Reports EPS of $0.12 and Second Consecutive Quarter of Positive Net Income
- Publication sales* increases by 2.1 percent in first half of 2005
- Recognized revenue grows 0.4 percent in second quarter; revenue growth
was 1.0 percent excluding Qwest advertising revenue and direct
marketing products
- EBITDA margin, as adjusted* is 56.8 percent for the quarter on EBITDA,
as adjusted*(1) of $235 million; net income rises to $19 million
- Operating cash flow is $115 million and adjusted free cash flow* is
$109 million for the quarter; free cash flow* of $505 - $525 million
projected for full year
- New products continue to exceed expectations; Dex Plus(TM) expands to
32 markets; Dex Web Clicks(TM) package sales accelerate
DENVER, Aug. 4 /PRNewswire-FirstCall/ -- Dex Media, Inc. (NYSE: DEX) today
announced its consolidated results for the quarter ended June 30, 2005. Dex
Media, Inc. ("Dex Media") reported second quarter net income of $18.8 million,
or basic and diluted net income of $0.12 per share. For the second quarter,
the company reported EBITDA (earnings before interest, taxes, depreciation and
amortization), as adjusted* of $234.7 million; an EBITDA, as adjusted* margin
of 56.8 percent; cash provided by operating activities of $115.4 million; and
adjusted free cash flow* of $108.8 million, which was used to pay down $91.4
million in aggregate bank debt, net of borrowings on the revolving credit
facilities.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030506/DEXLOGO)
For the first time, Dex Media disclosed publication sales* for the quarter
and six months ended June 30, 2005. Publication sales* was $457.1 million for
the quarter and $909.3 million year-to-date, a 2.1 percent increase over the
first half of 2004. For the three months and six months ended June 30, 2005,
Dex Media reported GAAP revenue of $413.5 million and $825.2 million,
respectively.
Publication sales* represents the total billable value of advertising in
directories that were published during the period and all other revenue,
including Internet products, sold during the period. Dex Media intends to
disclose publication sales* in its earnings releases going forward.
"We are very pleased with the momentum we are building in several areas of
the business," said George Burnett, Dex Media's president and CEO. "Our
results reflect our ability to compete aggressively, invest for growth and
further optimize operations. During the quarter, we invested over $7 million
to launch Dex Plus and Dex Web Clicks, and continued to implement our Internet
distribution agreements. We expect these investments to contribute to
strengthening sales growth in the second half of the year while we continue to
generate strong free cash flow and leading EBITDA margins.
"We believe that disclosing publication sales addresses the needs of our
shareholders, who have asked for greater visibility into our current sales
performance," noted Burnett. "With this information, investors will be better
equipped to evaluate our current results, gain insight into future performance
and make meaningful industry comparisons."
Consolidated GAAP Results
Second Quarter Consolidated GAAP Results
For the quarter ended June 30, 2005, Dex Media reported $413.5 million in
revenue, compared to $396.7 million for the second quarter of 2004. Dex Media
also reported $135.3 million and $111.2 million in operating income for the
second quarter of 2005 and 2004, respectively. Net income was $18.8 million
for the three months ended June 30, 2005, compared to a net loss of
$4.1 million for the second quarter of 2004. For the quarter ended June 30,
2005, basic and diluted earnings per share was $0.12, compared to basic and
diluted loss per share of $0.04 for the comparable period last year. Dex
Media generated cash from operating activities of $115.4 million in the second
quarter of 2005, compared to $121.5 million in the second quarter of 2004. In
the second quarter of 2005, cash from operating activities was used to pay
down aggregate bank debt of $91.4 million, net of borrowings on the revolving
credit facilities.
For each of the three months ended June 30, 2005 and 2004, Dex Media
reported $7.4 million in depreciation and amortization expense. Amortization
of intangibles for the three months ended June 30, 2005 and 2004 was
$86.4 million and $103.1 million, respectively, related to the identifiable
intangible assets such as customer relationships, non-compete/publishing
agreements and the Dex trademark. The decrease in amortization of intangibles
was the result of a declining method used to amortize the value of the
acquired accounts in proportion with their estimated retention lives.
Dex Media reported interest expense of $106.8 million and $118.0 million
for the three months ended June 30, 2005 and 2004, respectively. For the
three months ended June 30, 2005, interest expense included $10.1 million of
amortization of deferred financing costs and $11.9 million of accretion on
discount notes. Interest expense for the three months ended June 30, 2004
included $11.3 million of amortization of deferred financing costs and
$10.9 million of accretion on discount notes.
Consolidated Results, Including Adjustments and Non-GAAP Measures
The following non-GAAP measures are presented by Dex Media:
-- EBITDA*, EBITDA as adjusted*, free cash flow* and adjusted free cash
flow*.
