Dex One Corporation (NYSE: DEXO) today announced fourth quarter
and full year 2012 results in line with previously provided
guidance.
The quarter and year were highlighted by digital bookings growth
of 29 percent and 34 percent, respectively.
Ad sales for the quarter and year declined 14 percent, in line
with guidance. Quarterly bookings and revenue declined 13 percent
and 14 percent, while annual bookings and revenue declined 13
percent and 12 percent.
“Dex One continued to deliver in 2012, as we met all stated
guidance objectives,” said Dex One CEO Alfred Mockett. “Our team
found a way to achieve our business goals despite the continuing
pressure on our print business. We have stemmed the rate of ad
sales decline, thanks in large part to our bundled sales strategy,
and are aggressively selling bundles across our business.”
“Since early 2010, Dex One has retired $1.9 billion in debt and
we have consistently met our financial obligations,” said Dex One
CFO Greg Freiberg. “Concurrently, we have built a digital business
with growth exceeding industry averages.”
2012 PERFORMANCE
(dollars in millions)
Metric
4Q
2012
FY
2012
Results
Year over year change in bookings
Total
(13%) (13%) Digital 29%
34% Print (23%) (23%)
Year over year
change in advertising sales (14%) (14%)
Net revenue
$301 $1,300 Adjusted EBITDA(1)
$133 $561 Adjusted EBITDA margin(1) 44%
43% Adjusted free cash flow(1) $88
$335 Adjusted net debt(1) $1,874
$1,874
2012 GUIDANCE
(dollars in millions)
2012
Metric
Guidance(2)
FY 2012
Results
Fourth quarter year over year change in net advertising sales
(13%) to (14%) (14%)
Full year net revenue $1,275 -
$1,300 $1,300 Full year adjusted EBITDA(1,2)
$535 - $565 $561 Full year adjusted free cash flow(1,2)
$320 - $350 $335
Net loss and cash flow from operations in the fourth quarter
were $35 million and $87 million, respectively. Net income, cash
flow from operations and total debt (including fair value discount)
for full year 2012 were $62 million, $348 million and $2,010
million, respectively.
Dex One-SuperMedia Merger Update
On March 13, 2013, stockholders of both Dex One and SuperMedia
approved the merger. Earlier today, Dex One and SuperMedia each
filed pre-packaged plans of reorganization for Chapter 11
Bankruptcy as a means to complete the merger. This process will
allow both companies to finalize the proposed credit agreement
amendments previously agreed to by a significant percentage of
lenders. The companies expect to complete the merger in the first
half of 2013.
2013 Guidance
The company will not be providing first quarter or full year
2013 guidance due to its pending merger with SuperMedia, Inc.
Additional Information
Important information regarding operating results and related
reconciliations of non-GAAP financial measures to the most
comparable GAAP measures can be found in the schedules and related
footnotes to this press release, which should be thoroughly
reviewed. All figures are preliminary and subject to change pending
the filing of our Annual Report on Form 10-K.
Advertising sales is a non-GAAP statistical measure and consist
of sales of advertising in print directories distributed during the
period and Internet-based products and services with respect to
which such advertising first appeared publicly during the
period.
The year over year change in ad sales is calculated by dividing
the difference between ad sales in the current period and adjusted
ad sales in the prior year divided by adjusted ad sales in the
prior year. The adjustments made to the prior year’s ad sales are
made to align publication dates.
Bookings is another non-GAAP statistical measure that represents
sales activity associated with our print directories and
Internet-based marketing solutions during the period. Bookings
associated with our local customers represent signed contracts
during the period. Bookings associated with our national customers
represent what has been published or fulfilled during the
period.
The year over year change in bookings is calculated by dividing
the difference between bookings in the current period and bookings
generated in the prior year divided by bookings generated in the
prior year.
It is important to distinguish advertising sales and bookings
from net revenue, which is recognized under the deferral and
amortization method.
FOURTH QUARTER AND FULL YEAR CONFERENCE CALL
Dex One Corporation will be hosting a conference call to discuss
its fourth quarter and full year 2012 results today at 11:30 a.m.
(EDT). Individuals within the United States can access the call by
dialing 888-456-0318 – others should dial 212-547-0460. The pass
code for the call is “Dex One.” In order to ensure a prompt start
time, please dial into the call by 11:20 a.m. (EDT).
