Exhibit 99.1
The Reader's Digest Association, Inc.
Media: William Adler, (914) 244-7585 william.adler@rd.com
Investor Relations: Richard Clark, (914) 244-5425
richard.clark@rd.com
READER'S DIGEST ASSOCIATION ANNOUNCES 2Q FISCAL 2005 RESULTS;
FREE CASH FLOW IMPROVES TO $181 MILLION;
INTERNATIONAL PROFITS SHARPLY HIGHER,
OFFSET BY LOWER PROFITS AT CONSUMER BUSINESS SERVICES;
COMPANY REAFFIRMS FISCAL 2005 EPS GUIDANCE
PLEASANTVILLE, NY, January 26, 2005 - The Reader's Digest Association, Inc.
(NYSE: RDA) today reported earnings of $0.58 per share for the second quarter of
Fiscal 2005 ended December 31, 2004. Results included a non-cash charge of
$(0.17) per share for amortization of previously deferred magazine promotion
expenses. This quarter's results would also have been an additional $0.06 per
share higher than Fiscal 2004 results had magazine promotion expense in Fiscal
2004 been accounted for in the same manner as in Fiscal 2005. In Fiscal 2004,
second-quarter earnings were $0.67 per share, including net restructuring
charges of ($0.06) per share. For the Fiscal 2005 second quarter, free cash flow
improved by $15 million over the prior year to $181 million.
Revenues improved slightly to $798 million versus $796 million in the
Fiscal 2004 quarter. The company reported operating profits of $88 million,
which included $(26) million of amortization of previously deferred magazine
promotion expenses. This quarter's operating profits also would have been an
additional $10 million higher than Fiscal 2004 had magazine promotion expense in
Fiscal 2004 been accounted for in the same manner as in Fiscal 2005. Last year,
the company reported second-quarter operating profits of $114 million, including
$(9) million in net restructuring charges.
"We are pleased that our EPS came in higher than last year, before
the impact of the additional promotion expense amortization, and better than we
had expected," said Thomas O. Ryder, Chairman and Chief Executive Officer. "This
was largely the result of very strong profit growth at RD International and
better-than-expected results at RD North America, offset by weakness in our
Consumer Business Services segment. These improved results enabled us to
increase our free cash flow to $181 million and to use that cash to accelerate
debt repayment."
For the Fiscal 2005 second quarter, the company used most of the cash from
its free cash flow (change in cash before the change in total borrowings,
dividends, share repurchases, divestitures and acquisitions), as well as $47
million in net proceeds from the sale-leaseback of its Pleasantville property,
to reduce total debt outstanding in the second quarter by $203 million to $596
million. In addition, the company increased cash on hand by $21 million as of
December 31, 2004, to $56 million.
Factors contributing to the year-over-year variance in reported
results for the second quarter include:
- An $18 million increase in operating profits at RD
International, which improved by 75 percent. The increase in operating
profits would have been $17 million had magazine promotion expense in
Fiscal 2004 been accounted for in the same manner as in Fiscal 2005.
- An $(18) million decline in operating profits at CBS.
- An $(8) million decline in operating profits at RD North
America, which would have been an increase of $3 million had magazine
promotion expense in Fiscal 2004 been accounted for in the same manner as
in Fiscal 2005.
- A $(26) million non-cash charge related to amortization of a portion of
the deferred magazine promotion expenses on the books as of June 30, 2004.
- A $6 million improvement in Other Income and (Expense), Net, as a result
of the sale of several non-strategic assets.
- A lower effective tax rate as the result of favorable audit settlements
within the second quarter reduced tax expense by approximately $4 million.
As previously announced, effective July 1, 2004, the company began
expensing magazine direct-response promotion costs as incurred, versus the
previous practice of deferring and amortizing much of those costs. In connection
with this change, a non-cash charge of $(27) million was taken on June 30, 2004,
to reflect amortization of a portion of the then-existing deferred promotion
expense balance of $(104) million. The remaining balance of previously deferred
costs, $(77) million, or $(0.49) per share, is being amortized over Fiscal 2005,
with the second-quarter impact being $(26) million, or $(0.17) per share. All of
these amounts are non-cash. Excluding this amortization, the change is expected
to have a minimal impact on the full fiscal year but will result in timing
differences in year-to-year quarter comparisons. As expected, these timing
differences resulted in unfavorable comparisons in the first half and are
expected to cause favorable comparisons in the second.
