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SuperMedia Announces Fourth Quarter And Full Year 2011 Results

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 solutions include: the award-winning SuperGuarantee® program, Superpages® directories, published for Verizon®, FairPoint® and Frontier®, Superpages.com®, EveryCarListed.com®, Superpages for your mobile and Superpages direct mail products. For more information, visit  www.supermedia.com.

1 Advertising sales for the year ended December 31, 2011 include negative adjustments of $11 million or 0.6 percent 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, 2011 would have reflected a decline of 16.2 percent. As of June 2011, these accounts have been transitioned to other certified marketing representative firms.

SPMD-G

     
 
 
 
 
 
SuperMedia Inc.
Consolidated Statements of Operations
 
Reported (GAAP)
Year Ended December 31, 2011 Compared to Year Ended December 31, 2010 (2)
(dollars in millions, except per share amounts)
 
Year Ended Year Ended
Unaudited   12/31/11   12/31/10   % Change
 
Operating Revenue $ 1,642 $ 1,176 39.6
 
Operating Expense
Selling 435 470 (7.4 )
Cost of sales (exclusive of depreciation and amortization) 408 418 (2.4 )
General and administrative 220 198 11.1
Depreciation and amortization 172 186 (7.5 )
Impairment charge   1,003       -   NM
Total Operating Expense 2,238 1,272 75.9
 
Operating (Loss) (596 ) (96 ) NM
Interest expense, net   227       278   (18.3 )

(Loss) Before Reorganization Items, Gain on Early Extinguishment of Debt and Provision (Benefit) for Income Taxes

(823 ) (374 ) 120.1
 
Reorganization items (2 ) (5 ) (60.0 )
Gain on early extinguishment of debt   116       76   52.6
 

(Loss) Before Provision (Benefit) for Income Taxes

(709 ) (303 ) 134.0
Provision (benefit) for income taxes   62       (107 ) NM
Net (Loss) $ (771 )   $ (196 ) NM
 
Basic and Diluted (Loss) per Common Share (1) $ (51.04 ) $ (13.04 ) NM

Basic and diluted weighted-average common shares outstanding

15.1 15.0
 
These schedules are preliminary and subject to change pending the Company's filing of its Form 10-K.
Our 2010 financial results were impacted by our adoption of fresh start accounting in December 2009.
As a result, our 2011 financial results are not comparable to our 2010 financial results.
 
Notes:
 
(1) Equity based awards granted had no impact on the calculation of diluted earnings per common share.
 
(2) Results for the year ended December 31, 2010 include a $40 million general and administrative expense reduction related to the favorable non-recurring, non-cash resolution of state operating tax claims.
 
 
 
 
 
 
 
SuperMedia Inc.
Consolidated Statements of Operations
       
Reported (GAAP)
Three Months Ended December 31, 2011 Compared to Three Months Ended December 31, 2010
(dollars in millions, except per share amounts)
 
3 Mos. Ended 3 Mos. Ended
Unaudited   12/31/11   12/31/10   % Change
 
Operating Revenue $ 384 $ 426 (9.9 )
 
Operating Expense
Selling 101 126 (19.8 )
Cost of sales (exclusive of depreciation and amortization) 96 118 (18.6 )
General and administrative 54 56 (3.6 )
Depreciation and amortization   41       46 (10.9 )
Total Operating Expense 292 346 (15.6 )
 
Operating Income 92 80 15.0
Interest expense, net   55       66 (16.7 )

Income Before Reorganization Items, Gain on Early Extinguishment of Debt and Provision for Income Taxes

37 14 164.3
 
Reorganization items (1 ) - NM
Gain on early extinguishment of debt   116       76 52.6
 
Income Before Provision for Income Taxes

 

152 90 68.9
Provision for income taxes   14       34 (58.8 )
Net Income $ 138     $ 56 146.4
 
Basic and Diluted Earnings per Common Share (1) (2) $ 8.86 $ 3.67 141.4

Basic and diluted weighted-average common shares outstanding

15.1 15.0
 
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 for the quarters ended December 31, 2011 and December 31, 2010 was $3 million and $1 million, respectively.

