Bell Aliant Reports Second Quarter Results



    - 2008 Revenue Guidance Revised for Discontinued Operations

    HALIFAX, Aug. 5 /CNW/ - Bell Aliant Regional Communications Income Fund
(Bell Aliant or the Fund)(1) (TSX: BA.UN) today reported distributions to its
unitholders of $92.1 million or $0.725 per unit for the quarter ended June 30,
2008.
    Bell Aliant Holdings LP's second quarter financial highlights(2)(3) are
as follows:

    
    -------------------------------------------------------------------------
    (In                                    Per-                          Per-
     millions                              cen-                          cen-
     of                    Q2       Q2    tage        YTD        YTD    tage
     dollars)            2008     2007  Change       2008       2007  Change
    -------------------------------------------------------------------------
    Operating
     Revenue           $823.0   $804.0    2.4%   $1,667.9   $1,638.1    1.8%
    -------------------------------------------------------------------------
    EBITDA(4)           361.7    356.3    1.5%      715.1      704.3    1.5%
    -------------------------------------------------------------------------
    Capital
     Expenditures       127.5    143.4  (11.1%)     222.6      258.7  (14.0%)
    -------------------------------------------------------------------------
    Distributable
     Cash(5)            183.3    162.2   13.0%      390.1      354.3   10.1%
    -------------------------------------------------------------------------

    "I am very pleased with our revenue growth of 2.4 per cent and EBITDA
growth of 1.5 per cent that we have achieved in the second quarter," said
Stephen Wetmore, President and Chief Executive Officer. "The success of our
productivity initiatives has enabled us to maintain our year-to-date EBITDA
margin consistent with that of last year, and will continue to help us going
forward."

    Highlights of the second quarter of 2008 include the following:

    - Operating revenue increased $19.0 million (2.4 per cent) in the second
      quarter of 2008 compared to the same period a year ago with strong
      growth in Information Technology (IT) and Internet revenues.

    - Internet revenue grew by $9.4 million (10.9 per cent) in the second
      quarter of 2008 compared to the same period in 2007, with high-speed
      Internet subscribers growing 13.1 per cent from a year earlier.

    - IT revenue increased by $23.1 million (36.1 per cent) in the quarter
      compared to the same period last year, with increases in services
      revenue and equipment sales of 23.6 per cent and 45.6 per cent
      respectively.

    - Local service and long distance revenue declined by $8.5 million
      (2.4 per cent) and $5.7 million (4.8 per cent), respectively, in the
      second quarter of 2008 compared to the second quarter in 2007. Network
      access services (NAS) were 3.3 per cent lower than a year ago with
      net NAS declines of 20,669 in the quarter.

    - EBITDA increased $5.4 million (1.5 per cent) in the second quarter of
      2008 compared to the second quarter of 2007, with the benefits of cost
      containment and productivity programs and lower provincial capital
      taxes offsetting the effects of lower revenue margins.

    - Capital expenditures in the second quarter were $127.5 million, down
      $15.9 million (11.1 per cent) from the same quarter a year earlier, as
      2007 included higher spending for an accelerated
      fibre-to-the-node (FTTN) build out.

    - Distributable cash increased $21.1 million (13.0 per cent) in the
      second quarter of 2008 from the same period 2007, primarily as a result
      of EBITDA growth and reduced capital expenditures.

    Revised Operating Revenue Guidance

    During the second quarter, Bell Aliant determined that it will eliminate
the wholesale mobility products business of Atlantic Mobility Products Limited
Partnership (AMP), a wholly-owned Bell Aliant subsidiary and has reclassified
AMP as discontinued operations for accounting purposes. Also, earlier today,
Bell Aliant and CAE announced that they have entered into an asset purchase
agreement for CAE to acquire Bell Aliant's Defence, Security and Aerospace
information technology business unit, which currently operates under the xwave
brand. These events remove the revenue streams from these assets for the
purposes of Bell Aliant's 2008 operating revenue guidance, therefore
necessitating an adjustment to this guidance. Previously issued 2008 guidance
ranges for capital intensity and distributable cash are not affected.

    -------------------------------------------------------------------------
    2008 Guidance              Original issued             Revised issued
                                February 2008               August 2008
    -------------------------------------------------------------------------
    Operating                  $3,370 million to           $3,240 million to
     Revenue                    $3,440 million              $3,310 million
    -------------------------------------------------------------------------
    Capital                    14.5 to
     Intensity(6)               15.5 per cent               unchanged
    -------------------------------------------------------------------------
    Distributable              $720 million to
     Cash                       $740 million                unchanged
    -------------------------------------------------------------------------

    Analyst conference call

    A conference call with the financial community is scheduled for Wednesday,
August 6, 2008 at 9:00 a.m. (Eastern). The dial-in numbers are (866) 862-3915
or (416) 641-6110 for Toronto area participants. Media are invited to attend
in a listen-only mode. The title of the call is "Bell Aliant Second Quarter
2008 Financial Results." A replay of the session can be heard from August 7 to
August 20, 2008. To access the replay, dial (800) 408-3053 or (416) 695-5800
and enter the passcode 3265696#.
    A live audio webcast of the conference call can be accessed on
www.bell.aliant.ca under the Investor Relations section. A replay of the
conference call will be available on the website for one year.

