SuperMedia Announces Third Quarter 2012 Results
SuperMedia Announces Third Quarter 2012 Results
Q3 2012 Summary
* Proposed merger with Dex One Corporation to create a national provider of
social, local and mobile marketing solutions announced August 21^st
* Operating income of $125 million and operating margin of 37.9 percent
* Operating revenue of $330 million
* Total debt reduced by $36 million during Q3 2012, resulting in total debt
principal reduction of $270 million in 2012
Business Wire
DALLAS -- October 30, 2012
SuperMedia (NASDAQ:SPMD) today announced its financial results for the third
quarter and year to date 2012.
“The headline for the third quarter was the announcement of our merger
agreement with Dex One,” said Peter McDonald, president and CEO of SuperMedia.
“The merged company will have local presence and national scale to be a leader
in providing local, social and mobile marketing solutions to businesses and
delivering results.
“The transaction also will create financial benefits for shareholders and
lenders. Our employees have performed very well in continuing to improve the
company’s operating margin during the quarter, while doing an excellent job of
planning for the post-close integration of the companies,” he added.
Merger Update
SuperMedia and Dex One Corporation (“Dex”) announced the execution of a
definitive agreement to combine in a stock-for-stock merger of equals on
August 21, 2012.^1 Following the announcement of the proposed merger, a joint
steering committee of the senior secured lenders for both companies was formed
to evaluate the proposed amendments to the parties’ respective credit
agreements as set forth in the merger agreement. The consent of the lenders to
the proposed amendments is a condition to closing the merger. Thus far, the
senior secured lenders, acting through the steering committee, have rejected
the proposed amendments to the parties’ respective credit agreements.
SuperMedia and Dex continue to negotiate with the steering committee to reach
agreement on amendments to the parties’ respective credit agreements. The
parties are also considering alternatives to the current transaction
structure, including a “prepackaged” restructuring of the parties’ senior
secured indebtedness through proceedings instituted under Chapter 11 of the
Bankruptcy Code to implement acceptable credit agreement amendments that may
garner sufficient, though not unanimous, support from the parties’ respective
lenders, while otherwise maintaining the basic economic terms of the Merger
Agreement. However, there can be no assurance that SuperMedia and Dex can
effect a transaction through an alternative structure, that the necessary
consents will be obtained, or that the Merger will be consummated.
^1 “Dex One and SuperMedia Will Combine to Create a National Provider of
Social, Local and Mobile Marketing Solutions” Press Release
Third Quarter Financial Results
Operating revenue was $330 million, a decline of $69 million or 17.3 percent
compared with the same quarter last year.
Operating income was $125 million, compared with an operating loss of $897
million in Q3 2011, which included a non-cash impairment charge of $1,003
million associated with a write down of goodwill.
Operating income margin was 37.9 percent, compared with a negative 224.8
percent for Q3 2011.
Net income was $52 million, compared with a net loss of $968 million in Q3
2011, which included the after-tax impact of a goodwill impairment of $997
million.
Adjusted EBITDA (earnings before interest, taxes, depreciation and
amortization), a non-GAAP measure, which excludes proposed merger transaction
costs and the amortization of the deferred gains/losses related to other
post-employment benefit plans was $137 million, a decline of 12.7 percent
compared with Q3 2011 adjusted EBITDA of $157 million, which excludes
severance costs, a non-recurring vendor settlement and a non-cash impairment
charge associated with a write down of goodwill.
Adjusted EBITDA margin, a non-GAAP measure, was 41.5 percent, a 220 basis
point improvement from 39.3 percent in the same quarter last year.
Total expenses, excluding depreciation and amortization, merger transaction
costs, the amortization of the deferred gains/losses related to the
post-employment benefit plans, severance costs, a non-recurring vendor
settlement and a non-cash impairment charge, were $193 million, compared with
Q3 2011 expenses of $242 million, a reduction of $49 million or 20.2 percent.
During the third quarter, SuperMedia reduced indebtedness under its loan
agreement by $36 million. SuperMedia’s total indebtedness at September 30,
2012 was $1.475 billion.
Advertising sales^2 declined 19.1 percent, compared with a decline of 15.6
percent reported for the same quarter last year.
^2 Net advertising sales is an operating measure used by the Company to
compare advertising sales for current advertising periods to corresponding
sales for previous periods. It is important to distinguish net advertising
sales from operating revenue, which on our financial statements is recognized
under the deferral and amortization method.
