Bell Aliant reports solid first quarter 2009 results

    HALIFAX, May 6 /CNW/ - Bell Aliant Regional Communications Income Fund
(Bell Aliant or the Fund) (TSX: BA.UN) today reported the Fund's and Bell
Aliant Holdings LP's first quarter 2009 financial results, demonstrating
continued solid performance.
    "We are making good progress on our 2009 strategy and despite the
economic downturn, our results for the quarter are solid and well in-line with
our expectations," said Karen Sheriff, President and Chief Executive Officer.
"We are continuing to invest in broadband expansion and increasing our
high-speed customer base. With the completion of a significant management
restructuring in mid February, we are resetting our cost structure and
beginning to see operational and financial benefits. We expect that this along
with our streamlined capital spending plan will support cash flow growth as we
move forward."
    "The execution of our strategy is well underway. Service to our customers
continues to improve and we have taken steps to simplify and strengthen our
brand presence. We are introducing Bell Aliant as our market-facing brand in
Atlantic Canada. In Ontario and Quebec, we will continue to leverage our
existing brands while building a closer linkage to the Bell Aliant brand,"
said Sheriff.

    Bell Aliant Holdings LP's first quarter financial highlights

    (In millions of dollars)   Q1 2009        Q1 2008     Percentage Change
    Operating Revenue             $828           $838          (1.2%)
    EBITDA                         356            353           0.7%
    Capital Expenditures           107             95          13.0%
    Distributable Cash             197            207          (5.0%)

    Operating revenues were down $10 million or 1.2 per cent in the first
quarter of 2009 compared to the first quarter of 2008. Local, long distance,
and other revenue declines more than offset increases in Internet and
Information Technology (IT) revenues.
    Internet revenue grew by $10 million or 10.8 per cent in the first
quarter of 2009, compared to the same period in 2008, with the number of
high-speed Internet customers 8.6 per cent higher than a year ago, and
residential high-speed Internet average revenue per customer (ARPC) 5.3 per
cent higher than the same quarter in 2008.
    IT revenue grew $9 million or 8.6 per cent from the same period last
year, with IT equipment sales growth of $21 million offsetting declines in IT
services revenues, resulting from the recognition of deferred revenues for a
significant health care project in the first quarter of 2008.
    Local service and long distance revenue declined by $9 million (2.5 per
cent) and $7 million (5.9 per cent), respectively, in the first quarter of
2009 compared to the same quarter in 2008, with network access services (NAS)
3.9 per cent lower than a year ago. After adjusting for the NAS added through
the acquisition of the assets of Kenora Municipal Telephone Services (KMTS) in
the first quarter of 2008, NAS declines in the first quarter of 2009 increased
modestly, by approximately 6,000, from the same period a year earlier, in line
with management's expectations discussed in early February.
    Other revenues declined $12 million or 20.4 per cent from the same
quarter in 2008, primarily as a result of lower outsourcing and other
miscellaneous revenues.
    EBITDA in the quarter increased by $2 million from the same quarter a
year earlier, as operating revenue declines were offset by labour-related cost
reductions and other cost containment initiatives. EBITDA margin improved to
43.0 per cent, up from 42.2 per cent from the same quarter in 2008.
    Capital expenditures in the first quarter of 2009 were $107 million, up
$12 million (13 per cent) from the same quarter a year ago, driven by the
previously announced network enhancements to provide upgraded wireless
backhaul functionality for Bell Mobility that began in the fourth quarter of
2008. Capital intensity for the first quarter of 2009 was 13.0 per cent, below
the low end of Bell Aliant's 2009 annual guidance of 13.5 - 14.5 per cent, as
the first quarter reflected typical seasonality associated with capital
    Distributable cash decreased $10 million (5.0 per cent) in the first
quarter of 2009 from the same period in 2008, primarily as a result of higher
capital spending as compared to the same period last year. Expected
improvements in operating costs as restructuring plans are completed, and
lower planned capital spending for the balance of 2009 as compared to 2008,
are expected to result in increased distributable cash in 2009 from 2008
levels, consistent with Bell Aliant's 2009 guidance range.
    The Fund maintained its distributions to unitholders and reported
distributions of $92 million or $0.725 per unit for the quarter ended March
31, 2009.
    On April 28, 2009, Bell Aliant LP filed a short form base shelf
prospectus, allowing for the issuance of up to $1.5 billion of medium term
notes, with maturities of not less than one year. The prospectus expires 25
months from the date of filing. Any notes issued will be unsecured, will rank
pari passu with all other unsecured and unsubordinated indebtedness incurred
by Bell Aliant LP and will be issued at rates of interest or at prices
determined by Bell Aliant LP from time to time based on a number of factors,
including general market conditions.
    On May 1, 2009, CAE and Bell Aliant announced that CAE's acquisition of
Bell Aliant's Defence, Security and Aerospace (DSA) business unit, operated by
the xwave division of Bell Aliant Regional Communications LP, had been
completed with proceeds of $16 million received on closing. An additional $8.5
million of proceeds is contingent upon the satisfaction of various conditions.

