SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934
Date of Report (Date of earliest event reported) JULY 27, 1999
-------------
R.H. DONNELLEY CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Delaware 1-7155 13-2740040
(State or Other (Commission File (I.R.S. Employer
Jurisdiction Number) Identification
of Incorporation or Number)
Organization)
One Manhattanville Road
Purchase, New York 10577
(Address of Principal Executive Offices) (Zip Code)
Telephone Number, including Area Code 914-933-6400
------------
<PAGE>
Item 5. Other Events
------------
Attached hereto as Exhibit 99 is the Registrant's press
release dated July 27, 1999, with respect to the Registrant's (i)
release of its 1999 2nd quarter earnings and (ii) decision to make a
change in its revenue recognition for certain directories in its
Sprint relationship which resulted in a restatement of certain prior
period results.
Item 7. Exhibits
--------
99. Press release dated July 27, 1999
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
R.H. DONNELLEY CORPORATION
(Registrant)
July 27, 1999 By:
--------------------------------
Philip C. Danford
Senior Vice President and
Chief Financial Officer
<PAGE>
INDEX TO EXHIBITS
-----------------
<TABLE>
<CAPTION>
Exhibit Description
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<S> <C>
99 Press release dated July 27, 1999
</TABLE>
R.H. Donnelley
newsrelease
Media Contact: Analyst Contact:
Reid H. Gearhart Frank M. Colarusso
The Dilenschneider Group R.H. Donnelley
212.922.0900 914.933.3178
R.H. DONNELLEY REPORTS 8.9 PERCENT GROWTH
IN SECOND-QUARTER DILUTED EARNINGS PER SHARE
VERSUS AS-ADJUSTED EARNINGS A YEAR AGO
Results for the Quarter in Line with the Company's Expectations;
RHD Remains on Track to Achieve EPS Target in 1999
PURCHASE, N.Y., July 27--R.H. Donnelley Corporation (NYSE:RHD), the nation's
largest independent marketer of yellow pages advertising, today reported
second-quarter diluted earnings of 49 cents a share, up 8.9 percent compared
with as-adjusted diluted earnings of 45 cents a share a year ago.
"R.H. Donnelley's second-quarter performance, highlighted by continued
good growth in advertising sales and operating income at DonTech, met our
expectations," said Frank R. Noonan, chairman and chief executive officer.
"Based on our favorable results to date and the current outlook for the
business, we are on pace to achieve our full-year operational and financial
goals for 1999."
R.H. Donnelley separated from The Dun & Bradstreet Corporation and
became an independent public company on July 1, 1998. The company's 1998
results have been adjusted to include estimated corporate overhead, interest
expense and income taxes as if RHD had been an independent company prior to
July 1, 1998.
Second-quarter advertising sales for published directories increased by
3.9 percent to $280.7 million from $270.1 million a year ago. Results for
the quarter included $6.8 million in sales from Bell Atlantic's Buffalo,
N.Y., market, a contract won by the company in May 1998.
Advertising sales at DonTech increased by 4.1 percent in the second
quarter to $82.1 million from $78.9 million a year ago. Continued good
growth in advertising sales at DonTech underscored the successful
rebalancing of the unit's directory publication schedule in 1997 and 1998.
DonTech is a perpetual joint venture partnership between R.H. Donnelley and
Ameritech, selling yellow pages advertising in Illinois and northwest
Indiana.
Directory Advertising Services posted second-quarter advertising sales
of $198.6 million, up 3.9 percent from $191.2 million a year ago. Excluding
sales from Bell Atlantic's Buffalo market, Directory Advertising Services ad
sales were up slightly over a year ago. Advertising sales in most of Bell
Atlantic's upstate markets were in line with expectations, while results in
certain downstate markets were lower than anticipated. Directory
Advertising Services includes the company's relationships with Bell Atlantic
and Sprint, RHD's independent directory business in Cincinnati, and the
company's new joint venture in China.
Second-quarter operating income at R.H. Donnelley increased by 1.6
percent to $37.5 million from $36.9 million a year ago. DonTech posted a
5.2 percent increase in second-quarter operating income, to $36.7 million
from $34.9 million a year ago. Operating income at Directory Advertising
Services was up 6.8 percent to $6.3 million from $5.9 million a year ago.
