• Cost reductions improve 2009 EBITDA margin 1.5 percentage points over 2008
• Distributable cash reaches $773 million in 2009; expected to remain strong at $750 million - $790 million in 2010
• FibreOP Internet and HDTV services on 100 per cent fibre optic network to pass 140,000 homes by year end 2010
• 2010 Distributions expected to continue at $2.90 per unit
• Unitholder vote regarding January 2011 conversion to corporate structure planned for June 2010

"Our 2009 results demonstrate that our strategy is working. Our EBITDA margins improved over 2008 performance despite growing competitive activity, because of action we took to reset our cost structure and grow our broadband business," said Karen Sheriff, President and Chief Executive Officer. "Our distributable cash generation was very strong, our service metrics continued to improve, and with our launch of our FibreOP fibre to the home service we are providing an unparalleled Internet and HDTV experience for our customers in those markets."

Bell Aliant Holdings LP's fourth quarter financial highlights

Operating revenues were down 2.2 per cent in the fourth quarter of 2009 compared to the fourth quarter of 2008, primarily as a result of declines in local and long distance revenues associated with lower network access services (NAS), offset by increases in Internet and Information Technology (IT) revenues.

Despite the revenue declines, restructuring programs and ongoing cost containment initiatives reduced operating expenses by $18 million from the same quarter in 2008, maintaining EBITDA at $366 million, consistent with the fourth quarter of 2008. For the full year 2009, EBITDA improved $16 million or 1.1 per cent over 2008 performance with operating expenses down $88 million from the year before.

Local service and long distance revenue declined $15 million (4.1 per cent) and $9 million (8.6 per cent), respectively, in the fourth quarter of 2009 compared to the same quarter in 2008. NAS declined 5.0 per cent from a year earlier, as a result of increased competitive activity and the effects of a slower economy throughout 2009.

NAS declines in total were relatively stable in the fourth quarter of 2009 compared to the third quarter. Residential NAS declines were approximately 6,000 higher than the same quarter in 2008 with more residential customers having a competitive telephony offering than a year earlier. Business NAS declines were approximately 4,000 lower than those incurred in the fourth quarter of 2008 when business shutdowns and the completion of the federal election reduced NAS for that period.

Internet revenue grew by $7 million or 7.2 per cent in the fourth quarter of 2009 compared to the same period in 2008, with the number of high-speed Internet customers 7.0 per cent higher than a year ago and strong growth in Bell Aliant TV subscribers in 2009.

IT revenue increased $8 million or 14.2 per cent in the fourth quarter of 2009, driven by higher IT equipment sales than the same quarter a year ago. Other revenues declined $8 million or 14.9 per cent from the same quarter in 2008, mainly as a result of lower product sales and rentals.

Capital expenditures in the fourth quarter of 2009 were $121 million, down $46 million from the same quarter a year ago. This reflects a streamlined 2009 capital program and the completion of the Bell Mobility backhaul project which began in the fourth quarter of 2008. Capital intensity for the fourth quarter of 2009 was 15.4 per cent, bringing 2009's annual capital intensity to 14.6 per cent.

Distributable cash increased $36 million (24.8 per cent) in the fourth quarter of 2009 from the same period in 2008, mainly as a result of the lower capital program. Year over year, distributable cash increased $57 million (8.1 per cent) due to better operating performance and a lower capital program, which were offset slightly by declines in cash from discontinued operations.

The Fund reported distributions to unitholders of $92 million or $0.725 per unit for the quarter ended December 31, 2009.

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