2012 Year-to-date Financial Results
Operating revenue was $1,042 million, a decline of $216 million or 17.2
percent compared with the same period last year.
Operating income was $335 million, compared with an operating loss of $688
million which included a non-cash impairment charge of $1,003 million
associated with a write down of goodwill in Q3 2011.
Operating income margin was 32.1 percent, compared with a negative 54.7
percent in year-to-date Q3 2011.
Net income was $178 million, including a $51 million non-taxable gain on early
extinguishment of debt, compared with a net loss of $909 million, which
included the after-tax impact of a goodwill impairment of $997 million.
Adjusted EBITDA (earnings before interest, taxes, depreciation and
amortization), a non-GAAP measure, which excludes the gains realized on early
extinguishment of debt, merger transaction costs, the amortization of the
deferred gains/losses related to other post-employment benefit plans, as well
as severance costs, was $429 million, a decline of 7.3 percent compared with
adjusted EBITDA of $463 million for year to date 2011 which excludes severance
costs, a non-recurring vendor settlement and a non-cash impairment charge
associated with a write down of goodwill.
Adjusted EBITDA margin, a non-GAAP measure, was 41.2 percent compared with
36.8 percent for year to date 2011, a 440 basis point improvement.
Total expenses, excluding depreciation and amortization, merger transaction
costs, the amortization of the deferred gains/losses related to the
post-employment benefit plans, severance costs, a non-recurring vendor
settlement and a non-cash impairment charge, were $613 million, compared with
$795 million in the same period last year, a reduction of $182 million or 22.9
percent.
Free cash flow for 2012, a non-GAAP measure, was $225 million, representing
cash provided by operating activities of $234 million, less capital
expenditures (including capitalized software) of $9 million.
The Company’s cash balance on September 30, 2012, was $94 million.
Advertising sales^3 declined 18.8 percent, compared with a decline of 16.7
percent reported for the same period last year.
^3 Advertising sales for the nine months ended September 30, 2011 include
negative adjustments of $11 million, related to the financial distress and
operational wind down of a single certified marketing representative in our
third-party national sales channel. Excluding this impact, advertising sales
for the nine months ended September 30, 2012 would have reflected a decline of
19.6 percent. As of June 2011, these accounts were transitioned to other
certified marketing representative firms.
Earnings Call and Webcast Information
Individuals within the United States can access today’s earnings call by
dialing 888/603-6873. International participants should dial 973/582-2706. The
pass code for the call is: 51095102. In order to ensure a prompt start time,
please dial into the call by 9:50am (Eastern). A replay of the teleconference
will be available at 800/585-8367. International callers can access the replay
by calling 404/537-3406. The replay pass code is: 51095102. The replay will be
available through November 13, 2012. In addition, a live Web cast will be
available on SuperMedia’s Web site in the Investor Relations section at
www.supermedia.com.
Basis of Presentation and Non-GAAP Financial Measures
For the readers' convenience, the financial information accompanying this
release provides a reconciliation of GAAP to non-GAAP and adjusted non-GAAP
results. SuperMedia believes that the use of non-GAAP financial measures
provide useful information to investors to gain an overall understanding of
its current financial performance. Specifically, SuperMedia believes the
non-GAAP results provide useful information to both management and investors
by excluding certain expenses, gains and losses that SuperMedia believes are
not indicative of its core operating results. In addition, non-GAAP financial
measures are used by management for budgeting and forecasting as well as
subsequently measuring SuperMedia's performance and SuperMedia believes that
it is providing investors with financial measures that most closely align to
its internal measurement processes.