Other Income and (Expense), Net
Other Income and (Expense), Net was $(4) million this quarter,
favorable by $6 million compared with last year's second quarter. Net interest
expense was $(10) million, $1 million lower than the year-ago quarter. The
Fiscal 2005 second-quarter results included gains of $7 million from the sale of
certain assets, including Crafting Traditions magazine in the United States and
Moneywise magazine in the United Kingdom, as well as real estate in Australia.
Outlook
The company reaffirms its previously announced Fiscal 2005 full-year
EPS guidance of $0.77 to $0.87, not including amortization for deferred magazine
promotion costs ($(0.49) per share) and special items (including restructuring
charges). On a reported basis, full-year EPS is expected to be in the range of
$0.28-$0.38 per share.
"We are increasingly confident about the outlook for the second half and
our earnings for the full year," Ryder said. "The core Reader's Digest business
is showing considerable strength, particularly in International, and Books Are
Fun has been progressively better since Thanksgiving. We do expect, as we
previously announced, that results in the third quarter will be down and results
in the fourth quarter very strong relative to last year because of the way we
planned major marketing campaigns and investments in RD International and RD
North America."
Reconciliation of Previously Announced
Fiscal 2005 Guidance EPS
Previously Announced Fiscal 2005 Guidance $0.77 - $0.87
Add:
Amortization of existing magazine deferred
promotion asset as of June 30, 2004 $(0.49)
-------------
Earnings per share $0.28 - $0.38
Segment Information
Fiscal 2005 Fiscal 2004 Better
In millions Quarter 2 (a) Quarter 2 (a) (Worse)
Revenues:
Reader's Digest North America $ 252 $ 260 $ (8)
Reader's Digest International 306 275 31
Consumer Business Services 250 274 (24)
Intercompany eliminations (10) (13) 3
----- ----- -----
Total revenues $ 798 $ 796 $ 2
===== ===== =====
Operating Profit (Loss):
Reader's Digest North America $ 25 $ 33 $ (8)
Reader's Digest International 41 24 18
Consumer Business Services 61 79 (18)
Corporate Unallocated (13) (13) --
Deferred Promotion Amortization (26) -- (26)
Other Operating Items, net -- (9) 9
----- ----- -----
Total operating profit $ 88 $ 114 $ (26)
===== ===== =====
(a) Certain amounts do not recalculate due to rounding.
RD North America (RDNA)
In the second quarter of Fiscal 2005, operating profits at RDNA were
$25 million, down $(8) million from the year-ago period. Had magazine
direct-response advertising been accounted for in Fiscal 2004 in the same manner
as in Fiscal 2005, operating profits would have increased by $3 million from the
year-ago period. Operating profit improvements were driven by higher profits at
U.S. BHE, RD Canada and Reiman Publications, partly offset by lower profits at
the U.S. Magazines group as a result of planned lower circulation levels and
soft newsstand sales. Advertising sales were slightly above the prior-year
quarter. Profits increased at U.S. BHE because of improved performance at
general books and Select Editions. Reiman profits improved despite continued
investment in Backyard Living magazine, launched a year ago. The magazine is
expected to have a circulation of more than 900,000 by fiscal year's end.
Revenues at RDNA were $252 million, down $(8) million from $260 million
last year. The decline was principally driven by $(7) million in anticipated
lower revenues at U.S. BHE, principally related to a reduction in telemarketing.
Revenues were higher at RD Canada, offset by slightly lower revenues at U.S.
Reader's Digest magazine and Reiman.
RD International (RDI)
In the second quarter, revenues at RDI were $306 million, up 11
percent over the year-ago period. Excluding the effects of foreign currency
translation, revenues were up 2 percent. Operating profits during the quarter
increased by $18 million, or 75 percent, to $41 million, including $4 million in
favorable effects of foreign currency translation. Also, had magazine
direct-response advertising costs in Fiscal 2004 been accounted for in the same
manner as in Fiscal 2005, operating profits would have increased by $17 million
over the year-ago period. Profits for the first six months of Fiscal 2005 were
up 87 percent as revenues firmed, response rates improved, and costs were
reduced as a result of global turnaround efforts to lower operating costs and
improve mailing efficiency and execution that began 18 months ago.
Results during the quarter reflect higher revenues and profits in most
overseas markets including the United Kingdom, France, Russia and Australia. The
growth reflects improved mail campaign performance, lower promotion costs and
stronger single sales books, catalog, and music sales in most markets. Also
contributing were new-market launches in Romania, Croatia, Slovenia and Ukraine,
which overall achieved profitability ahead of expectations. Increased profits
were partially offset by continued investment in new initiatives.
