SuperMedia Announces Fourth Quarter and Full Year 2012 Results

  SuperMedia Announces Fourth Quarter and Full Year 2012 Results

2012 Year-end Summary

  *Dex One merger transaction on course
  *Operating income of $440 million and operating margin of 32.5 percent
  *Operating revenue of $1,354 million
  *Total debt reduced by $303 million during 2012

Business Wire

DALLAS -- March 21, 2013

SuperMedia (NASDAQ:SPMD) today announced its financial results for the fourth
quarter and full year 2012.

“Our merger with Dex One remains on track and we expect to close the
transaction in the first half of 2013,” said Peter McDonald, president and CEO
of SuperMedia. “The transaction represents an opportunity to improve the
combined companies’ positioning for growth, quality and productivity and
results in a strengthened balance sheet.

“As I look back at the last few years, I’m pleased with our efforts and
results from a cost control perspective. Looking forward, we will continue to
aggressively manage the new company’s cost structure, and will focus on top
line results. The success of Dex Media will come down to our ability to
execute on our strategy of helping businesses grow by using a complete suite
of social, local and mobile marketing solutions.”

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 On March 17, 2013, each of SuperMedia and Dex and all of
their domestic subsidiaries filed a voluntary “pre-packaged” bankruptcy
petition in the United States Bankruptcy Court for the District of Delaware
(the “Bankruptcy Court”), each seeking relief pursuant to a prepackaged plan
of reorganization under the provisions of Chapter 11 of title 11 of the United
States Code. The bankruptcy petition seeks the Bankruptcy Court’s approval of
the prepackaged plan in order to effect the proposed merger.

The prepackaged plans are an alternative means by which to consummate the
proposed merger. Under the merger agreement, the transaction may be completed
through Chapter 11 reorganization if either SuperMedia or Dex is unable to
obtain its stockholders’ approval of the merger agreement or unanimous lender
approval of certain amendments (the “financing amendments”) to SuperMedia’s
and Dex’s respective credit agreements.

On March 13, 2013, stockholders of Dex and SuperMedia voted to approve and
adopt the proposed merger in the event that both SuperMedia and Dex were able
to obtain unanimous lender approval of the transaction. Also on March 13,
2013, stockholders and lenders of Dex and SuperMedia voted to accept the
prepackaged plan in the event that they were unable to obtain unanimous lender
approval of the transaction and, alternatively, elected to effect the
transaction through Chapter 11 cases.

Neither Dex nor SuperMedia obtained the unanimous lender approval required to
effect the transaction outside of court. Accordingly, on March 17, 2013,
SuperMedia’s board of directors authorized SuperMedia management to file a
voluntary bankruptcy petition in order to seek approval of the prepackaged
plan and the completion of the merger.

There can be no assurance that the Bankruptcy Court will confirm the
prepackaged plans in a timely manner. While operating under bankruptcy, the
Company’s operations will be subject to oversight by the Bankruptcy Court,
which could lead to uncertainties as to the realization of assets and
satisfaction of obligations in the normal course of business.

^1 “Dex One and SuperMedia Will Combine to Create a National Provider of
Social, Local and Mobile Marketing Solutions” Press Release

Fourth Quarter Financial Results

Operating revenue was $312 million in 4Q 2012, a decline of $72 million or
18.8 percent compared with the same quarter last year.

Operating income was $105 million in 4Q 2012, an increase of $13 million or
14.1 percent compared with the same quarter last year.

Operating income margin was 33.7 percent in 4Q 2012, compared with 24.0
percent for 4Q 2011.

Net income was $45 million in 4Q 2012, a decline of $93 million or 67.4
percent compared with the same quarter last year, which included the early
extinguishment of debt of $116 million in 4Q 2011.

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 $117 million in 4Q 2012, a decline of 15.8
percent compared with 4Q 2011 adjusted EBITDA of $139 million, which excludes
severance costs and facility exit costs in 2011.

Adjusted EBITDA margin, a non-GAAP measure, was 37.5 percent in 4Q 2012, a 130
basis point improvement from 36.2 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, facility exit costs, and a non-cash impairment charge, were $195
million, compared with 4Q 2011 expenses of $245 million, a reduction of $50
million or 20.4 percent.

Advertising sales^2 declined 19.1 percent, compared with a decline of 15.9
percent reported for the same period 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 Full Year Financial Results

Operating revenue was $1,354 million for the full year 2012, a decline of $288
million or 17.5 percent compared to 2011.