Forward-Looking Statements
Some statements included in this report constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995 and
the federal securities laws. Statements that include the words “may,” “will,”
“could,” “should,” “would,” “believe,” “anticipate,” “forecast,” “estimate,”
“expect,” “preliminary,” “intend,” “plan,” “project,” “outlook” and similar
statements of a future or forward-looking nature identify forward-looking
statements. You should not place undue reliance on these statements. These
forward-looking statements include statements that reflect the current views
of our senior management with respect to our financial performance and future
events with respect to our business and industry in general. Forward-looking
statements address matters that involve risks and uncertainties. Accordingly,
there are or will be important factors that could cause our actual results to
differ materially from those indicated in these statements. We believe that
these factors include, but are not limited to, the risks related to the
following:
* our inability to provide assurance for the long-term continued viability
of our business;
* reduced advertising spending and increased contract cancellations by our
clients, which causes reduced revenue;
* declining use of print yellow pages directories by consumers;
* competition from other yellow pages directory publishers and other
traditional and new media;
* our ability to anticipate or respond to changes in technology and user
preferences;
* changes in our operating performance;
* limitations on our operating and strategic flexibility and the ability to
operate our business, finance our capital needs or expand business
strategies under the terms of our credit agreement;
* failure to comply with the financial covenants and other restrictive
covenants in our credit agreement;
* limited access to capital markets and increased borrowing costs resulting
from our leveraged capital structure and debt ratings;
* changes in the availability and cost of paper and other raw materials used
to print our directories;
* our reliance on third-party providers for printing, publishing and
distribution services;
* credit risk associated with our reliance on small- and medium-sized
businesses as clients;
* our ability to attract and retain qualified key personnel;
* our ability to maintain good relations with our unionized employees;
* changes in labor, business, political and economic conditions;
* changes in governmental regulations and policies and actions of federal,
state and local municipalities;
* the outcome of pending or future litigation and other claims;
* the potential adverse impacts of failure to complete, or delay in
completing the proposed merger with Dex as a result of obtaining consents
from the stockholders and secured creditors of Dex or the Company;
* the possibility that our merger agreement with Dex could be unilaterally
terminated by either party;
* the business uncertainties and contractual restrictions arising from the
timing and closing of the proposed merger with Dex, including the possible
inability to consummate the proposed transaction on the terms set forth in
the merger agreement;
* the significant costs associated with the potential transaction with Dex;
* the risk that we may not timely or successfully realize the anticipated
cost savings, growth opportunities and other financial and operating
benefits as a result of the transaction; and
* difficulties in connection with the process of integrating Dex and the
Company, including the risk that benefits from the transaction may be
significantly offset by costs incurred in integrating the companies.
The foregoing factors should not be construed as exhaustive and should be read
together with the other cautionary statements included in this and other
reports we file with the Securities and Exchange Commission (the “SEC”),
including the information in “Item 1A. Risk Factors” in Part I of our Annual
Report on Form 10-K for the year ended December 31, 2011 as updated in the
subsequent quarterly reports on Form 10-Q. If one or more events related to
these or other risks or uncertainties materialize, or if our underlying
assumptions prove to be incorrect, actual results may differ materially from
what we anticipate. All forward-looking statements included in this report are
expressly qualified in their entirety by these cautionary statements. The
forward-looking statements speak only as of the date made and, other than as
required by law, we undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
Important Information For Investors and Security Holders
This communication does not constitute an offer to sell or the solicitation of
an offer to buy any securities or a solicitation of any vote or approval. The
proposed merger transaction between SuperMedia and Dex will be submitted to
the respective stockholders of SuperMedia and Dex. In connection with the
proposed transaction, Newdex, Inc., a subsidiary of Dex (“Newdex”), will file
with the SEC a registration statement on Form S-4 that will include a joint
proxy statement/prospectus to be used by SuperMedia and Dex to solicit the
required approval of their stockholders and that also constitutes a prospectus
of Newdex. INVESTORS AND SECURITY HOLDERS OF SUPERMEDIA AND DEX ARE ADVISED TO
CAREFULLY READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS
(INCLUDING ALL AMENDMENTS AND SUPPLEMENTS) AND OTHER RELEVANT DOCUMENTS FILED
WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE TRANSACTION, THE PARTIES TO THE TRANSACTION AND THE
RISKS ASSOCIATED WITH THE TRANSACTION. A definitive joint proxy
statement/prospectus will be sent to security holders of SuperMedia and Dex
seeking their approval of the proposed transaction. Investors and security
holders may obtain a free copy of the joint proxy statement/prospectus (when
available) and other relevant documents filed by SuperMedia and Dex with the
SEC from the SEC’s website at www.sec.gov. Copies of the documents filed by
SuperMedia with the SEC will be available free of charge on SuperMedia’s
website at www.supermedia.com under the tab “Investors” or by contacting
SuperMedia’s Investor Relations Department at (877) 343-3272. Copies of the
documents filed by Dex with the SEC will be available free of charge on Dex’s
website at www.dexone.com under the tab “Investors” or by contacting Dex’s
Investor Relations Department at (800) 497-6329.
