8-K/A - THRY - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) March 1, 2021

THRYV HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-35895	13-2740040
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
2200 West Airfield Drive<br><br> <br>P.O. Box 619810<br><br> <br>DFW Airport, Texas	75261
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(Address of Principal Executive Offices)	(Zip Code)

(972) 453-7000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which<br><br> <br>registered
Common Stock, $0.01 par value	THRY	Nasdaq Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Introductory Note

On March 1, 2021, Thryv Holdings, Inc. (the “Company”) entered into a Share Purchase Agreement and completed the acquisition of Sunshine NewCo Pty Ltd and Sensis Holding Limited (the “Acquisition”). Historically, Sensis Holding Limited and Sunshine Newco Pty owned 70% and 30% of the Sensis operating companies, respectively. On March 2, 2021, the Company filed a Current Report on Form 8-K reporting on the Acquisition (the “Current Report”).

The purpose of this amendment to the Current Report is to include the financial statements and the pro forma financial information relating to the Acquisition required under Item 9.01 of Form 8-K that were previously omitted from the Current Report as permitted by Item 9.01(a)(3).

Except for the following, this Form 8-K/A No.1 effects no other changes to the Current Report.

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Businesses or Funds Acquired.

Sensis Holding Limited, which owns a controlling share of the Sensis operating companies, audited consolidated financial statements for the years ended June 30, 2020 and 2019, the notes related thereto and the related report of Ernst & Young LLP are filed herewith as Exhibit 99.1 and are incorporated into this Item 9.01(a) by reference.

  Sensis Holding Limited, which owns a controlling share of the Sensis operating companies, unaudited consolidated financial statements for the six months ended December 31, 2020 and 2019 and the notes related thereto are filed as Exhibit 99.2 and are
  incorporated into this Item 9.01\(a\) by reference.

(b) Pro Forma Financial Information.

The Company’s unaudited pro forma combined statements of operations for the three months ended March 31, 2021 and the year ended December 31, 2020 are filed as Exhibit 99.3 and are incorporated into this Item 9.01(b) by reference.

(d) Exhibits. The following exhibits are filed with this document:

Exhibit Number	Description
23.1	Consent of Ernst & Young LLP
99.1	Sensis Holding Limited-Audited consolidated financial statements for the years ended June 30, 2020 and 2019 and the notes related thereto.
99.2	Sensis Holding Limited-Unaudited consolidated financial statements for the six months ended December 31, 2020 and 2019 and the notes related thereto.
99.3	Unaudited pro forma combined statements of operations for the three months ended March 31, 2021 and the year ended December 31, 2020

SIGNATURE

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.

	THRYV HOLDINGS, INC.
Date: May 13, 2021	By:	/s/ Paul D. Rouse
	Name: Paul D. Rouse
	Title: Chief Financial Officer, Executive Vice President and Treasurer

Exhibit 23.1

Consent of Independent Auditors

We consent to the incorporation by reference in Registration Statement No. 333-249002 on Form S-8 of Thryv Holdings, Inc. of our report dated May 13, 2021, relating to the consolidated financial statements of Sensis Holdings Limited as of and for the years ended June 30, 2020 and 2019 appearing in this Current Report on Form 8-K/A of Thryv Holdings, Inc.

/s/ Ernst & Young, LLP

London, United Kingdom

13 May 2021

Exhibit 99.1

Sensis Holding Limited<br><br> <br><br><br> <br>Annual report and financial statements<br><br> <br><br><br> <br>for the year ended 30 June 2020<br><br> <br><br><br> <br>Registered number: 09872424

Sensis Holding Limited

Corporate information

Directors

Eva Monica Kalawski (resigned on 1 March 2021)

Ian M.S. Downie (resigned on 1 March 2021)

Mary Ann Sigler (resigned on 1 March 2021)

KJ Christopher (appointed on 1 March 2021 and resigned on 11 March 2021)

John Allan (Appointed on 11 March 2021)

Kerrie-Anne Hutchins (Appointed on 11 March 2021)

Auditors

Ernst & Young LLP

1 More London Place

London

SE1 2AF

Registered office

Windsor House, Bayshill Road

Cheltenham

GL50 3AT

2

Sensis Holding Limited

Contents

	Page
Directors’ responsibilities statement	4
Independent auditor’s report	5
Consolidated income statement	6
Consolidated statement of comprehensive income	7
Consolidated statement of changes in equity	9
Consolidated cash flow statement	10
Notes to the financial statements	11
3
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Sensis Holding Limited

Directors’ responsibilities statement

The directors are responsible for preparing the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that year. In preparing these financial statements, the directors are required to:

•	select suitable accounting policies and then apply them consistently;
•	make judgments and accounting estimates that are reasonable and prudent;
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•	state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
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•	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
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The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

4

Sensis Holding Limited

Consolidated audit report

For the year ended 30 June 2020

Report of Independent Auditors

The Directors of Sensis Holding Limited

We have audited the accompanying consolidated financial statements of Sensis Holding Limited and subsidiaries, which comprise the consolidated balance sheets as of June 30, 2020 and 2019, and the related consolidated income statements, comprehensive income, changes in equity and cash flows for the years then ended, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in conformity with United Kingdom Accounting Standards including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice); this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Sensis Holding Limited and subsidiaries at June 30, 2020 and 2019, and the consolidated results of their operations and their cash flows for the years then ended in conformity with United Kingdom Generally Accepted Accounting Practice.

/s/ Ernst & Young LLP

London, United Kingdom

        May 13, 2021

5

Sensis Holding Limited

Consolidated income statement

For the year ended 30 June 2020


Turnover	3
Cost of printing and digital advertising		)	)
Labour expense	5	)	)
Service contracts and other agreements		)	)
Information technology costs		)	)
Facilities expense			)
Customer compensation		)	)
Promotion and advertising		)	)
Bad debts/recovery costs		)	)
Other operating expenses		)	)
Profit before interest, tax, depreciation and amortisation
Depreciation and amortisation		)	)
Profit before interest and tax
Other income
Finance costs (net)	6	)	)
Profit on ordinary activities before taxation	4
Tax on profit on ordinary activities	7	)	)
Profit for the year
Profit for the year attributable to:
Non-controlling interest
Equity shareholders of the Company

All values are in US Dollars.

6

Sensis Holding Limited

Consolidated Statement of Comprehensive Income

For the year ended 30 June 2020

	2020<br> ’000	2019<br> ’000
Profit for the financial period
Other comprehensive income
Total other comprehensive income
Total comprehensive income
Total comprehensive income for the period attributable to:
Non-controlling interest
Equity shareholders of the Company

All values are in US Dollars.

7

Sensis Holding Limited

Consolidated Balance Sheet

At 30 June 2020


Fixed assets
Intangible assets	8
Tangible fixed assets	9

Current assets
Debtors
– due within one year	12
– due after one year	12
Cash at bank and in hand
Stock
Creditors: Amounts falling due within one year	13	)	)
Deferred income		)	)
Net current assets
Total assets less current liabilities
Creditors: Amounts falling due after more than one year	14	)	)
Provisions for liabilities	16	)	)
Deferred tax liability	7	)	)
Net assets
Capital and reserves
Called-up share capital	19
Share Premium	19
Profit and loss account	20		)
Shareholders’ funds
Non-controlling interest
Total capital employed

All values are in US Dollars.

The consolidated financial statements of Sensis Holding Limited were approved by the board of directors and authorised for issue on 13 May 2021.

8

Sensis Holding Limited

Consolidated Statement of Changes in Equity

For the year ended 30 June 2020

	Equity attributable to equity shareholders of the Group
	Called-up share capital<br> ’000	Share Premium<br> ’000	Merger Reserve<br> ’000	Profit and loss account<br> ’000		Sub-total<br> ’000		Non-controlling interest<br> ’000		Total<br> ’000
Balance at 30 June 2018					)		)
Profit for the financial period
Total comprehensive income					)
Dividends paid									)		)
Balance at 30 June 2019					)
Balance at 1 July 2019					)
Profit for the financial period
Total comprehensive income					)
Dividends paid									)		)
At 30 June 2020					)

All values are in US Dollars.

9

Sensis Holding Limited

Consolidated Cash Flow Statement

For the year ended 30 June 2020


Net cash flows from operating activities	22
Cash flows from investing activities
Payments for capital expenditures		)	)
Loans to shareholder		)
Net cash flows used in investing activities		)	)
Cash flows from financing activities
Interest paid		)	)
Repayment of borrowings		)	)
Settlement of forward exchange contracts			)
Net cash flows used in financing activities		)	)
Net decrease in cash and cash equivalents			)
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Reconciliation to cash at bank and in hand:
Cash at bank and in hand
Cash and cash equivalents

All values are in US Dollars.

10

Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

1. Significant accounting policies

The principal accounting policies are summarised below.

Statement of compliance

The Company is a private company limited by shares incorporated in the United Kingdom under the Companies Act 2006. The address of the registered office is given on page 2.

The financial statements have been prepared under the historical cost convention, modified to include certain items at fair value, and in accordance with Financial Reporting Standard 102 (FRS 102) issued by the Financial Reporting Council. They have all been applied consistently throughout the year ended 30 June 2020.

General information and basis of preparation

The figures shown for the year to 30 June 2020 are based on the Group’s statutory accounts for that period and do not constitute the Group’s statutory accounts for that period as defined in Section 434 of the Companies Act 2006. These statutory accounts, which were prepared under FRS 102, have been filed with the Registrar of Companies. The audit report on those accounts was not qualified, included a reference to matters to which the Auditor drew attention by way of emphasis without qualifying the report, and did not contain statements under Sections 498 (2) or (3) of the Companies Act 2006.

The financial statements of the Group were approved for issued by the Board of Directors on 13 May 2021.

The consolidated financial statements are presented in Australian Dollars and rounded to the nearest $’000. Foreign operations are included in accordance with the policies set out below.

In accordance with the merger accounting method the results of all combining entities have been included from the start and for comparatives restated.

Principal risks and uncertainties

The principal risks and uncertainties facing the Group are broadly grouped as competitive/technological risks and financial instrument risks.

►	Competitive/technological risks

The Group’s print advertising activities are exposed to the risk of technical obsolescence, as customers advance to digital methods of advertising and communication. To limit its exposure to the decline in the print market, the Group continues to diversify its product offering and invest in its services offerings.

►	Financial instrument risks

The Group’s activities expose it to a number of financial risks including credit risk, cash flow risk and liquidity risk. The use of financial derivatives is governed by the Group’s policies approved by the board of directors, which provide written principles on the use of financial derivatives to manage these risks. The Group does not use derivative financial instruments for speculative purposes.

►	Cash flow risk

Cash flow risk is the risk of exposure to variability in cash flows that is attributable to a particular risk associated with a recognised asset or liability. The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates (through USD denominated debt) and interest rates.

11

Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

►	Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for that other party by failing to discharge an obligation. The Group’s principal financial assets are bank balances and cash, trade and other receivables, and derivative financial assets.

The Group’s credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows.

The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

The Group has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers.

►	Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the Group uses long-term debt finance.

►	Covid-19 risk

Both Print and Digital businesses experienced minimal disruption to operations as a result of the COVID-19 pandemic during the year. Print distribution schedules were accelerated to ensure that print books were distributed to all targeted regions despite transit restrictions, while digital fulfilment was able to be continue due to the online nature of the business.

While not significant during the year, customer credit risk remains to be an area of focus considering the uncertainty of the full economic impact of the pandemic. Management have taken the approach of factoring in the uncertainty of future COVID-related impacts into accounting estimates such as assessing the ability of the business to continue as a going concern assessment, assessing long-term assets for impairment and provisioning for expected credit losses relating to financial assets on the Statement of Financial Position at 30 June 2020.

Going concern

The Group’s financial statements have been prepared on a going concern basis, which contemplates continuity of normal business activities and realisation of assets and settlement of liabilities in the normal course of business. As at 30 June 2020, the Group had a net asset position of $129.8m and net current assets of $94.5m.

The Group’s forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group will be able to operate within the level of its current facility. The Directors note the global COVID-19 pandemic and the resulting adverse economic impacts has caused uncertainty in the economic environment. The Group has reforecast its Annual Operating Plan for the next 12 months. The reforecast, which is the basis of the preparation of the 12 month cashflow through until 30 June 2022 includes management’s expected downturn in revenue, as well as the offsetting benefits in cash flow as a result of management’s continued effort to implement cost saving initiatives and maintain a strong EBITDA and cash flow margin. This includes an average reduction of 18% in cash inflows for the year to June 2022 reflecting a 15% fall in revenues compared to the year to June 2021 and offset with a significant reduction in income tax outflows. Under this scenario, the Group and its related entities will have access to adequate funds to meet its debts as and when they fall due.

The Group has sufficient financial resources and long-term funding in place. As a consequence, the directors believe that the group is well placed to manage its business risks successfully despite the expected continued decline in print revenue.

12

Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Basis of consolidation

The Group financial statements consolidate the financial statements of the Company and its subsidiary undertakings drawn up to the end of each reporting period presented.

Subsidiaries are consolidated from the date of their acquisition, being the date on which the Company obtains control and continue to be consolidated until the date that such control ceases. Control comprises the power to govern the financial and operating policies of the investee so as to obtain benefit from its activities.