Consumer Business Services (CBS)
Revenues at Consumer Business Services were $250 million in the quarter, a
decline of 9 percent, and operating profits were $61 million, down 23 percent
versus last year's quarter. These declines were principally driven by lower
sales and profits at QSP. Revenues at QSP declined by 10 percent. The revenue
decline reflects lower magazine subscription and gift sales, principally driven
by lower same-school sales versus the year-ago period. Profits declined at a
disproportionate rate to revenues because of a change in the revenue mix,
incremental investment spending to address increased competition for accounts,
and increased fundraising activity within schools. These investments include
hiring more sales staff, improving promotional marketing materials, and
expanding new product offerings. This year, QSP lost significantly fewer sales
staff versus last year and added nearly as much new business as was lost.
Following a slow start, Books Are Fun ended the second quarter on a
positive note, reversing the negative trends experienced early in the quarter
with December revenues improving significantly versus the year-ago period.
Revenues and profits were moderately lower versus a year ago because of higher
sales staff turnover at the start of the selling season. Revenues and profits
for the second half are expected to improve versus last year, reflecting
aggressive recruiting efforts and expanded selling programs launched in the
second quarter.
Corporate Unallocated
Corporate unallocated expenses were $(13) million in this quarter and
in the year-ago quarter. Corporate unallocated expenses include the cost of
governance and other centrally managed expenses, as well as the costs of the
U.S. pension plans, post-retirement healthcare plans, and executive compensation
programs.
Non-GAAP Financial Measures
The company publicly reports its financial information in accordance
with accounting principles generally accepted in the United States (GAAP). To
facilitate external analysis of the company's operating performance, the company
also presents financial information that may be considered "non-GAAP financial
measures" under Regulation G and related reporting requirements promulgated by
the Securities and Exchange Commission. Non-GAAP financial measures should be
evaluated in conjunction with, and are not a substitute for, GAAP financial
measures. The following non-GAAP financial measures included in this release are
used by the company in its internal analysis of the business:
- Free Cash Flow (change in cash before the change in total borrowings,
dividends, share repurchases, divestitures and acquisitions) - Free cash flow is
presented to provide period-to-period cash flow trends generated by the business
before any discretionary, finance-related uses/sources of cash. It is used by
management to reconcile the change in net debt from period to period. Certain
amounts may not recalculate due to rounding.
Reconciliation of Free Cash Flow, Q2 Fiscal Q2 Fiscal
in millions 2005 2004
Reported change in cash per cash flow $ 21 $ 6
statement (see Table 4)
Less:
Change in total borrowings (203) (155)
Dividends (5) (5)
Pleasantville facility sale proceeds, net 47 --
Magazine divestitures 1 --
----- -----
Free Cash Flow Source $ 181 $ 166
===== =====
- Net Debt (total borrowings less cash and cash equivalents) - Net debt is one
of management's measures of leverage and is an approximate measure of the
company's debt less amounts the company has the capacity to repay. The company
typically manages its cash and debt by using any "excess" cash (i.e., cash in
excess of a desired on-hand amount) to make principal payments on its
outstanding debt.
- Previously Announced Fiscal 2005 Guidance (earnings per share before the
effects of the change in accounting for magazine deferred promotion costs and
special items, including restructuring charges) - The Previously Announced
Fiscal 2005 Guidance represented the company's full-year earnings-per-share
guidance announced July 29, 2004. At that time, the guidance was provided
excluding final resolution of the treatment of its existing magazine deferred
promotion asset (which was not determinable at that time), and special items
(including restructuring charges). Subsequent to this date, the company
finalized the accounting for magazine deferred promotion costs. The Previously
Announced Fiscal 2005 Guidance is presented to facilitate an understanding of
the impact of the company's change in magazine deferred promotion accounting on
its guidance. Management uses Fiscal 2005 Guidance to assess the company's
actual performance relative to its full-year expectations on a per-share basis.
A reconciliation of this amount is included in the "Outlook" section, above.
The company will host a conference call with financial analysts to
discuss the company's second quarter results on Wednesday, January 26, 2005, at
8:30 a.m. EST. The company invites investors to listen to the webcast of the
conference call at the company's Investor Relations Web site,
www.rd.com/investors. The web site will also include a reconciliation of
non-GAAP financial measures that may be disclosed on the conference call or from
time to time in other oral, webcast or broadcast public announcements by the
company. A transcript of the conference call will be posted on
www.rd.com/investors.