In addition, a live webcast will be available at www.DexOne.com
and an archived version will be accessible for up to one year. A
replay of the conference call can also be accessed from within the
United States by dialing 866-424-4002 and internationally by
dialing 203-369-0852. There is no pass code for the telephonic
replay, which will be available through March 31, 2013.
Endnotes
1) These are non-GAAP financial measures. Please see the
discussion of non-GAAP financial measures in the schedules and
related footnotes at the end of this press release.
2) Full year guidance for net revenue, adjusted EBITDA, adjusted
free cash flow and adjusted net debt originally provided on July
28, 2011. Fourth quarter ad sales guidance was provided on November
3, 2011.
ABOUT DEX ONE CORPORATION
Dex One Corporation (NYSE: DEXO) is a leading marketing
solutions provider helping local businesses and their customers
connect wherever and whenever they choose to search. Building on
its heritage of delivering print-based solutions, the company
provides integrated products and services to help its clients
establish their digital presence and generate leads. Dex One’s
locally based marketing experts offer a broad network of local
marketing solutions including online, mobile and print search
solutions, such as DexKnows.com. For more information, visit
www.DexOne.com.
Safe Harbor Provision
Certain statements contained in this press release regarding Dex
One’s future operating results, performance, business plans,
prospects, guidance, statements about the benefits of the proposed
merger with SuperMedia Inc. (“SuperMedia”) and the combined
company, and other statements not constituting historical fact are
"forward-looking statements" subject to the safe harbor created by
the Private Securities Litigation Reform Act of 1995. Where
possible, the words "believe," "expect," "anticipate," "intend,"
"should," "will," "would," "planned," "estimated," "potential,"
"goal," "outlook," "may," "predicts," "could," or the negative of
such terms, or other comparable expressions, as they relate to Dex
One or its management, have been used to identify such
forward-looking statements. All forward-looking statements reflect
only Dex One’s current beliefs and assumptions with respect to
future business plans, prospects, decisions and results, and are
based on information currently available to Dex One. Accordingly,
the statements are subject to significant risks, uncertainties and
contingencies, which could cause Dex One’s or the combined
company’s actual operating results, performance or business plans
or prospects to differ materially from those expressed in, or
implied by, these statements.
Factors that could cause actual results to differ materially
from current expectations include risks and other factors described
in Dex One’s publicly available reports filed with the SEC, which
contain discussions of various factors that may affect the business
or financial results of Dex One or the combined company. Such risks
and other factors, which in some instances are beyond the company’s
control, include: the continuing decline in the use of print
directories; increased competition, particularly from existing and
emerging digital technologies; ongoing weak economic conditions and
continued decline in advertising sales; our ability to collect
trade receivables from customers to whom we extend credit; our
ability to generate sufficient cash to service our debt; our
ability to comply with the financial covenants contained in our
debt agreements and the potential impact to operations and
liquidity as a result of restrictive covenants in such debt
agreements; our ability to refinance or restructure our debt on
reasonable terms and conditions as might be necessary from time to
time; increasing interest rates; changes in the company’s and the
company’s subsidiaries credit ratings; changes in accounting
standards; regulatory changes and judicial rulings impacting our
business; adverse results from litigation, governmental
investigations or tax related proceedings or audits; the effect of
labor strikes, lock-outs and negotiations; successful realization
of the expected benefits of acquisitions, divestitures and joint
ventures; our ability to maintain agreements with CenturyLink,
AT&T and other major Internet search and local media companies;
our reliance on third-party vendors for various services; and other
events beyond our control that may result in unexpected adverse
operating results. Neither Dex One nor the combined company is
responsible for updating the information contained in this press
release beyond the published date, or for changes made to this
document by wire services or Internet service providers. This press
release is being furnished to the SEC through a Form 8-K. The
company’s Annual Report on Form 10-K for the year ended December
31, 2012 to be filed with the SEC may contain updates to the
information included in this release.
With respect to the proposed merger with SuperMedia, important
factors could cause actual results to differ materially from those
indicated by forward-looking statements included herein, including,
but not limited to, the ability of Dex One and SuperMedia to
consummate the transaction on the terms set forth in the merger
agreement; risks related to the impact that either Dex One’s or
SuperMedia’s voluntary case under Chapter 11 of title 11 of the
United States Code, filed to consummate the transaction, could have
on our business operations, financial condition, liquidity or cash
flow; the risk that anticipated cost savings, growth
opportunities and other financial and operating benefits as a
result of the transaction 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 the
companies; potential adverse impacts or delay in completing the
transaction as a result of the bankruptcy cases; and difficulties
in connection with the process of integrating Dex One and
SuperMedia, 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.