Foreign currency

Transactions in foreign currencies are initially recorded in the entity’s functional currency by applying the spot exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. All differences are taken to the profit and loss account.

Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty. The specific recognition criteria described below must also be met before revenue is recognised.

(i)	Advertising, directory services and digital marketing services

Classified advertisements and display advertisements are published online on a daily, weekly or monthly basis, for which revenues are recognised when the advertisement is published.

Yellow Pages^®^ and White Pages^®^ directory print advertising revenues are recognised on delivery of 60% of the published directories to consumers’ premises. Revenue from online directories is recognised over the life of service agreements, which, on average, span one year.

Various digital marketing services are performed for customers on a once-off basis, for which revenues are recognised when performance obligation is met at a point in time.

13

Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

(ii)	Interest revenue

For all financial instruments measured at amortised cost, interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or liability.

(iii)	Revenue arrangements with multiple deliverables

Where two or more revenue-generating activities or deliverables are sold under a single arrangement, each deliverable that is considered to be a separate unit of accounting is accounted for separately. When the deliverables in a multiple deliverable arrangement are not considered to be separate units of accounting, the arrangement is accounted for as a single unit.

A separate unit of accounting exists where the deliverable has a value to the customer on a stand-alone basis and any undelivered items cannot be terminated by the customer without incurring penalties if the delivered item was returned.

The consideration from the revenue arrangement is allocated to its separate units based on the relative selling prices of each unit. If neither vendor specific objective evidence nor third party evidence exists for the selling price, then the item is measured based on the best estimate of the selling price of that unit. When allocating revenue to the separate units within an arrangement, the amount allocated to a delivered item is limited to the amount that is not contingent upon the delivery of additional items or meeting other specified performance conditions (non-contingent amount). The non-contingent revenue allocated to each unit is then recognised in accordance with our revenue recognition policies described above.

Business combinations and goodwill

Business combinations are accounted for using the purchase method, which involves the following steps:

►	identifying an acquirer;
►	measuring the cost of the business combination as the aggregate of the fair value of assets given, liabilities assumed and equity issued, plus any directly attributable transaction costs; and
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►	allocating the cost of the business combination to the assets acquired and liabilities assumed based on their fair values.
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Positive goodwill acquired on each business combination is capitalised, classified as an asset on the balance sheet and amortised on a straight line basis over its useful life.

Goodwill acquired in a business combination is, from the acquisition date, allocated to each cash generating unit that is expected to benefit from the synergies of the combination.

If a subsidiary, associate or business is subsequently sold or discontinued, any goodwill arising on acquisition that has not been amortised through the profit and loss account is taken into account in determining the profit or loss on sale or discontinuance.

Intangible assets

Intangible assets acquired separately from a business are capitalised at cost. Intangible assets acquired as part of an acquisition of a business are capitalised separately from goodwill if the fair value can be measured reliably on initial recognition. Intangible assets acquired as part of an acquisition are not recognised where they arise from legal or other contractual rights, and where there is no history of exchange transactions. Intangible assets, excluding development costs, created within the business are not capitalised and expenditure is charged against profits in the year in which it is incurred.

Subsequent to initial recognition, intangible assets are stated at cost less accumulated amortisation and accumulated impairment. Intangible assets are amortised on a straight line basis over their estimated useful life. The carrying value of intangible assets is reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable.

14

Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

Internally developed software assets

Development expenditures on business software developed for internal use are recognised as an intangible asset when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the asset and the ability to measure reliably the expenditure during development.

Following initial recognition of the development expenditure as an asset, the cost model is applied requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses. Assets are classified as “Assets under construction” until development is complete and the asset is available for use, at which point amortisation commences, with assets amortised evenly over the period of expected future benefit.

All other research and development expenditure is written off as incurred.

The weighted average amortisation periods of the Group’s intangible assets are as follows:

Software assets	3 - 5 years
Brand names	15 years
Customer bases	5 years
Goodwill	5 years

If there are indicators that the residual value or useful life of an intangible asset has changed since the most recent annual reporting period previous estimates shall be reviewed and, if current expectations differ the residual value, amortisation method or useful life shall be amended. Changes in the expected useful life or the expected pattern of consumption of benefit shall be accounted for as a change in accounting estimate.

Property, Plant and Equipment

Property, plant and equipment are stated at cost, net of depreciation and any provision for impairment. Such cost includes costs directly attributable to making the asset capable of operating as intended. Assets are classified as “Assets under construction” until the asset is available for use, at which point depreciation commences.

Depreciation is provided on all property, plant and equipment, at rates calculated to write off the cost, less estimated residual value, of each asset on a straight line basis over its expected useful life as follows:

Leasehold improvements	5 years
IT equipment, plant & equipment	5 - 10 years

The carrying values of tangible fixed assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to sell, which is equivalent to the net realisable value. Cost is calculated using the FIFO (first-in, first-out) method. Provision is made for obsolete, slow-moving or defective items where appropriate.

Impairment of non-financial assets

The Group assesses at each reporting date whether an asset may be impaired. If any such indication exists the Group estimates recoverable amount of the asset. If it is not possible to estimate the recoverable amount of the individual asset, the Group estimates, the recoverable amount of the cash generating unit (CGU) to which the asset belongs.

The recoverable amount of an asset or CGU is the higher of its fair value less costs to sell and its value in use. If the recoverable amount is less than its carrying amount, the carrying amount of the asset is impaired and it is reduced to its recoverable amount through an impairment in profit and loss unless the asset is carried at a revalued amount where the impairment loss of a revalued asset is a revaluation decrease. An impairment loss recognised for all assets, including goodwill, is reversed in a subsequent period if and only if the reasons for the impairment loss have ceased to apply.

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Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

The following CGU’s have been identified for the purposes of impairment assessment:

►	Yellow Pages
►	White Pages
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Provisions for liabilities

A provision is recognised when the Group has a legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation.

(i)	Restructuring provisions

Restructuring provisions are recognised only when the recognition criteria for provisions are fulfilled. The Group has a constructive obligation when a detailed formal plan identifies the business or part of the business concerned, the location and number of employees affected, a detailed estimate of the associated costs, and an appropriate timeline. Furthermore, the employees affected have been notified of the plan’s main features.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Restructuring provisions are generally utilised within the subsequent 12 months.

(ii)	Employee benefit provisions

Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of the reporting date are recognised in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled. Expenses for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable.

The liability for long service leave is recognised and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures, and periods of service. Expected future payments are discounted using interest rates on high quality corporate bonds at the reporting date with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.

Employee benefit provisions are utilised over the life of the employment contract.

(iii)	Make good provision

The Group is required to restore the leased premises of its office premises to their original condition at the end of the respective lease terms. The amount of the provision recognised will be the best estimate of the expenditure required to settle the present obligation at reporting date. The provision is discounted to reflect the present value of the expenditures where the time value of money is material.

Make good provision is utilised over the life of the lease (varied across properties, longest maturity being 2023).

(iv)	Onerous lease provision

The Group has decided to exit a large number of property leases and is required to recognise an onerous lease provision. The amount of the provision recognised will be the best estimate of the total unavoidable costs offset with the expected rental benefit. The provision is discounted to reflect the present value of the expenditures and benefit where the time value of money is material.

Onerous Lease provision is utilised over the life of the lease (varied across properties, longest maturity being 2023).

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Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

Taxation

Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. The majority of the Group’s operations are subject to Australian company tax, except for the individual results of the Company, which is incorporated in the UK and therefore subject to UK corporation tax.

Deferred tax is recognised in respect of all timing differences which are differences between taxable profits and total comprehensive income that arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements, except that:

►	provision is made for deferred tax that would arise on remittance of the retained earnings of overseas subsidiaries, associates and joint ventures only to the extent that, at the balance sheet date, dividends have been accrued as<br> receivable;
►	where there are differences between amounts that can be deducted for tax for assets (other than goodwill) and liabilities compared with the amounts that are recognised for those assets and liabilities in a business combination a deferred<br> tax liability/ (asset) shall be recognised. The amount attributed to goodwill is adjusted by the amount of the deferred tax recognised; and
---	---
►	unrelieved tax losses and other deferred tax assets are recognised only to the extent that the directors consider that it probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable<br> profits.
---	---

Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

Financial instruments

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.

(i)	Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and in hand and short term deposits with an original maturity date of three months or less. For the purpose of the consolidated cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

(ii)	Interest-bearing loans and borrowings

All interest-bearing loans and borrowings which are basic financial instruments are initially recorded at the present value of future payments discounted at a market rate of interest for a similar loan, less transaction costs. Subsequently, they are measured at amortised cost using the effective interest rate (EIR) method. The EIR amortisation is include in finance costs in the income statement.

Loans and borrowings that are receivable or payable within one year are not discounted.

(iii)	Short-term debtors and creditors

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the income statement in ‘Bad debts / recovery costs / doubtful debts.’

17

Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

(iv)	Equity instruments

Equity instruments issued by the Company are recorded at the fair value of cash or other resources received or receivable, net of direct issue costs.

(v)	Derivative financial instruments

The Group uses forward foreign currency contracts to reduce exposure to foreign exchange rates.

Derivative financial instruments are initially measured at fair value on the date on which a derivative contract is entered into and are subsequently measured at fair value through profit or loss. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.

(vi)	Fair value measurement

The best evidence of fair value is a quoted price for an identical asset in an active market. When quoted prices are unavailable, the price of a recent transaction for an identical asset provides evidence of fair value as long as there has not been a significant change in economic circumstances or a significant lapse of time since the transaction took place. If the market is not active and recent transactions of an identical asset on their own are not a good estimate of fair value, the fair value is estimated by using a valuation technique.

Operating leases

Rentals payable under operating leases are charged in the profit and loss account on a straight line basis over the lease term. Lease incentives are recognised over the lease term on a straight line basis.

2. Critical accounting judgements and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgements in applying the Group’s accounting policies

The following are the critical judgements, apart from those involving estimations (which are dealt with separately below), that the directors have made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

Timing of print revenue recognition

Revenue from print directories is recognised on delivery of the published directory using the delivery method, with any amounts prepaid by customers deferred in the consolidated balance sheet prior to recognition.

The Group has determined that substantial completion of its obligations pursuant to the terms of the arrangement with the customer occurs upon the delivery of 60% of the published directory to the consumer’s premises.

18

Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

Key sources of estimation uncertainty

Impairment of non-financial assets

An impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow (DCF) model. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

Taxation

Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded.

3. Turnover

Turnover represents the amounts derived from the provision of goods and services which fall within the Group’s ordinary activities, stated net of goods and services tax (GST).

The Group operates in two principal areas of activity, being Yellow Pages and White Pages. The Group operates within a single geographical market, being Australia.

An analysis of the Group’s turnover is set out below.

Area of activity	2020<br> ’000	2019<br> ’000
Print advertising – Yellow Pages
Print advertising – White Pages
Digital advertising – Yellow Pages
Digital advertising – White Pages
Digital advertising – Other
Digital Marketing Services
Other revenue

All values are in US Dollars.

4. Group operating profit

Profit on ordinary activities before taxation is stated after charging/ (crediting):

	2020		2019
Group	$	’000	$	’000
Depreciation of tangible fixed assets (Note 9)		3		917
Amortisation of intangible assets (Note 8		37,897		58,750
Operating lease rentals		7,801		10,207
Onerous lease provision (Note 16		5,695		2,701
Foreign exchange loss		1,038		3,323
Cost of printing and digital advertising		49,309		53,111
Advisor fees paid to affiliate of ultimate shareholder		8,416		7,133
19
---

Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

5. Staff costs

	2020		2019
	$	’000	$	’000
Wages and salaries		84,532		101,776
Superannuation contributions		4,828		6,126
Other employee benefit expense		1,406		2,114
Total labour expenses		90,766		110,016

The Group pays advisory fees to an affiliate of its ultimate parent, refer to Note 24 for further details.

The average monthly number of employees (including executive directors) was:


Sales	115	120
Operations	442	628
Corporate (including IT)	96	189
	653	937

6. Finance costs (net)

	2020			2019
	$	’000		$	’000
Interest expense on borrowings		6,185			15,588
Net foreign exchange losses on foreign currency borrowings and derivative financial instruments		1,002			3,059
Amortisation of capitalised borrowing costs		1,645			989
Interest Income		(8,094	)		(7,911	)
Other ^(1)^		2,731			2,953
		3,469			14,678
^(1)^	Included in ‘Other’ are the line fee expense and unwinding of the make good provision (see note 17).
---	---
20
---

Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

7. Tax on profit on ordinary activities

(a) Tax on profit on ordinary activities

The tax charge comprises:

	2020			2019
	$	’000		$	’000
Current tax on profit on ordinary activities
UK corporation tax		-			2,100
Australian corporation tax		40,871			36,769
Total current tax		40,871			38,869
Deferred tax
Origination and reversal of timing differences		(5,857	)		(1,500	)
Total deferred tax (see Note 7b)		(5,857	)		(1,500	)
Adjustments in respect of prior years		104			(811	)
Derecognition of deferred tax liability		(1,240	)		(8,318	)
Total tax on profit on ordinary activities (see Note 7b)		33,878			28,239

(b) Factors affecting the total tax charge

Substantially all of the Group’s operations are subject to Australian company tax, with the exception of the individual results of the parent company, which is incorporated in the UK and therefore subject to UK corporation tax.