-- Adjustments to exclude the effects of purchase accounting. Dex Media's
revenue and related cost of revenue for the 12 months following the
acquisition of its wholly-owned subsidiary, Dex Media West LLC, in
September 2003, were lower than they otherwise would have been due to
the effects of recording the acquisition in accordance with the
purchase method of accounting. During the second quarter of 2004,
revenue and cost of revenue were lower than they would have been by
$15.4 million and $3.3 million, respectively, due to purchase
accounting. There was no impact on revenue and related cost of
revenue in the second quarter of 2005 related to purchase accounting.
Unless otherwise noted, the following "consolidated results, as
adjusted" and non-GAAP measures have been adjusted to exclude the
effects of purchase accounting.
-- Disclosure of publication sales*, which is the total billable value of
advertising in directories that were published during the period,
together with all other revenue, including Internet products, sold
during the period.
Dex Media does not intend for the non-GAAP information to be considered in
isolation from or as a substitute for GAAP measures. See Schedule 1 for a
description of why the presentation of such non-GAAP financial measures
provides useful information to investors regarding Dex Media's financial
condition and results of operations.
Second Quarter Consolidated Results, As Adjusted
Publication sales* for the second quarter was $457.1 million, compared to
$449.8 million for the comparable period in 2004, an increase of 1.6 percent.
For the three months ended June 30, 2005, Dex Media reported total revenue
of $413.5 million, compared to $412.1 million in the second quarter of 2004, a
0.4 percent increase. Excluding the effects of changes in Qwest advertising
revenue and direct marketing revenue, total revenue growth for the second
quarter of 2005 was 1.0 percent.
Local directory services revenue was essentially flat for the quarter
ended June 30, 2005. Dex Media reported $339.2 million in local directory
services revenue compared to $339.9 million in the second quarter of 2004.
Revenue from national advertisers in second quarter of 2005 was
$58.2 million, compared to $57.2 million in the second quarter of 2004, a
1.7 percent increase. The increase in national directory services in the
second quarter of 2005 represents the third consecutive quarter of revenue
growth, reversing the negative trend that began in 2003.
Qwest advertising revenue in the second quarter was $4.3 million, compared
to $6.2 million for the same period in 2004. The decrease of $1.9 million is
a result of the timing of purchases under the Advertising Commitment Agreement
between Dex Media and Qwest, which obligates Qwest to purchase $20.0 million
in advertising annually. Under that agreement, Qwest places advertising in
specific markets at its discretion, and revenue is recognized in accordance
with the timing of that placement. However, the terms of the agreement
require Qwest to remit cash monthly equal to one-twelfth of the $20.0 million
annual obligation.
For the three months ended June 30, 2005, Dex Media reported other revenue
of $11.9 million, compared to $8.7 million for the same period in 2004, a
35.9 percent increase. The increase is driven by an increase in Internet
revenue, and was partially offset by the impact of discontinuing certain
direct marketing products in 2004.
Gross margin in the second quarter of 2005 was 69.8 percent, compared to
an adjusted gross margin of 69.5 percent in the second quarter of 2004.
General and administrative expense, including bad debt expense, was
$59.6 million for the quarter, compared to $52.8 million for the same period
in 2004. The increase of $6.8 million was attributable primarily to net
severance costs of $4.0 million related to the planned workforce reduction,
contracting and professional fees related to on-going support costs for the
new production system and bad debt expense. Bad debt expense represented
3.0 percent of revenue for the second quarter of 2005, compared to 2.6 percent
for the same period last year.
EBITDA, as adjusted* was $234.7 million in the second quarter of 2005,
resulting in an EBITDA, as adjusted* margin of 56.8 percent, compared to
EBITDA, as adjusted* and an EBITDA, as adjusted* margin of $234.9 million and
57.0 percent, respectively, in the second quarter of 2004.
Free Cash Flow* and Debt
Dex Media defines free cash flow* as cash provided by operating activities
less capital expenditures.
For the quarter ended June 30, 2005, Dex Media reported cash provided by
operating activities of $115.4 million compared to $121.5 million in the same
period in 2004. Capital expenditures were $7.4 million for the second quarter
of 2005, compared to $12.1 million for the second quarter of 2004. Adjusted
free cash flow* of $108.8 million for the second quarter of 2005 compares to
adjusted free cash flow* of $110.4 million in the second quarter of 2004. For
the six-month period ended June 30, 2005, adjusted free cash flow* was
$246.1 million compared to $213.8 million for the same period in 2004, a 15.1%
increase.