 
 
 
 
 
 
 
SuperMedia Inc.
Consolidated Statements of Operations
       
Adjusted and Adjusted Pro Forma (Non-GAAP) (1)

Year Ended December 31, 2011 Compared to Year Ended December 31, 2010 (2)

(dollars in millions, except per share amounts)
 
Year Ended Year Ended
Unaudited   12/31/11   12/31/10   % Change
 
Operating Revenue $ 1,642 $ 2,002 (18.0 )
 
Operating Expense
Selling 435 578 (24.7 )
Cost of sales (exclusive of depreciation and amortization) 408 523 (22.0 )
General and administrative 197 250 (21.2 )
Depreciation and amortization 172 186 (7.5 )
Impairment charge   -     - NM
Total Operating Expense 1,212 1,537 (21.1 )
 
Operating Income 430 465 (7.5 )
Interest expense, net   227     278 (18.3 )

Income Before Reorganization Items, Gain on Early Extinguishment of Debt and Provision for Income Taxes

203 187 8.6
 
Reorganization items - - NM
Gain on early extinguishment of debt   -     - NM
 
Income Before Provision for Income Taxes

 

203 187 8.6
Provision for income taxes   78     70 11.4
Net Income $ 125   $ 117 6.8
 
 
 
Notes:

 

(1) These consolidated statements of operations provide a comparison of the twelve months ended December 31, 2011 adjusted results to the twelve months ended December 31, 2010 adjusted pro forma results. The following schedules provide reconciliations from our reported GAAP results to adjusted and adjusted pro forma non-GAAP results for the periods shown above.

 
(2) Results for the year ended December 31, 2010 include a $40 million general and administrative expense reduction related to the favorable non-recurring, non-cash resolution of state operating tax claims.
 
 
 
 
 
 
 
SuperMedia Inc.
Consolidated Statements of Operations
       
Adjusted and Adjusted Pro Forma (Non-GAAP) (1)
Three Months Ended December 31, 2011 Compared to Three Months Ended December 31, 2010
(dollars in millions, except per share amounts)
 
3 Mos. Ended 3 Mos. Ended
Unaudited   12/31/11   12/31/10   % Change
 
Operating Revenue $ 384 $ 468 (17.9 )
 
Operating Expense
Selling 101 136 (25.7 )
Cost of sales (exclusive of depreciation and amortization) 96 123 (22.0 )
General and administrative 48 58 (17.2 )
Depreciation and amortization   41     46 (10.9 )
Total Operating Expense 286 363 (21.2 )
 
Operating Income 98 105 (6.7 )
Interest expense, net   55     66 (16.7 )

Income Before Reorganization Items, Gain on Early Extinguishment of Debt and Provision for Income Taxes

43 39 10.3
 
Reorganization items - - NM
Gain on early extinguishment of debt   -     - NM
 
Income Before Provision for Income Taxes

 

43 39 10.3
Provision for income taxes   18     16 12.5
Net Income $ 25   $ 23 8.7
 
 
 
Notes:
 

(1) These consolidated statements of operations provide a comparison of the three months ended December 31, 2011 adjusted results to the three months ended December 31, 2010 adjusted pro forma results. The following schedules provide reconciliations from our reported GAAP results to adjusted and adjusted pro forma non-GAAP results for the periods shown above.

 
 
 
 
 
 
 
SuperMedia Inc.
Consolidated Statements of Operations
           
Reconciliation from Reported (GAAP) to Adjusted (Non-GAAP)
Year Ended December 31, 2011
(dollars in millions, except per share amounts)
 
Adjustments

Unaudited

 

Year Ended

12/31/11

Reported

(GAAP)

 

Severance,

Reorganization

and Other

Items (3)

 

Gain on Early

Extinguishment

of Debt (4)

 

Impairment

Charge (5)

 

Year Ended

12/31/11

Adjusted

(Non-GAAP)

 
Operating Revenue $ 1,642 $ - $ - $ - $ 1,642
 
Operating Expense
Selling 435 - - - 435
Cost of sales (exclusive of depreciation and amortization) 408 - - - 408
General and administrative 220 (23 ) - - 197
Depreciation and amortization 172 - - - 172
Impairment charge   1,003       -       -       (1,003 )     -  
Total Operating Expense   2,238       (23 )     -       (1,003 )     1,212  
 
