UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark one)


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2009


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 333-131626

DEX MEDIA, INC.

(Exact name of registrant as specified in its charter)

Delaware		20-4059762
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)
1001 Winstead Drive, Cary, N.C.		27513
(Address of principal executive offices)		(Zip Code)

(919) 297-1600


1001 Winstead Drive, Cary, N.C.		27513

(Address of principal executive offices)		(Zip Code)

(919) 297-1600

(Registrant’s telephone number, including area code)

N/A ~~(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)~~

(Former Name, Former Address and Former

Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No þ *

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See ~~definition~~the definitions of “~~accelerated~~large accelerated filer,” ~~large~~ “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer þ Smaller reporting company o (Do not check if a smaller reporting company) ~~Smaller reporting company o~~

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Title of Class		Shares Outstanding at ~~July~~October 15, 2009
Common Stock, par value $0.01 per share		1,000

THE REGISTRANT IS A WHOLLY-OWNED SUBSIDIARY OF R.H. DONNELLEY CORPORATION. THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.

* The Registrant is a voluntary filer and as such is not required to file reports by Section 13 or 15(d) of the Securities Exchange Act of 1934 (“Exchange Act”); however, the Registrant has voluntarily filed all Exchange Act reports for the preceding 12 months.

DEX MEDIA, INC.
INDEX TO FORM 10-Q

	PAGE
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets at June 30, 2009 and December 31, 2008	3
Condensed Consolidated Balance Sheets at September 30, 2009 and December 31, 2008		3
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, 2009 and 2008	4
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2009 and 2008		4
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2009 and 2008	5
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2009 and 2008		5
Notes to Condensed Consolidated Financial Statements	6	6
Item 2. Management’s Narrative Analysis of Results of Operations*	24	25
Item 3. Quantitative and Qualitative Disclosures About Market Risk**	37	39
Item 4. Controls and Procedures	37	39
PART II: OTHER INFORMATION
Item 1. Legal Proceedings	38	40
Item 1A. Risk Factors	38	40
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds***	41	40
Item 3. Defaults Upon Senior Securities***	41	40
Item 4. Submission of Matters to a Vote of Security Holders***	41	41
Item 5. Other Information	41	41
Item 6. Exhibits	42	41
SIGNATURES	43	42
EX-31.1
EX-31.2
EX-32.1


*		Pursuant to General Instruction H(2)(a) of Form 10-Q: (i) the information called for by Item 2 of Part I, Management’s Discussion and Analysis of Financial Condition and Results of Operations has been omitted and (ii) the registrant is providing a Management’s Narrative Analysis of Results of Operations.

**		Omitted pursuant to General Instruction H(2)(c) of Form 10-Q.

***		Omitted pursuant to General Instruction H(2)(b) of Form 10-Q.

PART I. FINANCIAL INFORMATION


Item I.		Financial Statements

Dex Media, Inc. and Subsidiaries
Debtor and Debtor-In-Possession as of May 28, 2009

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except share data)	~~June~~September 30, 2009			December 31, 2008
Assets
Current Assets
Cash and cash equivalents	$	97221,~~237~~403		$	112,362
Accounts receivable
Billed		~~158~~146,~~317~~194			188,090
Unbilled		~~438~~373,~~301~~340			461,750
Allowance for doubtful accounts and sales claims		(2932,~~316~~294	)		(34,166	)
Net accounts receivable		~~567~~487,~~302~~240			615,674
Intercompany loan receivable		125,000			—
Due from parent, net		2315,~~391~~134			—
Deferred directory costs		~~105~~88,~~478~~759			107,392
Short-term deferred income taxes, net		~~6,526~~—			25,225
Prepaid expenses and other current assets		2735,~~840~~154			52,452
Total current assets		~~952~~972,~~774~~690			913,105
Fixed assets and computer software, net		9088,~~491~~267			96,609
Other non-current assets		5652,~~414~~455			64,930
Intangible assets, net		7,~~319~~226,~~755~~973			7,505,200
Total assets	$	8,~~419~~340,~~434~~385		$	8,579,844
Liabilities and Shareholder’s Equity
Current Liabilities Not Subject to Compromise
Accounts payable and accrued liabilities	$	65109,~~189~~154		$	99,688
Due to parent, net		—			73,391
Accrued interest		1,~~793~~800			69,513
Deferred directory revenues		~~612~~526,~~583~~395			679,983
Current portion of long-term debt		~~117~~127,~~929~~768			99,625
Total current liabilities not subject to compromise		~~797~~765,~~494~~117			1,022,200
Long-term debt		2,~~066~~034,~~845~~134			4,562,206
Deferred income taxes, net		1,~~041~~036,~~687~~748			1,017,445
Intercompany debt		—			300,000
Other non-current liabilities		87,~~777~~463			184,402
Total liabilities not subject to compromise		3,~~993~~923,~~803~~462			7,086,253
Liabilities subject to compromise		2,~~954~~938,~~661~~223			—
Commitments and contingencies
Shareholder’s Equity
Common stock, par value $.01 per share, 1,000 shares authorized, issued and outstanding		—			—
Additional paid-in capital		3,496,~~258~~257			3,580,838
Accumulated deficit		(1,~~992~~988,~~333~~633	)		(2,040,807	)
Accumulated other comprehensive loss		(3228,~~955~~924	)		(46,440	)
Total shareholder’s equity		1,~~470~~478,~~970~~700			1,493,591
Total liabilities and shareholder’s equity	$	8,~~419~~340,~~434~~385		$	8,579,844

The accompanying notes are an integral part of the condensed consolidated financial statements.

Dex Media, Inc. and Subsidiaries
Debtor and Debtor-In-Possession as of May 28, 2009

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)

	Three months ended						~~Six~~Nine months ended
	June 30,						June 30,
	September 30,						September 30,
(in thousands)	2009			2008			2009			2008
Net revenues	$	~~342~~318,~~043~~588		$	~~400~~391,~~817~~201		$	~~704~~1,~~815~~023,403		$	~~807~~1,~~615~~198,817
Expenses:
Production and distribution expenses (exclusive of depreciation and amortization shown separately below)		48,~~716~~104			5358,~~527~~474			~~101~~149,~~061~~164			~~115~~173,~~141~~615
Selling and support expenses		9789,~~989~~157			99102,~~346~~462			~~191~~280,~~031~~188			~~201~~304,~~841~~303
General and administrative expenses		1512,~~571~~470			1220,~~243~~600			3143,~~075~~545			2545,~~233~~833
Depreciation and amortization		99,~~259~~416			8490,~~367~~036			~~198~~298,~~627~~044			~~168~~258,~~591~~627
Impairment charges		—			~~422,209~~—			—			2,557,719
Total expenses		~~261~~249,~~535~~147			~~671~~271,~~692~~572			~~521~~770,~~794~~941			3,~~068~~340,~~525~~097
Curtailment gain, net		~~13,461~~—			—			13,461			—
Operating income (loss)		9369,~~969~~441			~~(270~~119,~~875~~629	)		~~196~~265,~~482~~923			(2,~~260~~141,~~910~~280	)
Interest expense, net		(7735,~~354~~123	)		(~~104~~91,~~692~~479	)		(~~170~~205,~~075~~198	)		(~~194~~285,~~499~~978	)
Income (loss) before reorganization items, net and income taxes		1634,~~615~~318			~~(375~~28,~~567~~150	)		2660,~~407~~725			(2,~~455~~427,~~409~~258	)
Reorganization items, net		58(4,~~465~~491	)		—			5853,~~465~~974			—
Income (loss) before income taxes		7529,~~080~~827			~~(375~~28,~~567~~150	)		84114,~~872~~699			(2,~~455~~427,~~409~~258	)
(Provision) benefit for income taxes		(3226,~~123~~127	)		~~128~~(21,~~719~~970	)		(3662,~~398~~525	)		~~891~~869,~~340~~369
Net income (loss)	$	423,~~957~~700		$	~~(246~~6,~~848~~180	)	$	4852,~~474~~174		$	(1,~~564~~557,~~069~~889	)
Comprehensive Income (Loss)
Net income (loss)	$	423,~~957~~700		$	~~(246~~6,~~848~~180	)	$	4852,~~474~~174		$	(1,~~564~~557,~~069~~889	)
Unrealized (loss) gain on interest rate swaps, net of tax		(4,212	)		27,308			(3,884	)		9,140
Unrealized gain (loss) on interest rate swaps, net of tax		4,120			(4,422	)		236			4,716
Benefit plans adjustment, net of tax		~~17,368~~(89	)		(1	)		17,~~369~~280			(12	)
Comprehensive income (loss)	$	567,~~113~~731		$	~~(219~~1,~~541~~757	)	$	6169,~~959~~690		$	(1,~~554~~553,~~930~~175	)

The accompanying notes are an integral part of the condensed consolidated financial statements.