During the second quarter of 2005, Dex Media's cash provided by operating
activities was primarily used to pay down aggregate bank debt by
$91.4 million, net of borrowings on the revolving credit facilities. Debt pay
down, net of borrowings on the revolving credit facilities, in the first half
of 2005 was $222.1 million, compared to $219.0 million in the first half of
2004. At June 30, 2005, Dex Media had total debt (in millions) of:
Bank Credit Facilities $2,124.6
Bank Revolver 96.5
Notes Outstanding 3,307.7
$5,528.8
At June 30, 2005, after considering the outstanding derivatives, the fixed
rate portion of Dex Media's total debt was 68 percent. The total leverage
ratio(2), as defined in Dex Media's credit facilities, was 6.0x at June 30,
2005. Dex Media's average interest rate, based on its weighted average cost
of debt at June 30, 2005, was 7.4 percent. Cash interest of $104.7 million
was paid during the second quarter.
2005 Guidance
"This is our first quarter of disclosing publication sales data," said Bob
Neumeister, Dex Media's executive vice president and CFO. "We believe this
new level of disclosure will provide greater transparency to the investment
community while providing enhanced comparability with our industry peers."
Updated guidance for the full year 2005 is set forth below:
-- Free cash flow* is expected to be between $505 - $525 million.
Quarterly variations are anticipated. The first and fourth quarters
are expected to generate the greatest amount of free cash flow, with
the fourth quarter being the strongest quarter.
-- Capital expenditures are expected to be approximately $40 million.
-- Debt pay down is expected to be in the range of $450 - $470 million.
-- Interest expense is expected to be in the range of
$455 - $470 million.
-- Previous guidance, as provided on our May 4, 2005 earnings call, is
reiterated with regard to revenue growth, EBITDA, as adjusted* margin,
amortization of intangibles, book depreciation and amortization, cash
interest, amortization of deferred financing costs, and accretion of
discount notes. See Schedule 2 for all full year 2005 guidance.
Footnotes
(1) EBITDA, as adjusted* is defined as EBITDA*, adjusted to exclude the
effects of purchase accounting. EBITDA, as adjusted* margin is
defined as EBITDA, as adjusted* divided by revenue, adjusted to
exclude the effects of purchase accounting.
(2) As defined by Dex Media's credit facilities, total leverage ratio is
the ratio of total indebtedness to adjusted consolidated EBITDA* for
the period of four consecutive fiscal quarters. Total indebtedness
is the aggregate principal amount of indebtedness that would be
reflected on a balance sheet prepared in accordance with GAAP.
Adjusted consolidated EBITDA* is EBITDA, as adjusted* and further
adjusted for specific non-recurring and any significant non-cash
items defined in the credit agreement. The presentation of total
leverage at June 30, 2005, is not in accordance with GAAP. We have
presented total leverage because we believe that such financial
information is important to an investor's understanding of Dex
Media's ability to service its debt.
Second Quarter Conference Call
A conference call will be held Thursday, August 4, 2005, at 11 a.m.
Eastern Daylight Time. The domestic dial-in number is 866-253-6505 and the
international number is 703-639-1207. The conference ID is 742183. Please
call 10 minutes in advance to facilitate an on-time start. The call will be
broadcast on Dex Media's web site at http://www.dexmedia.com.
Please note: All statements made by Dex Media officers on this call are
the property of Dex Media and subject to copyright protection. Recording of
the call is prohibited without the express written consent of Dex Media.
About Dex Media, Inc.
Dex Media, Inc., is the leading provider of print directories and
Internet-based local search for 14 Western and Midwestern states. As the
official publisher for Qwest Communications International Inc., Dex published
44.5 million copies of 269 White and Yellow Page directories in 2004. Dex's
Internet-based directory, DexOnline.com(TM), has been the most used Internet
Yellow Pages local search site in the Dex region for five consecutive
quarters, with a share of the local search market that is more than the next
two competitors combined.** In 2004, Dex Media generated revenue of
approximately $1.65 billion, excluding the effects of purchase accounting
related to the acquisition of Dex Media West LLC.
* Denotes a non-GAAP measure. See schedules 1, 8 & 9 for a
reconciliation of GAAP to non-GAAP measures.
** According to market research firm comScore
Safe Harbor for Forward-Looking and Cautionary Statements
This press release contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. In some cases,
forward-looking statements can be identified by terminology such as "may,"
"will," "should," "expects," "intends," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential," "continue," "assumption" or the negative
of these terms or other comparable terminology. Such forward-looking
statements include, but are not limited to, the statements made under the
heading "2005 Guidance." Regardless of any identifying phrases, these
statements relate to future events or our future financial performance, and
involve known and unknown risks, uncertainties and other factors that may
cause our actual results, levels of activity, performance or achievements to
be materially different from any future results, levels of activity,
performance or achievements expressed or implied by these forward-looking
statements. Although we believe that the expectations reflected in these
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements.