Operating income was $440 million in 2012, compared with an operating loss of
$596 million in 2011, which included a non-cash impairment charge of $1,003
million associated with a write down of goodwill in 3Q 2011.

Operating income margin was 32.5 percent in 2012, compared with a negative
36.3 percent in 2011.

Net income for 2012 was $223 million, including a $51 million non-taxable gain
on early extinguishment of debt, compared with a net loss of $771 million in
2011, which included the after-tax impact of a goodwill impairment change of
$997 million and a $116 million non-taxable gain on early extinguishment of
debt.

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 $546 million in 2012, a decline of 9.3 percent
compared with adjusted EBITDA of $602 million for 2011 which excludes
severance costs, a non-recurring vendor settlement, facility exit costs, gains
realized on early extinguishment of debt, and a non-cash impairment charge
associated with a write down of goodwill.

Adjusted EBITDA margin, a non-GAAP measure, was 40.3 percent compared in 2012
with 36.7 percent for full year 2011, a 360 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, facility exit costs, and a non-cash impairment charge, were $808
million in 2012, compared with $1,040 million in 2011, a reduction of $232
million or 22.3 percent.

Free cash flow for 2012, a non-GAAP measure, was $275 million, representing
cash provided by operating activities of $288 million, less capital
expenditures (including capitalized software) of $13 million.

In 2012, SuperMedia reduced indebtedness under its loan agreement by $303
million. SuperMedia’s total indebtedness at December 31, 2012 was $1.442
billion.

The Company’s cash balance on December 31, 2012, was $105 million.

Advertising sales^3 declined 18.9 percent, compared with a decline of 16.5
percent reported for the same period last year.

^3 Advertising sales for the nine months ended December 31, 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 December 31, 2012 would have reflected a decline of
19.5 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: 18576757. 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: 18576757. The replay will be
available through April 04, 2013. 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
provides 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 release 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:

  *the potential adverse impacts of failure to complete, or delay in
    completing, the proposed merger with Dex One Corporation (“Dex One”) as a
    result of obtaining consents from the stockholders and secured creditors
    of Dex One or the Company;
  *the business uncertainties and contractual restrictions arising from the
    timing and closing of the proposed merger with Dex One, including the
    possible inability to consummate the proposed merger on the terms
    originally contemplated;
  *the risk that anticipated cost savings, growth opportunities and other
    financial and operating benefits as a result of the proposed merger may
    not be realized or may take longer to realize than expected;
  *the risk that benefits from the transaction may be significantly offset by
    costs incurred in integrating Dex One and the Company;
  *difficulties in connection with the process of integrating Dex One and the
    Company if the transaction with Dex One is consummated, including:
    coordinating geographically separate organizations; integrating business
    cultures, which could prove to be incompatible; difficulties and costs of
    integrating information technology systems; and the potential difficulty
    in retaining key officers and personnel;
  *the risks related to the impact either Dex One’s or the Company’s
    voluntary case under Chapter 11 of title 11 of the United States Code (the
    “Bankruptcy Code”) to consummate the proposed merger (together, “Chapter
    11 cases”) could have on the Company’s business operations, financial
    condition, liquidity or cash flow;
  *the risks related to other parties objecting to the Chapter 11 cases and
    the resulting cost and expenses of delays in either Chapter 11 case; and
  *risks that the combined company will incur significant, non-recurring
    costs in connection with the administration of the Chapter 11 cases;
  *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 foregoing factors should not be construed as exhaustive and should be read
together with the other cautionary statements included in the 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, 2012 and in all subsequent filings with
the SEC. 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 release 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.

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, visitwww.supermedia.com.

SPMD-G

                                                             
                                                                            
SuperMedia Inc.                                                   Schedule A
Consolidated Statements of
Operations

Reported (GAAP)
Year Ended December 31, 2012 Compared to Year Ended December 31, 2011       
                                 (dollars in millions, except per share
                                 amounts)
                                 
                                 Year Ended      Year Ended       
Unaudited                       12/31/12       12/31/11        % Change  
                                                                            
Operating Revenue                $  1,354        $  1,642         (17.5     )
                                                                            
Operating Expense
Selling                             345             435           (20.7     )
Cost of sales (exclusive of         325             408           (20.3     )
depreciation and amortization)
General and administrative          87              220           (60.5     )
Depreciation and amortization       157             172           (8.7      )
Impairment charge                  -            1,003        (100.0    )
Total Operating Expense             914             2,238         (59.2     )
                                                                            