Dex Media, Inc. and Subsidiaries
Debtor and Debtor-In-Possession as of May 28, 2009

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Six months ended June 30,
	Nine months ended September 30,
(in thousands)	2009			2008	~~2008~~
Cash Flows from Operating Activities
Net income (loss)	$	4852,~~474~~174			$	(1,~~564~~557,~~069~~889	)
Reconciliation of net income (loss) to net cash provided by operating activities:
Impairment charges		—				2,557,719
Loss on extinguishment of debt		—				2,142
Curtailment gain, net		(13,461	)			—
Depreciation and amortization		~~198~~298,~~627~~044				~~168~~258,~~591~~627
Deferred income tax provision (benefit)		3662,~~318~~285				(~~891~~869,~~388~~428	)
Provision for bad debts		4968,~~632~~508				4164,~~597~~463
Stock-based compensation expense		45,~~084~~431				812,~~324~~128
Change in fair value of interest rate swaps		16,~~784~~860				138,~~007~~030
Amortization of deferred financing costs		57,~~298~~675				24,~~470~~924
Amortization of debt fair value adjustment		(7,659	)			(813,~~620~~081	)
Accretion on discount notes		(623	)			3046,~~621~~427
Other non-cash items, net		10,~~335~~249				(48,~~378~~571	)
Non-cash reorganization items		(8687,~~822~~614	)			—
Changes in assets and liabilities:
Increase in accounts receivable		(1,259	)			(93,472	)
Decrease (increase) in accounts receivable		59,928				(67,776	)
Decrease in other assets		2738,~~809~~737				416,~~494~~318
Increase (decrease) in accounts payable and accrued liabilities		11,~~434~~800				(2444,~~712~~801	)
Increase (decrease) in amounts due to parent		1825,~~879~~750				(3213,~~413~~918	)
(Decrease) increase in deferred directory revenues		(67,400	)			33,553
(Decrease) in deferred directory revenues		(152,399	)			(34,419	)
Decrease in other non-current liabilities		(53,759	)			(6,234	)
(Decrease) in other non-current liabilities		(54,758	)			(1,170	)
Net cash provided by operating activities		~~181~~330,~~691~~927				~~237~~359,~~232~~725
Cash Flows from Investing Activities
Intercompany loan		(125,000	)			—
Additions to fixed assets and computer software		(611,~~729~~130	)			(1935,~~211~~314	)
Net cash used in investing activities		(~~131~~136,~~729~~130	)			(1935,~~211~~314	)
Cash Flows from Financing Activities
Credit facilities borrowings, net of costs		—				1,035,~~512~~103
Credit facilities repayments		(~~153~~176,~~915~~787	)			(1,053,492	)
Revolver borrowings		187,000				~~304~~321,~~400~~900
Revolver repayments		(9,811	)			(~~327~~345,~~450~~950	)
(Decrease) increase in checks not yet presented for payment		(31,~~781~~578	)			13,~~398~~717
Contribution to parent		(84,580	)			(~~125~~258,~~400~~100	)
Net cash used in financing activities		(6585,~~087~~756	)			(~~165~~296,~~032~~822	)
(Decrease) increase in cash and cash equivalents		(15,125	)			52,989
Increase in cash and cash equivalents		109,041				27,589
Cash and cash equivalents, beginning of period		112,362				12,975
Cash and cash equivalents, end of period	$	97221,~~237~~403			$	6540,~~964~~564
Supplemental Information:
Cash paid:
Interest, net	$	~~139~~166,~~712~~946			$	~~148~~237,~~015~~838
Income taxes, net	$	2740			$	272

The accompanying notes are an integral part of the condensed consolidated financial statements.

Dex Media, Inc. and Subsidiaries
Debtor and Debtor-In-Possession as of May 28, 2009

Notes to Condensed Consolidated Financial Statements (Unaudited)
(tabular amounts in thousands)

1. Business and Basis of Presentation

Dex Media, Inc. is a direct wholly-owned subsidiary of R.H. Donnelley Corporation (“RHD” or “parent”). The interim condensed consolidated financial statements of Dex Media, Inc. and its direct and indirect wholly-owned subsidiaries (the “Company,” “Dex Media,” “we,” “us” and “our”) have been prepared in accordance with the instructions to Quarterly Report on Form 10-Q and should be read in conjunction with the financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2008. The interim condensed consolidated financial statements include the accounts of Dex Media, Inc. and its direct and indirect wholly-owned subsidiaries. All intercompany transactions and balances between Dex Media and its subsidiaries have been eliminated. The results of interim periods are not necessarily indicative of results for the full year or any subsequent period. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of financial position, results of operations and cash flows at the dates and for the periods presented have been included.

We are a ~~leader~~directional inmarketing company that helps local businesses by distributing their message to consumers wherever they choose to search, ~~within~~including ~~the~~print, ~~Dex~~online, ~~States~~mobile ~~(defined~~and ~~below)~~voice. Through our Dex® Advantage, customers’ business information is collected and marketed through a single profile and distributed via a variety of local search products. The Dex Advantage spans multiple media platforms for local advertisers including print with the Dex directories, which we co-brand with Qwest, a recognizable brand in the industry, online and mobile devices with dexknows.com®, voice-activated directory search at 1-800-Call-Dex™ and leading search engines and other online sites via DexNet™.

Dex Media is the exclusive publisher of the “official” yellow pages and white pages directories for Qwest Corporation, the local exchange carrier of Qwest Communications International Inc. (“Qwest”), in Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota (collectively, the “Dex East States”) and Arizona, Idaho, Montana, Oregon, Utah, Washington and Wyoming (collectively, the “Dex West States” and together with the Dex East States, the “Dex States”). Dex Media East LLC (“Dex Media East”) operates the directory business in the Dex East States and Dex Media West LLC (“Dex Media West”) operates the directory business in the Dex West States.

Chapter 11 Bankruptcy Proceedings and Plan of Reorganization

Filing of Voluntary Petitions in Chapter 11

On May 28, 2009 (the “Petition Date”), RHD, the Company and RHD’s other subsidiaries (collectively the “RHD Entities”) filed voluntary petitions for Chapter 11 relief under Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) in order to consummate a balance sheet restructuring. The cases are being jointly administered under the caption In re: R.H. Donnelley, Corporation, et al., Case No. 09-11833 (KG) (Bankr. D. Del. 2009) (the “Chapter 11 Cases”). Promptly after filing the Chapter 11 petitions, the Company began notifying all known current or potential creditors of the commencement of the Chapter 11 Cases.

WeThrough ~~intend to use~~ the Chapter 11 Cases, the Company intends to consummate a balance sheet restructuring, resulting in a less leveraged capital structure that is better aligned with the ongoing cash flows of our business.