Segment Composition
Effective with the second quarter of Fiscal 2005, the company moved
Adult and Children's Trade Publishing from Consumer Business Services to the RD
North America segment to reflect a change in management responsibility.
Prior-year results for these segments have been restated for comparability.
The company reports business results in three segments:
Reader's Digest North America - Reader's Digest magazine in the United
States and Canada; Reiman Media Group, including magazines Taste of Home, Light
& Tasty, Quick Cooking, Backyard Living, Cooking for 2, Birds & Blooms, Country,
Country Woman, Country Discoveries, Reminisce, and Farm & Ranch, as well as
books, cooking schools, country tours and other enterprises; The Family
Handyman, American Woodworker, Reader's Digest Large Print Edition and U.S.
Selecciones magazines; Reader's Digest Young Families; Adult and Children's
Trade Publishing; financial services marketing alliances; and Select Editions,
series and general books, health and home books, and music and video products in
the United States and Canada.
Consumer Business Services - Books Are Fun, a display marketer in North
America selling books, gifts and other items; and QSP, Inc. and QSP Canada,
schools and youth fundraising companies.
Reader's Digest International - Products sold in more than 60 countries
outside the United States and Canada, including: Select Editions, series and
general books, music, video and Young Families products; Reader's Digest
magazine in 48 editions and 19 languages, Special Interest magazines in the
Czech Republic; The Family Handyman in Australia; Books Are Fun operations in
France, Mexico and Spain; and financial services marketing partnerships and
other initiatives in more than 30 countries.
The Reader's Digest Association, Inc. is a global publisher and
direct marketer of products that inform, enrich, entertain and inspire people of
all ages and cultures around the world. Global headquarters are located at
Pleasantville, New York. The company's main Web site is www.rd.com.
This release may include "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements inherently involve risks and uncertainties that could cause actual
future results and occurrences to differ materially from the forward-looking
statements. The Reader's Digest Association, Inc.'s filings with the Securities
and Exchange Commission, including its reports on Forms 10-K, 10-Q and 8-K,
contain a discussion of additional factors that could affect future results and
occurrences. Reader's Digest does not undertake to update any forward-looking
statements.
###
Table 1 of 4
The Reader's Digest Association, Inc. and Subsidiaries
Consolidated Condensed Statements of Income
(In millions, except per share data)
(unaudited)
Three-month period ended Six-month period ended
December 31, 2004 and 2003 (A) December 31, 2004 and 2003
Fiscal Year Better/ Fiscal Year Better/
2005 2004 (Worse) 2005 2004 (Worse)
Revenues $798.0 $796.4 -- $1,288.0 $1,291.1 --
Product, distribution and editorial expenses (308.5) (310.1) 1% (511.5) (518.4) 1%
Promotion, marketing and administrative expenses (401.3) (363.3) (10%) (724.3) (663.1) (9%)
Other operating items, net -- ($9.1) N/M -- (9.1) N/M
------ ------ --- -------- -------- ---
Operating profit 88.2 113.9 (23%) 52.2 100.5 (48%)
Other income and (expense), net (3.6) (10.0) 64% (14.5) (17.6) 18%
------ ------ --- -------- -------- ---
Income before provision for income tax 84.6 103.9 (19%) 37.7 82.9 (55%)
Provision for income taxes (26.8) (37.4) 28% (10.2) (29.8) 66%
------ ------ --- -------- -------- ---
Net income $57.8 $66.5 (13%) $27.5 $53.1 (48%)
====== ====== === ======== ======== ===
Basic earnings per share:
Weighted average common shares outstanding 97.4 97.0 97.4 97.0
Basic earnings per share $0.59 $0.68 (13%) $0.28 $0.54 (48%)
====== ====== === ======== ======== ===
Diluted earnings per share:
Adjusted weighted average common shares outstanding 99.9 99.3 99.9 99.1
Diluted earnings per share $0.58 $0.67 (13%) $0.27 $0.53 (49%)
====== ====== === ======== ======== ===
Dividends per common share $0.05 $0.05 -- $0.10 $0.10 --
(A) RDA reports on a fiscal year beginning July 1. The three-month periods ended December 31, 2004 and 2003 are the second fiscal
quarters of fiscal year 2005 and fiscal year 2004, respectively. Operating results for any interim period are not necessarily
indicative of the results for an entire year.