Operating Income (Loss) (596 ) 23 - 1,003 430
Interest expense, net   227       -       -       -       227  

Income (Loss) Before Reorganization Items, Gain on Early Extinguishment of Debt and Provision for Income Taxes

(823 ) 23 - 1,003 203
 
Reorganization items (2 ) 2 - - -
Gain on early extinguishment of debt   116       -       (116 )     -       -  
 
Income (Loss) Before Provision for Income Taxes

 

(709 ) 25 (116 ) 1,003 203
Provision for income taxes   62       10       -       6       78  
Net Income (Loss) $ (771 )   $ 15     $ (116 )   $ 997     $ 125  
 
 
Basic and Diluted (Loss) per Common Share $ (51.04 )
 
 
Operating Income (Loss) $ (596 ) $ 23 $ - $ 1,003 $ 430
Depreciation and Amortization   172       -       -       -       172  
EBITDA (non-GAAP) (1) $ (424 )   $ 23     $ -     $ 1,003     $ 602  
 
 
Operating income (loss) margin (2) -36.3 % 26.2 %
Impact of depreciation and amortization   10.5 %                 10.5 %
EBITDA margin (non-GAAP) (1)   -25.8 %                 36.7 %
 
Notes:
 

(1) EBITDA is a non-GAAP measure that represents earnings before interest, taxes, gain on early extinguishment of debt, reorganization items, depreciation and amortization. EBITDA margin is a non-GAAP measure calculated by dividing EBITDA by operating revenue.

 

(2) Operating income (loss) margin is calculated by dividing operating income (loss) by operating revenue.

 
(3) Severance costs of $13 million are associated with headcount reductions. Other items includes charges associated with a non-recurring vendor settlement and facility exit costs. Reorganization items of $2 million represent charges that are directly associated with the process of reorganizing the business under Chapter 11 of the United States Bankruptcy Code.
 

(4) Gain on early extinguishment of debt represents the gain associated with the purchase of a portion of the Company's debt below par value.

 
(5) Includes a non-cash impairment charge associated with the write down of goodwill.
 
 
 
 
 
 
 
SuperMedia Inc.
Consolidated Statements of Operations
         
Reconciliation from Reported (GAAP) to Adjusted (Non-GAAP)
Three Months Ended December 31, 2011

(dollars in millions, except per share amounts)

 
Adjustments

Unaudited

 

3 Mos. Ended

12/31/11

Reported

(GAAP)

 

Severance,

Reorganization

and Other

Items (3)

 

Gain on Early

Extinguishment

of Debt (4)

 

3 Mos. Ended

12/31/11

Adjusted

(Non-GAAP)

 
Operating Revenue $ 384 $ - $ - $ 384
 
Operating Expense
Selling 101 - - 101
Cost of sales (exclusive of depreciation and amortization) 96 - - 96
General and administrative 54 (6 ) - 48
Depreciation and amortization   41       -       -       41  
Total Operating Expense   292       (6 )     -       286  
 
Operating Income 92 6 - 98
Interest expense, net   55       -       -       55  

Income Before Reorganization Items, Gain on Early Extinguishment of Debt and Provision for Income Taxes

37 6 - 43
 
Reorganization items (1 ) 1 - -
Gain on early extinguishment of debt   116           (116 )     -  
 
Income Before Provision for Income Taxes

 

152 7 (116 ) 43
Provision for income taxes   14       4       -       18  
Net Income $ 138     $ 3     $ (116 )   $ 25  
 
 
Basic and Diluted Earnings per Common Share $ 8.86
 
 
Operating Income $ 92 $ 6 $ - $ 98
Depreciation and Amortization   41       -       -       41  
EBITDA (non-GAAP) (1) $ 133     $ 6     $ -     $ 139  
 
 
Operating Income margin (2) 23.9 % 25.5 %
Impact of depreciation and amortization   10.7 %             10.7 %
EBITDA margin (non-GAAP) (1)   34.6 %             36.2 %
 
Notes:
 

(1) EBITDA is a non-GAAP measure that represents earnings before interest, taxes, gain on early extinguishment of debt, reorganization items, depreciation and amortization. EBITDA margin is a non-GAAP measure calculated by dividing EBITDA by operating revenue.