The following important factors, among others, could cause such a
difference: (i) our substantial indebtedness, which could impair our ability
to operate our business; (ii) the terms of our subsidiaries' credit
facilities, which may restrict Dex Media's access to cash flow and its ability
to pursue its business strategies; (iii) increased competitive pressure from
other directory publishers or media companies; (iv) the loss of any of our key
agreements with Qwest; (v) declining usage of printed yellow page directories;
(vi) our inability to renew customer advertising contracts; (vii) risks
related to the start-up of new print or Internet directories and media
services; (viii) our practice of extending credit to small and medium-sized
businesses; (ix) our dependence on third-party providers of printing,
distribution and delivery services; (x) the impact of fluctuations in the
price or availability of paper; (xi) our failure to successfully convert to
the Amdocs software system; (xii) the impact of turnover among sales
representatives or the loss of key personnel; (xiii) the occurrence of work
stoppages; and (xiv) general economic, market or business conditions. These
and other risks and uncertainties are described in detail in Dex Media's
Annual Report on Form 10-K for the year ended December 31, 2004, as well as
our other periodic filings with the Securities and Exchange Commission
Investors, potential investors and other readers are urged to consider these
factors carefully in evaluating the forward-looking statements and are
cautioned not to place undue reliance on such forward-looking statements. The
forward-looking statements made herein are only made as of the date of this
press release and Dex Media undertakes no obligation to publicly revise or
update such forward-looking statements to reflect events or circumstances that
occur after the date of this press release or to reflect the occurrence of any
unanticipated event.
Appendix: The following schedules have been provided for ease of reviewing
consolidated selected financial data for Dex Media, Inc. and its wholly-owned
subsidiaries, Dex Media East, LLC and Dex Media West, LLC. Non-GAAP measures
presented in these tables have been reconciled within this press release to
the most directly comparable GAAP measure.
Index of Schedules
Schedule 1: Reconciliation of GAAP to Non-GAAP Measures for the three
months ended June 30, 2005 and 2004 and the six months ended
June 30, 2005 and 2004
Schedule 2: Guidance for Full Year 2005
Schedule 3: Selected Balance Sheet Data for the three months ended
June 30, 2005 and the twelve months ended December 31, 2004
Schedule 4: Selected Combining Statement of Operations Data for the
three months ended June 30, 2005 and 2004
Schedule 5: Selected Combining Statement of Operations Data for the six
months ended June 30, 2005 and 2004
Schedule 6: Selected Combining Cash Flow Data for the three months ended
June 30, 2005 and 2004
Schedule 7: Selected Combining Cash Flow Data for the six months ended
June 30, 2005 and 2004
Schedule 8: EBITDA* Reconciliation for the three months ended
June 30, 2005 and 2004
Schedule 9: EBITDA* Reconciliation for the six months ended
June 30, 2005 and 2004
Schedule 10: 2004-2005 Revenue Break-down by Channel
Schedule 1
Dex Media, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
*Non-GAAP Financial Measures
In addition to disclosing financial results that are determined in
accordance with GAAP, Dex Media also discloses certain non-GAAP measures.
Management believes that presenting adjusted GAAP results and non-GAAP
measures is important for investors to better understand Dex Media's
underlying operational and financial performance, to facilitate comparison of
results between periods, to enable investors to better assess and understand
Dex Media's ability to meet debt service, make capital expenditures and meet
its working capital requirements.
Dex Media discloses EBITDA, EBITDA, as adjusted, free cash flow, adjusted
free cash flow and publication sales, all of which are non-GAAP measures.
The most directly comparable GAAP measure to EBITDA and EBITDA, as
adjusted, is net income (loss). The following table presents a reconciliation
of net income (loss) to EBITDA and EBITDA, as adjusted, for consolidated
second quarter and YTD 2005 results compared to consolidated second quarter
and YTD 2004 results (in millions). The following table also reflects
adjustments to exclude the effects of purchase accounting.
