$ in millions

GAAP Reporting

3Q’ 14

YTD ‘14

Operating Revenue

$

452

$

1,382

Operating Income

$

25

$

37

Net (Loss)

$

(59

)

$

(226

)

Non-GAAP Reporting

3Q’ 14

YTD ‘14

Pro forma Operating Revenue(1)

$

452

$

1,412

Adjusted Pro forma EBITDA(1)

$

167

$

535

Adjusted Pro forma EBITDA margin(1)

36.9

%

37.9

%

Advertising Sales(2)

Print

(22.2

)%

(21.0

)%

Digital

10.3

%

10.9

%

Total

(12.5

)%

(12.7

)%

Dex Media, Inc.

Schedule A

Consolidated Statements of Comprehensive Loss

Reported (GAAP)

Nine Mos. Ended

Nine Mos. Ended

Unaudited

9/30/14

9/30/13

% Change

Operating Revenue

$

1,382

$

1,015

36.2

Operating Expenses

Selling

333

273

22.0

Cost of service (exclusive of depreciation and amortization)

440

338

30.2

General and administrative

89

154

(42.2

)

Depreciation and amortization

483

524

(7.8

)

Total Operating Expenses

1,345

1,289

4.3

Operating Income (Loss)

37

(274

)

NM

Interest expense, net

269

221

21.7

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

(232

)

(495

)

(53.1

)

Reorganization items

—

37

(100.0

)

Gains on early extinguishment of debt

2

—

NM

(Loss) Before (Benefit) for Income Taxes

(230

)

(532

)

(56.8

)

(Benefit) for income taxes

(4

)

(269

)

(98.5

)

Net (Loss)

$

(226

)

$

(263

)

(14.1

)

Other Comprehensive (Loss)

Adjustments for pension and other post-employment benefits, net of taxes

9

(10

)

NM

Comprehensive (Loss)

$

(217

)

$

(273

)

(20.5

)

Basic and Diluted (Loss) per Common Share

$

(13.08

)

$

(18.55

)

(29.5

)

Basic and diluted weighted-average common shares outstanding

17.3

14.1

Dex Media, Inc.

Schedule B

Consolidated Statements of Comprehensive Loss

Reported (GAAP)

Three Mos. Ended

Three Mos. Ended

Unaudited

9/30/14

9/30/13

% Change

Operating Revenue

$

452

$

392

15.3

Operating Expenses

Selling

106

113

(6.2

)

Cost of service (exclusive of depreciation and amortization)

144

130

10.8

General and administrative

16

54

(70.4

)

Depreciation and amortization

161

242

(33.5

)

Total Operating Expenses

427

539

(20.8

)

Operating Income (Loss)

25

(147

)

NM

Interest expense, net

89

99

(10.1

)

(Loss) Before Gains on Early Extinguishment of Debt and (Benefit) for Income Taxes

(64

)

(246

)

(74.0

)

Gains on early extinguishment of debt

2

—

NM

(Loss) Before (Benefit) for Income Taxes

(62

)

(246

)

(74.8

)

(Benefit) for income taxes

(3

)

(111

)

(97.3

)

Net (Loss)

$

(59

)

$

(135

)

(56.3

)

Other Comprehensive (Loss)

Adjustments for pension and other post-employment benefits, net of taxes

5

(4

)

NM

Comprehensive (Loss)

$

(54

)

$

(139

)

(61.2

)

Basic and Diluted (Loss) per Common Share

$

(3.41

)

$

(7.85

)

(56.6

)

Basic and diluted weighted-average common shares outstanding

17.3

17.2

Dex Media, Inc.

Schedule C

Reconciliation of Non-GAAP Measures

Nine Mos. Ended

Nine Mos. Ended

Unaudited

9/30/14

9/30/13

Net (Loss) - GAAP

$

(226

)

$

(263

)

Add/(subtract) non-operating items:

(Benefit) for income taxes

(4

)

(269

)

Interest expense, net

269

221

Reorganization items, (3)

—

37

Gains on early extinguishment of debt (4)

(2

)

—

Operating Income (Loss)

37

(274

)

Depreciation and amortization

483

524

EBITDA (non-GAAP) (1)

520

250

Adjustments and Pro Forma Items:

Adjustments for SuperMedia acquisition accounting (5)

21

366

Merger transaction costs (6)

—

36

Merger integration costs (7)

33

42

Severance (8)

—

3

Employee benefit plan amendments (9)

(42

)

(38

)

Asset write down (10)

3

—

Adjusted Pro Forma EBITDA (non-GAAP) (2)

$

535

$

659

Operating Revenue - GAAP

$

1,382

$

1,015

SuperMedia revenue excluded from GAAP revenue (11)

30

656

Pro Forma Operating Revenue (non-GAAP)

$

1,412

$

1,671

Operating income (loss) margin (12)

2.7

%

-27.0

%

Impact of depreciation and amortization

34.9

%

51.6

%

EBITDA margin (non-GAAP) (13)