Directory Publishing Services posted a modest loss in the second quarter,
improving slightly from the loss reported in the second quarter of 1998.
Second-quarter operating income was held down by general and corporate
expenses, which increased in line with the company's expectations. For the
full year, the company expects general and corporate expenses to be down
modestly from 1998.
Restatement to Conform Sprint Revenue Recognition
The company also announced a change in its recording of revenue for
certain directories in its Sprint relationship. As a result of this change,
RHD restated its prior period results. The company noted that for certain
Sprint directories R.H. Donnelley earns both revenue from commissions on the
sale of directory advertising and a share of income from the Sprint
partnership, which publishes the directories. Previously, RHD recorded
sales-commission revenues from these directories, including the semi-annual
Sprint First Source Las Vegas directory, in July and December. However, the
company's share of partnership-publishing income was recorded in July and
January when the directories were published. To be consistent, the company
will now record both the revenue and its share of partnership income in July
and January.
As a result of this change, fourth-quarter 1997 and fourth-quarter 1998
results will be reduced, and results for the first quarters of 1997, 1998
and 1999 will be increased. On a full-year basis, RHD's 1998 as-adjusted
diluted earnings per share will be reduced by 1 cent to $1.38 and 1997 as-
adjusted diluted earnings per share will be reduced by 1 cent to $1.24.
Also, a one-time charge against equity of $2.7 million will be taken for
periods prior to 1997. This change will have no impact on cash flow and
will not affect R.H. Donnelley's full-year 1999 earnings per share goal.
First-Half Results
R.H. Donnelley's first-half results reflect the impact of the
restatement noted above.
First-half diluted earnings per share increased by 12.1 percent to 74
cents, compared with as-adjusted diluted earnings per share of 66 cents a
year ago. Advertising sales for published directories in the first six
months of 1999 increased by 5.0 percent to $530.4 million from $505.3 million
a year ago. Excluding sales of $9.6 million from Bell Atlantic's Buffalo
market, sales for the period increased by 3.1 percent.
DonTech posted first-half advertising sales of $217.0 million, up 4.3
percent from $208.1 million in the first six months of 1998. Advertising
sales at Directory Advertising Services increased by 5.5 percent, to $313.4
million from $297.2 million a year ago. Excluding sales from Bell Atlantic's
Buffalo market, sales at Directory Advertising Services were up 2.2 percent.
Operating income in the first half increased by 2.8 percent to $61.4
million from $59.7 million a year ago, reflecting good growth in Directory
Advertising Services and DonTech, held down by an anticipated increase in
first-half general and corporate expenses, primarily due to timing. The
company noted that while general and corporate expenses in the first half
increased over the relatively low level in the first half of 1998, general
and corporate expenses to date in 1999 remain below the expected run rate
for the full year. DonTech reported 4.7 percent growth in first-half
operating income to $57.5 million from $54.9 million in the first half of
1998. Operating income at Directory Advertising Services rose by 13.0
percent to $18.3 million, compared with $16.2 million a year ago.
Outlook for R.H. Donnelley
The company noted that the restatement will have no impact on cash flow
and will not affect R.H. Donnelley's full-year 1999 earnings per share goal.
RHD reaffirmed its goal to deliver low-double-digit growth in earnings per
share over the long term. For the full year, the company expects DonTech to
generate continued solid results, with sales above the industry average.
The trend in Bell Atlantic's sales is expected to improve, but full-year
sales are likely to be below expectations. Sprint's sales are forecast to
be below expectations, due to various one-time factors. As a result of
these factors, and an expected reduction in general and corporate expense,
the company anticipates good growth in full-year operating income. Growth
in earnings per share is expected to be in the low double digits, as a
result of the net impact of lower interest costs due to strong cash flow and
the effect of the company's share repurchase program.
Financial Position
At June 30, 1999, total debt was $457.8 million. In the second
quarter, operating cash flow, which is cash flow before capital expenditures
and capitalized software spending, was $7.6 million. Capital expenditures
and capitalized software spending for the second quarter were $1.8 million,
which was somewhat below normal quarterly spending levels. During the
quarter the company invested $8.0 million in its joint venture in China,
bringing its total investment in the joint venture to $9.3 million. The
company also repurchased $5.3 million of stock in the quarter and received
$1.1 million of proceeds from the exercise of stock options. Debt increased
by $6.9 million in the quarter.