During the pendency of the Chapter 11 Cases, the Company is operating its business as a debtor-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. We expect to continue to operate in the normal course of business during the reorganization process. Unless otherwise authorized by the Bankruptcy Court, the Bankruptcy Code prohibits the Company from making payments to creditors on account of pre-petition claims. Vendors are, however, being paid for goods furnished and services provided after the Petition Date in the ordinary course of business. However, operating in bankruptcy imposes significant risks on our business and we cannot predict whether or when we will successfully emerge from bankruptcy.

Commencement of Chapter 11 Cases

As of the Petition Date, all pending litigation wherein the Company is named as a defendant is generally stayed by operation of the Bankruptcy Code and absent further order of the Bankruptcy Court, no party, subject to certain exceptions, may take any action, also subject to certain exceptions, to recover on pre-petition claims against the Company.

On the same day that the RHD Entities filed the voluntary petitions, the RHD Entities also filed a motion seeking procedural consolidation of the Chapter 11 Cases for ease of administration, which order was granted by the Bankruptcy Court on June 1, 2009. The Bankruptcy Court also granted certain other motions in substantially the manner requested seeking typical “first day” relief to ensure that we were able to transition into the Chapter 11 process with as little disruption to our business as possible and to enable our business to function in the ordinary course while the Chapter 11 Cases were pending. The most significant of these granted “first day” motions authorized us to (i) pay pre-petition wages and other benefits to our employees; (ii) honor pre-petition customer obligations and continue customer programs; (iii) pay certain pre-petition claims of shippers, warehouseman and other lien claimants; (iv) make payments to certain pre-petition vendors that were vital to our uninterrupted operations; (v) pay and set aside amounts to adequately assure payment to providers of utility service; (vi) pay certain pre-petition tax claims; (vii) pay certain pre-petition insurance claims; (viii) continue use of our existing cash management system and bank accounts and (ix) use cash collateral with the consent of our secured lenders.

As required by the Bankruptcy Code, on June 11, 2009, the United States Trustee for the District of ~~Delaware~~ Delaware appointed anfive creditors to the official committee of unsecured creditors on(the ~~June 11,~~“Unsecured Creditors ~~2009~~Committee”). InThe ~~addition,~~United States Trustee subsequently appointed an additional member to ~~unofficial~~the adUnsecured ~~hoc~~Creditors ~~committee~~Committee on each of ~~note~~June 15, ~~holders~~2009 isand ~~represented~~June 19, in2009. ~~the~~The ~~Chapter 11~~Unsecured Creditors ~~Cases~~Committee currently consists of seven members.

The Company continues to generate positive operating cash flows. If this trend continues, debtor-in-possession financing is not likely to be required as a result of our Chapter 11 bankruptcy filing. However, the Company has incurred and will continue to incur significant costs associated with reorganization. These costs are being expensed as incurred and are included in reorganization items, net on the condensed consolidated statements of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2009.

Proposed Plan of Reorganization

On July 27, 2009, the RHD Entities filed a proposed joint plan of reorganization with the Bankruptcy Court (the “Plan”), together with a disclosure statement in respect of the Plan (the “Disclosure Statement”). The RHD Entities filed an amended Plan and an amended Disclosure Statement on September 18, 2009, October 7, 2009, October 19, 2009 and October 21, 2009. On October 21, 2009, the Bankruptcy Court held a hearing, during which it approved the Disclosure Statement and granted the RHD Entities the authority to begin soliciting votes on the Plan. A plan of reorganization sets forth the ~~means~~treatment ~~for~~of ~~satisfying~~the various classes of claims against and equity interests in ~~the~~ ~~debtor~~each of the debtors. The ~~consummation~~confirmation of a plan of reorganization is the principal objective of a Chapter 11 reorganization case. A hearing on the confirmation of the Plan is scheduled for January 12, 2010 in the Bankruptcy Court.

Certain salient economic terms of the Plan, which are subject in all respects to the specific terms and definitions set forth in the Plan, include, but are not limited to, the following: ~~(i)~~ elimination of approximately $6.4 billion of the RHD Entities’ indebtedness, including the payment of $715.0 million of secured indebtedness, and $500.0 million of annual interest expense; (ii) payment to the pre-petition secured lenders of the RHD Entities of approximately $675.0 million of debt paydown, including $200.0 million paid down pre-petition, in addition to scheduled amortization and interest payments that are subject to future cash flows of the RHD Entities; (iii) the exchange of all pre-petition publicly issued unsecured note debt for (a) 100% of the reorganized RHD equity that is subject to dilution pursuant to a stock-based management incentive plan, which is expected to permit equity-based compensation in an amount of not less than 10% of the fully diluted RHD equity, if approved in accordance with the Plan and (b) in the case of the holders of the Dex Media West 8.5% Senior Notes due 2010 and 5.875% Senior Notes due 2011, $300.0 million of new seven-year RHD unsecured notes on a pro rata basis in addition to their share of the reorganized RHD equity; (iv) the obligations of the lenders under the R.H. Donnelley Inc. (“RHDI”) revolving credit facility (the “RHDI Revolver”) to make additional advances terminated on the Petition Date and the outstanding loans under the RHDI Revolver will be converted to a term loan with a maturity date of October 2014 and an interest rate of LIBOR plus 625 basis points (“bps”), subject to a reduction upon satisfaction of a specified financial covenant threshold, and the current RHDI term loans will be amended to extend the maturity date to October 2014 with an interest rate of LIBOR plus 625 bps, subject to a reduction upon satisfaction of a specified financial covenant threshold; (v) the obligations of the lenders under the Dex Media East revolving credit facility (“Dex Media East Revolver”) to make additional advances terminated on the Petition Date, and the outstanding loans under the Dex Media East Revolver will be converted to a term loan with a maturity date of October 2014 and an interest rate of LIBOR plus 250 bps, subject to reductions upon satisfaction of certain financial covenant thresholds, the current Dex Media East Term Loan A will be amended to extend the maturity date to October 2014 and increase the interest rate to LIBOR plus 250 bps, subject to reductions upon satisfaction of certain financial covenant thresholds, and the Dex Media East Term Loan B will be amended to increase the interest rate to LIBOR plus 250 bps, subject to reductions upon satisfaction of certain financial covenant thresholds; (vi) the obligations of the lenders under the Dex Media West revolving credit facility (“Dex Media West Revolver”) to make additional advances terminated on the Petition Date and the outstanding loans under the Dex Media West

	(i)		Elimination of approximately $6.4 billion of the RHD Entities’ indebtedness, including the payment of $700.0 million of secured indebtedness, and $500.0 million of annual interest expense;

	(ii)		The exchange of all pre-petition publicly issued unsecured note debt for (a) 100% of the reorganized RHD equity that is subject to dilution pursuant to a stock-based management incentive plan, which is expected to permit equity-based compensation in an amount of not less than 10% of the fully diluted RHD equity, if approved in accordance with the Plan and (b) in the case of the holders of the Dex Media West 8.5% Senior Notes due 2010 and 5.875% Senior Notes due 2011, $300.0 million of new seven-year RHD unsecured notes on a pro rata basis in addition to their share of the reorganized RHD equity;