SuperMedia and Dex and their respective directors, executive officers and
certain other members of management may be deemed to be participants in the
solicitation of proxies from their respective security holders with respect to
the transaction. Information about these persons is set forth in SuperMedia’s
proxy statement relating to its 2012 Annual Meeting of Shareholders and Dex’s
proxy statement relating to its 2012 Annual Meeting of Stockholders, as filed
with the SEC on April 11, 2012 and March 22, 2012, respectively, and
subsequent statements of changes in beneficial ownership on file with the SEC.
These documents can be obtained free of charge from the sources described
above. Security holders and investors may obtain additional information
regarding the interests of such persons, which may be different than those of
the respective companies’ security holders generally, by reading the joint
proxy statement/prospectus and other relevant documents regarding the
transaction (when available), which will be filed with the SEC.
About SuperMedia
SuperMedia Inc. (NASDAQ: SPMD) helps small and medium-sized businesses grow
through effective local marketing solutions across print, online, mobile and
social media. SuperMedia provides a full range of solutions including: the
award-winning SuperGuarantee® program, Superpages® directories, published for
Verizon®, FairPoint® and Frontier®, Superpages.com®, EveryCarListed.com®,
Superpages for your mobile and Superpages direct mail products. For more
information, visit www.supermedia.com.
SPMD-G
SuperMedia Inc.
Consolidated Statements of Comprehensive Income (Loss)
Reported (GAAP)
Nine Months Ended September 30, 2012 Compared to Nine Months Ended
September 30, 2011
(dollars in millions, except per share amounts)
Unaudited 9 Mos. Ended 9 Mos. Ended % Change
9/30/12 9/30/11
Operating Revenue $ 1,042 $ 1,258 (17.2 )
Operating Expense
Selling 261 334 (21.9 )
Cost of sales
(exclusive of 249 312 (20.2 )
depreciation and
amortization)
General and 78 166 (53.0 )
administrative
Depreciation and 119 131 (9.2 )
amortization
Impairment charge - 1,003 (100.0 )
Total Operating 707 1,946 (63.7 )
Expense
Operating Income 335 (688 ) NM
(Loss)
Interest expense, net 129 172 (25.0 )
Income (Loss) Before
Reorganization Items,
Gains on Early 206 (860 ) NM
Extinguishment of Debt
and Provision for
Income Taxes
Reorganization items (1 ) (1 ) -
Gains on early 51 - NM
extinguishment of debt
Income (Loss) Before
Provision for Income
Taxes 256 (861 ) NM
Provision for income 78 48 62.5
taxes
Net Income (Loss) $ 178 $ (909 ) NM
Basic and Diluted
Earnings (Loss) per $ 11.36 $ (60.15 ) NM
Common Share ^(1) (2)
(3)
Basic and diluted
weighted-average 15.3 15.1
common shares
outstanding
Comprehensive Income
(Loss)
Net Income (Loss) $ 178 $ (909 ) NM
Adjustments for
pension and
post-employment 137 12 NM
benefits, net of tax
^(4)
Total Comprehensive $ 315 $ (897 ) NM
Income (Loss)
Notes:
(1) Equity based awards granted had no impact on the calculation of diluted
earnings per common share.
Net income allocated to participating securities (unvested restricted
stock awards) which are eligible to receive dividend equivalents is
(2) excluded from the calculation of EPS. The amount excluded from earnings
per common share was $5 million for the nine months ended September 30,
2012.
Basic and diluted earnings per common share for the nine months ended
September 30, 2012 includes a correction of a calculation error that was
(3) previously reported for the three months ended March 31, 2012. The
corrected basic and diluted earnings per common share for the three
months ended March 31, 2012 was $3.97 as opposed to $3.92 previously
reported.
Adjustments for pension and post-employment benefits, net of tax of $137
million includes an adjustment for the after-tax deferred gain of $161
million associated with certain amendments to the Company's other
(4) post-employment benefit plans. This is offset by amortization of $29
million ($18 million after-tax) of deferred gains/losses related to
other post-employment benefits which is included in net income as part
of general and administrative expense.
Schedule A
SuperMedia Inc.