Second Quarter Six Months
Ended June 30, Ended June 30,
2005 2004 2005 2004
Net income (loss) $18.8 $(4.1) $33.9 $(14.6)
Income tax provision
(benefit) 12.1 (2.3) 22.0 (9.0)
Interest expense - net 106.0 117.6 221.9 241.9
Depreciation & amortization 7.4 7.4 14.1 13.7
Amortization of intangibles 86.4 103.1 172.9 206.2
EBITDA* 230.7 221.7 464.8 438.2
Effects of purchase
accounting:
Revenue -- 15.4 -- 38.1
Cost of revenue -- (3.3) -- (9.7)
EBITDA*, adjusted to exclude
the effects of purchase
accounting -- 233.8 -- 466.6
Other adjustments:
Advisory fees to Sponsors -- 1.0 -- 2.0
Accrued severance costs 4.0 0.1 3.6 0.4
EBITDA, as adjusted* $234.7 $234.9 $468.4 $469.0
Revenue $413.5 $396.7 $825.2 $784.9
Effects of purchase
accounting -- 15.4 -- 38.1
Revenue, adjusted to
exclude the effects
of purchase accounting $413.5 $412.1 $825.2 $823.0
EBITDA, as adjusted*,
margin 56.8% 57.0% 56.8% 57.0%
The most directly comparable GAAP measure to free cash flow and adjusted
free cash flow is cash provided by operating activities. The following table
presents a reconciliation of cash provided by operating activities to free
cash flow and adjusted free cash flow for second quarter and YTD 2005 results
compared to consolidated second quarter and YTD 2004 results (in millions):
Second Quarter Six Months
Ended June 30, Ended June 30,
2005 2004 2005 2004
Cash provided by operating
activities $115.4 $121.5 $260.1 $251.8
Capital expenditures (7.4) (12.1) (16.6) (39.4)
Free cash flow* 108.0 109.4 243.5 212.4
Adjustments:
Severance paid related to
workforce reduction 0.8 1.0 2.6 1.4
Adjusted free cash flow* $108.8 $110.4 $246.1 $213.8
Dex Media utilizes the deferral and amortization method of accounting,
under which revenue and expenses are recognized over the lives of the
directories published by the company. Publication sales, which is a non-GAAP
financial measure for the company, represents the total billable value of
advertising in directories that were published during the period, together
with all other revenue, including Internet products, sold during the period.
The most comparable GAAP financial measure to publication sales is revenue.
Management believes that a comparison of publication sales from one period to
another provides a meaningful indication of recent sales trends, taking into
consideration the diversity of directories published and other products sold
in each quarter that are not fully reflected by deferral and amortization
accounting. Although publication sales is subsequently recognized as revenue
over the lives of the respective directories, publication sales may not be
directly indicative of the amount ultimately recognized as revenue under
deferral and amortization, due to adjustments that may occur in subsequent
reporting periods. Therefore, publication sales is not necessarily indicative
of Dex Media's future quarterly or annual revenue. Dex Media utilizes
publication sales to set bonus targets and to monitor, assess and reward sales
performance.
The following table presents a reconciliation of publication sales to
total revenue for second quarter and YTD 2005 results compared to second
quarter and YTD 2004 results (in millions):
Second Quarter Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
Publication sales $456.7 $363.7 $909.3 $893.4
Adjustments for changes in
directory publication dates 0.4 86.1 -- (3.2)
Publication sales, as
adjusted 457.1 449.8 909.3 890.2
Less: Current period
publication sales not
recognized as revenue
in current period due
to the deferral method
of accounting (409.8) (407.4) (698.0) (661.1)
Plus: Revenue recognized in
the current period
for publication sales
from prior periods 335.9 354.3 583.9 555.8
Plus: Revenue recognized in
the current period
related to extension
billings for changes
in directory
publication dates 30.3 -- 30.0 --
Revenue $413.5 $396.7 $825.2 $784.9
Schedule 2
Dex Media, Inc. and Subsidiaries
Full Year 2005 Guidance
Item 2005 Guidance
Revenue Growth Growth rate consistent with 2004
Adjusted EBITDA* Margin Margin consistent with 2004
Capital Expenditures $40 million
Free Cash Flow* $505 to $525 million
Debt Pay Down $450 to $470 million
Amortization of Intangibles $345 million
Depreciation & Amortization - Book $30 to $35 million
Interest Expense $455 to $470 million
Cash Interest Paid $365 to $380 million
Amortization of Deferred
Financing Costs $35 to $40 million
Accretion of Notes $50 million
Schedule 3
Dex Media, Inc. and Subsidiaries
Selected Balance Sheet Data
As of
(Dollars in Millions) June 30, 2005
Dex Media Dex Media Dex Media, Inc.
East West Consolidated
Total Current Assets $223.9 $267.4 $465.7
Total Assets 2,504.4 4,151.8 6,691.9
Total Current Liabilities 315.5 353.2 687.4
Long-term Debt (including
current portion) 1,660.1 2,799.1 5,528.8
Total Liabilities 1,862.6 3,084.8 6,002.2
Total Equity 641.8 1,067.0 689.7
Total Liabilities & Equity 2,504.4 4,151.8 6,691.9
Leverage Ratio 4.2x 5.3x 6.0x
As of
(Dollars in Millions) December 31, 2004
Dex Media Dex Media Dex Media, Inc.
East West Consolidated
Total Current Assets $204.9 $225.4 $431.2
Total Assets 2,600.5 4,224.8 6,878.0
Total Current Liabilities 271.7 286.8 577.3
Long-term Debt (including
current portion) 1,760.5 2,920.8 5,727.4
Total Liabilities 1,966.9 3,165.7 6,197.5
Total Equity 633.6 1,059.1 680.5
Total Liabilities & Equity 2,600.5 4,224.8 6,878.0
Leverage Ratio 4.4x 5.6x 6.2x
Schedule 4
Dex Media, Inc. and Subsidiaries
Selected Combining Statement of Operations Data
Quarter Ended
(Dollars in Millions) June 30, 2005
Dex Media,
Inc., Dex Media,
Dex Media Dex Media Eliminations Inc.