(iii) The obligations of the lenders under the R.H. Donnelley Inc. (“RHDI”) revolving credit facility (the “RHDI Revolver”) to make additional advances terminated on the Petition Date and the outstanding loans under the RHDI Revolver will be converted to a term loan with a maturity date of October 2014 and an interest rate of LIBOR plus 625 basis points (“bps”), subject to a reduction upon satisfaction of a specified financial covenant threshold, and the current RHDI term loans will be amended to extend the maturity date to October 2014 with an interest rate of LIBOR plus 625 bps, subject to a reduction upon satisfaction of a specified financial covenant threshold; (iv) The obligations of the lenders under the Dex Media East revolving credit facility (“Dex Media East Revolver”) to make additional advances terminated on the Petition Date, and the outstanding loans under the Dex Media East Revolver will be converted to a term loan with a maturity date of October 2014 and an interest rate of LIBOR plus 250 bps, subject to reductions upon satisfaction of certain financial covenant thresholds, the current Dex Media East Term Loan A will be amended to extend the maturity date to October 2014 and increase the interest rate to LIBOR plus 250 bps, subject to reductions upon satisfaction of certain financial covenant thresholds, and the Dex Media East Term Loan B will be amended to increase the interest rate to LIBOR plus 250 bps, subject to reductions upon satisfaction of certain financial covenant thresholds; (v) The obligations of the lenders under the Dex Media West revolving credit facility (“Dex Media West Revolver”) to make additional advances terminated on the Petition Date and the outstanding loans under the Dex Media West Revolver will be converted to a term loan with a maturity date of October 2014 and an interest rate of LIBOR plus 450 bps, subject to reductions upon satisfaction of certain financial covenant thresholds, the current Dex Media West Term Loan A will be amended to extend the maturity date to October 2014 and increase the interest rate to LIBOR plus 450 bps, subject to reductions upon satisfaction of certain financial covenant thresholds, and the Dex Media West Term Loan B will be amended to increase the interest rate to LIBOR plus 450 bps, subject to reductions upon satisfaction of certain financial covenant thresholds; and (~~vii~~vi) ~~enhancement~~ Enhancement of the collateral and guarantees of the Dex Media East, Dex Media West and RHDI secured debt. As of emergence, the RHD Entities’ proposed Plan would, if adopted in its present form, result in consolidated debt of approximately $3.4 billion, of which $3.1 billion would be secured.

On May 29, 2009, RHD announced that the RHD Entities had reached pre-petition agreements in principle with a substantial majority of its unsecured noteholders and a substantial majority of their pre-petition secured lenders on a restructuring plan. The terms of the RHD Entities’ restructuring plan are evidenced by (i) Support Agreements dated as of May 21, 2009 and executed by certain of the RHD Entities and lenders holding in excess of two-thirds in principal amount and one-half in number of claims under each of the RHDI, Dex Media East, and Dex Media West pre-petition credit facilities and (ii) the Restructuring Support Agreement dated as of May 28, 2009 executed by the RHD Entities and noteholders holding in excess of a majority of the aggregate principal amount of the pre-petition unsecured note debt (together, the “Plan Support Agreements”). The Plan is consistent with the terms and conditions of the Plan Support Agreements and applicable related term sheets. The Plan Support Agreements, together with the applicable terms sheets, form the basis for the Plan. There can be no assurance, however, that the Plan will be approved by all requisite holders of claims or interests or by the Bankruptcy Court or that all conditions precedent to the implementation of the Plan will be satisfied. Each Plan Support Agreement is subject to certain material conditions. Moreover, each Plan Support Agreement may be terminated upon the occurrence of certain events, including if ~~the~~a ~~Plan~~plan of reorganization is not confirmed by ~~the Bankruptcy Court by~~ January 15, 2010.

Going Concern

The Company’s financial statements are prepared using accounting principles generally accepted in the United States applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The accompanying historical consolidated financial statements and interim condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded assets or to the amounts classified as liabilities or any other adjustments that might be necessary if the Company is unable to continue as a going concern.

The assessment of our ability to continue as a going concern was made by management considering, among other factors: (i) our Chapter 11 bankruptcy filing on May 28, 2009; (ii) the current global credit and liquidity crisis; (iii) the significant negative impact on our operating results and cash flows from the overall downturn in the global economy and an increase in competition and more fragmentation in the local business search market; (iv) that certain of our credit ratings have been recently downgraded; and (v) that RHD’s common stock ceased trading on the New York Stock Exchange (“NYSE”) on December 31, 2008 and is now traded over-the-counter on the Pink Sheets. These considerations are further reflected by our goodwill impairment charges of $2.6 billion and intangible asset impairment charges of $603.0 million recorded for the year ended December 31, 2008. In management’s view, these circumstances and events raise substantial doubt as to whether the Company will be able to continue as a going concern for a reasonable period of time.

Accounting Matters

The filing of the Chapter 11 petitions constituted an event of default under the indentures governing the Company’s senior notes, senior discount notes and senior subordinated notes (collectively the “notes in default”) and the debt obligations under those instruments became automatically and immediately due and payable, although any actions to enforce such payment obligations are automatically stayed under the applicable bankruptcy law. Based on the bankruptcy petitions, the notes in default are included in liabilities subject to compromise on the condensed consolidated balance sheet at June 30, 2009.

The filing of the Chapter 11 petitions also constituted an event of default under RHDI’s, Dex Media West’s and Dex Media East’s credit facilities. However, based upon the Plan, these secured lenders would receive 100% principal recovery and scheduled amortization and interest subsequent to the filing of the Chapter 11 petitions. In addition, substantially all of the assets of Dex Media East and Dex Media West and their respective subsidiaries, including their equity interests, are pledged to secure the obligations under their respective credit facilities. The Company has determined that the fair value of the collateral securing these credit facilities exceeds the book value of such credit facilities, including accrued interest and interest rate swap liabilities associated with the credit facilities, and therefore, the credit facilities are excluded from liabilities subject to compromise on the condensed consolidated balance sheet at June 30, 2009.

AsThe aassessment ~~result~~ of ~~filing~~our ~~the~~ability ~~Chapter 11~~to ~~petitions,~~continue ~~certain~~as ~~interest~~a ~~rate~~going ~~swaps~~concern ~~with~~was amade ~~notional~~by ~~amount~~management considering, ofamong ~~$500.0 million~~other ~~were~~factors: ~~terminated~~(i) our byChapter 11 ~~the~~bankruptcy ~~respective~~filing ~~counterparties~~on ~~and~~May 28, as2009; ~~such,~~(ii) the ~~are~~current ~~no longer~~global ~~deemed~~credit ~~financial~~and ~~instruments~~liquidity tocrisis; be(iii) the ~~remeasured~~significant atnegative ~~fair~~impact ~~value~~on ~~under~~our ~~Statement~~operating ofresults ~~Financial Accounting~~and ~~Standards~~cash ~~(“SFAS”)~~flows ~~No. 133,~~from ~~Accounting~~the ~~for~~overall ~~Derivative~~downturn ~~Instruments~~in ~~and~~the ~~Hedging~~global ~~Activities~~economy ~~(“SFAS~~and ~~No. 133”).~~an Asincrease ofin ~~June 30,~~competition ~~2009,~~and ~~these~~more fragmentation ~~interest~~in ~~rate~~the ~~swaps~~local ~~have~~business ~~not~~search ~~been~~market; ~~settled~~(iv) that ~~and,~~certain asof ~~such,~~our ~~a liability~~credit ofratings ~~$21.5 million~~have been isdowngraded; ~~recognized~~and in(v) that ~~accounts~~RHD’s ~~payable~~common ~~and~~stock ~~accrued~~ceased ~~liabilities~~trading on the ~~condensed~~ ~~consolidated~~New ~~balance~~York ~~sheet~~Stock atExchange (“NYSE”) ~~June~~on December 3031, ~~2009.~~2008 Inand ~~addition,~~is asnow atraded ~~result~~over-the-counter ofon ~~filing~~ the ~~Chapter 11~~ ~~petitions,~~Pink ~~Dex~~Sheets. ~~Media~~These considerations ~~East~~are ~~interest~~further ~~rate~~reflected ~~swaps~~by ~~with~~our agoodwill ~~notional~~impairment ~~amount~~charges of $~~500~~2.06 ~~million~~billion and atintangible ~~June 30,~~asset ~~2009,~~impairment ~~which~~charges ~~includes~~of $~~400~~603.0 million ~~that~~recorded ~~have~~for ~~been~~the ~~terminated~~year ~~and~~ended ~~$100.0~~December ~~million still outstanding~~31, 2008. ~~are~~In nomanagement’s ~~longer~~view, ~~highly~~these ~~effective~~circumstances inand ~~offsetting~~events ~~changes~~raise insubstantial ~~cash~~doubt ~~flows.~~as ~~Accordingly,~~to ~~cash~~whether ~~flow~~the ~~hedge~~Company ~~accounting~~will ~~treatment~~be ~~under~~able ~~SFAS~~to ~~No. 133~~continue isas noa ~~longer~~going ~~permitted~~concern for a reasonable period of time.