Operating Income (Loss)             440             (596    )     NM
Interest expense, net              170          227          (25.1     )
Income (Loss) Before
Reorganization Items, Gains on
Early
Extinguishment of Debt and          270             (823    )     NM
Provision for Income Taxes
                                                                            
Reorganization items                (1     )        (2      )     (50.0     )
Gains on early extinguishment      51           116          (56.0     )
of debt
                                                                            
Income (Loss) Before Provision      320             (709    )     NM
for Income Taxes
Provision for income taxes         97           62           56.5
Net Income (Loss)                $  223        $  (771    )     NM
                                                                            
Basic and Diluted Earnings
(Loss) per Common Share ^(1)     $  14.28        $  (51.04  )     NM
(2)
Basic and diluted
weighted-average common shares      15.3            15.1
outstanding
                                                                            

Notes:

(1) Equity based awards granted had no impact on the calculation of diluted
earnings per common share.

(2) Net income allocated to participating securities (unvested restricted
stock awards) which are eligible to receive dividend equivalents is excluded
from the calculation of EPS. The amount excluded from earnings per common
share was $5 million for the year ended December 31, 2012.

                                                               
                                                                             
SuperMedia Inc.                                                     Schedule B
Consolidated Statements of
Operations

Reported (GAAP)
Three Months Ended December 31, 2012 Compared to Three Months Ended December
31, 2011
                               (dollars in millions, except per share amounts)
                                                                             
                               3 Mos. Ended        3 Mos. Ended     
Unaudited                     12/31/12           12/31/11        % Change 
                                                                             
Operating Revenue              $      312          $   384          (18.8    )
                                                                             
Operating Expense
Selling                               84               101          (16.8    )
Cost of sales (exclusive of
depreciation and                      76               96           (20.8    )
amortization)
General and administrative            9                54           (83.3    )
Depreciation and                     38             41          (7.3     )
amortization
Total Operating Expense               207              292          (29.1    )
                                                                             
Operating Income                      105              92           14.1
Interest expense, net                41             55          (25.5    )
Income Before Reorganization
Items, Gains on Early
Extinguishment of Debt and            64               37           73.0
Provision for Income Taxes
                                                                             
Reorganization items                  -                (1     )     (100.0   )
Gains on early                       -              116         (100.0   )
extinguishment of debt
                                                                             
Income Before Provision for           64               152          (57.9    )
Income Taxes
Provision for income taxes           19             14          35.7
Net Income                     $      45          $   138         (67.4    )
                                                                             
Basic and Diluted Earnings     $      2.92         $   8.86         (67.0    )
per Common Share ^(1) (2)
Basic and diluted
weighted-average common               15.3             15.1
shares outstanding
                                                                             

Notes:

(1) Equity based awards granted had no impact on the calculation of diluted
earnings per common share.

(2) Net income allocated to participating securities (unvested restricted
stock awards) which are eligible to receive dividend equivalents is excluded
from the calculation of EPS. The amounts excluded from earnings per common
share for the three months ended December 31, 2012 and December 31, 2011 was
$1 million and $3 million, respectively.

                                                      
                                                         
SuperMedia Inc.                                          Schedule C
Reconciliation of Non-GAAP Measures

Year Ended December 31, 2012 and 2011                 
                                                         (dollars in millions)
                                                         
                                                         
                                           Year Ended   Year Ended
Unaudited                                  12/31/12    12/31/11
                                                         
Net Income (Loss) - GAAP                    $  223       $      (771      )
Add/subtract non-operating items:
Provision for income taxes                     97               62
Interest expense, net                          170              227
Reorganization items ^ (5)                     1                2
Gains on early extinguishment of debt ^       (51   )        (116      )
(6)
Operating Income (Loss)                        440              (596      )
Depreciation and amortization                 157           172       
EBITDA (non-GAAP) ^(1)                        597           (424      )
                                                         
Adjustments:
Severance costs/other ^ (7)                    2                23
Merger transaction costs ^ (8)                 5                -
Post-employment benefits amortization ^        (58   )          -
(9)
Impairment charge ^ (10)                      -             1,003     
Adjusted EBITDA (non-GAAP) ^(2)             $  546     $      602       
                                                         
                                                         
Operating Revenue                           $  1,354     $      1,642
                                                         
Operating Income (Loss) margin ^ (3)           32.5  %          -36.3     %
Impact of depreciation and amortization       11.6  %        10.5      %
EBITDA margin (non-GAAP) ^(4)                 44.1  %        -25.8     %
Impact of adjustments                         -3.8  %        62.5      %
Adjusted EBITDA margin (non-GAAP) ^(4)        40.3  %        36.7      %
                                                         

Notes:

(1) EBITDA is a non-GAAP measure that represents earnings before interest,
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.