In the first half, operating cash flow was $36.4 million, driven
primarily by seasonal collections of receivables in the first quarter.
Capital expenditures and capitalized software spending for the first half
were $2.9 million, below normal spending levels due to timing factors. The
company repurchased $12.8 million of stock in the first half of 1999 and
received $2.2 million of proceeds from the exercise of stock options. Debt
decreased by $10.9 million in the first half and cash increased by $4.0
million.
Reported Results
R.H. Donnelley's reported results include the company's performance as
a unit of The Dun & Bradstreet Corporation up to the separation of the
company from D&B on July 1, 1998, and the company's actual results since the
separation. For the period prior to the separation, reported results
include actual overhead, which was lower compared with the post-separation
period. Reported results include a stand-alone tax rate for RHD for the
period prior to the separation.
In the second quarter of 1999, RHD reported net income of $16.9
million, or 49 cents per diluted share, compared with net income of $21.7
million, or 63 cents per diluted share, in the second quarter of 1998.
In the first half of 1999, RHD reported restated net income of $25.4
million, or 74 cents per diluted share, compared with restated net income of
$36.7 million, or $1.06 per diluted share, in the first half of 1998.
R.H. Donnelley, headquartered in Purchase, N.Y., is the largest
independent marketer of yellow pages advertising in the U.S. RHD sells
approximately $1 billion in yellow pages advertising a year and is the
publisher or sales agent for nearly 300 directories with a total circulation
of more than 36 million copies. More information about R.H. Donnelley can
be found on its Internet site at www.rhd.com.
Safe Harbor Provision
---------------------
The statements contained in this press release regarding R.H. Donnelley's
future operating results and performance and business prospects 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," "should," "planned," "estimated,"
"potential," "goal," "outlook," and similar expressions, as they relate to
R.H. Donnelley or its management, have been used to identify such forward-
looking statements. Without limiting the generality of the foregoing, the
statements regarding earnings per share growth and advertising sales growth
are forward looking statements set forth under the caption "Outlook for
R.H. Donnelley." These statements and all other forward looking statements
reflect R.H. Donnelley's current beliefs and specific assumptions with
respect to future business decisions and are based on information currently
available to R.H. Donnelley. Accordingly, the statements are subject to
significant risks, uncertainties and contingencies which could cause R.H.
Donnelley's actual operating results, performance or business prospects to
differ from those expressed in, or implied by, these statements. Such
risks, uncertainties and contingencies include the following: (1) loss of
market share through competition; (2) uncertainties caused by the
consolidation of the telecommunications industry; (3) introduction of
competing products or technologies by other companies; (4) complexity and
uncertainty regarding the development of new high technology products;
(5) pricing pressures from competitors and/or customers; (6) changes in the
yellow pages industries and markets; (7) the company's inability to
complete the implementation of its Year 2000 plans on a timely basis; (8) a
sustained economic downturn in the United States.
(See attached tables.)
July 27, 1999
<PAGE>
<TABLE>
<CAPTION>
R.H. DONNELLEY CORPORATION Schedule 1
APPENDIX OF SCHEDULES
---------------------
<S> <C>
Schedule 1: Appendix of Schedules
Schedule 2: Consolidated Adjusted Statement of Income for the Three
Months Ended June 30, 1999 and June 30, 1998
Schedule 3: Consolidated Adjusted Statement of Income for the Six
Months Ended June 30, 1999 and June 30, 1998
Schedule 4: Consolidated Balance Sheet at June 30, 1999
Schedule 5: Notes for Consolidated Adjusted Statement of Income
</TABLE>
<TABLE>
<CAPTION>
Supplemental Schedules - Results Q1 1998 through Q2 1999
--------------------------------------------------------
<S> <C>
Schedule 6: Before Restatement - Consolidated Adjusted Statement of
Income for the quarterly periods from Q1 1998 to Q2 1999.
For the periods prior to the separation on July 1, 1998,
the results have been adjusted to give affect to the
spin-off from The Dun & Bradstreet Corporation
Schedule 7: With Restatement - Consolidated Adjusted Statement of
Income for the quarterly periods from Q1 1998 to Q2 1999
to give affect to the restatement in Q1 1998, Q4 1998 and
Q1 1999
Schedule 8: After Restatement - Consolidated Adjusted Statement of
Income for the quarterly periods from Q1 1998 to Q2 1999.