~~For~~Accounting ~~periods subsequent to the Chapter 11 bankruptcy filing, the American Institute of Certified~~Matters Public Accountant’s Statement of Position 90-7, Financial Reporting by Entities in Reorganization Under the Bankruptcy Code (“SOP 90-7”), has been applied in preparing the condensed consolidated financial statements. SOP 90-7 requires that the financial statements distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses including professional fees, realized gains and losses and provisions for losses that are realized from the reorganization and restructuring process will be classified as reorganization items on the condensed consolidated statement of operations. Additionally, on the condensed consolidated balance sheet, liabilities are segregated between liabilities not subject to compromise and liabilities subject to compromise. Liabilities subject to compromise are reported at their pre-petition amounts or current unimpaired values, even if they may be settled for lesser amounts.

The filing of the Chapter 11 petitions also constituted an event of default under RHDI’s, Dex Media West’s, and Dex Media East’s credit facilities. However, based upon the Plan, these secured lenders would receive 100% principal recovery and scheduled amortization and interest subsequent to the filing of the Chapter 11 petitions. In addition, substantially all of the assets of Dex Media East and Dex Media West and their respective subsidiaries, including their equity interests, are pledged to secure the obligations under their respective credit facilities. The Company has determined that the fair value of the collateral securing these credit facilities exceeds the book value of such credit facilities, including accrued interest and interest rate swap liabilities associated with the credit facilities, and therefore, the credit facilities are excluded from liabilities subject to compromise on the condensed consolidated balance sheet at September 30, 2009.

As a result of filing the Chapter 11 petitions, certain interest rate swaps with a notional amount of $500.0 million were terminated by the respective counterparties and, as such, are no longer deemed financial instruments to be remeasured at fair value. As of September 30, 2009, these interest rate swaps have not been settled and, as such, a liability of $21.5 million is recognized in accounts payable and accrued liabilities on the condensed consolidated balance sheet at September 30, 2009. In addition, as a result of filing the Chapter 11 petitions, Dex Media East interest rate swaps with a notional amount of $100.0 million at September 30, 2009 are no longer highly effective in offsetting changes in cash flows. Accordingly, cash flow hedge accounting treatment is no longer permitted.

For periods subsequent to the Chapter 11 bankruptcy filing, the American Institute of Certified Public Accountant’s Statement of Position 90-7, Financial Reporting by Entities in Reorganization Under the Bankruptcy Code (Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 852-10) (“SOP 90-7”), has been applied in preparing the condensed consolidated financial statements. SOP 90-7 requires that the financial statements distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses including professional fees, realized gains and losses and provisions for losses that are realized from the reorganization and restructuring process will be classified as reorganization items on the condensed consolidated statement of operations. Additionally, on the condensed consolidated balance sheet, liabilities are segregated between liabilities not subject to compromise and liabilities subject to compromise. Liabilities subject to compromise are reported at their pre-petition amounts or current unimpaired values, even if they may be settled for lesser amounts.

The accompanying condensed consolidated financial statements do not purport to reflect or provide for the consequences of the Chapter 11 bankruptcy proceeding. In particular, the financial statements do not purport to show (i) as to assets, their realizable value on a liquidation basis or their availability to satisfy liabilities; (ii) as to pre-petition liabilities, the amounts that may be allowed for claims or contingencies, or the status and priority thereof; (iii) as to shareholders’ deficit accounts, the effects of any changes that may be made in the Company’s capitalization; or (iv) as to operations, the effects of any changes that may be made to the Company’s business.

Other Significant Financing Developments

On May 28, 2009 and in conjunction with the Plan, the Company repaid an aggregate of $122.4 million in principal on outstanding balances owed under the Dex Media East credit facility and Dex Media West credit facility. The repayments were made under each of the credit facilities as follows:


Description	Amount

Dex Media West
Term Loan A	$	6,971
Term Loan B		50,941
Revolver		4,826

Dex Media East
Term Loan A		34,176
Term Loan B		20,454
Revolver		4,985

Total repayment	$	122,353

On May 14, 2009, the Company exercised a 30-day grace period on $54.0 million in interest payments due on the following senior notes and senior discount notes:

Description	Amount
Dex Media, Inc.
8% Senior Notes due 2013	$	20,000
9% Senior Discount Notes due 2013.		33,744
9% Senior Discount Notes due 2013		33,744
Dex Media West
5.875% Senior Notes due 2011		256
Total interest payments	$	54,000

Exercising the grace period did not constitute an event of default under the bond indentures or any of the Company’s or its subsidiaries’ other debt agreements. The Company did not make these interest payments prior to filing the Chapter 11 petitions.

On April 15, 2009, RHD exercised a 30-day grace period on $54.6 million in interest payments due on its 8.875% Series A-4 Senior Notes due 2017 (“Series A-4 Senior Notes”). As a result of exercising the 30-day grace period, certain existing interest rate swaps associated with the Dex Media East credit facility having a notional amount of $350.0 million were required to be settled on May 28, 2009. Cash settlement payments of $26.4 million were made during the ~~three~~second ~~and~~quarter ~~six~~of ~~months ended June 30,~~ 2009 associated with these interest rate swaps.

As a result of the ~~recent~~ decline in certain of our credit ratings, an existing interest rate ~~swap~~ swap associated with the Dex Media West credit facility having a notional amount of $50.0 million was required to be settled on April 23, 2009. A cash settlement payment of $0.5 million was made during the ~~three~~second ~~and~~quarter ~~six~~of ~~months ended June 30,~~ 2009 associated with this interest rate swap.

On February 13, 2009, the Company borrowed the unused portions under the Dex Media East Revolver and Dex Media West Revolver totaling $97.0 million and $90.0 million, respectively. The Company made the borrowings under the revolving credit facilities to preserve its financial flexibility in light of the continuing uncertainty in the global credit markets.

2. Summary of Significant Accounting Policies

Identifiable Intangible Assets and Goodwill

As a result of RHD’s acquisition of the Company on January 31, 2006 (the “RHD Merger”), certain intangible assets were identified ~~in accordance with SFAS No. 141, Business Combinations (“SFAS No. 141”)~~ and recorded at their estimated fair values. InThe ~~accordance with SFAS No. 142, Goodwill and Other Intangible Assets (“SFAS No. 142”), the~~ fair values of the identifiable intangible assets are being amortized over their estimated useful lives in a manner that best reflects the economic benefit derived from such assets. Amortization expense was $92.8 million and $76.8 million for the three months ended ~~June~~September 30, 2009 and 2008, respectively, and $~~185~~278.53 million and ~~153~~$230.64 million for the ~~six~~nine months ended ~~June~~September 30, 2009 and 2008, respectively.