The differences between the total tax charge shown above and the amount calculated by applying the standard rate of tax for Australian companies to the profit before tax is as follows:

	2020		2019
	$	’000	$	’000
Profit on ordinary activities before tax		110,233		98,922
At Australia’s statutory income tax rate of 30%		33,070		29,677
Effects of:
- Expenses not deductible for tax purposes		43		33
- Adjustments in respect of prior years		104		(811	)
- Foreign tax credits utilised		-		(782	)
- Effect of non-recoverable net tax loss in UK		-		122
- Other		661		-
Total tax expense for the period		33,878		28,239
21
---

Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

Finance Act 2016 provides that the rate of corporation tax is 19%. On 15 September 2016 the UK Government enacted legislation to further reduce the main rate of UK corporation tax from 18% to 17% with effect from 1 April 2020. In 2020, the government announced that the UK corporation tax rate for the years starting 1 April 2020 and 2021 would remain at 19%. As a result the disclosure of deferred tax has been adjusted to reflect the enactment of this Act with no significant impact on these financial statements.

(d) Deferred tax

The deferred tax included in the balance sheet is as follows:

	2020			2019
Group	$	’000		$	’000
Balance at 30 June		(6,806	)		(11,473	)
Timing differences arising on:
- Trade and other receivables		1,362			(682	)
- Intangible assets		(20,656	)		(26,750	)
- Accrued expenses		202			2,527
- Provisions		5,256			8,289
- Deferred revenue		-			1,089
- Leases		4,439			-
- Foreign exchange		647			2,291
- Financial liabilities at fair value through profit or loss		1,487			1,712
- Other		457			51
Deferred tax charge / (credit) in group profit and loss account		(5,857	)		(1,500	)
At 30 June		(5,857	)		(1,500	)

Deferred tax assets and liabilities are offset only where the Group has a legally enforceable right to do so and where the assets and liabilities relate to income taxes levied by the same taxation authority on the same taxable entity or another entity within the Group.

22

Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

8. Intangible assets

Group
Cost
At 30 June 2018
Additions
Transfers					)
At 30 June 2019
Amortisation
At 30 June 2018	)	)	)	)		)
Charge for the period	)	)	)	)		)
At 30 June 2019	)	)	)	)		)
Net book value
At 30 June 2019

All values are in US Dollars.

23

8. Intangible assets (continued)


Cost
At 30 June 2019
Additions
Transfers					)
At 30 June 2020
Amortisation
At 30 June 2019	)	)	)	)		)
Charge for the period	)	)				)
At 30 June 2020	)	)	)	)		)
Net book value
At 30 June 2020

All values are in US Dollars.

24

9. Tangible fixed assets

Group
Cost
At 30 June 2018
Charge for the period
At 30 June 2019
Depreciation
At 30 June 2018	)	)	)
Charge for the period		)	)
At 30 June 2019	)	)	)
Net book value
At 30 June 2019

All values are in US Dollars.


Cost
At 30 June 2019
Charge for the period
At 30 June 2020
Depreciation
At 30 June 2019	)	)
Charge for the period	)	)
At 30 June 2020	)	)
Net book value
At 30 June 2020

All values are in US Dollars.

25

Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

10. Investments

No Company standalone financial statements are presented in this set of financial statements. All subsidiary undertakings have been included in the consolidation.

Principal Group investments

The Group has investments in the following subsidiary undertakings which principally affected the profits or net assets of the Group.

Subsidiary undertakings	Country of incorporation	Principal activities	Registered office
Sensis Holding II Limited^+^	UK	Holding company	Windsor House, Bayshill Road, Cheltenham, Gloucestershire, GL50 3AT
Project Strawberry Holding Limited^*^	UK	Holding company	Windsor House, Bayshill Road, Cheltenham, Gloucestershire, GL50 3AT
Project Sunshine I Pty Limited	Australia	Holding company	222 Lonsdale Street, Melbourne VIC 3000
Project Sunshine II Pty Limited	Australia	Holding company	222 Lonsdale Street, Melbourne VIC 3000
Project Sunshine III Pty Limited	Australia	Holding company	222 Lonsdale Street, Melbourne VIC 3000
Project Sunshine IV Pty Limited	Australia	Holding company	222 Lonsdale Street, Melbourne VIC 3000
Sensis Pty Ltd	Australia	Directories & advertising	222 Lonsdale Street, Melbourne VIC 3000
Sensis Holding Pty Ltd	Australia	Dormant company	222 Lonsdale Street, Melbourne VIC 3000
CitySearch Australia Pty Ltd	Australia	Dormant company	222 Lonsdale Street, Melbourne VIC 3000
Life Events Media Pty Ltd	Australia	Quote services	222 Lonsdale Street, Melbourne VIC 3000
Australian Local Search Pty Ltd	Australia	Directories & advertising	222 Lonsdale Street, Melbourne VIC 3000

100 % equity interest held directly by Sensis Holding Limited.

* 100 % equity interest held indirectly by Sensis Holding Limited.

Sensis Holding Limited indirectly holds 70% ownership in all other subsidiaries.

12. Debtors

	2020<br> ’000	2019<br> ’000
Amounts falling due within one year:
Trade debtors, net of provision for doubtful debts
Accrued revenue
Prepayments and other current assets
Derivative financial assets

Amounts falling due after more than one year:
Loans to non-controlling interests

All values are in US Dollars.

Per the loan agreement, the loan to non-controlling interest is to be repaid in full by 31 December 2022. The interest charged on the loan is compounded daily at 9.5% per annum.

On 28 June 2019, the Group entered into a new shareholder facility with Telstra Corporation Limited (“Telstra”) with a facility limit of $42 million, to fund future distributions and working capital. Total shareholder loans has been capped at $105 million.

26

Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

The first drawdown incurs interest at 9.5% per annum with subsequent drawdown interest rates to be either the prevailing interest rate or that agreed between the Lender and Borrower at the time of drawdown date. Similar to the terms of the existing shareholder loan, interest is capitalised every 180 days with final repayment to be made 7 years after drawdown date.

On 30 July 2019, Telstra requested a drawdown of $0.9 million respectively on the shareholder facilities with the Group.

Trade debtors includes $6.6 million (2019: $10.1 million) due from Telstra in respect of White Pages billing.

13. Creditors – amounts falling due within one year

	Group	Group
	2020<br> ’000	2019<br> ’000
Borrowings (see Note 18)
Trade creditors
Accrued expenses
Income tax payable
Other current liabilities

All values are in US Dollars.

27

14. Creditors – amounts falling due after more than one year

	2020<br> 000	2019<br> 000
Borrowings (see Note 18)
Loan from non-controlling interests
Other non-current liabilities

All values are in US Dollars.

On 24 January 2020, the group executed a loan facility arrangement with its non-controlling shareholder, Telstra. During the period, the Group utilised $18.0 million, and accrued $0.7m of interest payable.

15. Leasing commitments

The Group future minimum rentals payable under non-cancellable operating leases are as follows:

	2020<br> 000	2019<br> 000
Within one year
Between one and five years

All values are in US Dollars.

The Group future minimum rental sub-let income under non-cancellable operating leases are as follows:

	2020<br> 000	2019<br> 000
Within one year
Between one and five years

All values are in US Dollars.

16. Provisions for liabilities


At 30 June 2019
Charged to profit and loss
Released unused		)		)	)	)
Utilisation of provision	)	)	)		)	)
At 30 June 2020

All values are in US Dollars.

For a description of all provisions above, refer to ‘Provisions for Liabilities’ in Note 1 - Significant accounting policies on page 17. During the period, the make good provision was re-assessed and $7.4 million was release to the income statement and recognised within facilities expense.

As at 30 June 2020, $8.8 million of the above balance is due and payable within 12 months.

28

Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

Borrowings

Loans repayable, included within creditors, are analysed as follows:


Current borrowings
Term loan ^^(a)
Accrued interest
Capitalised transaction costs	)	)

Non-current borrowings
Term loan (a)
Capitalised transaction costs		)

Wholly repayable within five years

All values are in US Dollars.

(a)	Term Loan

On 23 September 2014, Project Sunshine IV Pty Limited (“PS4”), a subsidiary of the Company, entered into a Syndicated Facility Agreement with Bank of America, N.A for USD $450 million. This loan was secured by a first lien on assets, subject to waterfall preference on accounts receivable granted to the lenders, repayable in equal quarterly instalments subject to an interest charge equal to LIBOR + 7.0% per annum, with a floor of 8.0% per annum.

On 8 December 2015, PS4 increased its Syndicated Facility Agreement by USD $100 million subject to terms identical to the original agreement. As a result of the increase, PS4 capitalised an additional $10.2 million of transaction costs, which were amortised over the life of the loan using the effective interest rate method.

On 21^st^ August 2017, PS4, entered into a new Syndicated Facility Agreement with Bank of America, N.A for USD $250 million under the same terms noted above, repayable in equal quarterly instalments of USD $12.5 million per annum. An additional AUD $11.9 million of transaction costs were capitalised as a result of the increased facility.

From the facility entered in to on 21 August 2017, the funds received were used to repay the December 2015 term loan in its entirety, with the remainder being distributed to shareholders by way of a shareholder loan.

The split between current and non-current borrowings is based on contractual payments and estimated free cash flow payment required.

(b)	Asset Backed Revolving Credit Agreement

On 28 February 2014, PS4 also entered into an Asset Backed Revolving Credit Agreement with Bank of America N.A. to provide a revolving line of credit facility of $50 million secured against the aged debtors borrowing base.

Following the increase in the Syndicated Facility Agreement on 21st August 2017, the Asset Backed Revolving Credit facility was reduced to $30 million and extended for 5 years to August 2021. This remains undrawn as at 30 June 2020.

29

Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

18. Financial instruments

The carrying values of the Group’s financial assets and liabilities are summarised by category below:

Group
Financial assets at fair value through profit or loss
- Forward currency swaps
Financial assets that are debt instruments measured at amortised cost
- Trade debtors (Note 12)
- Loans to non-controlling interests (Note 12)
Financial liabilities measured at amortised cost
- Trade creditors (Note 13)	)	)
- Borrowings (Note 17)	)	)
- Income tax payable (Note 13)	)	)

All values are in US Dollars.

The Group purchases forward currency swaps to hedge currency exposure on borrowings. The fair values of assets and liabilities held at fair value through Income Statement at the balance sheet date are determined using quoted prices.

19. Called-up share capital

Group	Number		per Share	Share Capital ’000	Share Premium<br> ’000	Total Share Capital<br> ’000
Allotted, called-up and fully-paid		12,000,000

All values are in US Dollars.

20. Profit and loss account

The Profit and Loss reserve represents cumulative profits or losses, net of dividends paid and other adjustments.

21. Dividends and other appropriations

	2020		2019
Group	$	’000	$	’000
Amounts recognised as distributions to non-controlling interests in the period:
- Dividends paid		18,000		9,000

No final dividend has been proposed at the date of this report.

30

Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

22. Cash flow statement

Reconciliation of operating profit to cash generated by operations:


Net profit/(loss) after tax from total operations
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
Depreciation & amortisation expense
Finance costs
Income tax expense
Finance income	)	)
Movement in working capital
Decrease in trade and other receivables
Increase/ (decrease) in stocks		)
Decrease/ (increase) in other assets		)
Increase/ (decrease) in creditors	)	)
Decrease in provisions	)	)
Decrease in deferred revenue	)	)
Increase/ (decrease) in other liabilities		)
Interest received
Income tax paid	)	)
Cash generated by operations

All values are in US Dollars.

23. Contingent assets and liabilities

There were no contingent assets or contingent liabilities relating to the Group at the reporting date.

24. Related party transactions

(A) Group and subsidiary transactions

The Group is party to the following transactions with Telstra, who holds a 30% interest in Project Sunshine I Pty Limited. All transactions are entered into at arm’s-length prices:

►	Provision of telecommunication services by Telstra to the Group.
►	Provisions of advertising services to Telstra by the Group.
---	---
►	Provisions for transitional services by Telstra for the Group.
---	---

In addition, certain transactions and balances were entered into in respect of the separation of Sensis Pty Ltd from the control of Telstra. These include the provision of certain services previously provided by Telstra shared services and receipts obtained and payments made in respect of the Share Purchase Agreement entered into between Project Sunshine IV Pty Limited and Telstra for the sale of 100% of the share capital of Sensis Pty Ltd.

31

Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

As at reporting date, the Group had amounts receivable from / payable to Telstra as follows:

	2020<br> ’000		2019<br> ’000
Amounts receivable
Amounts payable		)		)

All values are in US Dollars.

In addition, during the period, the Group paid a fee for corporate and advisory services (and certain costs related thereto) to Platinum Equity Advisors, LLC an affiliate of the Group’s ultimate shareholders. Fees for such services (and related costs) for the period were $8.4 million (US$5.5 million) (2019: $6.9 million (US$5.05 million)).

As at 30 June 2020, the Group had a loan receivable from Telstra, of $90.4 million (30 June 2019: $81.5 million).

Other than the transactions described above and those disclosed elsewhere in this financial report, there have been no other material transactions or balances held with related parties during the period.