Consolidated Statements of Comprehensive Income (Loss)
Reported (GAAP)
Three Months Ended September 30, 2012 Compared to Three Months Ended
September 30, 2011
(dollars in millions, except per share amounts)
3 Mos.
Unaudited Ended % Change
9/30/12 3 Mos. Ended
9/30/11
Operating Revenue $ 330 $ 399 (17.3 )
Operating Expense
Selling 83 106 (21.7 )
Cost of sales
(exclusive of 79 96 (17.7 )
depreciation and
amortization)
General and 4 48 (91.7 )
administrative
Depreciation and 39 43 (9.3 )
amortization
Impairment charge - 1,003 (100.0 )
Total Operating 205 1,296 (84.2 )
Expense
Operating Income 125 (897 ) NM
(Loss)
Interest expense, 40 58 (31.0 )
net
Income (Loss) Before 85 (955 ) NM
Reorganization Items
and Provision for
Income Taxes
Reorganization items (1 ) - NM
Income (Loss) Before
Provision for Income 84 (955 ) NM
Taxes
Provision for income 32 13 146.2
taxes
Net Income (Loss) $ 52 $ (968 ) NM
Basic and Diluted
Earnings (Loss) per $ 3.27 $ (63.97 ) NM
Common Share ^(1)
(2)
Basic and diluted
weighted-average 15.3 15.1
common shares
outstanding
Comprehensive Income
(Loss)
Net Income (Loss) $ 52 $ (968 ) NM
Adjustments for
pension and
post-employment (36 ) 9 NM
benefits, net of tax
^(3)
Total Comprehensive $ 16 $ (959 ) NM
Income (Loss)
(1) Equity based awards granted had no impact on the calculation of diluted
earnings per common share.
Net income allocated to participating securities (unvested restricted
stock awards) which are eligible to receive dividend equivalents is
(2) excluded from the calculation of EPS. The amount excluded from earnings
per common share was $2 million for the three months ended September 30,
2012.
Adjustments for pension and post-employment benefits, net of tax of
($36) million includes an amortization credit of $29 million ($18
(3) million after-tax) included in net income as part of general and
administrative expense, which represents the after-tax amortization of
deferred gains/losses associated with the Company's other
post-employment benefits.
Schedule B
SuperMedia Inc.
Reconciliation of Non-GAAP Measures
Nine Months Ended September 30, 2012 and 2011
(dollars in millions)
Unaudited 9 Mos. Ended 9 Mos. Ended
9/30/12 9/30/11
Net Income (Loss) - GAAP $ 178 $ (909 )
Add/subtract non-operating
items:
Provision for income taxes 78 48
Interest expense, net 129 172
Reorganization items ^ (5) 1 1
Gains on early
extinguishment of debt ^ (51 ) -
(6)
Operating Income (Loss) 335 (688 )
Depreciation and 119 131
amortization
EBITDA (non-GAAP) ^(1) 454 (557 )
Adjustments:
Severance costs/other ^ (7) 2 17
Merger transaction costs ^ 2 -
(8)
Post-employment benefits (29 ) -
amortization ^ (9)
Impairment charge ^ (10) - 1,003
Adjusted EBITDA (non-GAAP) $ 429 $ 463
^(2)
Operating Revenue $ 1,042 $ 1,258
Operating Income (Loss) 32.1 % -54.7 %
margin ^ (3)
Impact of depreciation and 11.5 % 10.4 %
amortization
EBITDA margin (non-GAAP) 43.6 % -44.3 %
^(4)
Impact of adjustments -2.4 % 81.1 %
Adjusted EBITDA margin 41.2 % 36.8 %
(non-GAAP) ^(4)
Notes:
EBITDA is a non-GAAP measure that represents earnings before interest,
(1) taxes, reorganization items, gains on early extinguishment of debt,
depreciation and amortization.
(2) Adjusted EBITDA is a non-GAAP measure that adjusts EBITDA for certain
unique costs.
(3) Operating Income (Loss) margin is calculated by dividing Operating
Income (Loss) by Operating Revenue.
(4) EBITDA and Adjusted EBITDA margin is calculated by dividing EBITDA and
Adjusted EBITDA by Operating Revenue.
Reorganization items represent charges that are directly associated
(5) with the process of reorganizing the business under Chapter 11 of the
United States Bankruptcy Code.
(6) Gains on early extinguishment of debt represents the gains associated
with the purchase of a portion of the Company's debt below par value.