In connection with ~~the~~Dex Media East’s and Dex Media West’s impairment testing of ~~RHD’s~~their definite-lived intangible assets and other long-lived assets at December 31, 2008, ~~RHD~~they evaluated the remaining useful lives of ~~its~~their intangible assets by considering, among other things, the effects of obsolescence, demand, competition, ~~and~~which takes into consideration the price premium benefit Dex ~~other~~Media East and Dex Media West has over competing independent publishers in their markets, and other economic factors, including the stability of the industry in which itthey ~~operates~~operate, known technological advances, legislative actions that result in an uncertain or changing regulatory environment, and expected changes in distribution channels. Based on this evaluation, Dex Media East and Dex Media West recognized a reduction in the remaining useful lives of all directory services agreements associated with the RHD Merger due to compression of the price premium benefit over competing independent publishers in their respective markets as well as a decline in market share during the year ended December 31, 2008. As a result, the remaining useful lives of these directory services agreements were reduced to 33 years effective January 1, 2009 in order to better reflect the period these intangible assets are expected to contribute to ~~RHD’s~~their future cash flow. The increase in amortization expense for the three and ~~six~~nine months ended ~~June~~September 30, 2009 is a direct result of reducing the remaining useful lives associated with these directory services agreements, partially offset by a reduction in amortization expense associated with a revision to the carrying values of ~~our~~the local and national customer relationships subsequent to impairment charges recorded during the fourth quarter of 2008.

Annual amortization expense infor the full year 2009 is expected to increase by approximately $63.3 million as a result of the reduction of remaining useful lives associated with our directory services agreements and revision to the carrying values of our local and national customer relationships subsequent to the impairment charges during the fourth quarter of 2008.

10Dex Media East and Dex Media West performed impairment tests of their definite-lived intangible assets and other long-lived assets during the three and nine months ended September 30, 2009. They utilized the following information and assumptions to complete their impairment evaluation:

	•		Historical financial information, including revenue, profit margins, customer attrition data and price premiums enjoyed relative to competing independent publishers;

	•		Long-term financial projections, including, but not limited to, revenue trends and profit margin trends; and

	•		Intangible asset carrying values.

The results of these tests indicated no impairment. In connection with Dex Media East’s and Dex Media West’s impairment testing, they also evaluated the remaining useful lives of their definite-lived intangible assets and other long-lived assets by evaluating the relevant factors noted above. Based on this evaluation, Dex Media East and Dex Media West concluded the remaining useful lives of such assets reflect the period they are expected to contribute to their future cash flows and are therefore deemed appropriate.

AsIf aindustry ~~result~~and ofeconomic ~~the~~conditions ~~decline~~ in ~~the trading value of~~ our ~~debt~~markets and RHD’s ~~debt~~markets ~~and~~continue ~~equity~~to ~~securities during the first and second quarters of 2008 and continuing negative industry and economic trends that have directly affected RHD’s and our business~~deteriorate, ~~RHD performed impairment tests of its goodwill,~~ ~~definite-lived~~resulting ~~intangible~~in ~~assets~~further ~~and~~declines ~~other long-lived assets~~ in ~~accordance~~advertising ~~with~~sales ~~SFAS No. 142~~ and ~~SFAS~~ ~~No. 144,~~operating ~~Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS No. 144”)~~results, ~~respectively.~~ ~~RHD used estimates~~ and ~~assumptions~~if inthe ~~its~~trading ~~impairment evaluations, including, but not~~value ~~limited~~of ~~to,~~our ~~projected~~debt ~~future cash flows, revenue growth~~ and ~~customer attrition rates. Based upon~~ RHD’s ~~impairment~~debt ~~test~~and ofequity ~~its~~securities ~~goodwill~~decline further, RHD, ~~recognized~~Dex ~~goodwill~~Media ~~impairment~~East ~~charges of $2.5 billion~~ and ~~$660.2 million~~Dex ~~during the three months ended March 31, 2008 and June 30, 2008, respectively,~~Media ~~for~~West ~~total~~will ~~goodwill~~be ~~impairment~~required ~~charges~~to ofagain ~~$3.1 billion~~assess ~~during~~ the ~~six~~recoverability ~~months~~and ~~ended~~useful ~~June 30,~~lives ~~2008. The Company’s share~~ of ~~the~~its ~~impairment~~long-lived ~~charges, based on a discounted cash flow analysis, was $2.1~~assets ~~billion~~ and ~~$422.2 million~~other ~~during~~intangible ~~the three months ended March 31, 2008 and June 30, 2008, respectively, for total goodwill impairment charges of $2~~assets.~~6 billion~~ ~~for~~This ~~the~~could ~~six months ended June 30, 2008. As a~~ result ofin ~~these~~additional impairment charges, wea ~~have~~reduction ~~no recorded goodwill at December 31,~~of ~~2008~~remaining oruseful ~~June 30,~~lives ~~2009. RHD’s testing results of its definite-lived intangible assets~~ and ~~other long-lived~~acceleration ~~assets indicated no impairment as~~ of ~~March 31,~~amortization ~~2008 and June 30, 2008~~expense.

If industry and economic conditions in RHD’s markets continue to deteriorate, resulting in further declines in advertising sales and operating results, and if the trading value of our debt and RHD’s debt and equity securities decline further, RHD will be required to assess the recoverability and useful lives of its long-lived assets and other intangible assets. This could result in additional impairment charges, a reduction of remaining useful lives and acceleration of amortization expense.

Interest Expense and Deferred Financing Costs

Contractual interest expense that would have appeared on the condensed consolidated statement of operations if not for the filing of the Chapter 11 petitions was $9188.52 million and $~~180~~268.13 million for the three and ~~six~~nine months ended ~~June~~September 30, 2009, respectively.

Certain costs associated with the issuance of debt instruments are capitalized and included in other non-current assets on the condensed consolidated balance sheets. These costs are amortized to interest expense over the terms of the related debt agreements. The bond outstanding method is used to amortize deferred financing costs relating to debt instruments with respect to which we make accelerated principal payments. Other deferred financing costs are amortized using the effective interest method. Amortization of deferred financing costs included in interest expense was $2.94 million and $32.75 million for the three months ended ~~June~~September 30, 2009 and 2008, respectively, and $57.3 7 million and $47.61 million for the ~~six~~nine months ended ~~June~~September 30, 2009 and 2008, respectively.

Interest expense for the three and ~~six~~nine months ended ~~June~~September 30, 2009 includes a non-cash charge of of $51.0 million and $6.1 million, respectively, associated with the change in fair value of the Dex Media East interest rate swaps that were required to be settled and interest rate swaps no longer deemed financial instruments ~~under~~ ~~SFAS No. 133~~ as a result of filing the Chapter 11 petitions. Interest expense for the three and ~~six~~nine months ended ~~June~~September 30, 2009 also includes a non-cash charge of $24.01 million and $6.1 million, respectively, resulting from amounts previously charged to accumulated other comprehensive loss related to these interest rate swaps. The amounts previously charged to accumulated other comprehensive loss related to the Dex Media East interest rate swaps will be amortized to interest expense over the remaining life of the interest rate swaps based on future interest payments, as it is not probable that those forecasted transactions will not occur.

As a result of the refinancing of the former Dex Media West credit facility on June 6, 2008, the existing interest rate swaps associated with this debt arrangement are no longer highly effective in offsetting changes in cash flows. Accordingly, cash flow hedge accounting treatment ~~under SFAS No. 133~~ is no longer permitted. In addition, certain of these interest rate swaps were required to be settled or terminated during the second quarter of 2009 as noted above. The change in fair value of these interest rate swaps resulted in a reduction to interest expense of $5.0 million for the three ~~and six~~ months ended ~~June~~September 30, ~~2009~~2008, ofand $25.34 million and $57.40 million for the nine months ended September 30, 2009 and 2008, respectively. Interest expense for the ~~three~~ ~~and~~nine ~~six~~ months ended ~~June~~September 30, 2008 includes a non-cash charge of $15.0 million resulting from amounts previously charged to accumulated other comprehensive loss related to these interest rate ~~swaps,~~ ~~offset by a reduction to interest expense of $2.0 million resulting from the change in the fair value of these interest rate~~ swaps ~~since June 6, 2008~~.