N/M - Not meaningful.
Table 2 of 4
The Reader's Digest Association, Inc. and Subsidiaries
Revenues and Operating Profit by Operating Segments
(In millions)
(unaudited)
Three-month period ended Six-month period ended
December 31, 2004 and 2003 (A) Deceber 31, 2004 and 2003
Fiscal Year Fiscal Year
Restated (B) Better/ Restated (B) Better/
2005 2004 (Worse) 2005 2004 (Worse)
Revenues
Reader's Digest North America $251.8 $259.6 (3%) $478.0 $484.5 (1%)
Reader's Digest International 306.2 275.5 11% 521.0 491.3 6%
Consumer Business Services 250.3 274.1 (9%) 305.3 334.5 (9%)
Intercompany eliminations (C) (10.3) (12.8) 20% (16.3) (19.2) 15%
------ ------ --- -------- -------- ---
Total Revenues $798.0 $796.4 -- $1,288.0 $1,291.1 --
====== ====== === ======== ======== ===
Operating profit (loss)
Reader's Digest North America $25.2 $33.1 (24%) $41.1 $45.2 (9%)
Reader's Digest International 41.2 23.6 75% 41.9 22.4 87%
Consumer Business Services 61.2 79.4 (23%) 42.7 65.0 (34%)
Corporate unallocated (D) (13.3) (13.1) (2%) (21.9) (23.0) 5%
------ ------ --- -------- -------- ---
$114.3 $123.0 (7%) $103.8 $109.6 (5%)
Deferred promotion amortization (E) (26.1) --- N/M (51.6) --- N/M
Other Operating Items, net (F) --- ($9.1) N/M ($9.1) N/M
------ ------ --- -------- -------- ---
Total operating profit $88.2 $113.9 (23%) $52.2 $100.5 (48%)
====== ====== === ======== ======== ===
(A) RDA reports on a fiscal year beginning July 1. The three-month periods ended December 31, 2004 and 2003 are the second fiscal
quarters of fiscal year 2005 and fiscal year 2004, respectively. Operating results for any interim period are not necessarily
indicative of the results for an entire year.
(B) The results for fiscal 2004 have been restated for the transfer of the Young Families, Financial Services and Trade Publishing
businesses from the Consumer Business Services segment to the Reader's Digest North America segment.
(C) In the normal course of business, the company's segments enter into transactions with one another.These intercompany
transactions are recorded by each segment at amounts as if the transactions were with third parties and, therefore, affect segment
performance. Operating segment revenues, above, are presented gross before intercompany eliminations. However, intercompany
revenues and associated expenses are eliminated in consolidation and are not reflected in the company's consolidated results.
(D) Corporate unallocated expenses include the cost of governance and other centrally managed expenses, as well as the accounting
for U.S. pension plans, post-retirement healthcare costs, and executive compensation programs which are not allocated to the
operating segments. Governance and centrally managed expenses include costs such as corporate finance and general management,
investor and public relations, legal, treasury, and any related information technology and facility costs utilized by these
departments.
(E) The deferred promotion amortization of $(26.1) million reflects the expensing of the deferred magazine promotion asset as of
June 30, 2004, and includes $(0.2) million from the effects of foreign exchange. For the six-month period ended December 31, 2004,
the total deferred promotion amortization is $(51.6) and includes $(0.3) million from the effects of foreign exchange.
(F) Other operating items, net in Fiscal 2004 is comprised of restructuring charges of $(9.1) million, or $(0.06) per share
primarily for severance. The charges are related to the company's global restructuring and cost-reduction program announced in
Fiscal 2003.
N/M - Not meaningful.