37.6

%

24.6

%

Impact of adjustments and pro forma Items

0.3

%

14.8

%

Adjusted Pro Forma EBITDA margin (non-GAAP) (14)

37.9

%

39.4

%

Nine Mos. Ended

Nine Mos. Ended

Unaudited

9/30/14

9/30/13

Net cash provided by operating activities - GAAP

$

305

$

250

SuperMedia operating cash flow excluded from GAAP results

—

55

Adjustment for merger transaction cash costs

—

34

Adjusted Pro Forma net cash provided by operating activities

$

305

$

339

Less: Additions to fixed assets and capitalized software - GAAP

(15

)

(21

)

Less: SuperMedia additions to fixed assets and capitalized software not included in GAAP results

—

(6

)

Pro Forma addtions to fixed assets and capitalized software

(15

)

(27

)

Adjusted Pro Forma Free Cash Flow (15)

$

290

$

312

Dex Media, Inc.

Schedule D

Reconciliation of Non-GAAP Measures

Unaudited

Three Mos. Ended
9/30/14

Three Mos. Ended
9/30/13

Net (Loss) - GAAP

$

(59

)

$

(135

)

Add/(subtract) non-operating items:

(Benefit) for income taxes

(3

)

(111

)

Interest expense, net

89

99

Gains on early extinguishment of debt (4)

(2

)

—

Operating Income (Loss)

25

(147

)

Depreciation and amortization

161

242

EBITDA (non-GAAP) (1)

186

95

Adjustments and Pro Forma Items:

SuperMedia results-EBITDA impact (5)

—

104

Merger transaction costs (6)

—

2

Merger integration costs (7)

7

14

Emloyee benefit plan amendments (9)

(29

)

—

Asset write down (10)

3

—

Adjusted Pro Forma EBITDA (non-GAAP) (2)

$

167

$

215

Operating Revenue - GAAP

$

452

$

392

SuperMedia revenue excluded from GAAP revenue (11)

—

140

Pro Forma Operating Revenue (non-GAAP) (2013 only)

$

452

$

532

Operating income (loss) margin (12)

5.5

%

-37.5

%

Impact of depreciation and amortization

35.7

%

61.7

%

EBITDA margin (non-GAAP) (13)

41.2

%

24.2

%

Impact of adjustments and pro forma Items

-4.3

%

16.2

%

Adjusted Pro Forma EBITDA margin (non-GAAP) (14)

36.9

%

40.4

%

Dex Media, Inc.

Schedule E

Consolidated Balance Sheets

Reported (GAAP)

(dollars in millions)

Unaudited

September 30, 2014

December 31, 2013

Assets

Current assets:

Cash and cash equivalents

$

145

$

156

Accounts receivable, net of allowances of $31 and $26

151

218

Deferred directory costs

161

183

Deferred tax assets

9

9

Prepaid expenses and other

19

27

Assets held for sale

12

16

Total current assets

497

609

Fixed assets and capitalized software, net

76

106

Goodwill

315

315

Intangible assets, net

941

1,381

Pension assets

60

41

Other non current assets

9

12

Total Assets

$

1,898

$

2,464

Liabilities and Shareholders’ Equity (Deficit)

Current liabilities:

Current maturities of long-term debt

$

123

$

154

Accounts payable and accrued liabilities

133

166

Accrued interest

11

20

Deferred revenue

97

126

Total current liabilities

364

466

Long-term debt

2,320

2,521

Employee benefit obligations

89

132

Deferred tax liabilities

29

28

Unrecognized tax benefits

13

19

Other liabilities

1

1

Stockholders’ equity (deficit):

Common stock, par value $.001 per share, authorized-300,000,000 shares: issued and outstanding-17,642,686 at September 30, 2014 and 17,601,520 at December 31, 2013

—

—

Additional paid-in capital

1,553

1,551

Retained (deficit)

(2,446

)

(2,220

)

Accumulated other comprehensive (loss)

(25

)

(34

)

Total shareholders’ equity (deficit)

(918

)

(703

)

Total Liabilities and Shareholders’ Equity (Deficit)

$

1,898

$

2,464

Dex Media, Inc.

Schedule F

Consolidated Statements of Cash Flows

Reported (GAAP) and Non-GAAP Financial Reconciliation - Free Cash Flow

(dollars in millions)

Nine Mos. Ended

Nine Mos. Ended

Unaudited

9/30/14

9/30/13

$ Change

Cash Flows from Operating Activities

Net (loss)

$

(226

)

$

(263

)

$

37

Reconciliation of net (loss) to net cash provided by operating activities:

Depreciation and amortization

483

524

(41

)

Provision for deferred income taxes

(4

)

(243

)

239

Provision for unrecognized tax benefits

(6

)

(28

)

22

Provision for bad debts

20

20

—

Non-cash interest expense

69

47

22

Stock-based compensation expense

2

4

(2

)

Employee retiree benefits

(5

)

(3

)

(2

)

Employee benefit plan amendments

(42

)

—

(42

)

Gains on early extinguishment of debt

(2

)

—

(2

)