(B) Key management compensation

Key management includes the directors and members of senior management. The compensation paid or payable to key management for employee services for the period is shown below:

	2020		2019
	$	’000	$	’000
Salaries and other short-term benefits		9,953		9,300
Post-employment benefits		170		165
Total		10,123		9,465

25. Subsequent events

On 23 February 2021, Project Sunshine I Pty Ltd declared a A$100 million fully franked dividend to its shareholders Sensis Holding Limited and Telstra based on the 70 / 30 shareholder split. This was recognised as an intercompany loan payable from Project Sunshine I Pty Ltd to Sensis Holding Limited on the same terms as pre-existing loans.

On 24 February 2021, Project Sunshine I Pty Ltd executed a deed of debt forgiveness with Telstra to extinguish intercompany receivable amount of A$96.1 million. This transaction was undertaken to facilitate the subsequent disposal of the net assets of the Group related to the non-controlling shareholder, being Telstra Limited.

On 1 March 2021 Thryv Australia Pty Ltd, an Australian proprietary limited company and wholly-owned subsidiary of Thryv Holdings Inc., acquired 100% of the issued share capital of Sensis Holdings Limited and 100% of the issued share capital of Sunshine NewCo Pty Ltd. Sunshine Newco Pty Ltd held Telstra’s 30% interest in Project Sunshine 1 Pty Ltd, a wholly owned subsidiary of the Group. Thryv Holdings Inc paid consideration of approximately A$278 million in cash to acquire all of the issued and outstanding equity interests of (i) Sunshine NewCo Pty Ltd, an Australian proprietary limited company, and its subsidiaries and (ii) Sensis Holding Limited, a private limited company, which is incorporated under the laws of England and Wales, and its subsidiaries.

Other than the aforementioned matter, there has not been any matter or circumstance occurring subsequent to the end of the financial year that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.

32

Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

26. Summary of significant differences between UK GAAP and U.S. GAAP

The consolidated financial statements of the Group have been prepared in accordance with generally accepted accounting policies in the United Kingdom (UK GAAP), which differ in certain significant respects from generally accepted accounting policies in the United States (U.S. GAAP). A description of the differences and their effects on net income and shareholders’ equity are set out below.

Description of differences between UK GAAP and US GAAP

a.	Revenue from contracts with customers

This adjustment converts revenue from UK GAAP to US GAAP. Under UK GAAP, revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty. Under US GAAP, revenue is recognized when or as performance obligations are satisfied by transferring control of a promised good or service to a customer. Control either transfers over time or at a point in time, which affects when revenue is recorded. Judgment might be needed in some circumstances to determine when control transfers. Various methods can be used to measure the progress toward satisfying a performance obligation when revenue is recognized over time. The difference in the timing of revenue recognition results in a $171 thousand decrease and $219 thousand increase to digital revenue for years 2020 and 2019 respectively, and an increase of $604 thousand and a decrease of $276 thousand to consolidated shareholders’ equity for years 2020 and 2019 respectively, and affected the following line items in the financial statements:

	June 30,<br><br> <br>2020
Net income: increase/(decrease)
Turnover		(2,649	)	(5,181	)
Customer compensation		2,478		5,400
		(171	)	219
Shareholders’ equity: increase/(decrease)
Debtors: Due within one year		(5,119	)	(7,637	)
Creditors: Amount falling due within one year		536		666
Deferred income		5,187		6,695
		604		(276	)
b.	Leases
---	---

Under UK GAAP, the Group was not required to capitalise lease balances for its operating leases, except for the onerous lease provisions recognized on office leases the Group had exited. A lessee classifies a lease as either finance or operating. Finance leases are capitalized as assets, with the concurrent recognition of an obligation. Operating leases are treated as annual rental expenses on a straight-line basis. Upon adoption of ASC 842, Leases, under US GAAP, a lessee classifies a lease as either finance or operating. The leases were classified as operating leases under US GAAP. A lease liability and right of use asset are recognised on the balance sheet. The lease liability is measured at the present value of lease payments that are not paid at commencement and discounted using the interest rate implicit in the lease, if that rate can be readily determined, otherwise using the incremental borrowing rate. The right-of-use asset is recognized on the balance sheet and is measured as the initial amount of the lease liability, plus any lease payments and initial direct costs incurred, minus any lease incentives received. Upon adoption of ASC 842 the onerous leases are offset against the right of use asset. Interest and amortisation expenses are recognised for finance leases, while only a single lease expense is recognized for operating leases, typically on a straight-line basis. The difference in the models resulted in a decrease of profit of $1,380 thousand and a $1,224 decrease to consolidated shareholder’s equity in 2020. The accounting treatment under UK GAAP in 2019 did not result in an adjustment upon conversion to US GAAP, as the new Leases standard only became effective in 2020. The following line items in the financial statements were adjusted:


Net income: increase/(decrease)
Facilities expense	(1,421	)
Other operating expenses	42
	(1,380	)
Shareholders’ equity: increase/(decrease)
Tangible Fixed assets	20,671
Debtors: Due after one year	192
Creditors: Amount falling due within one year	(6,373	)
Creditors: Amount falling due after one year	(22,632	)
Provisions for liabilities	6,919
	(1,224	)
33
---

c.	Long service leave and annual leave provision

Under UK GAAP, a liability for annual leave and long service leave benefits is recognised and measured at the present value of expected future payments to be paid. Consideration is given to expected future wage and salary levels, experience of employee departures, and periods of service in the calculation of the present value. Under US GAAP, a liability is recognised and measured at the total amount to be paid without considering future wages or the time-value of money. The adjustments for long service leave amounted to $395 thousand and $471 thousand as increases to profit and shareholders’ equity in 2020 and 2019 respectively. The annual leave adjustment resulted in increases to profit and shareholders’ equity in 2020 and 2019 amounting to $176 thousand and $196 thousand respectively. The following line items in the financial statements were adjusted:

Long service leave	June 30,<br><br> <br>2020		June 30,<br><br> <br>2019
Net income: increase/(decrease)
Labour expense		395		471
		395		471
Shareholders’ equity: increase/(decrease)
Provisions for liabilities		395		471
		395		471
Annual leave provision	June 30,<br><br> <br>2020		June 30,<br><br> <br>2019
---	---	---	---	---
Net income: increase/(decrease)
Labour expense		176		196
		176		196
Shareholders’ equity: increase/(decrease)
Provisions for liabilities		176		196
		176		196
34
---

Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

d.	Goodwill

Under UK GAAP, the Group capitalised transaction costs as part of goodwill acquired from a business combination and amortised it on a straight-line basis over its useful life.

Under US GAAP, transaction costs from business combinations cannot be capitalised. Instead, the costs would have been expensed when incurred. The goodwill balance at both balance sheet dates was already fully amortized; however, there was amortisation expense in the year ended June 30, 2019 of $2,425 thousand that was reversed for US GAAP purposes. There was no impact to the shareholders’ equity for the years ended June 30, 2019 and June 30, 2020.

	June 30, 2019
Net income: increase/(decrease)
Depreciation and amortisation		2,425
		2,425
e.	Make good provision
---	---

The Group is required to restore the leased office premises to their original condition at the end of the respective lease terms. Under UK GAAP, the amount recognised is the best estimate of the expenditure required to settle the present obligation at reporting date. The provision is discounted, using the current discount rate, to reflect the present value of the expenditures where the time value of money is material. Under US GAAP, an asset retirement obligation is discounted using the specific discount rate for the historical period when the provision was first assumed. The discount rate is not updated in subsequent periods. However, where the future expected costs increase, the current discount rate is used for the incremental costs. The impact amounted to a $66 thousand increase in profit and shareholders’ equity in 2020, and a $254 thousand increase in profit and in shareholders’ equity in 2019.

	June 30,<br><br> <br>2020
Net income: increase/(decrease)
Finance costs (net)		66		254
		66		254
Shareholders’ equity: increase/(decrease)
Debtors: Due after one year		(7	)	-
Provisions for liabilities		73		254
		66		254
f.	Capitalised financing costs
---	---

Under UK GAAP, the Group capitalised certain transaction costs related to a modification of the Group’s syndicated facility agreement that occurred in 2017. Under US GAAP, the amendment would have been treated as a debt modification, in which fees paid to third parties would have been expensed instead of capitalised. This adjustment derecognises the costs paid to third parties and reverses the amortisation expense recognised in the periods presented. The adjustment amounted to $450 thousand and $271 thousand for 2020 and 2019 respectively as increases to profit, and $99 thousand and $549 thousand adjustments as increases in consolidated shareholders’ equity for 2020 and 2019.


Net income: increase/(decrease)
Finance costs (net)	450	271
	450	271
Shareholders’ equity: increase/(decrease)
Creditors: Amount falling due after one year	99	549
	99	549
35
---

Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

g.	Telstra loan

Under UK GAAP, a receivable from a shareholder is recognised if the Group has a contractual right to receive cash or another financial asset. However, under US GAAP, public companies are required to record notes or other receivables from a parent or another affiliate as contra-equity. This adjustment reclasses the shareholder loan and associated accrued interest receivable from an asset to contra-equity. The adjustment amounted to $8,094 thousand and $7,911 thousand as decreases in profit for 2020 and 2019 respectively for the income statement, and $90,369 thousand and $81,447 thousand in decreases in consolidated shareholders’ equity for 2020 and 2019 respectively.

	June 30,<br><br> <br>2020
Net income: increase/(decrease)
Finance costs (net)		(8,094	)	(7,911	)
		(8,094	)	(7,911	)
Shareholders’ equity: increase/(decrease)
Debtors: Due after one year		(90,369	)	(81,447	)
		(90,369	)	(81,447	)
h.	Income taxes<br><br> <br><br> The tax effects of the adjustments described above is calculated as an adjustment to consolidated net income and shareholder’s equity.
---	---
i.	Non-controlling interest
---	---

Non-controlling interest (NCI) is adjusted by a 30% allocation of the income statement impact to Telstra.

Significant adjustments to consolidated net income

The significant adjustments to consolidated net income for the twelve months ended 30 June 2020 and 2019 which would be required if U.S. GAAP have been applied, instead of UK GAAP, in the consolidated financial statements are set out below:


Net income according to the consolidated income statement prepared under UK GAAP
U.S. GAAP adjustments — increase/(decrease) due to:
Digital revenue timing of recognition	a	)
Leases	b	)
Long service leave	c
Annual leave	c
Reverse goodwill amortisation	d
Capitalised financing costs	e
Telstra loan	f	)	)
Make good provision	g
Income Taxes	h
		)	)
Non-controlling interest	i	)	)
Net income in accordance with U.S. GAAP attributable to the Equity shareholders of the Company

All values are in US Dollars.

36

Sensis Holding Limited

Notes to the Financial Statements

For the year ended 30 June 2020

Significant adjustments to consolidated shareholders’ equity

The significant adjustments to consolidated shareholders’ equity as of 30 June 2020 and 2019 which would be required if U.S. GAAP have been applied, instead of UK GAAP, in the consolidated financial statements are set out below:


Shareholders’ equity according to the consolidated balance sheet prepared under UK GAAP
U.S. GAAP adjustments — increase/(decrease) due to:
Digital revenue timing of recognition	a		)
Leases	b	)
Long service leave	c
Annual leave	c
Reverse amortisation of goodwill	d
Capitalised financing costs	e
Telstra loan	f	)	)
Make good provision	g
Income Taxes	h
		)	)
Non-controlling interest	i	)	)
Shareholders’ equity in accordance with U.S. GAAP		)	)

All values are in US Dollars.

Significant adjustments to consolidated statement of cash flows

No significant adjustments were required to the consolidated statement of cash flow if U.S. GAAP had been applied instead of UK GAAP, with the exception of the following:

•	Interest paid being classified as a financing activity under UK GAAP and as an operating activity under U.S. GAAP, amounting to $5,239 thousand and $17,121 thousand for the years ended June 30, 2020 and June 30, 2019 respectively.
•	Loan advances to shareholders being classified as an investing activity under UK GAAP and as a financing activity under U.S. GAAP, amounting to $900 thousand for the year ended June 30, 2020 (June 30, 2019: nil).
---	---
37
---

Exhibit 99.2

Sensis Holding Limited<br><br> <br><br><br> <br>Interim condensed financial report<br><br> <br>for the half year ended 31 December 2020<br><br> <br>Registered number: 0987242

Sensis Holding Limited

Unaudited Consolidated Income Statement

For the six months ended 31 December 2020


Turnover
Cost of printing and digital advertising	)	)
Labour expense	)	)
Service contracts and other agreements	)	)
Information technology costs	)	)
Facilities expense	)	)
Customer compensation	)	)
Promotion and advertising	)	)
Bad debts/recovery costs	)	)
Other operating expenses	)	)
Profit before interest, tax, depreciation and amortisation
Depreciation and amortisation	)	)
Profit before interest and tax
Other income	)
Finance income/(cost) (net)		)
Profit on ordinary activities before taxation
Tax on profit on ordinary activities	)	)
(Loss) / Profit for the period	)
(Loss) / Profit for the period attributable to:
Non-controlling interest
Equity shareholders of the Company	)
	)

All values are in US Dollars.