For the periods prior to the separation on July 1, 1998,
the results have been adjusted to give affect to the spin-
off from Dun & Bradstreet, as well as the restatement in
Q1 1998, Q4 1998 and Q1 1999
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
R.H. DONNELLEY CORPORATION Schedule 2
CONSOLIDATED ADJUSTED STATEMENT OF INCOME
-----------------------------------------
(Unaudited)
Amounts in millions, except earnings per share
Three Months Ended June 30
As
Adjusted Variance
1999 1998 $ %
<S> <C> <C> <C> <C>
Advertising sales (1)
Directory Advertising Services $198.6 $191.2 $ 7.4 3.9%
DonTech Partnership 82.1 78.9 3.2 4.1%
----- ----- --- ---
Total advertising sales $280.7 $270.1 $10.6 3.9%
===== ===== ==== ===
Revenue (2) $ 40.1 $ 38.0 2.1 5.5%
---- ---- --- ---
Operating income: (3)
Directory Advertising Services $ 6.3 $ 5.9 $ 0.4 6.8%
DonTech Partnership 36.7 34.9 1.8 5.2%
Directory Publishing Services (0.5) (0.7) 0.2 28.6%
General & corporate (4) (5.0) (3.2) (1.8) (56.3%)
---- ---- --- ----
Total operating income $ 37.5 $ 36.9 $ 0.6 1.6%
Interest & other expense - net (5) (9.2) (10.6) 1.4 13.2%
---- ---- --- ----
Pre-tax income $ 28.3 $ 26.3 $ 2.0 7.6%
Tax (6) (11.4) (10.5) (0.9) (8.6%)
---- ---- --- ---
Net income $ 16.9 $ 15.8 $ 1.1 7.0%
==== ==== === ===
Earnings per share (EPS):
Basic $0.50 $0.46 $0.04 8.7%
Diluted $0.49 $0.45 $0.04 8.9%
Shares used in computing EPS:
Basic 33.8 34.3
Diluted 34.4 34.6
D&A - Directory Ad. & Pub. $3.3 $3.3 $ - 0.0%
D&A - Gen & Corp + DonTech $1.7 $1.7 $ - 0.0%
EBITDA $42.5 $41.9 $0.6 1.4%
</TABLE>
[FN]
See notes attached.
</FN>
<PAGE>
<TABLE>
<CAPTION>
R.H. DONNELLEY CORPORATION Schedule 3
CONSOLIDATED ADJUSTED STATEMENT OF INCOME
-----------------------------------------
(Unaudited)
Amounts in millions, except earnings per share
Six Months Ended June 30
Restated
As
Restated Adjusted Variance
1999 1998 $ %
<S> <C> <C> <C> <C>
Advertising sales (1)
Directory Advertising Services $313.4 $297.2 $16.2 5.5%
DonTech Partnership 217.0 208.1 8.9 4.3%
----- ----- --- ---
Total advertising sales $530.4 $505.3 $25.1 5.0%
===== ===== ==== ===
Revenue (2) $ 82.2 $ 71.8 10.4 14.5%
---- ---- --- ---
Operating income: (3)
Directory Advertising Services $ 18.3 $ 16.2 $ 2.1 13.0%
DonTech Partnership 57.5 54.9 2.6 4.7%
Directory Publishing Services (1.9) (1.0) (0.9) n/m
General & corporate (4) (12.5) (10.4) (2.1) (20.2%)
---- ---- --- ----
Total operating income $ 61.4 $ 59.7 $ 1.7 2.8%
Interest & other expense - net (5) (18.9) (21.3) 2.4 11.3%
---- ---- --- ----
Pre-tax income $ 42.5 $ 38.4 $ 4.1 10.7%
Tax (6) (17.1) (15.4) (1.7) (11.0%)
---- ---- --- ----
Net income $ 25.4 $ 23.1 $ 2.4 10.4%
==== ==== === ====
Earnings per share (EPS):
Basic $0.75 $0.67 $0.08 11.9%
Diluted $0.74 $0.66 $0.08 12.1%
Shares used in computing EPS:
Basic 33.9 34.2
Diluted 34.4 34.5
D&A - Directory Ad. & Pub. $6.6 $6.2 $ 0.4 6.5%
D&A - Gen & Corp + DonTech $3.5 $3.7 $(0.2) (5.4%)
EBITDA $71.5 $69.6 $ 2.1 3.0%
</TABLE>
[FN]
See notes attached.