East West & Other Consolidated
Total Revenue $178.2 $235.3 $ -- $413.5
Cost of Revenue 54.1 70.8 -- 124.9
General & Administrative -
(including bad debt
expense) 27.0 32.0 0.6 59.6
Depreciation & Amortization 2.9 4.4 0.1 7.4
Amortization of Intangibles 38.4 48.0 -- 86.4
Total Operating Expenses 122.5 155.2 0.5 278.2
Interest Expense - gross 36.9 47.7 22.2 106.8
Net Income (Loss) 11.9 20.8 (13.9) 18.8
(Dollars in Millions) June 30, 2004
Dex Media,
Inc., Dex Media,
Dex Media Dex Media Eliminations Inc.
East West & Other Consolidated
Total Revenue $179.8 $216.9 $ -- $396.7
Total Revenue -
excluding the effects
of Purchase Accounting 179.8 232.3 -- 412.1
Cost of Revenue 55.3 66.9 -- 122.2
Cost of Revenue -
excluding the effects
of Purchase Accounting 55.3 70.2 -- 125.5
General & Administrative -
(including bad debt
expense) 23.4 29.4 -- 52.8
Depreciation & Amortization 3.1 4.3 -- 7.4
Amortization of Intangibles 45.3 57.8 -- 103.1
Total Operating Expenses 127.1 158.4 -- 285.5
Interest Expense - gross 44.3 52.7 21.0 118.0
Net Income (Loss) 5.2 3.6 (12.9) (4.1)
Schedule 5
Dex Media, Inc. and Subsidiaries
Selected Combining Statement of Operations Data
Six Months Ended
(Dollars in Millions) June 30, 2005
Dex Media,
Inc., Dex Media,
Dex Media Dex Media Eliminations Inc.
East West & Other Consolidated
Total Revenue $359.4 $465.8 $-- $825.2
Cost of Revenue 107.8 140.5 -- 248.3
General & Administrative -
(including bad debt
expense) 51.0 60.6 1.9 113.5
Depreciation & Amortization 5.7 8.5 (0.1) 14.1
Amortization of Intangibles 76.8 96.0 0.1 172.9
Total Operating Expenses 241.2 305.6 2.0 548.8
Interest Expense - gross 74.3 104.4 44.4 223.1
Net Income (Loss) 27.2 35.1 (28.4) 33.9
(Dollars in Millions) June 30, 2004
Dex Media,
Inc., Dex Media,
Dex Media Dex Media Eliminations Inc.
East West & Other Consolidated
Total Revenue $360.6 $424.3 $-- $784.9
Total Revenue -
excluding the effects
of Purchase Accounting 360.6 462.4 -- 823.0
Cost of Revenue 110.7 129.7 -- 240.4
Cost of Revenue -
excluding the effects
of Purchase Accounting 110.7 139.4 -- 250.1
General & Administrative -
(including bad debt
expense) 47.8 58.3 0.1 106.2
Depreciation & Amortization 5.6 8.1 -- 13.7
Amortization of Intangibles 90.6 115.7 (0.1) 206.2
Total Operating Expenses 254.6 311.8 0.1 566.5
Interest Expense - gross 94.5 107.9 40.2 242.6
Net Income (Loss) 7.0 3.0 (24.6) (14.6)
Schedule 6
Dex Media, Inc. and Subsidiaries
Selected Combining Cash Flow Data
Quarter Ended
(Dollars in Millions) June 30, 2005
Dex Media,
Inc., Dex Media,
Dex Media Dex Media Eliminations Inc.
East West & Other Consolidated
Net Income (Loss) $11.9 $20.8 ($13.9) $18.8
Cash Interest Paid 56.2 28.5 20.0 104.7
Amortization of Deferred
Financing Costs 4.2 5.5 10.1
Accretion of Notes -- -- 11.9 11.9
Cash Provided by (Used for)
Operating Activities 43.4 92.4 (20.4) 115.4
Capital Expenditures (3.0) (4.4) -- (7.4)
Cash Provided by (Used for)
Investing Activities (3.0) (4.4) -- (7.4)
Net Borrowings on Revolver 48.0 43.5 -- 91.5
Debt Repayments (72.6) (110.2) (0.1) (182.9)
Cash Provided by (Used for)
Financing Activities (40.4) (88.0) 20.2 (108.2)
Beginning Cash Balance -- -- 0.4 0.4
Ending Cash Balance -- -- 0.3 0.3
(Dollars in Millions) June 30, 2004
Dex Media,
Inc., Dex Media,
Dex Media Dex Media Eliminations Inc.