(5) Reorganization items represent charges that are directly associated 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
include charges associated with a non-recurring vendor settlement and a
facility exit costs both in 2011.

(8) Merger transaction costs are costs associated with the proposed merger
transaction with Dex One.

(9) This adjustment includes a $64 million credit to expense related to a
deferred pretax gain of $257 million ($161 million after-tax) associated with
plan amendments to post-employment benefits and amortization of unrecognized
net losses of $6 million related to other post-employment benefits.

(10) Represents a non-cash impairment charge associated with the write down of
goodwill.

                                                            
                                                               
SuperMedia Inc.                                                Schedule D
Reconciliation of Non-GAAP Measures

Three Months Ended December 31, 2012 and 2011               
                                                (dollars in millions)
                                                               
                                                               
                                               3 Mos. Ended   3 Mos. Ended
Unaudited                                      12/31/12      12/31/11
                                                               
Net Income - GAAP                               $   45         $   138
Add/subtract non-operating items:
Provision for income taxes                          19             14
Interest expense, net                               41             55
Reorganization items ^ (5)                          -              1
Gains on early extinguishment of debt ^ (6)        -           (116   )
Operating Income                                    105            92
Depreciation and amortization                      38          41     
EBITDA (non-GAAP) ^(1)                             143         133    
                                                               
Adjustments:
Severance costs/other ^ (6)                         -              6
Merger transaction costs ^ (7)                      3              -
Post-employment benefits amortization ^ (8)        (29   )      -      
Adjusted EBITDA (non-GAAP) ^(2)                 $   117      $   139    
                                                               
                                                               
Operating Revenue                               $   312        $   384
                                                               
Operating Income margin ^ (3)                       33.7  %        24.0   %
Impact of depreciation and amortization            12.1  %      10.6   %
EBITDA margin (non-GAAP) ^(4)                      45.8  %      34.6   %
Impact of adjustments                              -8.3  %      1.6    %
Adjusted EBITDA margin (non-GAAP) ^(4)             37.5  %      36.2   %
                                                               

Notes:

(1) EBITDA is a non-GAAP measure that represents earnings before interest,
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 margin is calculated by dividing Operating Income by
Operating Revenue.

(4) EBITDA and Adjusted EBITDA margin is calculated by dividing EBITDA and
Adjusted EBITDA by Operating Revenue.

(5) Reorganization items represent charges that are directly associated with
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
include a facility exit charge in 2011.

(7) Merger transaction costs are costs associated with the proposed merger
transaction with Dex One.

(8) This adjustment includes a $32 million credit to expense related to a
deferred pretax gain of $257 million ($161 million after-tax) associated with
plan amendments to post-employment benefits offset by the amortization of
unrecognized net losses of $3 million related to other post-employment
benefits.

                                                               
                                                                   
SuperMedia Inc.                                                    Schedule E
Consolidated Balance Sheets

Reported (GAAP)
As of December 31, 2012 and December                          
31, 2011
                                                                   (dollars in
                                                                   millions)
                                                                   
                                                                   
Unaudited                               12/31/2012  12/31/2011  $ Change
                                                                   
Assets
Current assets:
Cash and cash equivalents                $  105       $  90        $  15
Accounts receivable, net of allowances      119          147          (28   )
of $39 and $59
Accrued taxes receivable                    2            27           (25   )
Deferred directory costs                    128          155          (27   )
Prepaid expenses and other                  22           12           10
Assets held for sale                       21        -         21    
Total current assets                       397       431       (34   )
Property, plant and equipment               99           127          (28   )
Less: accumulated depreciation             70        53        17    
                                           29        74        (45   )
Goodwill                                    704          704          -
Intangible assets, net                      221          345          (124  )
Pension assets                              56           75           (19   )
Other non-current assets                   3         4         (1    )
Total Assets                             $  1,410   $  1,633   $  (223  )
                                                                   