Table 3 of 4
The Reader's Digest Association, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
As of December 31, 2004 and June 30, 2004
(In millions)
(unaudited)
December 31, June 30,
2004 2004
Assets
Cash and cash equivalents $56.4 $50.3
Accounts receivable, net 343.7 229.0
Inventories 175.2 152.0
Prepaid and deferred promotion costs 63.7 106.9
Prepaid expenses and other current assets 180.6 152.1
-------- --------
Total current assets 819.6 690.3
Property, plant and equipment, net 120.3 155.8
Goodwill 1,010.0 1,009.5
Other intangible assets, net 155.1 173.9
Other noncurrent assets 416.0 413.2
-------- --------
Total assets $2,521.0 $2,442.7
======== ========
Liabilities and Stockholders' Equity
Loans and notes payable $54.3 $83.9
Accounts payable 115.9 110.6
Accrued expenses 328.9 268.7
Income taxes payable 35.2 15.5
Unearned revenue 441.5 403.4
Other current liabilities 12.0 10.2
-------- --------
Total current liabilities 987.8 892.3
Long-term debt 541.8 637.7
Postretirement and postemployment benefits other than pensions 116.7 119.5
Unearned revenues 141.0 129.3
Other noncurrent liabilities 232.5 200.8
-------- --------
Total liabilities 2,019.8 1,979.6
Capital stock 16.0 17.8
Paid-in capital 206.9 210.1
Retained earnings 1,347.2 1,330.4
Accumulated other comprehensive (loss) income (74.0) (89.4)
Treasury stock, at cost (994.9) (1,005.8)
-------- --------
Total stockholders' equity 501.2 463.1
-------- --------
Total liabilities and stockholders' equity $2,521.0 $2,442.7
======== ========
Table 4 of 4
The Reader's Digest Association, Inc. and Subsidiaries
Consolidated Condensed Statements of Cash Flows
(In millions)
(unaudited)
Three-month period ended Six-month period ended
December 31, (A) December 31,
2004 2003 2004 2003
Cash flows from operating activities
Net income $57.8 $66.5 $27.5 $53.1
Depreciation and amortization 15.3 16.1 30.4 32.2
Asset impairments -- 0.5 -- 0.5
Amortization of debt issuance costs 1.0 1.3 2.0 2.6
Stock-based compensation 2.4 2.7 5.5 5.6
Net gain on marketable securities and sales of certain assets (7.2) (0.3) (7.2) (3.7)
Changes in current assets and liabilities, net of effects of
acquisitions and dispositions
Accounts receivable, net (61.0) (51.4) (97.6) (77.1)
Inventories 34.6 39.0 (17.8) (6.6)
Unearned revenues 6.9 4.3 26.2 33.4
Accounts payable and accrued expenses 43.2 15.1 44.5 17.5
Other, net 77.6 83.4 44.0 19.7
Changes in noncurrent assets and liabilities, net of effects
of acquisitions and dispositions (5.0) (11.5) 23.7 19.5
----- ----- ---- ----
Net change in cash due to operating activities 165.6 165.7 81.2 96.7
----- ----- ---- ----
Cash flows from investing activities
Proceeds from sales of marketable securities -- -- -- 0.8
Purchases of licensing agreements -- -- -- (1.3)
Proceeds from other long-term investments 2.7 0.3 2.7 3.0
Proceeds from sales of property, plant and equipment 10.2 -- 10.2 0.1
Proceeds from the sale of the Pleasantville facility 48.2 -- 48.2 --
Magazine divestitures 1.5 -- 1.5 --
Capital expenditures (4.4) (4.5) (7.6) (8.5)
----- ----- ---- ----
Net change in cash due to investing activities 58.2 (4.2) 55.0 (5.9)
----- ----- ---- ----
Cash flows from financing activities
Proceeds / (repayments) of revolving credit and short-term
facilities, net (130.3) (105.6) (44.6) (0.6)
Repayments of term loan (73.0) (49.3) (80.9) (67.4)
Dividends paid (5.2) (5.1) (10.4) (10.3)
Cash paid for financing fees -- -- (0.5) --
Proceeds from employee stock purchase plan and exercise
of stock options 1.3 1.4 1.4 1.4
Other, net (1.8) -- (1.9) (0.1)
----- ----- ---- ----
Net change in cash due to financing activities (209.0) (158.6) (136.9) (77.0)
----- ----- ---- ----
Effect of exchange rate changes on cash 6.0 2.8 6.8 3.3
----- ----- ---- ----
Net change in cash and cash equivalents 20.8 5.7 6.1 17.1
----- ----- ---- ----
Cash and cash equivalents at beginning of period 35.6 62.7 50.3 51.3
----- ----- ---- ----
Cash and cash equivalents at end of period $56.4 $68.4 $56.4 $68.4
===== ===== ===== =====
(A) RDA reports on a fiscal year beginning July 1. The three-month periods ended December 31, 2004 and 2003 are the second fiscal
quarters of fiscal year 2005 and fiscal year 2004, respectively. Operating results for any interim period are not necessarily
indicative of the results for an entire year.