 
(2) Operating income margin is calculated by dividing operating income by operating revenue.
 

(3) Severance costs of $1 million are associated with headcount reductions. Other items includes a facility exit charge. Reorganization items of $1 million represent charges that are directly associated with the process of reorganizing the business under Chapter 11 of the United States Bankruptcy Code.

 

(4) Gain on early extinguishment of debt represents the gain associated with the purchase of a portion of the Company's debt below par value.

 
 
 
 
 
 
 
SuperMedia Inc.
Consolidated Statements of Operations
                 
Reconciliation from Reported (GAAP) to Adjusted Pro Forma (Non-GAAP) (8)
Year Ended December 31, 2010
(dollars in millions, except per share amounts)
 

 

 

Adjustments

Pro Forma

Items

Unaudited

Year Ended

12/31/10

Reported

(GAAP)

Restructuring

and Other

Severance

Costs (3)

Reorganization

Items (4)

Health Care

Reform Act (5)

Gain on Early

Extinguishment

of Debt (6)

Year Ended

12/31/10

Adjusted

(Non-GAAP)

Fresh Start

Accounting

Items (7)

Year Ended

12/31/10

Adjusted

Pro Forma

(Non-GAAP)

 
Operating Revenue $ 1,176 $ - $ - $ - $ - $ 1,176 $ 826 $ 2,002
 
Operating Expense
Selling 470 - - - - 470 108 578
Cost of sales (exclusive of depreciation and amortization) 418 - - - - 418 105 523
General and administrative 198 (9 ) - - - 189 61 250
Depreciation and amortization   186       -       -     -       -       186       -     186  
Total Operating Expense   1,272       (9 )     -     -       -       1,263       274     1,537  
 
Operating Income (Loss) (96 ) 9 - - - (87 ) 552 465
Interest expense, net   278       -       -     -       -       278       -     278  

Income (Loss) Before Reorganization Items, Gain on Early Extinguishment of Debt and Provision (Benefit) for Income Taxes

(374 ) 9 - - - (365 ) 552 187
 
Reorganization items (5 ) - 5 - - - - -
Gain on early extinguishment of debt   76       -       -     -       (76 )     -       -     -  
 
Income (Loss) Before Provision (Benefit) for Income Taxes

 

(303 ) 9 5 - (76 ) (365 ) 552 187
Provision (benefit) for income taxes   (107 )     4       2     (7 )     (28 )     (136 )     206     70  
Net Income (Loss) $ (196 )   $ 5     $ 3   $ 7     $ (48 )   $ (229 )   $ 346   $ 117  
 
 
Basic and Diluted (Loss) per Common Share $ (13.04 )
 
 
Operating Income (Loss) $ (96 ) $ 9 $ - $ - $ - $ (87 ) $ 552 $ 465
Depreciation and Amortization   186       -       -     -       -       186       -     186  
EBITDA (non-GAAP) (1) $ 90     $ 9     $ -   $ -     $ -     $ 99     $ 552   $ 651  
 
 
Operating income (loss) margin (2) -8.1 % -7.4 % 23.2 %
Impact of depreciation and amortization   15.8 %                     15.8 %         9.3 %
EBITDA margin (non-GAAP) (1)   7.7 %                     8.4 %         32.5 %
 
Notes:
 

(1) EBITDA is a non-GAAP measure that represents earnings before interest, taxes, gain on early extinguishment of debt, reorganization items, depreciation and amortization. EBITDA margin is a non-GAAP measure calculated by dividing EBITDA by operating revenue.

 
(2) Operating income (loss) margin is calculated by dividing operating income (loss) by operating revenue.
 

(3) Restructuring and other severance costs include costs associated with strategic organizational cost savings initiatives of $5 million and costs related to the termination of our former chief executive officer's employment of $4 million.

 

(4) Reorganization items represent charges that are directly associated with the process of reorganizing the business under Chapter 11 of the United States Bankruptcy Code.

 
(5) As a result of the passage of the Health Care Reform Act in March of 2010, the future benefit of certain deferred tax assets was eliminated, resulting in a charge in the year ended December 31, 2010.
 
(6) Gain on early extinguishment of debt represents the gain associated with the purchase of a portion of the Company's debt below par value.
 
