Yellow Media Inc.

Distribution Breakdown for Tax Purposes

• 2009: Canadian investors | U.S. investors
• 2008: Canadian investors | U.S. investors
• 2007: Canadian investors | U.S. investors
• 2006: Canadian investors | U.S. investors

Monthly Cash Distributions | RRSP, RRIF, or DPSP | Tax Information for U.S. Residents and Other Non-Residents of Canada

The following summary is intended to assist individual Canadian resident unitholders of the Yellow Pages Income Fund (the "Fund") with respect to the treatment of cash distributions received from the Fund for Canadian income tax purposes.

For all other types of Canadian taxpayers (i.e. corporations, partnerships, trusts, etc…), please consult a tax and/or financial advisor with respect to the Canadian tax treatment of cash distributions received from the Fund.

For U.S. and other non-resident unitholders, please refer to the special section below, entitled "Tax Information for U.S. Residents and Other Non-Residents of Canada".

The information that follows is not exhaustive of all possible Canadian federal tax considerations applicable to an investment in the Fund's units. Moreover, the income and other tax consequences of acquiring, holding or disposing of the Fund's units will vary depending on the unitholder's particular circumstances. Accordingly, this summary is of a general nature only and is not intended to be legal or tax advice to any unitholder of the Fund's units. Investors should consult their own tax advisors for advice with respect to the tax consequences of an investment in the Fund's units based on their particular circumstances.

Monthly Cash Distributions:

While the distributions from the Fund may generally consist of interest income, dividend income and/or return of capital components, all or substantially all of such distributions have historically been taxable to individual Canadian resident unitholders. Furthermore, the Fund expects that all or substantially all of its future distributions will be taxable to individual Canadian resident unitholders for the foreseeable future.

Units held within an RRSP, RRIF, or DPSP:

If the Fund units are held within an RRSP, RRIF or DPSP, the amount of the cash distributions received from the Fund will not be taxable to the individual Canadian resident unitholder.

Units held outside of an RRSP, RRIF or DPSP:

Individual Canadian resident unitholders, who hold their units outside of an RRSP, RRIF or DPSP through a broker or other intermediary and who have received cash distributions during a particular calendar year, will receive a "T3 Supplementary" slip directly from their broker or intermediary, not from the Fund. Unitholders who are resident in the province of Quebec on December 31 of the particular calendar year will also receive a Relevé 16 slip from their broker or intermediary. The T3/Relevé 16 slips will provide sufficient detail as to the taxable portion of the cash distributions to the individual Canadian resident unitholders.

Tax Information for U.S. Residents and Other Non-Residents of Canada:

Click here to consult the 2008 distribution breakdown for YPG Holdings Inc.
Click here to consult the 2007 distribution breakdown for YPG Holdings Inc.
Click here to consult the 2006 distribution breakdown for YPG Holdings Inc. 

Distributions paid to unitholders who are non-residents of Canada for Canadian income tax purposes are normally subject to a withholding tax of 25% of the taxable amount of the distribution (i.e. interest and dividend income portion only), as required by Canadian income tax laws, unless a lower percentage is prescribed by a reciprocal tax treaty in effect between Canada and the non-resident's country of residence. For example, for individual unitholders who are residents of the U.S., the reciprocal tax treaty between Canada and the U.S. prescribes a reduction of the withholding tax rate to 15% on the taxable amount of a distribution received from a trust.  Please note that there is no withholding tax requirement on the portion of the distribution classified as a “return of capital”.

The  nature of the income received by US investor (Investor) from Yellow Pages Income  Fund (Fund) (interest or dividends) will be based on the distributions made to  the Fund by its subsidiary YPG Holdings.   Interest paid by YPG Holdings will be taxed as interest in the hands of  the Investor.  Dividends paid by YPG Holdings will be taxed as dividends in the hands of the Investor for US tax  purposes, unless their amount exceeds YPG Holdings’ earnings and profits  (E&P).  As a Canadian corporation, YPG Holdings is not required to compute E&P for US tax purposes and it does not anticipate doing so. Investors should therefore assume that these amounts constitute dividends for US tax purposes. We intend to inform our US Investors annually of the nature of their distributions. The breakdown will specify the portion relating to interest income, to dividend income and the portion relating to return of capital.

Given the fact that the information above is not exhaustive of all possible Canadian and foreign tax considerations applicable to an investment in the Fund's units by a non-resident of Canada for Canadian tax purposes, such unitholders are encouraged to seek advice from a qualified tax advisor in their country of residence.