    Supplementary financial information

    More information on the Fund's and Bell Aliant Holdings LP's Q1 results
can be found in Bell Aliant's supplementary information package, first quarter
2009, available at

    Analyst conference call

    A conference call with the financial community is scheduled for Thursday,
May 7, 2009 at 9:00 a.m. (Eastern). The dial-in numbers are (866) 299-6657 or
(416) 641-6121 for Toronto area participants. Media are invited to attend in a
listen-only mode. The title of the call is "Bell Aliant First Quarter 2009
Financial Results." A replay of the session can be heard from May 8 to May 21,
2009. To access the replay, dial (800) 408-3053 or (416) 695-5800 and enter
the passcode 7001021#.
    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.


    The information contained in this news release is unaudited.

    (1) Bell Aliant derives virtually 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) Percentage changes quoted in this release related to dollar values
    are based on amounts rounded to the nearest hundred-thousand, consistent
    with disclosure in the Fund's and Bell Aliant Holdings LP's management's
    discussion and analysis and supplementary information package. Dollar
    values quoted in this release are rounded to the nearest million unless
    otherwise stated.

    (4) Bell Aliant Holdings LP defines EBITDA, a non-GAAP measure, as
    operating revenue less expenses (earnings) before interest, income taxes,
    depreciation and amortization expense, net benefit plans cost, and
    restructuring and other charges. For a reconciliation of EBITDA to the
    most closely comparable GAAP measure, please refer to Bell Aliant
    Holdings LP's management's discussion and analysis for the first quarter
    of 2009.

    (5) Bell Aliant defines EBITDA margin, a non-GAAP measure, as EBITDA as a
    percentage of operating revenue.

    (6) Bell Aliant defines capital intensity as capital expenditures as a
    percentage of operating revenue.

    (7) Bell Aliant defines distributable cash, a non-GAAP measure, as cash
    from operating activities of continuing and discontinued operations of
    Bell Aliant Holdings LP and of the Fund, plus operating items funded
    through cash reserves or borrowings, such as working capital, pension
    deficit funding, restructuring and other charges and cash capital taxes
    in excess of normalized levels, plus amounts for current income tax
    provisions plus other elements of working capital changes that do not
    affect cash flow, less capital expenditures. For a reconciliation of
    EBITDA to the most closely comparable GAAP measure, please refer to Bell
    Aliant Holdings LP's management's discussion and analysis for the first
    quarter of 2009.

    Forward-looking statements

    This news release contains forward-looking statements concerning
anticipated future events, results, circumstances or expectations, including
statements relating to operating expense reductions, broadband expansion and
increasing high-speed customer base, strengthening brand presence, cash flow
and distributable cash growth, and capital expenditure plans. Unless otherwise
noted, such statements describe management's expectations at May 6, 2009.
These statements are based on management's beliefs regarding future events,
and are subject to inherent risks and uncertainties that are beyond
management's control. Therefore, actual results may differ materially from
what is predicted. Assumptions made and risk factors considered in preparing
our forward-looking statements are discussed in detail in Bell Aliant's fourth
quarter 2008 earnings and 2009 guidance news release dated February 2, 2009,
as well as in the Fund's and Bell Aliant Holdings LP's 2008 annual
management's discussion and analysis (MD&A) and annual information forms, and
their first quarter 2009 MD&As, which are available at or at All forward-looking statements in this news release are
qualified by these cautionary statements, and there can be no assurance that
the results or events predicted will be realized. Except as may be required by
Canadian securities laws, Bell Aliant disclaims any intention and assumes 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

    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 employees are
committed to deliver the highest quality of customer service, choice and
convenience. More information can be found at

For further information:

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

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