East West & Other Consolidated
Net Income (Loss) $5.2 $3.6 ($12.9) ($4.1)
Cash Interest Paid 68.4 24.1 20.5 113.0
Amortization of Deferred
Financing Costs 45.3 6.2 (40.2) 11.3
Accretion of Notes -- -- 10.9 10.9
Cash Provided by (Used for)
Operating Activities 50.7 87.8 (17.0) 121.5
Capital Expenditures (6.8) (5.3) -- (12.1)
Cash Provided by (Used for)
Investing Activities (6.8) (5.3) -- (12.1)
Net Borrowings on Revolver 3.0 -- -- 3.0
Debt Repayments (39.0) (78.0) -- (117.0)
Cash Provided by (Used for)
Financing Activities (43.9) (89.1) 12.0 (121.0)
Beginning Cash Balance -- 8.4 5.7 14.1
Ending Cash Balance -- 1.8 0.5 2.3
Schedule 7
Dex Media, Inc. and Subsidiaries
Selected Combining Cash Flow Data
Six Months Ended
(Dollars in Millions) June 30, 2005
Dex Media,
Inc., Dex Media,
Dex Media Dex Media Eliminations Inc.
East West & Other Consolidated
Net Income (Loss) $27.2 $35.1 ($28.4) $33.9
Cash Interest Paid 66.0 94.2 20.0 180.2
Amortization of Deferred
Financing Costs 9.0 10.7 0.9 20.6
Accretion of Notes -- -- 23.6 23.6
Cash Provided by (Used for)
Operating Activities 130.0 151.3 (21.2) 260.1
Capital Expenditures (7.8) (8.7) (0.1) (16.6)
Cash Provided by (Used for)
Investing Activities (7.8) (8.7) (0.1) (16.6)
Net Borrowings on Revolver 53.0 43.5 -- 96.5
Debt Repayments (153.4) (165.2) -- (318.6)
Cash Provided by (Used for)
Financing Activities (122.1) (151.6) 21.2 (252.5)
Beginning Cash Balance -- 8.9 0.3 9.2
Ending Cash Balance -- -- 0.3 0.3
(Dollars in Millions) June 30, 2004
Dex Media,
Inc., Dex Media,
Dex Media Dex Media Eliminations Inc.
East West & Other Consolidated
Net Income (Loss) $7.0 $3.0 ($24.6) ($14.6)
Cash Interest Paid 82.8 100.9 20.5 204.2
Amortization of Deferred
Financing Costs 15.7 13.1 0.8 29.6
Accretion of Notes -- -- 19.4 19.4
Cash Provided by (Used for)
Operating Activities 134.7 134.2 (17.1) 251.8
Capital Expenditures (18.4) (21.0) -- (39.4)
Cash Provided by (Used for)
Investing Activities (18.4) (15.7) -- (34.1)
Net Borrowings on Revolver 3.0 -- -- 3.0
Debt Repayments (114.0) (108.0) -- (222.0)
Cash Provided by (Used for)
Financing Activities (119.0) (121.3) 17.7 (222.6)
Beginning Cash Balance 2.8 4.7 (0.1) 7.4
Ending Cash Balance -- 1.8 0.7 2.5
Schedule 8
Dex Media, Inc. and Subsidiaries
EBITDA* Reconciliation
Quarter Ended
(Dollars in Millions) June 30, 2005
Dex Media,
Inc., Dex Media,
Dex Media Dex Media Eliminations Inc.
East West & Other Consolidated
Net income (loss) $11.9 $20.8 ($13.9) $18.8
Income tax provision
(benefit) 7.7 13.3 (8.9) 12.1
Interest expense - net 36.5 47.2 22.3 106.0
Depreciation & amortization 2.9 4.4 0.1 7.4
Amortization of intangibles 38.4 48.0 -- 86.4
EBITDA* 97.4 133.7 (0.4) 230.7
Other adjustments:
Advisory fees to Sponsors -- -- -- --
Accrued severance costs 1.8 2.2 -- 4.0
EBITDA, as adjusted* 99.2 135.9 (0.4) 234.7
Revenue $178.2 $235.3 $-- $413.5
EBITDA*, margin 55.7% 57.8% 56.8%
(Dollars in Millions) June 30, 2004
Dex Media,
Inc., Dex Media,
Dex Media Dex Media Eliminations Inc.
