  To directly image exoplanets and faint circumstellar disks, the noisy stellar
halo must be suppressed to a high level. To achieve this feat, the angular
differential imaging observing technique and the least-squares Locally
Optimized Combination of Images (LOCI) algorithm have now become the standard
in single band direct imaging observations and data reduction. With the
development and commissioning of new high-order high-contrast adaptive optics
equipped with integral field units, the image subtraction algorithm needs to be
modified to allow the optimal use of polychromatic images, field-rotated images
and archival data. A new algorithm, TLOCI (for Template LOCI), is designed to
achieve this task by maximizing a companion signal-to-noise ratio instead of
simply minimizing the noise as in the original LOCI algorithm. The TLOCI
technique uses an input spectrum and template Point Spread Functions (PSFs,
generated from unocculted and unsaturated stellar images) to optimize the
reference image least-squares coefficients to minimize the planet
self-subtraction, thus maximizing its throughput per wavelength, while
simultaneously providing a maximum suppression of the speckle noise. The new
algorithm has been developed using on-sky GPI data and has achieved impressive
contrast. This paper presents the TLOCI algorithm, on-sky performance, and will
discuss the challenges in recovering the planet spectrum with high fidelity.