(See attached schedules and related
footnotes)
DEX ONE CORPORATION
Schedule 1
INDEX OF SCHEDULES
Schedule 1: Index of Schedules Schedule
2:
Unaudited Condensed Consolidated
Statements of Operations for the three months and years ended
December 31, 2012 and 2011
Schedule 3: Unaudited Condensed Consolidated Balance Sheets
at December 31, 2012 and 2011 ` Schedule 4: Unaudited Condensed
Consolidated Statements of Cash Flows for the three months and
years ended December 31, 2012 and 2011 Schedule 5:
Reconciliation of Non-GAAP Measures Schedule 6: Statistical
Measures - Advertising Sales and Bookings Schedule 7:
Notes to Unaudited Condensed Consolidated
Financial Statements and Non-GAAP Measures
Note: These schedules are preliminary
and subject to change pending the Company's filing of its Form
10-K.
DEX ONE CORPORATION
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Schedule 2 Amounts in
millions, except earnings (loss) per share
Three Months EndedDecember
31,
Years EndedDecember 31,
2012 2011 2012
2011 Net revenue (1) $ 301.3 $ 352.0 $ 1,300.0 $ 1,480.6
Expenses 176.9 203.0 755.6 858.0 Depreciation and amortization (2)
105.5 69.8 418.7 251.8 Impairment charges (3) -
- - 801.1
Operating income (loss) 18.9 79.2 125.7 (430.3 ) Gain
on Debt Repurchases, net (4) - - 139.6 - Gain on sale of assets,
net (5) - - - 13.4 Interest expense, net (44.3 )
(55.7 ) (196.0 ) (226.8 )
Income (loss) before income taxes (25.4 ) 23.5 69.3 (643.7 )
(Provision) benefit for income taxes (10.0 )
(18.0 ) (6.9 ) 124.7
Net
income (loss) $ (35.4 ) $ 5.5 $ 62.4
$ (519.0 )
Earnings (loss) per share
(EPS): Basic $ (0.70 ) $ 0.11 $ 1.23 $ (10.35 ) Diluted $ (0.70
) $ 0.11 $ 1.23 $ (10.35 )
Shares used in computing EPS:
Basic 50.9 50.2 50.6 50.1 Diluted 50.9
50.3 50.7 50.1
See accompanying Notes to Unaudited Condensed Consolidated
Financial Statements and Non-GAAP Measures - Schedule 7.
Note: These schedules are preliminary and subject to change
pending the Company's filing of its Form 10-K.
DEX ONE CORPORATION Schedule 3
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
Amounts in millions December 31, 2012
2011 Assets Cash and cash equivalents $ 172.0
$ 257.9 Accounts receivable, net 528.8 605.7 Deferred directory
costs 100.3 130.8 Short term deferred income taxes, net 39.4 67.8
Other current assets 37.4 51.4
Total
current assets 877.9 1,113.6 Fixed assets and computer
software, net 105.1 151.5 Intangible assets, net (2) 1,832.7
2,182.1 Other non-current assets 19.7 13.0
Total Assets $ 2,835.4 $ 3,460.2
Liabilities and Shareholders' Equity (Deficit) Accounts
payable and accrued liabilities $ 95.5 $ 126.2 Accrued interest
18.9 29.2 Deferred revenue 529.9 644.1 Current portion of long-term
debt (7) (8) 2,009.6 326.3
Total
current liabilities 2,653.9 1,125.8 Long-term debt (7)
(8) - 2,184.1 Deferred income taxes, net 54.2 75.5 Other
non-current liabilities 86.7 84.7
Total liabilities 2,794.8 3,470.1 Shareholders’
equity (deficit) 40.6 (9.9 )
Total
Liabilities and Shareholders' Equity (Deficit) $ 2,835.4
$ 3,460.2 See accompanying Notes to Unaudited
Condensed Consolidated Financial Statements and Non-GAAP Measures -
Schedule 7. Note: These
schedules are preliminary and subject to change pending the
Company's filing of its Form 10-K.