In conjunction with the RHD Merger and as a result of purchase accounting required under U.S. generally accepted accounting principles (“GAAP”), our debt was recorded at its fair value on January 31, 2006. We recognized an offset to interest expense in each period subsequent to the RHD Merger through May 28, 2009 for the amortization of the corresponding fair value adjustment. The offset to interest expense was $37.07 million ~~and $4.4 million~~ for the ~~three~~nine months ended ~~June~~September 30, 2009 and ~~2008, respectively, and~~ $74.7 5 million and $813.61 million for the ~~six~~three and nine months ended ~~June~~September 30, ~~2009~~ ~~and~~ 2008, respectively. The offset to interest expense was to be recognized over the life of the respective debt, however due to filing the Chapter 11 petitions, unamortized fair value adjustments at May 28, 2009 of $78.5 million were written-off and recognized as a reorganization item on the condensed consolidated statement of operations for the ~~three~~nine ~~and six~~ months ended ~~June~~ September 30, 2009. See Note 3, “Reorganization Items, Net and Liabilities Subject to Compromise” for additional information.

11Apart from business combinations, it is the Company’s policy to recognize losses incurred in conjunction with debt extinguishments as a component of interest expense. Interest expense for the nine months ended September 30, 2008 includes the write-off of unamortized deferred financing costs of $2.1 million associated with the refinancing of the former Dex Media West credit facility, which has been accounted for as an extinguishment of debt.

Apart from business combinations, it is the Company’s policy to recognize losses incurred in conjunction with debt extinguishments as a component of interest expense. Interest expense for the three and six months ended June 30, 2008 includes the write-off of unamortized deferred financing costs of $2.1 million associated with the refinancing of the former Dex Media West credit facility, which has been accounted for as an extinguishment of debt.

Advertising Expense

We recognize advertising expenses as incurred. These expenses include media, public relations, promotional, branding and sponsorship costs and on-line advertising. Total advertising expense was $57.9 7 million and $4.59 million for the three months ended ~~June~~September 30, 2009 and 2008, respectively, and $1018.3 0 million and $813.65 million for the ~~six~~nine months ended ~~June~~September 30, 2009 and 2008, respectively. Total advertising expense includes costs associated with traffic purchased and distributed to multiple advertiser landing pages of $23.75 million and $2.10 million for the three months ended ~~June~~September 30, 2009 and 2008, respectively, and $59.60 million and $46.2 million for the nine ~~six~~ months ended ~~June~~September 30, 2009 and 2008, respectively.

Concentration of Credit Risk

Approximately 85% of our advertising revenues are derived from the sale of advertising to local small- and medium-sized businesses. Most new advertisers and advertisers desiring to expand their advertising programs are subject to a credit review. We do not require collateral from our advertisers, although we do charge interest to advertisers that do not pay by specified due dates. The remaining approximately 15% of our advertising revenues are derived from the sale of advertising to national or large regional chains. Substantially all of the revenues derived through national accounts are serviced through certified marketing representatives (“CMRs”) from which we accept orders. We receive payment for the value of advertising placed in our directories, net of the CMR’s commission, directly from the CMR. While we are still exposed to credit risk, the amount of credit losses from these accounts has historically been less than our credit losses on local accounts because the advertisers, and in some cases, the CMRs tend to be larger companies with greater financial resources than local advertisers.

We continue to experience adverse bad debt trends attributable to economic challenges in our markets. Our bad debt expense represented approximately 75.79% and 76.07% of our net revenue for the three and ~~six~~nine months ended ~~June~~September 30, 2009, respectively, as compared to 5.8% and 5.24% of our ~~net~~ net revenue for the three and ~~six~~nine months ended ~~June~~September 30, 2008, respectively.

At ~~June~~September 30, 2009, we had an interest rate swap agreement with a major financial institution with a notional amount of $100.0 million. We are exposed to credit risk in the event that the ~~counterparty~~ counterparty to the agreement does not, or cannot, meet their obligation. The notional amount is used to measure interest to be paid or received and does not represent the amount of exposure to credit loss. Any loss would be limited to the amount that would have been received over the remaining life of the swap agreement. The counterparties to the swap agreements are major financial institutions with credit ratings of AA- or higher.

Stock-Based Awards

RHD ~~and the Company account for stock-based compensation under SFAS No. 123 (R), Share-Based Payment (“SFAS No. 123 (R)”). RHD~~ allocates compensation expense to its subsidiaries, including the Company, consistent with the method it utilizes to allocate employee wages and benefits to its subsidiaries. The Company recorded stock-based compensation expense related to stock-based awards granted under RHD’s various employee and non-employee stock incentive plans of $1.73 million and $23.78 million for the three months ended ~~June~~September 30, 2009 and 2008, respectively, and $45.14 million and $812.31 million for the nine ~~six~~ months ended ~~June~~September 30, 2009 and 2008, respectively. RHD did not grant any stock-based awards during the three and ~~six~~nine months ended ~~June~~September 30, 2009.

Long-Term Incentive Program

On March 9, 2009, RHD’s Compensation and Benefits Committee of the Board of Directors (the “Committee”) approved the 2009 Long-Term Incentive Program (the “2009 LTIP”) for the Company. The 2009 LTIP is a cash-based plan designed to provide long-term incentive compensation to participants based on the achievement of performance goals designated by the Committee pursuant to RHD’s 2005 Stock Award and Incentive Plan. The Committee administers the 2009 LTIP in its sole discretion and may, subject to certain exceptions, delegate some or all of its power and authority under the 2009 LTIP to the Chief Executive Officer or other executive officer of RHD. Participants in the 2009 LTIP consist of (i) such executive officers of RHD and its affiliates as the Committee in its sole discretion may select from time to time and (ii) such other employees of RHD and its subsidiaries and affiliates as the Chief Executive Officer in his sole discretion may select from time to time. The amount of each award under the 2009 LTIP will be paid in cash and is dependent upon the attainment of certain performance measures related to the amount of RHD’s cumulative free cash flow for the 2009, 2010 and 2011 fiscal years (the “Performance Period”). Participants who are executive officers of RHD, and certain other participants designated by the Chief Executive Officer, are also eligible to receive a payment upon the achievement of a restructuring, reorganization and/or recapitalization relating to RHD’s outstanding indebtedness and liabilities (the “Specified Actions”) during the Performance Period. Payments will be made following the end of the Performance Period or the date of a Specified Action, as the case may be. Awards granted to executive officers under the 2009 LTIP (and to certain other participants designated by the Chief Executive Officer) will continue to be paid, subject to the applicable performance conditions, in the event the participant’s employment is terminated by the participant with Good Reason (as such term is defined in the 2009 LTIP), by RHD

1213

free cash flow for the 2009, 2010 and 2011 fiscal years (the “Performance Period”). Participants who are executive officers of RHD, and certain other participants designated by the Chief Executive Officer, are also eligible to receive a payment upon the achievement of a restructuring, reorganization and/or recapitalization relating to RHD’s outstanding indebtedness and liabilities (the “Specified Actions”) during the Performance Period. Payments will be made following the end of the Performance Period or the date of a Specified Action, as the case may be. Awards granted to executive officers under the 2009 LTIP (and to certain other participants designated by the Chief Executive Officer) will continue to be paid, subject to the applicable performance conditions, in the event the participant’s employment is terminated by the participant with Good Reason (as such term is defined in the 2009 LTIP), by RHD without Cause (as such term is defined in the 2009 LTIP) or as a result of the participant’s death or disability. Such payment will be made as if the participant had remained employed with RHD through the applicable payment date under the 2009 LTIP, subject to the achievement of the applicable performance conditions. If any participant’s employment with RHD is terminated under any other circumstances, any unpaid amount under the 2009 LTIP will be forfeited. These cash-based awards were granted to participants in April 2009. As a result, the Company recognized compensation expense related to the 2009 LTIP of $0.9 million and $1.09 million during the three and ~~six~~nine months ended ~~June~~September 30, 2009, respectively.