(7) Fresh start accounting items include adjustments for revenue and expense items that would have been otherwise amortized into the Company's statement of operations but were written off at December 31, 2009 according to the rules of fresh start accounting.
 
(8) Results include a $40 million general and administrative expense reduction related to the favorable non-recurring, non-cash resolution of state operating tax claims.
 
 
 
 
 
 
 
SuperMedia Inc.
Consolidated Statements of Operations
           
Reconciliation from Reported (GAAP) to Adjusted Pro Forma (Non-GAAP)
Three Months Ended December 31, 2010
(dollars in millions, except per share amounts)
   

Adjustments

Pro Forma

Items

Unaudited

 

3 Mos. Ended

12/31/10

Reported

(GAAP)

 

Gain on Early

Extinguishment

of Debt and

Other (3)

 

3 Mos. Ended

12/31/10

Adjusted

(Non-GAAP)

 

Fresh Start

Accounting

Items (4)

 

3 Mos. Ended

12/31/10

Adjusted

Pro Forma

(Non-GAAP)

 

 

 

 

 
Operating Revenue $ 426 $ - $ 426 $ 42 $ 468
 
Operating Expense
Selling 126 - 126 10 136
Cost of sales (exclusive of depreciation and amortization) 118 - 118 5 123
General and administrative 56 - 56 2 58
Depreciation and amortization   46       -       46       -     46  
Total Operating Expense   346       -       346       17     363  
 
Operating Income 80 - 80 25 105
Interest expense, net   66       -       66       -     66  

Income Before Reorganization Items, Gain on Early Extinguishment of Debt and Provision for Income Taxes

14 - 14 25 39
 
Reorganization items - - - - -
Gain on early extinguishment of debt   76       (76 )     -       -     -  
 
Income Before Provision for Income Taxes

 

90 (76 ) 14 25 39
Provision for income taxes   34       (28 )     6       10     16  
Net Income $ 56     $ (48 )   $ 8     $ 15   $ 23  
 
 
Basic and Diluted Earnings per Common Share $ 3.67
 
 
Operating Income $ 80 $ - $ 80 $ 25 $ 105
Depreciation and Amortization   46       -       46       -     46  
EBITDA (non-GAAP) (1) $ 126     $ -     $ 126     $ 25   $ 151  
 
 
Operating income margin (2) 18.8 % 18.8 % 22.5 %
Impact of depreciation and amortization   10.8 %         10.8 %         9.8 %
EBITDA margin (non-GAAP) (1)   29.6 %         29.6 %         32.3 %
 
Notes:
 
(1) EBITDA is a non-GAAP measure that represents earnings before interest, taxes, gain on early extinguishment of debt, depreciation and amortization. EBITDA margin is a non-GAAP measure calculated by dividing EBITDA by operating revenue.
 
(2) Operating income margin is calculated by dividing operating income by operating revenue.
 
(3) Gain on early extinguishment of debt and other represents the gain associated with the purchase of a portion of the Company's debt below par value and other adjustments of less than $1 million.
 
(4) Fresh start accounting items include adjustments for revenue and expense items that would have been otherwise amortized into the Company's statement of operations but were written off at December 31, 2009 according to the rules of fresh start accounting.
 
 
 
 
 
 
 
SuperMedia Inc.
Consolidated Balance Sheets
       
Reported (GAAP)
As of December 31, 2011 and December 31, 2010
(dollars in millions)
 
 
Unaudited   12/31/2011   12/31/2010  

$ Change

 
Assets
Current assets:
Cash and cash equivalents $ 90 $ 174 $ (84 )
Accounts receivable, net of allowances of $59 and $89 147 210 (63 )
Accrued taxes receivable 27 - 27
Deferred directory costs 155 199 (44 )
Prepaid expenses and other   12       13       (1 )
Total current assets   431       596       (165 )
Property, plant and equipment 127 122 5
Less: accumulated depreciation   53       28       25  
  74       94       (20 )
Goodwill 704 1,707 (1,003 )
Intangible assets, net 345 481 (136 )
Pension assets 75 42 33
Other non-current assets   4       6       (2 )
Total Assets $ 1,633     $ 2,926     $ (1,293 )
 