DEX ONE
CORPORATION
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Schedule 4 Amounts in millions
Three Months EndedDecember
31,
Years EndedDecember 31,
2012 2011 2012
2011 Net cash provided by operating activities
$ 87.1 $ 118.4 $ 348.5
$ 413.3 Investment activities:
Additions to fixed assets and computer software (5.5 ) (8.9 ) (22.6
) (28.1 ) Proceeds from sale of assets 0.1
0.2 0.1 15.5
Net cash used in investing activities (5.4
) (8.7 ) (22.5 ) (12.6
) Financing activities: Long-term debt
repurchases and repayments - (47.5 ) (400.9 ) (254.6 ) Debt
issuance costs and other financing items, net (5.5 ) - (10.8 ) 0.5
Increase (decrease) in checks not yet presented for payment
0.2 0.3 (0.2 )
(16.6 )
Net cash used in financing activities
(5.3 ) (47.2 ) (411.9 )
(270.7 ) Increase (decrease) in cash and cash
equivalents 76.4 62.5 (85.9 ) 130.0 Cash and cash equivalents,
beginning of period 95.6 195.4
257.9 127.9
Cash and
cash equivalents, end of period $ 172.0
$ 257.9 $ 172.0
$ 257.9 Non-cash
financing activities: Issuance of Dex One Senior Subordinated
Notes in lieu of cash interest payments (6)
$ -
$ - $ 17.9 $ - Reduction
of debt from Debt Repurchases (4)
$ -
$ - $ (144.3 )
$ - See accompanying
Notes to Unaudited Condensed Consolidated Financial Statements and
Non-GAAP Measures - Schedule 7. Note: These schedules are
preliminary and subject to change pending the Company's filing of
its Form 10-K.
DEX ONE
CORPORATION
RECONCILIATION OF
NON-GAAP MEASURES
Schedule 5a
(unaudited)
EBITDA and Adjusted EBITDA are not
measurements of operating performance computed in accordance with
GAAP and should not be considered as a substitute for net income
(loss) prepared in conformity with GAAP. In addition, EBITDA and
Adjusted EBITDA may not be comparable to similarly titled measures
of other companies. Management believes that these non-GAAP
financial measures are important indicators of our operations
because they exclude items that may not be indicative of, or
related to, our core operating results, and provide a better
baseline for analyzing our underlying business. Adjusted EBITDA for
the three months ended December 31, 2012 is determined by adjusting
EBITDA for (i) stock-based compensation expense and long-term
incentive program and (ii) merger transaction and integration
expenses associated with the proposed merger between Dex One and
SuperMedia, Inc. Adjusted EBITDA for the three months ended
December 31, 2011 is determined by adjusting EBITDA for stock-based
compensation expense and long-term incentive program. Adjusted
EBITDA for the year ended December 31, 2012 is determined by
adjusting EBITDA for (i) gain on Debt Repurchases, net, (ii)
stock-based compensation expense and long-term incentive program
and (iii) merger transaction and integration expenses associated
with the proposed merger between Dex One and SuperMedia, Inc.
Adjusted EBITDA for the year ended December 31, 2011 is determined
by adjusting EBITDA for (i) impairment charges, (ii) gain on sale
of assets, net and (iii) stock-based compensation expense and
long-term incentive program.
Amounts in millions
Three Months EndedDecember
31,
Years EndedDecember 31,
Reconciliation of
net income (loss) - GAAP to EBITDA and Adjusted
EBITDA
2012 2011 2012
2011 Net income (loss) - GAAP $ (35.4 ) $ 5.5
$ 62.4 $ (519.0 ) Plus (less): tax provision (benefit) 10.0 18.0
6.9 (124.7 ) Plus: interest expense, net 44.3 55.7 196.0 226.8
Plus: depreciation and amortization 105.5
69.8 418.7 251.8
EBITDA $ 124.4 $ 149.0 $ 684.0 $
(165.1 ) Plus: Impairment charges (3) - - - 801.1
Less: Gain on Debt Repurchases, net (4) - - (139.6 ) - Less:
Gain on sale of assets, net (5) - - - (13.4 ) Plus:
Stock-based compensation expense and long-term incentive program
1.0 1.4 4.9 6.1 Plus: Merger transaction and integration
expenses 7.4 - 11.8 -
Adjusted EBITDA $ 132.8 $ 150.4 $ 561.1
$ 628.7
See accompanying Notes to Unaudited
Condensed Consolidated Financial Statements and Non-GAAP Measures -
Schedule 7.
Note: These schedules are
preliminary and subject to change pending the Company's filing of
its Form 10-K.