</FN>
<PAGE>
<TABLE>
<CAPTION>
R.H. DONNELLEY CORPORATION Schedule 4
CONSOLIDATED BALANCE SHEET
--------------------------
(Unaudited)
Amounts in millions
<S> <C>
At 6/30/99
Assets
Cash and Cash Equivalents $ 6.3
Accounts Receivable - net 62.8
Deferred Contract Costs 15.0
Other Current Assets 5.3
-----
Total Current Assets $ 89.4
Property and Equipment - net $ 18.1
Computer Software - net 29.1
Partnership Investments 222.0
Other Non-Current Assets 21.2
-----
Total Assets $ 379.8
=====
Liabilities and Shareholders' Deficit
Accounts Payable and Other Current Liabilities $ 63.5
Current Portion - Long-Term Debt 6.0
Long-Term Debt 451.8
Postretirement and Postemployment Benefits 9.8
Deferred Income Taxes 49.0
Other Liabilities 9.7
-----
Total Liabilities $ 589.8
Shareholders' Deficit (Restated) $(210.0)
-----
Total Liabilities and Shareholders' Deficit $ 379.8
=====
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
R.H. DONNELLEY CORPORATION Schedule 5
NOTES FOR CONSOLIDATED ADJUSTED STATEMENT OF INCOME
---------------------------------------------------
<S> <C>
(1) Advertising sales is the billing value of total advertising sold for
directories published in the period, including RHD's sales agency
relationships and partnerships.
(2) Revenue includes sales commissions received from Bell Atlantic and
Sprint related to sales agency activity performed by RHD, as well as
revenue generated by Cincinnati and Directory Publishing Services
operations.
(3) Operating income has three components. First, results from
operations for Bell Atlantic, Sprint, including the CenDon
partnership, Cincinnati and the company's joint venture in China are
shown as Directory Advertising Services. Second, results from
DonTech, RHD's perpetual joint-venture partnership with Ameritech,
and related fees from Ameritech. Third, results from Directory
Publishing Services which is comprised of RHD's pre-press directory
compilation and graphic arts design businesses.
(4) General and corporate expenses include corporate general &
administrative, depreciation & amortization and an estimate for
stand-alone corporate overhead expenses as if RHD was a separate
public company for the period prior to the separation from D&B on
July 1, 1998 and actual expenses thereafter.
(5) Interest and other expenses related to the $500 million of company
debt, prior to the separation from D&B on July 1, 1998, and actual
debt and related interest expenses thereafter. Assumes debt was
outstanding for the entire period prior to July 1, 1998.
(6) Taxes include the estimated stand-alone company rate.
(7) On July 27, 1999, the Company announced a change in its recording of
revenue for certain Sprint directories. As a result of this change,
results for the first quarter 1998, fourth quarter 1998 and first
quarter 1999 have been restated.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
R.H. DONNELLEY CORPORATION Schedule 6
CONSOLIDATED ADJUSTED STATEMENT OF INCOME
-----------------------------------------
(Given affect to the spin-off from Dun & Bradstreet for the periods prior to
the separation on July 1, 1998 and before the effect of the restatement)
(Unaudited)
Amounts in millions, except earnings per share
1998 1999
Full
Q1 Q2 Q3 Q4 Year Q1 Q2
<S> <C> <C> <C> <C> <C> <C> <C>
Advertising sales:
Directory Advertising Svcs $64.9 $191.2 $119.5 $215.2 $590.8 $ 69.9 $198.6
DonTech Partnership (1) 129.2 78.9 64.6 136.2 408.9 134.8 82.1
----- ----- ----- ----- ----- ----- -----