2

Sensis Holding Limited

Unaudited Consolidated Statement of Comprehensive Income

For the six months ended 31 December 2020

	2020<br> ’000		2019<br> ’000
(Loss) / Profit for the financial period		)
Other comprehensive income
Total other comprehensive income
Total comprehensive (loss) / income		)
Total comprehensive income for the period attributable to:
Non-controlling interest
Equity shareholders of the Company		)
		)

All values are in US Dollars.

3

Sensis Holding Limited

Unaudited Consolidated Balance Sheet

As at 31 December 2020


Fixed assets
Intangible assets
Tangible fixed assets

Current assets
Debtors
– due within one year
– due after one year
Cash at bank and in hand
Stock
Creditors: Amounts falling due within one year	)	)
Deferred income	)	)
Net current assets
Total assets less current liabilities
Creditors: Amounts falling due after more than one year		)
Provisions for liabilities	)	)
Deferred tax liability	)	)
Net assets
Capital and reserves
Called-up share capital
Share Premium
Profit and loss account
Shareholders’ funds
Non-controlling interest
Total capital employed

All values are in US Dollars.

The consolidated financial statements of Sensis Holding Limited were approved by the board of directors and authorised for issue on 13 May 2021.

4

Sensis Holding Limited

Unaudited Consolidated Statement of Changes in Equity

For the six months ended 31 December 2020

	Equity attributable to equity shareholders of the Company
	Called-up share<br> capital<br> ’000	Share Premium<br> ’000	Merger Reserve<br> ’000	Profit and loss account<br> ’000		Sub-total<br> ’000		Non-controlling <br> interest<br> ’000	Total<br> ’000
At 1 July 2019					)
Total comprehensive income
Dividends paid on equity shares
At 31 December 2019					)
At 1 July 2020					)
Total comprehensive (loss) / income					)		)			)
Dividends paid on equity shares
At 31 December 2020					)

All values are in US Dollars.

5

Sensis Holding Limited

Unaudited Consolidated Cash Flow Statement

For the six months ended 31 December 2020


Net cash flows from operating activities	3
Cash flows from investing activities
Payments for capital expenditures		)	)
Net cash flows used in investing activities		)	)
Cash flows from financing activities
Interest paid		)	)
Repayment of borrowings	5	)	)
Settlement of forward exchange contracts		)
Loans to shareholder			)
Net cash flows used in financing activities		)	)
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Reconciliation to cash at bank and in hand:
Cash at bank and in hand
Cash and cash equivalents

All values are in US Dollars.

6

Sensis Holding Limited

Unaudited Condensed notes to the consolidated financial statements

For the six months ended 31 December 2020

Directors’ responsibilities statement

The directors are responsible for preparing the condensed financial statements in accordance with applicable accounting standards. The directors have elected to prepare the condensed financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). In preparing these financial statements, the directors confirm that to the best of their knowledge the condensed set of financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of Sensis Holding Limited.

1. Basis of preparation and accounting policies

The condensed consolidated interim financial statements (the ‘Interim financial report’) comprise the unaudited consolidated results of Sensis Holding Limited and its subsidiaries (collectively, the ‘Group’) for the six months ended 31 December 2020.

This interim financial report:

●	has been prepared in accordance with Financial Reporting Standards 104 “Interim Financial Reporting” (FRS 104) as issued by the Financial Reporting Council;
●	is presented on a condensed basis as permitted by FRS 104 and therefore does not include all disclosures that would otherwise be required for a full financial report and should be read in conjunction with the Group’s annual report for<br> the year ended 30 June 2020;
---	---
●	applies the same accounting policies, presentation and methods of calculation as those followed in the preparation of the Group’s consolidated financial statements for the year ended 30 June 2020, which were prepared in accordance with<br> Financial Reporting Standard 102 (FRS 102) issued by the Financial Reporting Council;
---	---
●	is presented in Australian dollars with values rounded to the nearest $’000 unless otherwise stated;
---	---
●	were approved by the Board of Directors on 13 May 2021.
---	---

Review of the business

The principal activity of the Company was that of a holding company. The principal activity of the Group was the operation of a directories and advertising business, which includes print directories, digital directories, digital display advertising and business information services. The Group operates in two principal areas of activity, being Yellow Pages and White Pages. The Group operates within a single geographical market, being Australia.

During the period, the Group exited one floor of its Melbourne office and two floors in the Liverpool Street property, which resulted in an onerous lease provision being recognised in provision for liabilities of $12.7 million.

Principal risks and uncertainties

The principal risks and uncertainties facing the Group are broadly grouped as competitive/technological risks and financial instrument risks:

►	Competitive/technological risks
►	Financial instrument risks
---	---
►	Cash flow risk
---	---
►	Credit risk
---	---
►	Liquidity risk
---	---
►	Covid-19 risk
---	---

These remain consistent with the principal risks and uncertainties at 30 June 2020 and should be read in conjunction with the disclosure in the Group’s consolidated financial statements for the year end 30 June 2020.

7

Sensis Holding Limited

Unaudited Condensed notes to the consolidated financial statements

For the six months ended 31 December 2020

Going concern

The Group’s financial statements have been prepared on a going concern basis, which contemplates continuity of normal business activities and realisation of assets and settlement of liabilities in the normal course of business. As at 31 December 2020, the Group had a net asset position of $128.4 million and net current assets of $99.4 million.

The Group has sufficient financial resources through parent entity funding. As a consequence, the directors believe that the Group is well placed to manage its business risks successfully despite the expected continued decline in print revenue.

2. Financial instruments

The carrying values and fair values of the Group’s financial assets and financial liabilities are materially the same. The methods and assumptions used to estimate the fair value of financial instruments are as follows:

Cash

The carrying amount is fair value due to the liquid nature of these assets.

Debtors and creditors

Due to the short-term nature of these financial rights and obligations, their carrying amounts are considered reasonable approximations of their fair values.

Interest-bearing liabilities

For interest bearing liabilities fair value is based on discounting expected future cash flows at market rates.

8

Sensis Holding Limited

Unaudited Condensed notes to the consolidated financial statements

For the six months ended 31 December 2020

3. Cash flow statement

Reconciliation of operating (loss) / profit to cash generated by operations:

	Six months ended 31 December
	2020<br> ’000		2019<br> ’000
Net (loss) / profit after tax from total operations		)
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
Depreciation & amortisation expense
Finance costs
Income tax expense
Finance income		)		)
Movement in working capital
Increase in trade and other receivables		)		)
Increase in stocks		)		)
Decrease in other assets
Increase in creditors		)		)
Increase in provisions
Increase in deferred revenue
Decrease in other liabilities		)		)
Interest received
Income tax paid		)		)
Cash generated by operations

All values are in US Dollars.

4. Related party transactions

Transactions with related entities

The Group is party to the following transactions with Telstra Corporation Limited (Telstra), who holds a 30% interest in Project Sunshine I Pty Limited, a subsidiary related party of the Group. All transactions are entered into at arm’s-length prices:

►	Provision of telecommunication services by Telstra to the Group.
►	Provisions of advertising services to Telstra by the Group.
---	---
►	Provisions for transitional services by Telstra for the Group.
---	---

In addition, certain transactions and balances were entered into in respect of the separation of Sensis Pty Ltd, a subsidiary related party of the Group, from the shareholding held by Telstra. These include the provision of certain services previously provided by Telstra shared services and receipts obtained and payments made in respect of the Share Purchase Agreement entered into between Project Sunshine IV Pty Limited and Telstra for the sale of 100% of the share capital of Sensis Pty Ltd.

9

Sensis Holding Limited

Unaudited Condensed notes to the consolidated financial statements

For the six months ended 31 December 2020

As at reporting date, the Group had amounts receivable from / payable to Telstra as follows:

	2020<br> ’000		2019<br> ’000
Amounts receivable
Amounts payable		)		)

All values are in US Dollars.

In addition, during the six months to 31 December 2020, the Group paid a fee for corporate and advisory services (and certain costs related thereto) to Platinum Equity Advisors, LLC an affiliate of the Company’s ultimate shareholders. Fees for such services (and related costs) for the six months to 31 December 2020 were $3.50 million (six months to 31 December 2019: $3.66 million).

As at 31 December 2020, the Group had a loan receivable from Telstra, of $94.7 million (30 June 2020: $90.4 million).

5. Borrowings

During the six months to 31 December 2020, the Group made no drawdowns on the term loan facility (31 December 2019: $2.1 million). During the period Telstra made no drawdowns on the loan facility (31 December 2019: $0.9 million).

Debt repayments during the six months to 31 December 2020 were $15.1 million (31 December 2019: $47.4 million).

6. Subsequent events

On 23 February 2021, Project Sunshine I Pty Ltd declared a A$100 million fully franked dividend to its shareholders Sensis Holding Limited and Telstra Corporation Limited based on the 70 / 30 shareholder split. This was recognised as an intercompany loan payable from Project Sunshine I Pty Ltd to Sensis Holding Limited on the same terms as pre-existing loans.

On 24 February 2021, Project Sunshine I Pty Ltd executed a deed of debt forgiveness with Telstra Limited to extinguish intercompany receivable amount of A$96.1 million. This transaction was undertaken to facilitate the subsequent disposal of the net assets of the Group related to the non-controlling shareholder, being Telstra Limited.

On 1 March 2021 Thryv Australia Pty Ltd, an Australian proprietary limited company and wholly-owned subsidiary of Thryv Holdings Inc., acquired 100% of the issued share capital of Sensis Holdings Limited and 100% of the issued share capital of Sunshine NewCo Pty Ltd. Thryv Holdings Inc paid consideration of approximately A$278 million in cash to acquire all of the issued and outstanding equity interests of (i) Sunshine NewCo Pty Ltd, an Australian proprietary limited company, and its subsidiaries and (ii) Sensis Holding Limited, a private limited company, which is incorporated under the laws of England and Wales, and its subsidiaries.

10

Sensis Holding Limited

Unaudited Condensed notes to the consolidated financial statements

For the six months ended 31 December 2020

7. Summary of significant differences between UK GAAP and U.S. GAAP

Description of differences between UK GAAP and US GAAP

a.	Revenue from contracts with customers

Under UK GAAP, revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty.

Under US GAAP, revenue is recognised when or as performance obligations are satisfied by transferring control of a promised good or service to a customer. Control either transfers over time or at a point in time, which affects when revenue is recorded. Judgment might be needed in some circumstances to determine when control transfers. Various methods can be used to measure the progress toward satisfying a performance obligation when revenue is recognised over time. The difference in the timing of revenue recognition results in an decrease in net income of $65 thousand and $13 thousand at 31 December 2020 and 31 December 2019, respectively, which also resulted in a decrease of $419 thousand and an increase of $604 thousand to consolidated shareholders’ equity at 31 December 2020 and 30 June 2020, respectively.

	December 31,<br><br> <br>2020			December 31,<br><br> <br>2019
Net income: increase/(decrease)
Turnover		(2,640	)		(1,134	)
Customer compensation		2,575			1,121
		(65	)		(13	)
	December 31,<br><br> <br>2020			June 30,<br><br> <br>2020
Shareholders’ equity: increase/(decrease)
Debtors: Due within one year		(11,799	)		(5,119	)
Creditors: Amount falling due within one year		(999	)		536
Deferred income		12,379			5,187
		(419	)		604
b.	Leases
---	---

Under UK GAAP, the Group has classified all leases for which it is the lessee as operating leases on the basis substantially all the risks and rewards incidental to ownership are not transferred. Rentals payable are charged to profit and loss on a straight line basis over the lease term.

Upon adoption of ASC 842, Leases, under US GAAP, lessee classifies a lease as either finance or operating. A lease liability and right of use asset are recognised on the balance sheet. The leases were classified as operating leases under US GAAP. The lease liability is measured at the present value of lease payments that are not paid at commencement and discounted using the interest rate implicit in the lease, if that rate can be readily determined, otherwise using the incremental borrowing rate. The right-of-use asset is recognized on the balance sheet and is measured as the initial amount of the lease liability, plus any lease payments and initial direct costs incurred, minus any lease incentives received. Interest and amortisation expenses are recognised for finance leases,

11

Sensis Holding Limited

Unaudited Condensed notes to the consolidated financial statements

For the six months ended 31 December 2020

while only a single lease expense is recognised for operating leases, typically on a straight-line basis. The difference in the models resulted in an increase to net income of $1,634 thousand for the six months to 31 December 2020 (six months to 31 December 2019: $648 thousand decrease) and an increase to consolidated shareholder’s equity at 31 December 2020 of $1,197 thousand (at 30 June 2020: $1,224 thousand decrease). An impairment expense amounting to $8,648 thousand was recorded during the six months ended 31 December 2020, which is included in the adjustment to facilities expense. The following line items in the financial statements were adjusted:

	December 31,<br><br> <br>2020			December 31,<br><br> <br>2019
Net income: increase/(decrease)
Facilities expense		1,434			(658	)
Other operating expenses		25			10
Finance costs (net)		34			-
Depreciation and amortisation		141			-
		1,634			(648	)
	December 31,<br><br> <br>2020			June 30,<br><br> <br>2020
Shareholders’ equity: increase/(decrease)
Tangible Fixed assets		10,788			20,671
Debtors: Due after one year		236			192
Creditors: Amount falling due within one year		(8,557	)		(6,373	)
Creditors: Amount falling due after one year		(17,869	)		(22,633	)
Provisions for liabilities		16,599			6,919
		1,197			(1,224	)
c.	Long service leave and annual leave provision
---	---

Under UK GAAP, the liabilities for annual leave and long service leave is recognised and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.