DEX ONE CORPORATION
RECONCILIATION OF
NON-GAAP MEASURES (cont'd)
Schedule 5b (unaudited) Free cash flow and
Adjusted free cash flow are not measurements of operating
performance computed in accordance with GAAP and should not be
considered as a substitute for cash flow from operations prepared
in conformity with GAAP. In addition, Free cash flow and Adjusted
free cash flow may not be comparable to similarly titled measures
of other companies. Management believes that these cash flow
measures provide investors and stockholders with a relevant measure
of liquidity and a useful basis for assessing the Company's ability
to fund its activities and obligations. Adjusted free cash flow for
the three months and year ended December 31, 2012 is determined by
adjusting Free cash flow for merger transaction and integration
cash payments associated with the proposed merger between Dex One
and SuperMedia, Inc.
Amounts in millions
Three Months EndedDecember
31,
Years EndedDecember 31,
Reconciliation of cash flow from operations - GAAP to free cash
flow and adjusted free cash flow 2012 2011
2012 2011 Cash flow from
operations - GAAP $ 87.1 $ 118.4 $ 348.5 $ 413.3 Less:
Additions to fixed assets and computer software - GAAP (5.5
) (8.9 ) (22.6 ) (28.1 )
Free cash flow 81.6 $ 109.5 325.9 $ 385.2 Add: Merger
transaction and integration cash payments 6.8
9.4 Adjusted free cash flow $ 88.4 $ 335.3
Reconciliation of debt - GAAP to net
debt and net debt - eliminating fair value discount (8)
(9)
December 31, 2012
December 31, 2011 Debt - GAAP $ 2,009.6 $
2,510.4 Less: Cash and cash equivalents (172.0 )
(257.9 ) Net debt 1,837.6 2,252.5 Fair value discount
36.7 63.2 Net debt - eliminating fair
value discount $ 1,874.3 $ 2,315.7 See
accompanying Notes to Unaudited Condensed Consolidated Financial
Statements and Non-GAAP Measures - Schedule 7. Note: These
schedules are preliminary and subject to change pending the
Company's filing of its Form 10-K.
DEX ONE
CORPORATION
STATISTICAL MEASURES
CALCULATION OF
ADVERTISING SALES AND BOOKINGS PERCENTAGE CHANGE OVER PRIOR YEAR
PERIODS
Schedule 6 (unaudited) Amounts in
millions, except percentages Year Ended
Three Months Ended
Three Months Ended
Three Months Ended
Three Months Ended
Advertising Sales (10) December 31, 2012
December 31, 2012 September 30, 2012
June 30, 2012 March 31, 2012
Advertising Sales $ 1,194 $ 332 $ 232 $ 334 $ 296
Advertising sales
percentage change over prior year periods (14 %)
(14 %) (14 %) (12 %)
(16 %)
Year Ended Three Months
Ended Three Months Ended Three Months
Ended Three Months Ended Bookings
(10) December 31, 2012 December 31,
2012 September 30, 2012 June 30,
2012 March 31, 2012 Bookings: Print
bookings $ 837 $ 194 $ 200 $ 206 $ 237 Digital bookings
285 77 72
69 67 Total
Bookings $ 1,122 $ 271 $ 272 $ 275 $ 304 Bookings percentage
change over prior year periods: Print bookings percentage
change (23 %) (23 %) (22 %) (24 %) (21 %) Digital bookings
percentage change 34 % 29 % 26 %
53 % 32 % Total bookings
percentage change over prior year periods (13 %)
(13 %) (13 %) (13 %)
(13 %) See accompanying Notes to Unaudited
Condensed Consolidated Financial Statements and Non-GAAP Measures -
Schedule 7. Note: These schedules are preliminary and
subject to change pending the Company's filing of its Form 10-K.
DEX ONE CORPORATION Schedule 7
NOTES TO
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND NON-GAAP
MEASURES
(1)
Our advertising revenues are earned
primarily from the sale of advertising in yellow pages directories
we publish. Advertising revenues also include revenues from our
Internet-based marketing solutions including online directories,
such as DexKnows.com and Dex Net. Advertising revenues are affected
by several factors, including changes in the quantity and size of
advertisements, acquisition of new clients, renewal rates of
existing clients, premium advertisements sold, changes in
advertisement pricing, the introduction of new marketing solutions,
an increase in competition and more fragmentation in the local
business search market and general economic factors. Revenues with
respect to print advertising and Internet-based marketing solutions
that are sold with print advertising are recognized under the
deferral and amortization method whereby revenues are initially
deferred when a directory is published, net of sales claims and
allowances, and recognized ratably over the directory’s life, which
is typically 12 months. Revenues with respect to Internet-based
marketing solutions that are sold standalone, such as Dex Net, are
recognized ratably over the life of the contract commencing when
they are first delivered or fulfilled. Revenues with respect to our
marketing solutions that are performance-based are recognized as
the service is delivered or fulfilled.
