Bell Aliant Announces Distribution Increase with Fourth Quarter 2007 Results and 2008 Guidance

    - Distribution increase of 2.8 per cent effective February 2008
    - Revenue growth of 2.6 per cent in fourth quarter 2007 compared to 2006
    - Distributable cash projected to grow to $720 - $740 million in 2008

    HALIFAX, Nova Scotia, Feb. 5 /CNW/ - Bell Aliant Regional Communications
Income Fund ("Bell Aliant" or the "Fund")(1) (TSX: BA.UN) today announced a
distribution increase of 2.8 per cent to $0.2417 per unit per month ($2.90 per
unit per annum) effective with the February 2008 distribution, along with its
fourth quarter 2007 financial results and financial guidance for 2008.

    Fourth quarter Fund results

    The Fund reported distributions declared to its unitholders of
$89.5 million or $0.705 per unit for the quarter ended December 31, 2007, up
5.2 per cent from the same quarter in 2006.

    Bell Aliant Holdings LP's fourth quarter financial highlights(2) are as

                                      Percen-     Actual      forma  Percen-
    (In millions   Actual    Actual     tage   12 months  12 months    tage
     of dollars)  Q4 2007   Q4 2006   Change        2007       2006  Change
     Revenue       $858.7    $837.3      2.6%   $3,373.4   $3,299.2     2.2%
    EBITDA(3)       370.2     363.9      1.7%    1,450.2    1,446.7     0.2%
     Expenditures   144.1     131.1      9.9%      543.0      517.5     4.9%
     Cash(4)        169.5     186.8     (9.3%)     701.4      722.9    (3.0%)

    "This quarter our revenue growth was at the high end of our expectations,
our productivity program exceeded expectations and we completed our planned
accelerated broadband rollout," said Stephen Wetmore, President and Chief
Executive Officer. "We also successfully gained forbearance from local service
regulation in a number of additional exchanges in our region. These
significant accomplishments, along with the marketing flexibility we now have
as a result of regulatory changes made in 2007, give us a strong competitive
position heading into 2008."
    "We are pleased to announce that our Board of Trustees has approved an
increase to our distributions of 2.8 per cent, consistent with our
expectations for growth in 2008 and the objectives we set when Bell Aliant was
established," continued Mr. Wetmore.

    Highlights of the fourth quarter of 2007 include the following:

    - Operating revenue increased $21.4 million (2.6 per cent) in the
      fourth quarter of 2007 compared to the same period a year earlier due
      to growth in Internet, information technology and other revenue.

    - Internet revenue grew by $6.4 million (7.7 per cent) in the quarter
      compared to the same period in 2006 with high-speed Internet
      subscribers growing by 17.1 per cent from a year earlier.

    - Information technology revenue increased by $5.1 million (7.0 per cent)
      in the quarter compared to the same period in 2006, with increased
      services revenue and higher sales of computer hardware and software.

    - Other revenue increased $18.5 million (20.4 per cent) in the quarter
      compared to the same period in 2006 due to higher product sales and
      out-sourcing revenues.

    - Local service and long distance revenue declined by $8.3 million
      (2.3 per cent) and $2.0 million (1.7 per cent), respectively, in the
      fourth quarter of 2007 compared to the fourth quarter of 2006. Network
      access services ("NAS") were 3.2 per cent lower than a year earlier
      with net NAS declines of 42,282 in the quarter.

    - Higher revenues, cost containment achieved through productivity
      improvements and lower provincial capital taxes resulted in an EBITDA
      increase of $6.3 million (1.7 per cent) in the fourth quarter of 2007
      over the same period a year earlier.

    - Bell Aliant completed its planned accelerated rollout of
      fibre-to-the-node ("FTTN") technology in the fourth quarter of 2007,
      bringing the total number of homes passed with this technology to
      approximately 188,000 at December 31, 2007. This technology provides
      higher bandwidth, improving Internet speed and enabling customers to
      access the company's IPTV product.

    - The increase in capital expenditures associated with the accelerated
      FTTN expansion was the primary reason for a decline in distributable
      cash in the fourth quarter of 2007 of $17.3 million (9.3 per cent) from
      the same period a year earlier. Lower distributable cash as a result of
      the sale of Bell Aliant's interest in Aliant Directory Services earlier
      in 2007 also contributed to the decline.

    - During the fourth quarter, Bell Aliant gained forbearance from local
      service regulation for a number of exchanges where forbearance was
      contingent on satisfying specified competitor quality of service

    - On January 16, 2008, the City of Kenora announced that Kenora City
      Council unanimously approved Bell Aliant's offer to purchase the assets
      and business of Kenora Municipal Telephone System (KMTS). The
      transaction closed on February 1, 2008, with an acquisition price of
      approximately $27 million.

    2008 Guidance

    Refer to the section entitled "Forward-looking Statements" later in this
news release for a discussion concerning the material risk factors that could
affect, and the material assumptions underlying, Bell Aliant's 2008 financial
guidance provided below, and to Bell Aliant's Notice Concerning
Forward-looking Statements dated February 5, 2008, which is available on Bell
Aliant's website at or at, for a detailed
discussion of these key risk factors and assumptions.

    Bell Aliant's financial guidance for 2008 is as follows:

                                                      2008 Guidance
    Operating Revenue                                 $3.37 - $3.44 billion
    Distributable Cash                                $720 - $740 million
    Capital Intensity(5)                              14.5 - 15.5 per cent

    "With improved products and services available through our FTTN
technology, the benefits of forbearance, and our focus on superior customer
service, we expect our average revenue per household to continue to grow in
2008," said Mr. Wetmore. "We anticipate that Internet will continue to be our
primary source of revenue growth in 2008. With our Value Packages and bundles
providing the greatest value to our customers, we expect our sales of features
and TV will also increase, further supporting growth."
    "Productivity will continue to be of paramount importance in 2008, as the
margins on our new services are lower than those on the declining local and
long distance businesses. However, with the carryover of the productivity
achievements of 2007, we are in a solid position heading into 2008."