(7) Severance costs are associated with headcount reductions. Other items
includes charges associated with a non-recurring vendor settlement.
(8) Merger transaction costs are costs associated with the proposed merger
transaction with Dex One.
Post-employment benefits amortization includes $32 million related to a
(9) deferred pretax gain of $257 million ($161 million after-tax)
associated with plan amendments and amortization of unrecognized net
losses of $3 million related to other post-employment benefits.
(10) Represents a non-cash impairment charge associated with the write down
of goodwill.
Schedule C
SuperMedia Inc.
Reconciliation of Non-GAAP Measures
Three Months Ended September 30, 2012 and 2011
(dollars in millions)
Unaudited 3 Mos. Ended 3 Mos. Ended
9/30/12 9/30/11
Net Income (Loss) - GAAP $ 52 $ (968 )
Add/subtract non-operating
items:
Provision for income taxes 32 13
Interest expense, net 40 58
Reorganization items ^ (5) 1 -
Operating Income (Loss) 125 (897 )
Depreciation and 39 43
amortization
EBITDA (non-GAAP) ^(1) 164 (854 )
Adjustments:
Severance costs/other ^ (6) - 8
Merger transaction costs ^ 2 -
(7)
Post-employment benefits (29 ) -
amortization ^ (8)
Impairment charge ^ (9) - 1,003
Adjusted EBITDA (non-GAAP) $ 137 $ 157
^(2)
Operating Revenue $ 330 $ 399
Operating Income (Loss) 37.9 % -224.8 %
margin ^ (3)
Impact of depreciation and 11.8 % 10.8 %
amortization
EBITDA margin (non-GAAP) 49.7 % -214.0 %
^(4)
Impact of adjustments -8.2 % 253.3 %
Adjusted EBITDA margin 41.5 % 39.3 %
(non-GAAP) ^(4)
Notes:
EBITDA is a non-GAAP measure that represents earnings before interest,
(1) taxes, reorganization items, gains on early extinguishment of debt,
depreciation and amortization.
(2) Adjusted EBITDA is a non-GAAP measure that adjusts EBITDA for certain
unique costs.
(3) Operating Income (Loss) margin is calculated by dividing Operating
Income (Loss) by Operating Revenue.
(4) EBITDA and Adjusted EBITDA margin is calculated by dividing EBITDA and
Adjusted EBITDA by Operating Revenue.
Reorganization items represent charges that are directly associated with
(5) the process of reorganizing the business under Chapter 11 of the United
States Bankruptcy Code.
(6) Severance costs are associated with headcount reductions. Other items
includes charges associated with a non-recurring vendor settlement.
(7) Merger transaction costs are costs associated with the proposed merger
transaction with Dex One.
Post-employment benefits amortization includes $32 million related to a
(8) deferred pretax gain of $257 million ($161 million after-tax) associated
with plan amendments and amortization of unrecognized net losses of $3
million related to other post-employment benefits.
(9) Represents a non-cash impairment charge associated with the write down
of goodwill.
Schedule D
SuperMedia Inc.
Consolidated Balance Sheets
Reported (GAAP)
As of September 30, 2012 and December 31, 2011
(dollars in millions)
Unaudited 9/30/2012 12/31/2011 $ Change
Assets
Current assets:
Cash and cash equivalents $ 94 $ 90 $ 4
Accounts receivable, net of 117 147 (30 )
allowances of $43 and $59
Accrued taxes receivable - 27 (27 )
Deferred directory costs 130 155 (25 )
Prepaid expenses and other 11 12 (1 )
Total current assets 352 431 (79 )
Property, plant and equipment 128 127 1
Less: accumulated depreciation 70 53 17
58 74 (16 )
Goodwill 704 704 -
Intangible assets, net 250 345 (95 )
Pension assets 74 75 (1 )
Other non-current assets 6 4 2
Total Assets $ 1,444 $ 1,633 $ (189 )
Liabilities and Stockholders'
(Deficit)
Current liabilities:
Current maturities of $ 1 $ 4 $ (3 )
long-term debt
Accounts payable and accrued 105 126 (21 )
liabilities
Deferred revenue 68 82 (14 )
Deferred tax liabilities 7 4 3
Other 12 18 (6 )
Total current liabilities 193 234 (41 )
Long-term debt 1,474 1,741 (267 )
Employee benefit obligations 104 364 (260 )
Non-current deferred tax 100 43 57
liabilities
Unrecognized tax benefits 43 39 4
Stockholders' (deficit):
Common stock ($.01 par value;
60 million shares authorized,
15,666,504 and 15,468,740 - - -
shares issued and outstanding
in 2012 and 2011,
respectively)
Additional paid-in capital 213 210 3
Retained (deficit) (789 ) (967 ) 178
Accumulated other 106 (31 ) 137
comprehensive income (loss)
Total stockholders' (deficit) (470 ) (788 ) 318
Total Liabilities and $ 1,444 $ 1,633 $ (189 )
Stockholders' (Deficit)
Schedule E
SuperMedia Inc.