Non-cash reorganization items

—

32

(32

)

Changes in assets and liabilities:

Accounts receivable

47

218

(171

)

Deferred directory costs

24

(43

)

67

Other current assets

8

9

(1

)

Accounts payable and accrued liabilities

(60

)

(15

)

(45

)

Other items, net

(3

)

(9

)

6

Net cash provided by operating activities

305

250

55

Cash Flows from Investing Activities

Additions to fixed assets and capitalized software

(15

)

(21

)

6

Cash acquired in acquisition

—

154

(154

)

Net cash provided by (used in) investing activities

(15

)

133

(148

)

Cash Flows from Financing Activities

Debt repayments

(300

)

(321

)

21

Debt issuance costs and other financing items, net

(1

)

—

(1

)

Net cash (used in) financing activities

(301

)

(321

)

20

Increase (decrease) in cash and cash equivalents

(11

)

62

(73

)

Cash and cash equivalents, beginning of year

156

172

(16

)

Cash and cash equivalents, end of period

$

145

$

234

$

(89

)

Non-GAAP Financial Reconciliation - Free Cash Flow

Nine Mos. Ended

Nine Mos. Ended

Unaudited

9/30/14

9/30/13

$ Change

Net cash provided by operating activities

$

305

$

250

$

55

Less: Additions to fixed assets and capitalized software

(15

)

(21

)

6

Free Cash Flow

$

290

$

229

$

61

Dex Media, Inc.

Schedule G

Metrics

Advertising Sales

Three Mos. Ended

Three Mos. Ended

Nine Mos. Ended

Nine Mos. Ended

Unaudited

9/30/14

9/30/13

9/30/14

9/30/13

Print Products Sales

% Change year-over-year

(22.2

)%

(19.8

)%

(21.0

)%

(21.5

)%

Digital Sales

% Change year-over-year

10.3

%

0.0

%

10.9

%

6.2

%

Total Advertising Sales(1)

% Change year-over-year

(12.5

)%

(14.6

)%

(12.7

)%

(15.6

)%

Other Metrics

Three Mos. Ended

Three Mos. Ended

Nine Mos. Ended

Nine Mos. Ended

Unaudited

9/30/14

9/30/13

9/30/14

9/30/13

% of Revenue Sourced from Digital Solutions

30

%

25

%

29

%

23

%

As of

As of

Unaudited

9/30/14

9/30/13

% Clients with a Digital Relationship

37

%

34

%

Dex Media, Inc.

Schedule H

Reconciliation of Non-GAAP Measures End 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 Pro Forma EBITDA is a non-GAAP measure that adjusts EBITDA for certain unique costs and pro forma items.

Adjusted Pro Forma results for 2014 and 2013 reflect the combination of Dex One and SuperMedia as if the transaction had been consummated prior to January 1, 2012 and reflect certain other adjustments, including adjustments to exclude the effects of purchase accounting, merger transaction and integration costs, severance, asset write downs and employee benefit plan amendments. Pro forma adjusted results do not necessarily reflect what the underlying operational or financial performance of Dex Media would have been had the Dex One / SuperMedia merger transaction been consummated prior to January 1, 2012.

(3)

Reorganization items represent charges that are directly associated with the process of reorganizing the business under Chapter 11 of the United States Bankruptcy Code. These costs include a non-cash charge of $32 million to write off the unamortized debt fair value adjustment associated with Dex One’s senior secured credit facilities in the year ended December 31, 2013.

(4)

Gains on early extinguishments of debt represents the gains associated with the purchase of a portion of the Company’s debt below par value.

(5)

This pro forma adjustment represents the historical EBITDA results of SuperMedia that as a result of acquisition accounting, were not included in the GAAP results of Dex Media.

(6)

Merger transaction costs represent costs associated with completing the merger between Dex One and SuperMedia.

(7)

Merger integration costs represent costs incurred to achieve synergies related to the merger of Dex One and SuperMedia.

(8)

Severance costs are associated with SuperMedia headcount reductions in 2013 prior to the merger.

(9)

These adjustments for 2014 and 2013 include credits to expense related to pretax gains associated with employee benefit plan amendments.

(10)

This adjustment for 2014 is related to the write down of a building.

(11)

This pro forma adjustment represents the historical revenue results of SuperMedia that as a result of acquisition accounting, was not included in the GAAP results of Dex Media.

(12)

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

(13)

EBITDA margin is calculated by dividing EBITDA (non-GAAP) by GAAP operating revenue.

(14)

Adjusted Pro Forma EBITDA margin is calculated by dividing Adjusted Pro Forma EBITDA by Pro Forma operating revenue.

(15)

Adjusted Pro Forma Free Cash Flow is calculated by adding Dex Media’s cash from operations to the historical SuperMedia cash from operations less capital expenditures of Dex Media and the historical capital expenditures of SuperMedia, before operating cash flow payments for merger transaction costs. As a result of acquisition accounting, the historical results of SuperMedia prior to April 30, 2013 were not included in the GAAP operating results of Dex Media.