have pursued three overriding strategies that have framed our progress.
The first was to build and grow our business through strategic initiatives. Today we are a much different company having expanded the geographic footprint of our directories to virtually all of Canada and created a second national platform in vertical media. Second, we committed ourselves to deliver consistent, industry-leading financial and operational performance. Year after year we have led our peer group in this regard, not just in North America but around the world. And finally, we dedicated ourselves to positioning our assets for long-term growth. Here as well we have succeeded in building a growing and durable company.
As economic conditions have become increasingly uncertain, we have been clear in our determination to continue to stay the course, based on our strong foundations.
We will continue to manage our business accordingly, carrying out our business plans and investing in our people and in new technology. These investments allow us to expand our product mix as well as the reach and efficiency of our advertising solutions. We believe that the nature of our business provides us a measure of resilience during challenging economic times.
Through the diligence of our employees at all levels in the organization, our margins continue to improve. Obviously, margin performance and the overall profitability of our business allow us to sustain and grow Distributable Cash. We are committed to see this growth continue in the future. The compound annual growth of our Distributable Cash per unit has been 9 per cent since our initial public offering August, 2003.
It is evident that we cannot control the markets, but we can control how we address those markets. That is precisely what we do – adapt our approach to changes in the marketplace. Because we have remained a tightly run, efficient organization we can quickly act and react. We notably provide support and training to our Media Account Consultants so they can in turn give the best advice to our customers.
Yellow Pages Group maintains the same guiding principles for managing its capital structure. These guidelines include the commitment to investment grade credit ratings, the diversification of our sources of funding, a staggered maturity profile and the maintenance at all times of adequate liquidity.
As we move into 2009 and our second century of operation, we remain equipped to continue our growth trajectory and industry leadership.
Focused on Execution
Strong execution in 2008 enabled us to achieve new levels of performance. Adjusted Revenues reached $1.7 billion, an increase of 4.2 per cent over what we achieved in 2007. Likewise, our Adjusted EBITDA performance increased by 6.9 per cent, reaching $931 million in 2008.
Again this year, our operating performance was accretive to Distributable cash which climbed to $751 million, an increase of 7.2 per cent over 2007. Distributable cash per unit grew by 8.3 per cent to $1.43 compared to $1.32 in 2007.
Our Directories segment continues to be the cornerstone of our operations. In September, we acquired the directory systems and services and the publishing operations of Volt Information Sciences, Inc. Volt has been a key technology partner for Yellow Pages Group for the past 17 years and the acquisition positions us for sustained operational excellence.
Volt has highly specialized knowledge in directories publishing, matched by a unique ability to translate this knowledge into industry- leading technology solutions. These are competencies we wanted to bring in-house because they will further the efficiency and capabilities of our directories platform.
As part of the transaction, we also acquired a number of independent directories under the Community Phone Book brand name in select Mid-Atlantic and Southeast U.S. markets. We continue to publish these directories.
We made two other acquisitions during the year which strengthened our geographic footprint. The acquisition of Get It Pages marked our entry into the province of Saskatchewan. Get It Pages publishes four directories in the province.
Coincident with the acquisition of Get It Pages, we also began selling online advertising in the major centres of Regina and Saskatoon. The arrival of Yellow Pages Group in Saskatchewan fills an important need in the market for an online product offering.
We also acquired the directories business of TBayTel, the telephone company serving the City of Thunder Bay, Ontario. Yellow Pages Group acted as the reseller of the TBayTel directories for the past 25 years. We know the market well and we quickly expanded the product offerings available to local advertisers.
Generating Leads
Throughout 2008 we made considerable progress in expanding our product mix – most notably through the introduction of multimedia solutions for our advertisers.
We believe that ongoing investment in our directories platform will drive greater usage. That heightened usage creates more sales leads for our advertisers and enhances their return on investment – essentially creating more value for every dollar spent on directories advertising.
Capitalizing on growing consumer interest in environmentally sound options, we have introduced an ecoFinder section in a number of our directories. This section promotes businesses that provide environmentally preferable products or services or that have leading environmental operational practices, giving like-minded buyers a convenient resource to help make purchasing decisions.
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MESSAGE TO UNITHOLDERS