Under US GAAP, the liabilities are recognised and measured at the value of the total amount to be paid and are not discounted. The adjustments for long service leave amounted to $357 thousand and $500 thousand as increases to profit in six months to 31 December 2020 and 31 December 2019, respectively and increases shareholders’ equity $357 thousand and $395 thousand at 31 December 2020 and 30 June 2020, respectively. The annual leave adjustment resulted in increases to profit in the six months to 31 December 2020 and 31 December 2019 amounting to $515 thousand and $154 thousand respectively, and increases shareholders’ equity $515 thousand and $176 thousand at 31 December 2020 and 30 June 2020, respectively.

Long service leave	December<br><br> <br>31, 2020		December<br><br> <br>31, 2019
Net income: increase/(decrease)
Labour expense		357		500
		357		500
	December<br><br> <br>31, 2020		June<br><br> <br>30, 2020
Shareholders’ equity: increase/(decrease)
Provisions for liabilities		357		395
		357		395
12
---

Sensis Holding Limited

Unaudited Condensed notes to the consolidated financial statements

For the six months ended 31 December 2020

Annual leave provision	December<br><br> <br>31, 2020		December<br><br> <br>31, 2019
Net income: increase/(decrease)
Labour expense		515		154
		515		154
	December<br><br> <br>31, 2020		June <br><br> 30, 2020
Shareholders’ equity: increase/(decrease)
Provisions for liabilities		515		176
		515		176
d.	Make good provision
---	---

The Group is required to restore the leased premises of its office premises to their original condition at the end of the respective lease terms. Under UK GAAP the amount of the provision to be recognised will be the best estimate of the expenditure required to settle the present obligation at reporting date. The provision is discounted, using the current discount rate, to reflect the present value of the expenditures where the time value of money is material. Make good provision is utilised over the life of the lease.

Under US GAAP an asset retirement obligation is discounted using the specific discount rate for the historical period when the provision was first assumed. The discount rate is not updated in subsequent periods. However, where the future expected costs increase, the current discount rate is used for the incremental costs. The impact amounted to a $7 thousand decrease and a $223 thousand increase in profit in the six months ended 31 December 2020 and 31 December 2019, respectively and a $7 thousand decrease and $66 thousands increase in shareholders’ equity at 31 December 2020 and 30 June 2020, respectively.

	December<br><br> <br>31, 2020			December<br><br> <br>31, 2019
Net income: increase/(decrease)
Finance costs (net)		(7	)		223
		(7	)		223
	December<br><br> <br>31, 2020			June<br><br> <br>30, 2020
Shareholders’ equity: increase/(decrease)
Due after one year		(66	)		(7	)
Provisions for liabilities		59			73
		(7	)		66
e.	Capitalised financing costs
---	---

Under UK GAAP the Group capitalised certain transaction costs related to a modification of the Group’s syndicated facility agreement that occurred in 2017.

Under US GAAP the amendment would have been treated as a debt modification, in which fees paid to third parties would have been expensed instead of capitalised. This adjustment derecognises the costs paid to third parties and reverses the amortisation expense recognised in the periods presented. The adjustment amounted to increases to profit $80 thousand and $495 thousand for the six months ended 31 December 2020 and at 31 December 2019, respectively, and an increase in shareholders’ equity of $19 thousand and $99 thousand at 31 December 2020 and 30 June 2020, respectively.

13

Sensis Holding Limited

Unaudited Condensed notes to the consolidated financial statements

For the six months ended 31 December 2020

	December<br><br> <br>31, 2020		December<br><br> <br>31, 2019
Net income: increase/(decrease)
Finance costs (net)		80		495
		80		495
	December <br><br> 31, 2020		June<br><br> <br>30, 2020
Shareholders’ equity: increase/(decrease)
Creditors: Amount falling due after one year		19		99
		19		99
f.	Telstra loan
---	---

Under UK GAAP, a receivable from a shareholder is recognised if the Group has a contractual right to receive cash or another financial asset. However, under US GAAP, public companies are required to record notes or other receivables from a parent or another affiliate as contra-equity. This adjustment reclasses the shareholder loan and associated accrued interest receivable from an asset to contra-equity. The adjustment amounted to $4,330 thousand and $3,978 thousand as decreases in profit for six months to 31 December 2020 and 31 December 2019, respectively for the income statement, and decreases of $94,698 thousand and $90,369 thousand in consolidated shareholders’ equity at 31 December 2020 and 30 June 2020, respectively.

	December<br><br> <br>31, 2020			December<br><br> <br>31, 2019
Net income: increase/(decrease)
Finance costs (net)		(4,330	)		(3,978	)
		(4,330	)		(3,978	)
Shareholders’ equity: increase/(decrease)	December<br><br> <br>31, 2020			June<br><br> <br>30, 2020
Debtors: Due after one year		(94,698	)		(90,369	)
		(94,698	)		(90,369	)
g.	Financial assets impairment
---	---

Under UK GAAP debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the income statement in ‘Bad debts / recovery costs / doubtful debts.’

Under US GAAP, the Current Expected Credit Loss (“CECL”) model is applied to determine impairments of financial assets. The CECL model requires that all losses are projected over the life of the loan, and require the use of forward and backward-looking information to project losses. The adjustment amounted to a $614 thousand decrease to net income for six months ended 31 December 2020 and $3,207 decrease to shareholders’ equity as at 31 December 2020. No adjustment was required for the period to 31 December 2019 or 30 June 2020.

14

Sensis Holding Limited

Unaudited Condensed notes to the consolidated financial statements

For the six months ended 31 December 2020

	December<br><br> <br>31, 2020
Net income: increase/(decrease)
Doubtful Debts		(614	)
		(614	)
Shareholders’ equity: increase/(decrease)
Provision for Doubtful Debts		(3,207	)
		(3,207	)
h.	Income taxes
---	---

The tax effects of the adjustments described above is calculated as an adjustment to consolidated net income and shareholder’s equity.

i.	Non-controlling interest

Non-controlling interest (NCI) is adjusted by a 30% allocation of the income statement impact to Telstra.

15

Sensis Holding Limited

Unaudited Condensed notes to the consolidated financial statements

For the six months ended 31 December 2020

Significant adjustments to consolidated net income

The significant adjustments to consolidated net income for the six months ended 31 December 2020 and 2019 which would be required if U.S. GAAP had been applied, instead of UK GAAP, in the consolidated financial statements are set out below:


Net income according to the consolidated income statement prepared under UK GAAP		)
U.S. GAAP adjustments — increase/(decrease) due to:
Digital revenue timing of recognition	a	)	)
Leases	b		)
Long service leave	c
Annual leave	c
Make good provision	d	)
Capitalised financing costs	e
Telstra loan	f	)	)
Current expected credit loss on trade receivables	g	)
Income taxes	h
		)	)
Non-controlling interest	i	)	)
Net income in accordance with U.S. GAAP attributable to the Equity shareholders of the Company		)

All values are in US Dollars.

Significant adjustments to consolidated shareholders’ equity

The significant adjustments to consolidated shareholders’ equity as at 31 December 2020 and as at 30 June 2020 which would be required if U.S. GAAP had been applied, instead of UK GAAP, in the consolidated financial statements are set out below:


Shareholders’ equity according to the consolidated balance sheet prepared under UK GAAP
U.S. GAAP adjustments — increase/(decrease) due to:
Digital revenue timing of recognition	a	)
Leases	b		)
Long service leave	c
Annual leave	c
Make good provision	d	)
Capitalised financing costs	e
Telstra loan	f	)	)
Current expected credit loss on trade receivables	g	)
Income taxes	h
		)	)
Non-controlling interest	i	)	)
Shareholders’ equity in accordance with U.S. GAAP		)	)

All values are in US Dollars.

Significant adjustments to consolidated statement of cash flows

No significant adjustments were required to the consolidated statement of cash flow if U.S. GAAP had been applied instead of UK GAAP, with the exception of interest paid being classified as a financing activity under UK GAAP and as an operating activity under U.S. GAAP, amounting to $463 thousand and $3,582 thousand for the six months ended December 31, 2020 and December 31, 2019 respectively.

16

Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Introduction

The following unaudited pro forma condensed combined financial information gives effect to the acquisition (the “Acquisition”) of Sensis Holding Limited (“the Acquiree” or “Sensis”) by Thryv Holdings, Inc. (“the Company” or “the Acquirer”) and gives effect to the settlement of the Company’s senior term loan, the new term loan credit agreement entered into, and amendment of the asset-based lending facility. The unaudited pro forma condensed combined financial information consists of the pro forma combined statements of operations for the three months ended March 31, 2021 and for the year ended December 31, 2020.

Under the terms and subject to the conditions set forth in the Purchase Agreement, at closing, Thryv acquired, directly or indirectly, all of the issued and outstanding shares of Sensis as of March 1, 2021. As a result, Thryv will account for the Acquisition of Sensis using the acquisition method of accounting. Accordingly, Sensis’s tangible and identifiable intangible assets acquired and liabilities assumed will be recorded at fair value as of March 1, 2021, with the excess of the purchase consideration over the fair value of Sensis’s net assets recorded as goodwill. The fair values of property, plant and equipment and intangible and other assets acquired and liabilities assumed, have been prepared on a preliminary basis with information currently available. Management is still reviewing the characteristics and assumptions related to Sensis’s assets acquired and liabilities assumed. Estimates and assumptions are subject to change upon finalization of these preliminary valuations. The completion of the valuation work could result in significantly different depreciation and amortization expenses and balance sheet measurement.

The unaudited pro forma condensed combined statements of operations have been prepared to give effect to the Acquisition as if it had been completed on January 1, 2020. As the transaction has been reflected in the historical balance sheet of the Company as of March 31, 2021, a pro forma balance sheet has not been presented. The unaudited pro forma condensed combined financial statements are based on the historical audited and unaudited consolidated results of operations of the Company and Sensis. The unaudited pro forma condensed combined financial statements should be read in conjunction with the following:

•	The accompanying notes to the unaudited pro forma condensed combined financial information;
•	The Company’s historical unaudited consolidated financial statements and notes thereto contained in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2021;
---	---
•	The Company’s historical audited consolidated financial statements and notes thereto contained in the Company’s Form 10-K Report for the year ended December 31, 2020;
---	---
•	The audited consolidated financial statements and notes thereto of Sensis as of and for the years ended June 30, 2020 and 2019 included in this Current Report on Form 8-K/A (the “Form 8-K/A”); and
---	---
•	The unaudited consolidated financial statements and notes thereto of Sensis as of and for the six-months ended December 31, 2020 and 2019 included in the Form 8-K/A.
---	---

The unaudited pro forma condensed combined financial statements were prepared in accordance with Article 11 of SEC Regulation S-X using the assumptions set forth in the notes to the unaudited pro forma condensed combined financial statements. The pro forma adjustments reflecting completion of the Acquisition are based upon the acquisition method of accounting in accordance with U.S. GAAP and upon the assumptions set forth in the notes to the unaudited pro forma condensed combined financial statements.

The unaudited pro forma condensed combined financial statements are presented to reflect the Acquisition and do not represent what the combined Company’s results of operations would have been had the Acquisition occurred on the date noted above, nor do they project the results of operations of Thryv following the Acquisition. The unaudited pro forma condensed combined financial statements are intended to provide information about the impact of the Acquisition as if it had been consummated earlier. The pro forma adjustments are based on available information and certain assumptions that management believes are factually supportable and are expected to have a continuing impact on Thryv’s results of operations, with the exception of certain non-recurring charges to be incurred in connection with the Acquisition.

The pro forma adjustments included in this unaudited pro forma condensed combined financial information are subject to modification as additional information becomes available and as additional analyses are performed depending on changes in interest rates, changes in foreign currency rates, and the final fair value determination of the assets acquired and liabilities assumed. The final allocation of the total purchase accounting will be determined after the completion of thorough analyses to determine the fair value of Sensis’s tangible and identifiable intangible assets acquired and liabilities assumed as of the Acquisition date.

THRYV HOLDINGS, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2021

(U.S. Dollars In Thousands, Except Per Share Amounts)

				Notes 2 and 4			Note 5
	Historical<br><br> <br>Thryv			Historical Adjusted<br><br> <br>Sensis			Transaction Adjustments			Notes			Pro Forma
Revenue		280,606			30,207			7,939			5(a	)		318,752
Cost of services		98,160			13,609			2,359			5(b	)		114,128
Gross Profit		182,446			16,598			5,580						204,624
Operating expenses:
Sales and marketing		76,540			4,360			755			5(b	)		81,655
General and administrative		41,279			7,366			1,277			5(b	)		49,922
Impairment charges		-			-			-						-
Total operating expenses		117,819			11,726			2,032						131,577
Operating income		64,627			4,872			3,548						73,047
Other income (expense):
Interest expense		(11,607	)		(2,155	)		3,768			5(c	)		(9,994	)
Interest expense, related party		(4,065	)		-			(2,267	)		5(c	)		(6,332	)
Other components of net periodic pension cost		453			-			-						453
Other income (expense)		(1,093	)		3,713			-						2,620
Income before benefit (provision) for income taxes		48,315			6,430			5,049						59,794
Benefit (provision) for income taxes		(11,809	)		(1,108	)		(1,545	)		5(d	)		(14,462	)
Net income		36,506			5,322			3,504						45,332
Net income per common share:
Basic	$	1.10											$	1.37
Diluted	$	1.07											$	1.33
Weighted-average shares used in computing basic and diluted net income per common share:
Basic		33,108,422												33,108,422
Diluted		34,013,480												34,013,480

See accompanying Notes to the Unaudited Pro Forma Condensed Combined Financial Information.