Total advertising sales $194.1 $270.1 $184.1 $351.4 $999.7 $204.7 $280.7
===== ===== ===== ===== ===== ===== =====
Revenue $ 24.3 $ 38.0 $ 53.4 $ 54.3 $170.0 $ 31.7 $ 40.1
----- ----- ----- ----- ----- ----- -----
Operating income:
Directory Advertising Svcs $5.5 $5.9 $12.9 $8.3 $32.6 $6.7 $6.3
DonTech Partnership 20.0 34.9 39.5 25.7 120.1 20.8 36.7
Directory Publishing Svcs (0.3) (0.7) (0.2) (1.8) (3.0) (1.4) (0.5)
General & corporate (7.2) (3.2) (9.1) (8.9) (28.4) (7.5) (5.0)
---- ---- ---- ---- ----- ---- ----
Total operating income $18.0 $36.9 $43.1 $23.3 $121.3 $18.6 $37.5
Interest & other
expense - net (10.7) (10.6) (10.4) (9.8) (41.5) (9.7) (9.2)
---- ---- ---- ---- ----- ---- ----
Pre-tax income $7.4 $26.3 $32.7 $13.5 $79.8 $8.9 $28.3
Tax (2.9) (10.5) (13.1) (5.4) (31.9) (3.6) (11.4)
---- ---- ---- ---- ---- --- ----
Net income $4.4 $15.8 $19.6 $8.1 $47.9 $5.3 $16.9
==== ==== ==== === ==== === ====
Earnings per share (EPS):
Basic $0.13 $0.46 $0.57 $0.24 $1.40 $0.16 $0.50
Diluted $0.13 $0.45 $0.57 $0.24 $1.39 $0.15 $0.49
Shares used in computing EPS:
Basic 34.2 34.3 34.2 34.2 34.2 34.0 33.8
Diluted 34.5 34.6 34.4 34.4 34.5 34.3 34.4
==== ==== ==== ==== ==== ==== ====
D&A - Directory Ad. & Pub. $2.9 $3.3 $2.9 $2.8 $11.9 $3.3 $3.3
D&A - Gen & Corp + DonTech $2.0 $1.7 $2.3 $2.4 $8.4 $1.8 $1.7
EBITDA $22.9 $41.9 $48.3 $28.5 $141.6 $23.7 $42.5
</TABLE>
[FN]
(1) - The DonTech Partnership 1998 advertising sales have been adjusted to
conform to 1999's quarterly publication schedule so that quarterly
comparisons will be more meaningful. Actual advertising sales for the
DonTech Partnership reported in 1998 were: $137.9 million for the first
quarter , $64.3 million for the second quarter, $63.2 million for the third
quarter, $137.7 for the fourth quarter 1998 and $403.1 million for the full
year.
</FN>
<PAGE>
<TABLE>
<CAPTION>
R.H. DONNELLEY CORPORATION Schedule 7
CONSOLIDATED ADJUSTED STATEMENT OF INCOME
-----------------------------------------
(Effect of the restatement)
(Unaudited)
Amounts in millions, except earnings per share
1998 1999
Full
Q1 Q2 Q3 Q4 Year Q1 Q2
<S> <C> <C> <C> <C> <C> <C> <C>
Advertising sales:
Directory Advertising Svcs $41.1 $ - $ - $(44.9) $ (3.8) $44.9 $ -
DonTech Partnership (1) - - - - - - -
---- --- --- ---- --- ---- ---
Total advertising sales $ 41.1 $ - $ - $(44.9) $ (3.8) $44.9 $ -
==== === === ==== === ==== ===
Revenue $ 9.5 $ - $ - $(10.4) (0.9) 10.4 $ -
---- --- --- ---- --- ---- ---
Operating income:
Directory Advertising Svcs $4.8 $ - $ - $ (5.3) $ (0.5) $ 5.3 $ -
DonTech Partnership - - - - - - -
Directory Publishing Svcs - - - - - - -
General & corporate - - - - - - -
--- --- --- --- --- --- ---
Total operating income $4.8 $ - $ - $ (5.3) $ (0.5) $ 5.3 $ -
Interest & other
expense - net - - - - - - -
--- --- --- --- --- --- ---
Pre-tax income $4.8 $ - $ - $ (5.3) $ (0.5) $ 5.3 $ -
Tax (1.9) - - 2.1 0.2 (2.1) -
--- --- --- --- --- --- ---
Net income $2.9 $ - - $ (3.2) $ (0.3) $ 3.2 $ -
=== === === === === === ===
Earnings per share (EPS):
Basic $0.08 $ - $ - $(0.10) (0.01) $0.09 $ -
Diluted $0.08 $ - $ - $(0.10) (0.01) $0.10 $ -
Shares used in computing EPS:
Basic 34.2 34.3 34.2 34.2 34.2 34.0 33.8
Diluted 34.5 34.6 34.4 34.4 34.5 34.3 34.4
==== ==== ==== ==== ==== ==== ====
D&A - Directory Ad. & Pub. $ - $ - $ - $ - $ - $ - $ -
D&A - Gen & Corp + DonTech $ - $ - $ - $ - $ - $ - $ -
EBITDA $4.8 $ - $ - $ (5.3) $ (0.5) $ 5.3 $ -
</TABLE>
[FN]
NOTE: The results by quarter may not equal the annual results due to
rounding.