    Forward-looking Statements

    This news release contains forward-looking statements concerning
anticipated future events, results, circumstances or expectations, including
adjustments to Bell Aliant's 2008 annual guidance necessitated by certain
recent events. Unless otherwise indicated, such forward-looking statements
describe management's expectations at August 5, 2008. These statements are
based on management's beliefs regarding future events, many of which, by their
nature are inherently uncertain and beyond management's control. These
statements are not guarantees of future performance and are subject to
numerous risks and uncertainties which are difficult to predict and
assumptions which may prove to be inaccurate.
    Many factors could cause results or events to differ materially from
current expectations. A number of assumptions are also made in making
forward-looking statements, such as economic assumptions, market assumptions,
financial and operational assumptions and assumptions about the execution of
certain transactions. Please refer to Bell Aliant's Notice Concerning
Forward-looking Statements dated February 5, 2008, as well as the Fund's and
Bell Aliant Holdings LP's management's discussion and analysis and annual
information forms for the year ended December 31, 2007, as updated by the
Fund's and Bell Aliant Holdings LP's management's discussion and analysis for
the first and second quarters of 2008, which are available at
www.bell.aliant.ca or at www.sedar.com, for a detailed discussion of these key
risk factors and assumptions. In particular, please refer to the "Assumptions
made in the preparation of forward-looking information and risks that could
affect our business and results" section of Bell Aliant Holdings LP's
management's discussion and analysis for the second quarter of 2008, for a
discussion of the factors influencing the aforementioned adjustments to Bell
Aliant's 2008 annual guidance.
    Should any factor impact Bell Aliant in an unexpected manner, or should
assumptions underlying the forward-looking statements prove incorrect, the
actual results or events may differ materially from the results or events
predicted. All of the forward-looking statements made in this press release
are qualified by these cautionary statements, and there can be no assurance
that the results or developments anticipated by Bell Aliant will be realized
or, even if substantially realized, that they will have the expected
consequences for Bell Aliant. Except as may be required by Canadian securities
laws, we disclaim any intention and assume no obligation to update or revise
any forward-looking statement even if new information becomes available, as a
result of future events or for any other reason. Readers should not place
undue reliance on any forward-looking statements. Forward-looking statements
are provided for the purpose of providing information about management's
current expectations and plans relating to fiscal 2008. Readers are cautioned
that such information may not be appropriate for other purposes.

    About Bell Aliant

    Bell Aliant (TSX: BA.UN) is one of North America's largest regional
communications providers. Through its operating entities it serves customers
in six Canadian provinces with innovative information, communication and
technology services including voice, data, Internet, video and value-added
business solutions. Through its xwave offices, Bell Aliant also provides IT
professional services in Canada and the US. Bell Aliant's 10,000 employees are
committed to deliver the highest quality of customer service, choice and
convenience.

    ---------------------------
    (1) Bell Aliant derives all of its income from its indirect ownership in
        Bell Aliant Regional Communications Holdings, Limited Partnership
        (Bell Aliant Holdings LP). Bell Aliant Holdings LP's results
        combine the results of Bell Aliant Regional Communications, Limited
        Partnership (Bell Aliant LP), Télébec, Limited Partnership (Télébec)
        and NorthernTel, Limited Partnership (NorthernTel).

    (2) On February 1, 2008 Bell Aliant Holdings LP completed the
        acquisition of the assets and operations of Kenora Municipal
        Telephone System (KMTS). Bell Aliant Holdings LP's financial results
        and subscriber metrics include KMTS data from that date onward.

    (3) In the second quarter of 2008 Bell Aliant adopted discontinued
        operations presentation for Atlantic Mobility Products. Prior period
        information has been restated to reflect this change.

    (4) Bell Aliant defines EBITDA, a non-GAAP measure, as earnings before
        interest, income taxes, depreciation and amortization expense, net
        benefit plans cost, and restructuring and other charges.

    (5) Bell Aliant defines distributable cash, a non-GAAP measure, as cash
        from operating activities plus operating items funded through cash
        reserves or borrowings, such as working capital, pension deficit
        funding, restructuring costs and cash taxes in excess of normalized
        levels, plus amounts for current income tax provisions, less capital
        expenditures.

    (6) Capital intensity, a non-GAAP measure, is defined as capital
        expenditures divided by operating revenues.
    
    %SEDAR: 00023938EF




For further information:

For further information: Media Relations: Kelly Gallant, (866)
762-6540,kelly.gallant@bell.aliant.ca; Investor Relations: Zeda Redden, (877)
487-5726, zeda.redden@bell.aliant.ca

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