East West & Other Consolidated
Net income (loss) $5.2 $3.6 ($12.9) ($4.1)
Income tax provision
(benefit) 3.4 2.4 (8.1) (2.3)
Interest expense - net 44.1 52.5 21.0 117.6
Depreciation & amortization 3.1 4.3 -- 7.4
Amortization of intangibles 45.3 57.8 -- 103.1
EBITDA* 101.1 120.6 -- 221.7
Effects of purchase
accounting:
Revenue -- 15.4 -- 15.4
Cost of revenue -- (3.3) -- (3.3)
EBITDA*, adjusted to exclude
the effects of purchase
accounting 101.1 132.7 -- 233.8
Other adjustments:
Advisory fees to Sponsors 0.5 0.5 -- 1.0
Accrued severance costs -- -- 0.1 0.1
EBITDA, as adjusted* $101.6 $133.2 $0.1 $234.9
Revenue $179.8 $216.9 -- $396.7
Effects of purchase
accounting -- 15.4 -- 15.4
Revenue, adjusted to
exclude the effects of
purchase account $179.8 $232.3 $-- $412.1
EBITDA, as adjusted*,
margin 56.5% 57.3% 57.0%
Schedule 9
Dex Media, Inc. and Subsidiaries
EBITDA* Reconciliation
Six Months Ended
(Dollars in Millions) June 30, 2005
Dex Media,
Inc., Dex Media,
Dex Media Dex Media Eliminations Inc.
East West & Other Consolidated
Net income (loss) $27.2 $35.1 ($28.4) $33.9
Income tax provision
(benefit) 17.4 22.5 (17.9) 22.0
Interest expense - net 73.9 103.7 44.3 221.9
Depreciation & amortization 5.7 8.5 (0.1) 14.1
Amortization of intangibles 76.8 96.0 0.1 172.9
EBITDA* 201.0 265.8 (2.0) 464.8
Other adjustments:
Advisory fees to Sponsors -- -- -- --
Accrued severance costs 1.5 2.1 -- 3.6
EBITDA, as adjusted* 202.5 267.9 (2.0) 468.4
Revenue $359.4 $465.8 $-- $825.2
EBITDA*, margin 56.3% 57.5% 56.8%
(Dollars in Millions) June 30, 2004
Dex Media,
Inc., Dex Media,
Dex Media Dex Media Eliminations Inc.
East West & Other Consolidated
Net income (loss) $7.0 $3.0 ($24.6) ($14.6)
Income tax provision
(benefit) 4.7 2.0 (15.7) (9.0)
Interest expense - net 94.2 107.6 40.1 241.9
Depreciation & amortization 5.6 8.1 -- 13.7
Amortization of intangibles 90.6 115.7 (0.1) 206.2
EBITDA* 202.1 236.4 (0.3) 38.2
Effects of purchase
accounting:
Revenue -- 38.1 -- 38.1
Cost of revenue -- (9.7) -- (9.7)
EBITDA*, adjusted to
exclude the effects of
purchase accounting 202.1 264.8 (0.3) 466.6
Other adjustments:
Advisory fees to Sponsors 1.0 1.0 -- 2.0
Accrued severance costs 0.2 0.1 0.1 0.4
EBITDA, as adjusted* $203.3 $265.9 $(0.2) $469.0
Revenue $360.6 $424.3 -- $784.9
Effects of purchase
accounting -- 38.1 -- 38.1
Revenue, adjusted to
exclude the effects of
purchase accounting $360.6 $462.4 $-- $823.0
EBITDA, as adjusted*,
margin 56.4% 57.5% 57.0%
Schedule 10
Dex Media, Inc. and Subsidiaries
2004 - 2005 Revenue Break-down by Channel
Consolidated Results, As Adjusted
(Dollars in Millions)
2005
Q1 Q2 YTD
Revenue
Local directory services $341.0 $339.2 $680.2
National directory services 58.2 58.2 116.4
Qwest advertising 4.1 4.3 8.4
Other revenue(1) 8.4 11.9 20.2
Total revenue $411.7 $413.5 $825.2
2004
Q1 Q2 Q3 Q4 Full Year
Revenue
Local directory services $337.5 $339.9 $343.1 $342.3 $1,362.8
National directory services 57.7 57.2 56.3 56.8 228.1
Qwest advertising 6.6 6.2 5.6 5.1 23.5
Other revenue(1) 9.1 8.7 8.3 8.5 34.6
Total revenue $410.9 $412.1 $413.3 $412.7 $1,648.9
(1) Other revenue is primarily comprised of Internet-related products,
direct marketing lists and the sale of Dex directories and other
publishers' directories outside of the normal delivery schedule.
SOURCE Dex Media, Inc.
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Related links:
http://www.dexmedia.com
Photo Notes:
NewsCom:
http://www.newscom.com/cgi-bin/prnh/20030506/DEXLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Investors, Brooke Martellaro,
+1-866-545-2900, brooke.martellaro@dexmedia.com, or Media, Pat
Nichols, +1-303-784-1555, pat.nichols@dexmedia.com, both of Dex
Media, Inc.
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