    Operating Revenue

    Consolidated operating revenue is expected to increase by up to 2 per cent
in 2008 from 2007 levels. Growth in Internet revenues, along with increased
penetration of features and other services are projected to offset the effects
of NAS declines and product substitution on local and long distance revenues,
with overall revenue projected to be between $3.37 billion and $3.44 billion
in 2008.

    Distributable Cash

    Distributable cash in 2008 is expected to increase to $720 - $740 million
primarily as a result of the expected revenue growth, reduced capital
expenditures and productivity improvements containing growth in capital and
operating expenditures.

    Capital Intensity

    With the completion of the accelerated phase of Bell Aliant's investment
in FTTN technology in 2007, capital expenditures are expected to return to a
level of 14.5 to 15.5 per cent of operating revenues in 2008, down from
16.1 per cent in 2007.

    Analyst conference call

    Mr. Wetmore and Glen LeBlanc, Chief Financial Officer of Bell Aliant, will
host a conference call with the investment community to discuss Bell Aliant's
year-end results for 2007 and the organization's 2008 financial guidance. The
conference call is scheduled for Wednesday, February 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 Fourth Quarter 2007 Financial Results."
A replay of the session can be heard from February 6 until midnight on
February 20. To access the replay, dial (800) 408-3053 or (416) 695-5800 and
enter the passcode 3243151#.
    A live audio webcast of the conference call can be accessed on 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, in
particular as described in the "2008 Guidance" section of this news release.
Unless otherwise indicated, such forward-looking statements describe
management's expectations at February 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.
    Some of the factors that could cause results or events to differ
materially from current expectations include but are not limited to:
management's ability to achieve strategies and plans; general economic
conditions; increasing competition; changing regulations; reliance on systems;
changing technology; required operating and capital expenditures; demand for
services; achievement of productivity targets; the relationship with BCE and
Bell Canada and the availability of business opportunities; pension plan
funding; liquidity and financing risk; leverage and restrictive covenants; BCE
governance rights; reliance on key personnel and labour relations; legal
contingencies and changes in laws; unpredictability and volatility of unit
price; the nature of Fund units; limitations on non-resident ownership;
dilution through issuance of additional units; and changing taxation rules for
income trusts. In addition, a number of assumptions were made in making
forward-looking statements in this press release, 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,
which is available at or at, for a detailed
discussion of these key risk factors and assumptions.
    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

    (1) Bell Aliant commenced operations on July 7, 2006, following the
        completion of the plan of arrangement (the "Plan of Arrangement") of
        Aliant Inc. ("Aliant"), which was described in Aliant's management
        information circular, dated April 14, 2006. Bell Aliant derives all
        of its income from its indirect ownership in Bell Aliant Regional
        Communications Holdings, Limited Partnership ("Bell Aliant Holdings
        LP") and its direct ownership in Bell Nordiq Trust. Bell Aliant
        Holdings LP's results combine Aliant's former wireline operation in
        Atlantic Canada, information technology and other operations and Bell
        Canada's former wireline operation in its regional territories in
        Ontario and Quebec, and the operations of Télébec, Limited
        Partnership and NorthernTel, Limited Partnership.

    (2) In order to provide meaningful year over year comparisons,
        Bell Aliant has provided pro forma results with the periods from
        January 1 to July 7, 2006, restated to reflect the operation of
        Bell Aliant Holdings LP as if the Plan of Arrangement had been
        completed on January 1, 2006.

    (3) EBITDA does not have any standardized meaning prescribed by Canadian
        GAAP.  It is therefore unlikely to be comparable to similar measures
        presented by other reporting issuers. Bell Aliant defines EBITDA as
        earnings before interest, income taxes, depreciation and amortization
        expense, net benefit plans cost, and restructuring and other charges.

    (4) Distributable cash does not have any standardized meaning prescribed
        by Canadian GAAP. It is therefore unlikely to be comparable to
        similar measures presented by other reporting issuers. Bell Aliant
        calculates distributable cash using EBITDA, adding or deducting any
        cash items not included in EBITDA but that are required for operating
        purposes in the current period, including the following items:

        (i)    Cash funding requirement for current service pension costs for
               defined benefit pension plans and other employee benefit plans
               to the extent not already deducted in determining EBITDA;

        (ii)   An adjustment to cash capital taxes to reflect a normalized
               level that will be achieved once announced provincial tax rate
               reductions come into effect in future years;

        (iii)  Cash expenses incurred by the Fund as these are not included
               in the EBITDA or pro forma EBITDA of Bell Aliant Holdings LP;

        (iv)   Cash interest expense;

        (v)    Other cash income or expenses that may be incurred to the
               extent not included in EBITDA or pro forma EBITDA;

        (vi)   Adjustments for certain one-time or other normalizing expense

        (vii)  The portion of consolidated distributable cash that is
               generated for the benefit of the non-controlling interest in
               controlled subsidiaries;

        (viii) Capital expenditures; and

        (ix)   The portion of distributable cash generated by discontinued

    (5) Bell Aliant defines capital intensity as capital expenditures as a
        percentage of operating revenues.
    %SEDAR: 00023938EF

For further information:

For further information: Media Relations: Kelly Gallant, (866) 762-6540,; Investor Relations: Zeda Redden, (877) 487-5726,

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