THRYV HOLDINGS, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2020

(U.S. Dollars In Thousands, Except Per Share Amounts)

				Notes 2 and 4			Note 5
	Historical<br><br> <br>Thryv			Historical Adjusted<br><br> <br>Sensis			Transaction Adjustments			Notes			Pro Forma
Revenue		1,109,435			220,558			(28,945	)		5(a	)		1,301,048
Cost of services		440,433			61,185			14,254			5(b	)		515,872
Gross Profit		669,002			159,373			(43,199	)					785,176
Operating expenses:
Sales and marketing		315,390			34,577			8,056			5(b	)		358,023
General and administrative		176,688			58,180			14,814			5(b	)		249,682
Impairment charges		24,911			5,410			-						30,321
Total operating expenses		516,989			98,167			22,870						638,026
Operating income		152,013			61,206			(66,069	)					147,150
Other income (expense):
Interest expense		(51,537	)		(4,578	)		11,621			5(c	)		(44,494	)
Interest expense, related party		(17,002	)		-			(10,089	)		5(c	)		(27,091	)
Other components of net periodic pension cost		(42,236	)		-			-						(42,236	)
Other income (expense)		-			2,534			-						2,534
Income before benefit (provision) for income taxes		41,238			59,162			(64,537	)					35,863
Benefit (provision) for income taxes		107,983			(19,670	)		19,237			5(d	)		107,550
Net income		149,221			39,492			(45,300	)					143,413
Net income per common share:
Basic	$	4.73											$	4.55
Diluted	$	4.42											$	4.24
Weighted-average shares used in computing basic and diluted net income per common share:
Basic		31,522,845												31,522,845
Diluted		33,795,594												33,795,594

See accompanying Notes to the Unaudited Pro Forma Condensed Combined Financial Information.

NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Note 1 - Description of Acquisition

On March 1, 2021, Thryv completed its previously announced Acquisition of Sensis to acquire all of the issued and outstanding shares of Sensis. In order to finance the Acquisition, the Company (as original guarantor and original borrower) entered into a term loan agreement of $700 million and an agreement to amend the ABL Facility. Proceeds from the new term loan agreement were used to finance the Acquisition, refinance in full Thryv’s existing term loan, and pay fees and expenses related to the Acquisition and related financing. For the three months ending March 31, 2021, Thryv recognized $10.5 million in transaction costs attributable to the Acquisition, which are nonrecurring in nature. Total consideration transferred, subject to customary adjustments for working capital, was cash of $215 million US dollars (USD).

The unaudited pro forma condensed combined financial information includes various assumptions, including those related to the preliminary purchase price allocation of the assets acquired and liabilities assumed of Sensis based on Thryv management’s best estimate of fair value. The final purchase price allocation may vary based on final valuations and analyses of fair value of the acquired assets and assumed liabilities. Accordingly, the pro forma adjustments are preliminary and have been made solely for illustrative purposes.

The following table summarizes the consideration transferred and the preliminary purchase price of the fair values of the Sensis assets acquired and liabilities assumed at the Acquisition Date (in thousands).

Total cash consideration	$	214,984
Total purchase consideration, as allocated below:	$	214,984
Cash and cash equivalents	$	40,794
Accounts receivable and other current assets		88,529
Other assets		11,801
Fixed assets and capitalized software		40,957
Intangible assets:
Client relationships (useful life 3.5 years)		101,839
Trademarks (useful life 3.5 years)		24,877
Accounts payable		(31,163	)
Accrued liabilities		(39,654	)
Contract liabilities		(27,075	)
Other current liabilities		(11,641	)
Deferred tax liabilities		(40,497	)
Other liabilities		(15,505	)
Total identifiable net assets	$	143,262
Goodwill		71,722
Total net assets acquired	$	214,984

Note 2 - Basis of Presentation

The unaudited pro forma condensed combined financial statements are based on the historical consolidated financial statements of Thryv and Sensis as adjusted to give pro forma effect to the Acquisition. Thryv’s fiscal year-end is December 31, 2020, whereas Sensis’s fiscal year-end is June 30, 2020. Thryv’s historical consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. (U.S. GAAP) and are presented in USD. The historical financial statements of Sensis have been prepared in accordance with generally accepted accounting principles in the U.K. (U.K. GAAP) and are presented in AUD. The unaudited pro forma condensed combined financial statements as of March 31, 2021, and for the year ended December 31, 2020, have been prepared using calculated historical results of Sensis (“Historical Adjusted Sensis”) (see Note 4).

As the transaction occurred on March 1, 2021, Thryv accounted for all Sensis transactions as of that date and has consolidated Sensis financial results for the month of March. Sensis results for the months of January and February have been reflected in the Sensis unaudited historical adjusted statement of operations for the two months ended February 28, 2021 (see Note 4). In order to calculate the historical adjusted results for Sensis in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020, the interim six months ended December 31, 2019 historical results have been deducted from the twelve months ended June 30, 2020, which produced the six months ended June 30, 2020, with the six months ended December 31, 2020 then added to this six month period to calculate the financial results for the twelve month period ended December 31, 2020 for Sensis.

The historical adjusted results used in the preparation of the unaudited pro forma condensed combined financial statements includes adjustments and reclassifications to convert the statements of operations of Sensis from U.K. GAAP to U.S. GAAP and to translate the financial statements from Australian dollars to U.S. dollars (see Note 4).

The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” Release No. 33-10786 replaces the existing pro forma adjustment criteria with simplified requirements to depict the accounting for the transaction (“Transaction Accounting Adjustments”) and present the reasonably estimable synergies and other transaction effects that have occurred or reasonably expected to occur (“Management’s Adjustments”). Thryv has elected not to present Management’s Adjustments and has only presented Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information. The pro forma adjustments are preliminary and based on estimates of the fair value and useful lives of the assets acquired and liabilities assumed and have been prepared by Thryv management to illustrate the estimated effect of the Acquisition and certain other adjustments. The unaudited pro forma condensed combined financial statements of operations give effect to the Acquisition of Sensis as if it had occurred on January 1, 2020.

Note 3 - Significant Accounting Policies

The accounting policies under U.S. GAAP used in the preparation of the unaudited pro forma condensed combined financial statements are those set forth in Thryv’s financial statements included in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, and Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

The accounting policies of Sensis under U.K. GAAP are as described in Note 2 to its historical consolidated financial statements which have been included in this Form 8-K/A. The conversion of the Sensis historical consolidated financial statements from U.K. GAAP to U.S. GAAP, including the impact of conforming to U.S. GAAP accounting policies as applied by Thryv, and the translation from Australian dollar amounts into U.S. dollars is discussed further in Note 4 below.

Note 4 – Adjustments to Sensis Historical Financial Statements to Conform to U.S. GAAP

The historical financial statements of Sensis have been prepared in accordance with U.K. GAAP, which differs in certain material respects from U.S. GAAP. In order to prepare unaudited pro forma condensed combined financial statements, the historical financial statements of Sensis have been adjusted to reflect a U.S. GAAP basis of accounting.

SENSIS HOLDING LIMITED

UNAUDITED HISTORICAL ADJUSTED STATEMENT OF OPERATIONS

TWO MONTHS ENDED FEBRUARY 28, 2021

(In Thousands U.S. Dollars (“USD”) and Australian Dollars (“AUD”))

				Notes 2 and 4						Note 6						Note 7
	Historical Sensis			U.K. GAAP to U.S. GAAP Conversion Adjustments			Notes			Reclassification Adjustments			Historical Adjusted Sensis			Historical Adjusted Sensis
	AUD			AUD						AUD			AUD
Turnover	$	49,784		$	(10,714	)		4(a	)	$	(39,070	)	$	-
Revenue		-			-						39,070			39,070
Costs of services		-			-						(17,602	)		17,602
Gross Profit											(17,602	)		21,468
Cost of printing and digital advertising		(7,926	)		1,463			4(a	)		6,463			-
Labour expense		(11,255	)		(345	)		4(c	)		11,600			-
Service contracts and other agreements		(631	)		-						631			-
Information technology costs		(4,396	)		-						4,396			-
Facilities expense		(432	)		(951	)		4(b	)		1,383			-
Customer compensation		(588	)		588			4(a	)		-			-
Promotion and advertising		(502	)		-						502			-
Bad debts/recovery costs		107			(923	)		4(d	)		816			-
Other operating expenses		(2,169	)		32			4(b	)		2,137			-
Operating expenses:
Sales and marketing		-			-						(5,639	)		5,639
General and administrative		-			-						(9,527	)		9,527
Impairment charges		-			-						-			-
Total operating expenses		-			-						12,762			15,166
Depreciation and amortisation		(4,978	)		138			4(b	)		4,840			-
Operating income		-			-						-			6,302
Other income		4,802			-						(4,802	)		-
Finance costs (net)		(1,816	)		(971	)		4 (b, e	)		2,787			-
Other income (expense):
Interest expense		-			-						(2,787	)		(2,787	)		)
Interest expense, related party		-			-						-			-
Other components of net periodic pension cost		-			-						-			-
Other income (expense)		-			-						4,802			4,802
Income before benefit (provision) for income taxes		-			-						-			8,317
Tax on profit on ordinary activities		(6,022	)		4,589			4 (f	)		1,433			-
Benefit (provision) for income taxes		-			-						(1,433	)		(1,433	)		)
Net income	$	13,978		$	(7,094	)				$	-		$	6,884

All values are in US Dollars.

SENSIS HOLDING LIMITED

UNAUDITED HISTORICAL ADJUSTED STATEMENT OF OPERATIONS

TWELVE MONTHS ENDED DECEMBER 31, 2020

(In Thousands U.S. Dollars (“USD”) and Australian Dollars (“AUD”))

				Notes 2 and 4						Note 6						Note 7
	Historical Sensis			U.K. GAAP to U.S. GAAP Conversion Adjustments			Notes			Reclassification Adjustments			Historical Adjusted Sensis			Historical Adjusted Sensis
	AUD			AUD						AUD			AUD
Turnover	$	323,570		$	(4,155	)		4(a	)	$	(319,415	)	$	-
Revenue		-			-						319,415			319,415
Costs of services		-			-						(88,609	)		88,609
Gross Profit		-			-						(88,609	)		230,806
Cost of printing and digital advertising		(46,993	)		-						46,993			-
Labour expense		(82,594	)		217			4(c	)		82,377			-
Service contracts and other agreements		(6,736	)		-						6,736			-
Information technology costs		(29,158	)		-						29,158			-
Facilities expense		(9,755	)		671			4(b	)		9,084			-
Customer compensation		(3,932	)		3,932			4(a	)		-			-
Promotion and advertising		(3,795	)		-						3,795			-
Bad debts/recovery costs		(2,392	)		(1,882	)		4(d	)		4,274			-
Other operating expenses		(12,026	)		57			4(b	)		11,969			-
Operating expenses:
Sales and marketing		-			-						(50,075	)		50,075
General and administrative		-			-						(84,257	)		84,257
Impairment charges		-			-						(7,835	)		7,835
Total operating expenses		-			-						52,219			142,167
Depreciation and amortisation		(36,531	)		141			4(b	)		36,390			-
Operating income		-			-						-			88,639
Other income		3,670			-						(3,670	)		-
Finance costs (net)		1,782			(8,412	)		4 (b, e	)		6,630			-
Other income (expense):
Interest expense		-			-						(6,630	)		(6,630	)		)
Interest expense, related party		-			-						-			-
Other components of net periodic pension cost		-			-						-			-
Other income (expense)		-			-						3,670			3,670
Income before benefit (provision) for income taxes		-			-						-			85,679
Tax on profit on ordinary activities		(30,859	)		2,373			4 (f	)		28,486			-
Benefit (provision) for income taxes		-			-						(28,486	)		(28,486	)		)
Net income	$	64,251		$	(7,058	)				$	-		$	57,193

All values are in US Dollars.

Summary of significant differences between U.K. GAAP and U.S. GAAP

The consolidated financial statements of Sensis and its subsidiaries have been prepared in accordance with U.K. GAAP, which differs in certain significant respects from U.S. GAAP. A description of the differences and their effects on the unaudited pro forma condensed combined financial statements are set out below (amounts presented in AUD unless specified otherwise):

a.	Revenue from contracts with customers

Under U.K. GAAP, revenue is recognized to the extent that it is probable that the economic benefits will flow to Sensis and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty. Under U.S. GAAP ASC 606, revenue is recognized when or as performance obligations are satisfied by transferring control of a promised good or service to a customer. Control either transfers over time or at a point in time, which affects when revenue is recorded. Judgment may be needed in some circumstances to determine when control transfers. Various methods can be used to measure the progress toward satisfying a performance obligation when revenue is recognized over time. The difference in the timing of revenue recognition results in decreases to revenue of $0.7 million and $4.2 million for the two months ended February 28, 2021, and the year ended December 31, 2020, respectively.