Liabilities and Stockholders'
(Deficit)
Current liabilities:
Current maturities of long-term debt     $  -         $  4         $  (4    )
Accounts payable and accrued                109          126          (17   )
liabilities
Deferred revenue                            66           82           (16   )
Deferred tax liabilities                    3            4            (1    )
Other                                      17        18        (1    )
Total current liabilities                  195       234       (39   )
Long-term debt                              1,442        1,741        (299  )
Employee benefit obligations                109          364          (255  )
Non-current deferred tax liabilities        81           43           38
Unrecognized tax benefits                   44           39           5
                                                                   
Stockholders' (deficit):
Common stock ($.01 par value; 60
million shares authorized,
15,664,432 and 15,468,740 shares
issued and outstanding
in 2012 and 2011, respectively)             -            -            -
Additional paid-in capital                  214          210          4
Retained (deficit)                          (744  )      (967  )      223
Accumulated other comprehensive income     69        (31   )    100   
(loss)
Total stockholders' (deficit)              (461  )    (788  )    327   
Total Liabilities and Stockholders'      $  1,410   $  1,633   $  (223  )
(Deficit)

                                                                
                                                                    
SuperMedia Inc.                                                     Schedule F
Consolidated Statements of Cash Flows

Reported (GAAP) and Non-GAAP Financial Reconciliation - Free Cash Flow
Year Ended December 31, 2012 Compared to Year Ended December 31, 2011
                                                                    
                                                                    
                                         Year Ended   Year Ended
Unaudited                                12/31/12    12/31/11    $ Change
                                                                    
Cash Flows from Operating Activities
Net Income (Loss)                         $  223       $  (771  )   $ 994
Adjustments to reconcile net income to
net cash provided by
operating activities:
Depreciation and amortization expense        157          172         (15    )
Gains on early extinguishment of debt        (51   )      (116  )     65
Employee retirement benefits                 (62   )      14          (76    )
Deferred income taxes                        (23   )      17          (40    )
Provision for uncollectible accounts         19           64          (45    )
Stock-based compensation expense             4            4           -
Impairment charge                            -            1,003       (1,003 )
Changes in current assets and
liabilities
Accounts receivable and unbilled             16           (1    )     17
accounts receivable
Deferred directory costs                     27           44          (17    )
Other current assets                         -            2           (2     )
Accounts payable and accrued                 (6    )      (166  )     160
liabilities
Other, net                                  (16   )    (22   )   6      
Net cash provided by operating              288       244      44     
activities
                                                                    
Cash Flows from Investing Activities
Capital expenditures (including              (13   )      (19   )     6
capitalized software)
Proceeds from sale of assets                -         1        (1     )
Net cash used in investing activities       (13   )    (18   )   5      
                                                                    
Cash Flows from Financing Activities
Repayment of long-term debt                  (251  )      (308  )     57
Other, net                                  (9    )    (2    )   (7     )
Net cash used in financing activities       (260  )    (310  )   50     
Increase (decrease) in cash and cash         15           (84   )     99
equivalents
Cash and cash equivalents, beginning of     90        174      (84    )
year
Cash and cash equivalents, end of year    $  105     $  90      $ 15     
                                                                    
                                                                    
                                         Year Ended   Year Ended
Non-GAAP Financial Reconciliation -      12/31/12    12/31/11    $ Change
Free Cash Flow
Unaudited
                                                                    
Net cash provided by operating            $  288       $  244       $ 44
activities
Less: Capital expenditures (including       (13   )    (19   )   6      
capitalized software)
Free Cash Flow                            $  275     $  225     $ 50     

                                                                         
                                                                                
SuperMedia                                                                      Schedule
Inc.                                                                            G
Advertising                                                          
Sales
                (dollars in millions)
                                                                                
                 3 Mos.       3 Mos.       3 Mos.     Year Ended   Year Ended   Year
                 Ended        Ended        Ended                                Ended
Unaudited       12/31/12    12/31/11    12/31/10  12/31/12    12/31/11    12/31/10
                                                                                
Net
Advertising      $ 321        $ 397        $   472    $ 1,216      $ 1,499      $  1,795
Sales^(1) (2)
% Change           (19.1 %)     (15.9 %)                (18.9 %)     (16.5 %)
year-over-year
                                                                      
                                                                                

Notes:

(1) 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.

(2) Advertising sales for the year ended December 31, 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 year
ended December 31, 2012 would have reflected a decline of 19.5%. As of June
2011, these accounts were transitioned to other certified marketing
representative firms.

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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