Liabilities and Stockholders' (Deficit)
Current liabilities:
Current maturities of long-term debt $ 4 $ - $ 4
Accounts payable and accrued liabilities 126 236 (110 )
Deferred revenue 82 114 (32 )
Deferred tax liabilities 4 2 2
Other   18       17       1  
Total current liabilities   234       369       (135 )
Long-term debt 1,741 2,171 (430 )
Employee benefit obligations 364 355 9
Non-current deferred tax liabilities 43 22 21
Unrecognized tax benefits 39 37 2
Other liabilities - 2 (2 )
 
Stockholders' (deficit):

Common stock ($.01 par value; 60 million shares authorized, 15,468,740 and 15,489,936 shares issued and outstanding in 2011 and 2010, respectively)

- - -
Additional paid-in capital 210 206 4
Retained (deficit) (967 ) (196 ) (771 )
Accumulated other comprehensive (loss)   (31 )     (40 )     9  
Total stockholders' (deficit)   (788 )     (30 )     (758 )
Total Liabilities and Stockholders' (Deficit) $ 1,633     $ 2,926     $ (1,293 )
 
 
 
 
 
 
 
SuperMedia Inc.
Consolidated Statements of Cash Flows
       
Reported (GAAP) and Non-GAAP Financial Reconciliation - Free Cash Flow
Year Ended December 31, 2011 Compared to Year Ended December 31, 2010
(dollars in millions)
 
Unaudited  

Year Ended

12/31/11

 

Year Ended

12/31/10

 

$ Change

 
Cash Flows from Operating Activities
Net (loss) $ (771 ) $ (196 ) $ (575 )

Adjustments to reconcile net (loss) to net cash provided by operating activities:

Depreciation and amortization expense 172 186 (14 )
Gain on early extinguishment of debt (116 ) (76 ) (40 )
Employee retirement benefits 14 11 3
Deferred income taxes 17 (225 ) 242
Provision for uncollectible accounts 64 61 3
Stock-based compensation expense 4 6 (2 )
Impairment charge 1,003 - 1,003
Changes in current assets and liabilities
Accounts receivable and unbilled accounts receivable (1 ) 675 (676 )
Deferred directory costs 44 (175 ) 219
Other current assets 2 4 (2 )
Accounts payable and accrued liabilities (166 ) 244 (410 )
Other, net   (22 )     (6 )     (16 )
Net cash provided by operating activities   244       509       (265 )
 
Cash Flows from Investing Activities
Capital expenditures (including capitalized software) (19 ) (45 ) 26
Proceeds from sale of assets   1       1       -  
Net cash used in investing activities   (18 )     (44 )     26  
 
Cash Flows from Financing Activities
Repayment of long-term debt (308 ) (500 ) 192
Other, net   (2 )     (3 )     1  
Net cash used in financing activities   (310 )     (503 )     193  
Decrease in cash and cash equivalents (84 ) (38 ) (46 )
Cash and cash equivalents, beginning of year   174       212       (38 )
Cash and cash equivalents, end of year $ 90     $ 174     $ (84 )
 
 
 
Non-GAAP Financial Reconciliation - Free Cash Flow  

Year Ended

12/31/11

 

Year Ended

12/31/10

 

$ Change

Unaudited
 
Net cash provided by operating activities $ 244 $ 509 $ (265 )
Less: Capital expenditures (including capitalized software)   (19 )     (45 )     26  
Free Cash Flow $ 225     $ 464     $ (239 )
 
 
 
 
 
 
 
SuperMedia Inc.
Advertising Sales
(dollars in millions)
               
3 Mos. Ended 3 Mos. Ended 3 Mos. Ended Year Ended Year Ended Year Ended
Unaudited   12/31/11   12/31/10   12/31/09     12/31/11   12/31/10   12/31/09
 
Net Advertising Sales (1) (2) $ 405 $ 483 $ 570 $ 1,530 $ 1,839 $ 2,214
% Change year-over-year   (16.1 %)     (15.3 %)           (16.8 %)     (16.9 %)    
 
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 or 0.6 percent 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, 2011 would have reflected a decline of 16.2 percent. As of June 2011, these accounts have been transitioned to other certified marketing representative firms.
 
 
 
 




Stock quotes in this article: SPMD 

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