Consolidated Statements of Cash Flows
Reported (GAAP) and Non-GAAP Financial Reconciliation - Free Cash Flow
Nine Months Ended September 30, 2012 Compared to Nine Months Ended September
30, 2011
(dollars in millions)
9 Mos. Ended
Unaudited 9 Mos. Ended 9/30/11 $ Change
9/30/12
Cash Flows from Operating
Activities
Net Income (Loss) $ 178 $ (909 ) $ 1,087
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 119 131 (12 )
expense
Gains on early extinguishment (51 ) - (51 )
of debt
Employee retirement benefits (30 ) 12 (42 )
Deferred income taxes (22 ) (32 ) 10
Provision for uncollectible 15 50 (35 )
accounts
Stock-based compensation 3 3 -
expense
Impairment charge - 1,003 (1,003 )
Changes in current assets and
liabilities
Accounts receivable and 15 3 12
unbilled accounts receivable
Deferred directory costs 25 36 (11 )
Other current assets 2 (1 ) 3
Accounts payable and accrued (4 ) (139 ) 135
liabilities
Other, net (16 ) (17 ) 1
Net cash provided by operating 234 140 94
activities
Cash Flows from Investing
Activities
Capital expenditures (including (9 ) (11 ) 2
capitalized software)
Net cash used in investing (9 ) (11 ) 2
activities
Cash Flows from Financing
Activities
Repayment of long-term debt (218 ) (36 ) (182 )
Other, net (3 ) - (3 )
Net cash used in financing (221 ) (36 ) (185 )
activities
Increase (decrease) in cash and 4 93 (89 )
cash equivalents
Cash and cash equivalents, 90 174 (84 )
beginning of year
Cash and cash equivalents, end $ 94 $ 267 $ (173 )
of period
Non-GAAP Financial 9 Mos. Ended 9 Mos. Ended
Reconciliation - Free Cash Flow $ Change
9/30/12 9/30/11
Unaudited
Net cash provided by operating $ 234 $ 140 $ 94
activities
Less: Capital expenditures
(including capitalized (9 ) (11 ) 2
software)
Free Cash Flow $ 225 $ 129 $ 96
Schedule F
SuperMedia Inc.
Advertising Sales
(dollars in millions)
3 Mos. 3 Mos. 3 Mos. 9 Mos. 9 Mos. 9 Mos.
Ended Ended Ended Ended Ended Ended
Unaudited 9/30/12 9/30/11 9/30/10 9/30/12 9/30/11 9/30/10
Net
Advertising $ 262 $ 324 $ 384 $ 895 $ 1,102 $ 1,323
Sales^(1) (2)
% Change (19.1 %) (15.6 %) (18.8 %) (16.7 %)
year-over-year
Notes:
Net advertising sales is an operating measure used by the Company to compare advertising
(1) sales for current advertising periods to corresponding sales for previous periods. It is
important to distinguish net advertising sales from operating revenue, which on our
financial statements is recognized under the deferral and amortization method.
Advertising sales for the nine months ended September 30, 2011 include negative
adjustments of $11 million, related to the financial distress and operational wind down of
(2) a single certified marketing representative in our third-party national sales channel.
Excluding this impact, advertising sales for the nine months ended September 30, 2012
would have reflected a decline of 19.6%. As of June 2011, these accounts were transitioned
to other certified marketing representative firms.
Schedule G
Contact:
SuperMedia Inc.
Media Relations:
Andrew Shane, 972-453-6473
andrew.shane@supermedia.com
or
Investor Relations:
Cliff Wilson, 972-453-6188
cliff.wilson@supermedia.com
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