</FN>
<PAGE>
<TABLE>
<CAPTION>
R.H. DONNELLEY CORPORATION Schedule 8
CONSOLIDATED ADJUSTED STATEMENT OF INCOME
-----------------------------------------
(Given affect to the spin-off from Dun & Bradstreet for the periods prior to
the separation on July 1, 1998 and the effect of the restatement)
(Unaudited)
Amounts in millions, except earnings per share
1998 1999
Full
Q1 Q2 Q3 Q4 Year Q1 Q2
<S> <C> <C> <C> <C> <C> <C> <C>
Advertising sales:
Directory Advertising Svcs $106.0 $191.2 $119.5 $170.3 $587.0 $114.8 $198.6
DonTech Partnership (1) 129.2 78.9 64.6 136.2 408.9 134.8 82.1
----- ----- ----- ----- ----- ----- -----
Total advertising sales $235.2 $270.1 $184.1 $306.5 $995.9 $249.6 $280.7
===== ===== ===== ===== ===== ===== =====
Revenue $ 33.8 $ 38.0 $ 53.4 $ 43.9 $169.1 $ 42.1 $ 40.1
----- ----- ----- ----- ----- ----- -----
Operating income:
Directory Advertising Svcs $10.3 $5.9 $12.9 $3.0 $32.1 $12.0 $6.3
DonTech Partnership 20.0 34.9 39.5 25.7 120.1 20.8 36.7
Directory Publishing Svcs (0.3) (0.7) (0.2) (1.8) (3.0) (1.4) (0.5)
General & corporate (7.2) (3.2) (9.1) (8.9) (28.4) (7.5) (5.0)
---- ---- ---- ---- ----- ---- ----
Total operating income 22.8 $36.9 $43.1 $18.0 $120.8 $23.9 $37.5
Interest & other
expense - net (10.7) (10.6) (10.4) (9.8) (41.5) (9.7) (9.2)
---- ---- ---- ---- ----- ---- ----
Pre-tax income $12.1 $26.3 $32.7 $ 8.2 $79.3 $14.2 $28.3
Tax (4.8) (10.5) (13.1) (3.3) (31.7) (5.7) (11.4)
---- ---- ---- ---- ---- --- ----
Net income $7.3 $15.8 $19.6 $4.9 $47.6 $8.5 $16.9
==== ==== ==== === ==== === ====
Earnings per share (EPS):
Basic $0.21 $0.46 $0.57 $0.14 $1.39 $0.25 $0.50
Diluted $0.21 $0.45 $0.57 $0.14 $1.38 $0.25 $0.49
Shares used in computing EPS:
Basic 34.2 34.3 34.2 34.2 34.2 34.0 33.8
Diluted 34.5 34.6 34.4 34.4 34.5 34.3 34.4
==== ==== ==== ==== ==== ==== ====
D&A - Directory Ad. & Pub. $2.9 $3.3 $2.9 $2.8 $11.9 $3.3 $3.3
D&A - Gen & Corp + DonTech $2.0 $1.7 $2.3 $2.4 $8.4 $1.8 $1.7
EBITDA $27.7 $41.9 $48.3 $23.2 $141.1 $29.0 $42.5
</TABLE>
[FN]
NOTE: The results by quarter may not equal the annual results due to
rounding
(1) - The DonTech Partnership 1998 advertising sales have been adjusted to
conform to 1999's quarterly publication schedule so that quarterly comparisons
will be more meaningful. Actual advertising sales for the DonTech Partnership
reported in 1998 were: $137.9 million for the first quarter , $64.3 million
for the second quarter, $63.2 million for the third quarter, $137.7 for the
fourth quarter 1998 and $403.1 million for the full year.
</FN>