(2)
The company evaluated the remaining useful lives of definite-lived
intangible assets and other long-lived assets during the first
quarter of 2012. Based on our evaluation, we reduced the estimated
useful lives of our directory services agreements, local and
national customer relationships and tradenames and trademarks. As a
result of reducing the estimated useful lives of these intangible
assets, the company recognized an increase in amortization expense
of $161.6 million in 2012.
(3)
The company concluded there were indicators of impairment as of May
31, 2011. As a result, we performed impairment tests of our
goodwill, definite-lived intangible assets and other long-lived
assets as of May 31, 2011. The impairment testing results for
recoverability of our definite-lived intangible assets and other
long-lived assets indicated they were recoverable and thus no
impairment test was required as of May 31, 2011. Based upon the
testing results of our goodwill, we determined that the remaining
goodwill assigned to each of our reporting units was fully impaired
and thus recognized an aggregate goodwill impairment charge of
$801.1 million during the second quarter of 2011, which was
recorded at each of our reporting units.
(4)
On April 19, 2012, the company utilized cash on hand of $26.5
million to repurchase $98.2 million aggregate principal amount of
Dex One senior subordinated notes. On March 23, 2012, the Company
utilized cash on hand of $69.5 million to repurchase loans under
our credit facilities of $142.1 million. These debt transactions
are hereby referred to as the "Debt Repurchases." The Debt
Repurchases have been accounted for as an extinguishment of debt
resulting in a non-cash, pre-tax gain of $139.6 million during the
year ended December 31, 2012.
(5)
On February 14, 2011, we completed the
sale of substantially all net assets of Business.com. As a result,
we recognized a gain on sale of these assets of $13.4 million
during the first quarter of 2011.
(6)
For the semi-annual interest periods ending September 30, 2012 and
March 31, 2012, the company made interest payments 50% in cash and
50% in paid-in-kind interest, as permitted by the indenture
governing the Dex One senior subordinated notes, resulting in the
issuance of an additional $17.9 million of Dex One senior
subordinated notes.
(7)
The company's voluntary filing for Chapter 11 on March 18, 2013
triggered the acceleration of financial obligations under our Dex
One senior subordinated notes and credit facilities. Although we
believe that any efforts to enforce the acceleration of these
financial obligations are stayed as a result of filing Chapter 11
in the bankruptcy court, we have classified our Dex One senior
subordinated notes and credit facilities as current obligations on
our consolidated balance sheet as of December 31, 2012.
(8)
In conjunction with our adoption of fresh start accounting, an
adjustment was established to record our outstanding debt at fair
value on the Fresh Start Reporting Date. The Company was required
to record our credit facilities at a discount as a result of their
fair value on the Fresh Start Reporting Date. Therefore, the
carrying amount of these debt obligations is lower than the
principal amount due at maturity. This fair value adjustment is
amortized as an increase to interest expense over the remaining
term of the respective debt agreements and does not impact future
scheduled interest or principal payments. The unamortized fair
value adjustment resulting from fresh start accounting was $36.7
million at December 31, 2012.
(9)
Net debt represents total debt less cash and cash equivalents on
the respective date. Net debt – eliminating fair value discount
eliminates the fair value discount as a result of fresh start
accounting described in Note 8 and represents principal amounts due
at maturity.
(10)
Advertising sales is a non-GAAP
statistical measure and consists of sales of advertising in print
directories distributed during the period and Internet-based
marketing solutions with respect to which such advertising first
appeared publicly during the period. In order to calculate a
percentage change over prior periods, adjustments have been made to
the prior year’s advertising sales in an attempt to create a same
store sales metric.Bookings is also a non-GAAP statistical measure
and represents sales activity associated with our print directories
and Internet-based marketing solutions during the period. Bookings
associated with our local customers represent signed contracts
during the period. Bookings associated with our national customers
represent what has been published or fulfilled during the period.
It is important to distinguish advertising sales and bookings from
net revenue, which is recognized under the deferral and
amortization method.
Note: These schedules are preliminary and subject to
change pending the Company's filing of its Form 10-K.
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