Under U.K. GAAP, Sensis recognized print revenue at a point in time when the directories under a given contract are 60% delivered. Thryv recognizes revenue for print contracts at a point in time when the delivery of the related directories is substantially complete. The difference in the timing of revenue recognition between Thryv and Senses resulted in an adjustment to revenue of $10.0 million and to cost of printing and digital advertising of $1.5 million for the two months ended February 28, 2021. Sensis completed the delivery of all print contracts prior to December 31, 2020, and as such, no adjustment was required for the year ended December 31, 2020.

b.	Leases

Under U.K. GAAP, Sensis recognized all leases as operating leases. As operating leases, the related expenses are treated as annual rental expenses on a straight-line basis, with no obligation recognized on the balance sheet. Under U.S. GAAP, the leases also are classified as operating leases, however, ASC 842 requires that a lease liability and right of use asset are recognised on the balance sheet for such operating leases. Where the related right of use asset has been impaired, the lease cost recognized as expense is calculated as the amortization of the remaining balance of the right of use asset after the impairment and accretion of the lease liability. An impairment expense amounting to $7.8 million was recorded for the year ended December 31, 2020. The difference in the models resulted in a decrease of profit of $0.8 million and an increase of $0.9 million for the two months ended February 28, 2021 and the year ended December 31, 2020, respectively. The following table is a summary of the Sensis line items impacted by the conversion from U.K. GAAP to U.S. GAAP (in $thousands):

Sensis line items impacted	For the two months ended February 28, 2021
Facilities expense		(951	)	671
Other operating expenses		32		57
Depreciation and amortisation		138		141
Finance costs (net)		-		34
Total impact		(781	)	903
c.	Long service leave and annual leave provision
---	---

Under U.K. GAAP, a liability for annual leave and long service leave benefits is recognised and measured at the present value of expected future payments to be paid. Consideration is given to expected future wage and salary levels, experience of employee departures, and periods of service in the calculation of the present value. Under U.S. GAAP, a liability is recognised and measured at the total amount to be paid without considering future wages or the time-value of money. The adjustments for long service leave and annual leave provision resulted in a decrease of $0.3 million to profit for the two months ended February 28, 2021 and an increase of $0.2 million for the year ended December 31, 2020 which is reflected as an adjustment to Labour expense.

d.	Accounts Receivable (CECL)

U.K. GAAP does not have an equivalent new accounting standard that resembles the U.S. GAAP Current Expected Credit Loss (CECL) model. Under U.K. GAAP, receivables (and the related allowances) have been measured using an approach similar to U.S. GAAP ASC 326 prior to the adoption of the CECL model, measured based on specifically identifiable allowances for bad debts. For U.S. GAAP purposes, the CECL model became effective for years beginning on or after January 1, 2020. Therefore, for the year ended December 31, 2020, accounts receivable reserves were determined using a CECL model to determine an equivalent U.S. GAAP value. The adjustment amounted to decreases of $0.9 million and $1.8 million in profit for the two months ended February 28, 2021 and the year ended December 31, 2020 which is reflected as an adjustment to Bad debts/recovery costs.

e.	Shareholder loans

Under U.K. GAAP, a receivable from a shareholder is recognised if the entity has a contractual right to receive cash or another financial asset. However, under U.S. GAAP, public companies are required to record notes or other receivables from a parent or another affiliate as contra-equity. This adjustment reflects the elimination of previously recognized interest income upon reclassification of the related shareholder loan receivable. For pro forma presentation purposes, this adjustment resulted in decreases of $1.0 million and $8.4 million to profit for the two months ended February 28, 2021 and the year ended December 31, 2020, respectively, which is reflected as an adjustment to Finance costs (net).

f.	Income taxes

The tax effects of the adjustments described above, excluding those adjustments related to the conformance with ASC 606, ASC 842 and ASC 326, is calculated as an adjustment to consolidated net income at the statutory rate of 30% for the year ended December 31, 2020 and the two months ended February 28, 2021. As a tax paying entity in Australia, the operating subsidiary of Sensis prepared and filed tax returns on a basis that is materially consistent with US GAAP with respect to ASC 606, ASC 842 and ASC 326 discussed above. Income tax expense was determined for UK GAAP reporting purposes using these amounts determined for Australia tax purposes, and consequently, no material adjustment was required to income tax expense on these above noted adjustments.

Note 5 – Transaction Adjustments

The unaudited pro forma condensed combined financial statements have been adjusted to reflect the following transaction adjustments:

a.	Deferred Revenue Step Down Amortization

Represents the amortization of the step-down in basis of the deferred revenue liabilities from the preliminary purchase price allocation at the closing of the Acquisition on March 1, 2021. The step-down in basis of the deferred revenue is amortized into income over the period over which the related performance obligation is performed, which is estimated to be a period of less than one year. This resulted in a decrease of revenue of $28.9 million for the year ended December 31, 2020. As the full impact of the step-down in the value of the deferred revenue is expected to be realized over a period of less than one year, there is no remaining impact to be reflected in the pro forma statement of operations for the three month period ended March 31, 2021. For the three months ended March 31, 2021, this resulted in an increase of revenue of $7.9 million to reflect the removal of amortization of the deferred revenue step down that is fully amortized prior to January 1, 2021 for pro forma purposes.

Amortization of the deferred revenue step-down is nonrecurring in nature and not anticipated to affect the combined statements of operations beyond twelve months after the acquisition date.

b.	Depreciation and Amortization of Acquired Assets

Represents the elimination of historical depreciation and amortization related to Sensis’ intangible assets and property plant and equipment, and adjustments to incorporate depreciation and amortization for the fair value of the tangible and intangible assets acquired based on preliminary purchase price accounting at the closing of the Acquisition on March 1, 2021. The following table is a summary of detail related to certain intangible and tangible assets acquired, including relevant information used to calculate the pro forma change in amortization and depreciation expense that is included as an adjustment to Costs of services, Sales and marketing, and General and administrative expenses:

Identifiable assets / liabilities
Intangible assets
Trademarks		3.5	1,323		7,766
Customer relationships		3.5	4,861		44,042
Total			6,184		51,808
Tangible assets
Machinery & Equipment		3	1		3
Computer Software		3	2,262		12,123
Total			2,263		12,126
Off-market leases	)	2-4	(314	)	(1,683	)
Total Depreciation and Amortization			8,133		62,251
Removal of Sensis’ historic Depreciation and Amortization			(2,369	)	(26,430	)
Net adjustment			5,764		35,821
Summary of impact
Cost of services			3,097		13,754
Sales and marketing			991		7,773
General and administrative			1,676		14,294
Total			5,764		35,821

All values are in US Dollars.

(1) Fair value has been translated from Australian dollars to U.S. dollars using the exchange rates of 0.7777 as of the acquisition date.

(2) The Company amortizes Trade names and Customer relationships using the income forecast method.

(3) The amortization and depreciation amounts are presented as of February 28, 2021, therefore excludes activity for the month of March, as that activity is already captured in the Company’s Statement of Operations for the three month period then ended.

c.	Interest Expense

Represents the elimination of historical interest expenses as it relates to (1) the Sensis’ debt obligation settled as part of the Acquisition, and (2) debt restructuring for Thryv’s existing term loan, including the term loan with related parties (“Existing Term Loan”) and asset-based lending facility (“ABL Facility”).

Sensis settled all of its debt obligations just prior to closing of the Acquisition, and therefore the Company eliminated all interest expenses related to historical debt, including the Telstra shareholder loan payable. As described in Note 1, Thryv entered into a new Term Loan Credit Agreement (“New Term Loan”) of $700 million on March 1, 2021, as part of the effort to finance the Acquisition of Sensis. The proceeds of the New Term Loan are used to pay off in full the Existing Term Loan facility agented by Wilmington Trust, National Association. The New Term Loan matures on March 1, 2026 and borrowings under the New Term Loan will bear interest at a fluctuating rate per annum equal to, at the Company’s option, LIBOR or base rate, in each case, plus an applicable margin per annum equal to (i) 8.50% (for LIBOR loans) and (ii) 7.50% (for base rate loans). The proceeds from the New Term Loan were net of original issue discount costs of $21 million and third-party fees of $4.1 million. In addition, the Company amended the ABL Facility to expand its borrowing capacity and reduce its interest rate per annum from 4% to 3% (for LIBOR loans). Historical interest expenses related to the Existing Term Loan and the original ABL Facility before the amendment were eliminated as part of the pro forma adjustments. Of the aggregate principal outstanding under the New Term Loan, 38.4% was held by related parties who are equity holders of the Company.

Represents pro forma adjustments relating to additional indebtedness incurred in connection with the Acquisition and repayment of existing indebtedness, as follows (in $ thousands):

	For the three months ended<br><br> <br>March 31, 2021
Elimination – historical interest expense		13,762		55,735
Elimination – related party interest expense		4,065		17,002
Interest expense – new term loan ^(1)^		(9,994	)	(44,114	)
Interest expense – new term loan related party		(6,332	)	(27,091	)
Interest expense		1,501		1,532
(1)	Each 0.125% change in assumed interest rates for the new term loan would change pro forma interest expense by $0.9 million.
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d.	Income taxes
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The tax effects of the adjustments described above is calculated as an adjustment to consolidated net income at the estimated blended statutory rate of 30% for the year ended December 31, 2020 and the three months ended March 31, 2021.

Note 6 – Reclassifications

Reclassification of historical Sensis financial statement line items was required as of the two months ended February 28, 2021 and the year ended December 31, 2020 to conform to the expected financial statement line items of the combined company following the Acquisition.

Pro Forma Combined Statement of Operations reclassification adjustments for the two month period ended February 28, 2021 included the following:

•	Reclassification of $39.1 million from Turnover to Revenue;
•	Reclassification of $32.8 million in expenses attributed to Sensis profit before interest and tax to the Thryv financial statement line items as described below:
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				Thryv financial statement line items
---	---	---	---	---	---	---	---	---	---
Sensis line items to reclassify	Historical Sensis<br><br> <br>amounts ^(1)^			Cost of services		Sales and marketing		General and administrative
	(in thousands AUD)
Cost of printing and digital advertising		(6,463	)		3,472		1,112		1,879
Labour expense		(11,600	)		6,231		1,996		3,373
Service contracts and other agreements		(631	)		339		109		183
Information technology costs		(4,396	)		2,361		756		1,279
Facilities expense		(1,383	)		743		238		402
Promotion and advertising		(502	)		270		86		146
Bad debts/recovery costs		(816	)		438		141		237
Other operating expenses		(2,137	)		1,148		368		621
Depreciation and amortisation		(4,840	)		2,600		833		1,407
Total reclassification		(32,768	)		17,602		5,639		9,527
(1)	Represents historic Sensis results and the impact of any GAAP conversion adjustments.
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•	Reclassification of $4.8 million from Other income to Other income (expense);
•	Reclassification of $2.8 million from Finance costs (net) to Interest expense; and
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•	Reclassification of $1.4 million from Tax on profit on ordinary activities to Benefit (provision) for income taxes.
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Pro Forma Combined Statement of Operations reclassification adjustments for the year ended December 31, 2020 included the following:

•	Reclassification of $319.4 million from Turnover to Revenue;
•	Reclassification of $230.8 million in expenses attributed to Sensis profit before interest and tax to the Thryv financial statement line items as described below:
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			Thryv financial statement line items
---	---	---	---	---	---	---
Sensis line items to reclassify	Historical Sensis<br><br> <br>amounts ^(1)^		Cost of services	Sales and<br><br> <br>marketing	General and<br><br> <br>administrative	Impairment<br><br> <br>charges
	(in thousands AUD)
Cost of printing and digital advertising	(46,993	)	18,043	10,197	18,753
Labour expense	(82,377	)	31,629	17,875	32,873
Service contracts and other agreements	(6,736	)	2,586	1,462	2,688
Information technology costs	(29,158	)	11,195	6,327	11,636
Facilities expense	(9,084	)	3,488	1,971	3,625
Promotion and advertising	(3,795	)	1,458	823	1,514
Bad debts/recovery costs	(4,274	)	1,641	927	1,706
Other operating expenses	(11,969	)	4,597	2,597	4,775
Depreciation and amortisation	(36,390	)	13,972	7,896	6,687	7,835
Total reclassification	(230,776	)	88,609	50,075	84,257	7,835
(1)	Represents historic Sensis results and the impact of any GAAP conversion adjustments.
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•	Reclassification of $3.7 million from Other income to Other income (expense);
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•	Reclassification of $6.6 million from Finance costs (net) to Interest expense; and
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•	Reclassification of $28.5 million from Tax on profit on ordinary activities to Benefit (provision) for income taxes.
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Note 7 – Foreign Currency Translation

The adjusted historical results have been translated from Australian dollars to U.S. dollars using the average exchange rates of 0.7732 and 0.6905 during the three months ended March 31, 2021 and the year ended December 31, 2020, respectively.