Fair Value of Financial Instruments

~~SFAS No. 107, Disclosures About Fair Value of Financial Instruments requires disclosure of the fair value of financial instruments for which it is practicable to estimate that value.~~ At ~~June~~September 30, 2009 and December 31, 2008, the fair value of cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities approximated their carrying value based on the short-term nature of these instruments. As a result of filing the Chapter 11 petitions and the Plan, we do not believe that it is meaningful to present the fair market value of our long-term debt at ~~June~~September 30, 2009 in Note 5, “Long-Term Debt.”

The Company has adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 157, Fair Value Measurements (FASB ASC 820-10) (“SFAS No. 157”), which defines fair value, establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value and expands disclosures about fair value measurements. SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy, which gives the highest priority to quoted prices in active markets, is comprised of the following three levels:

Level 1 — Unadjusted quoted market prices in active markets for identical assets and liabilities.

Level 2 — Observable inputs, other than Level 1 inputs. Level 2 inputs would typically include quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly.

Level 3 — Prices or valuations that require inputs that are both significant to the measurement and unobservable.

At ~~June~~September 30, 2009, the Company has an interest rate swap with a notional amount of $100.0 ~~million~~ million that continues to be measured at fair value on a recurring basis. InThe ~~accordance with SFAS No. 157, the~~ following table represents our assets and liabilities that were measured at fair value on a recurring basis at ~~June~~ September 30, 2009 and the level within the fair value hierarchy in which the fair ~~value~~ value measurements were included.

	Fair Value Measurements at
	June 30, 2009
	September 30, 2009
Description	Using Significant Other Observable Inputs (Level 2)
Derivatives — Liabilities	$	(34,~~555~~512	)

In conjunction with the classification of our credit facilities, this interest rate swap liability is excluded from liabilities subject to compromise on the condensed consolidated balance sheet at ~~June~~September 30, 2009, as both our credit facilities and interest rate swaps are fully collateralized.

Valuation Techniques

Fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Company uses prices and inputs that are current as of the measurement date.

13Fair value for our derivative instruments was derived using pricing models. Pricing models take into account relevant observable market inputs that market participants would use in pricing the asset or liability. The pricing models used to determine fair value incorporate contract terms (including maturity) as well as other inputs including, but not limited to, interest rate yield curves and the creditworthiness of the counterparty. The impact of our own credit rating is also considered when measuring the fair value of liabilities. Our credit rating could have a material impact on the fair value of our derivative instruments, our results of operations or financial condition in a particular reporting period. For the three and nine months ended September 30, 2009, the impact of applying our credit rating in determining the fair value of our derivative instruments was a reduction to our interest rate swap liability of $0.4 million.

Fair value for our derivative instruments was derived using pricing models. Pricing models take into account relevant observable market inputs that market participants would use in pricing the asset or liability. The pricing models used to determine fair value incorporate contract terms (including maturity) as well as other inputs including, but not limited to, interest rate yield curves and the creditworthiness of the counterparty. In accordance with SFAS No. 157, the impact of our own credit rating is also considered when measuring the fair value of liabilities. Our credit rating could have a material impact on the fair value of our derivative instruments, our results of operations or financial condition in a particular reporting period. For the three and six months ended June 30, 2009, the impact of applying our credit rating in determining the fair value of our derivative instruments was a reduction to our interest rate swap liability of $0.2 million.

Many pricing models do not entail material subjectivity because the methodologies employed do not necessitate significant judgment, and the pricing inputs are observed from actively quoted markets, as is the case for our derivative instruments. The pricing models used by the Company are widely accepted by the financial services industry. As such and as noted above, our derivative instruments are categorized within Level 2 of the fair value hierarchy.

Fair Value Control Processes

The Company employs control processes to validate the fair value of its derivative instruments derived from the pricing models. These control processes are designed to assure that the values used for financial reporting are based on observable inputs wherever possible. In the event that observable inputs are not available, the control processes are designed to assure that the valuation approach utilized is appropriate and consistently applied and that the assumptions are reasonable.

In February 2008, the ~~Financial Accounting Standards Board (“~~FASB”) issued Staff Position FAS 157-2, Effective Date of FASB Statement No. 157 (FASB ASC 820-10) (“FSP No. 157-2”), which deferred the effective date of SFAS No. 157 for non-financial assets and liabilities, except for items that are recognized or disclosed at fair value on a recurring basis, to fiscal years beginning after November 15, 2008 and interim periods within those fiscal years. The Company had elected the deferral option permitted by FSP No. 157-2 for its non-financial assets and liabilities initially measured at fair value in prior business combinations including intangible assets and goodwill. The Company adopted the provisions of FSP No. 157-2 effective January 1, 2009, resulting in no material impact to our interim condensed consolidated financial statements.

Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and certain expenses and the disclosure of contingent assets and liabilities. Actual results could differ materially from those estimates and assumptions. Estimates and assumptions are used in the determination of recoverability of long-lived assets, sales allowances, allowances for doubtful accounts, depreciation and amortization, employee benefit plans expense, restructuring reserves, deferred income taxes, certain estimates pertaining to liabilities under FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes: An Interpretation of FASB Statement No. 109 (FASB ASC 740-10) (“FIN No. 48”), certain assumptions pertaining to RHD’s stock-based awards and certain ~~estimates~~ estimates associated with liabilities classified as liabilities subject to compromise, among others.

New Accounting Pronouncements

In ~~May~~September 2009, the ~~FASB~~Emerging ~~issued~~Issues ~~SFAS~~Task ~~No. 165,~~Force ~~Subsequent Events~~ (“~~SFAS No. 165~~EITF”), ~~the~~reached ~~objective~~final ~~of which~~consensus ison toEITF ~~establish~~Issue No. 08-1, ~~general~~Revenue ~~standards~~Arrangements ofwith ~~accounting~~Multiple ~~for~~Deliverables ~~and~~(“EITF ~~disclosure~~08-1”). ofEITF ~~events~~08-1 ~~that~~has ~~occur~~not ~~after~~yet been ~~the~~incorporated ~~balance~~into ~~sheet~~the ~~date~~FASB’s ~~but~~Codification. ~~before~~EITF ~~financial~~08-1 ~~statements~~updates ~~are~~the ~~issued~~current orguidance ~~are~~pertaining ~~available~~ to ~~be issued. In~~ ~~particular,~~multiple-element ~~SFAS~~revenue ~~No. 165~~arrangements ~~sets~~included ~~forth~~in ~~(1) the~~FASB ~~period~~ASC ~~after~~605-25, ~~the~~which ~~balance~~originated ~~sheet~~from ~~date during which~~EITF ~~management~~00-21, ofRevenue aArrangements ~~reporting~~with ~~entity~~Multiple ~~should~~Deliverables. ~~evaluate~~EITF ~~events~~08-1 oraddresses ~~transactions~~how ~~that~~to ~~may occur for~~determine ~~potential~~whether ~~recognition~~an orarrangement ~~disclosure~~involving inmultiple ~~the~~deliverables ~~financial~~contains ~~statements,~~more ~~(2) the~~than ~~circumstances~~one ~~under~~unit ~~which~~of accounting anand ~~entity~~how ~~should~~the ~~recognize~~arrangement ~~events~~consideration orshould ~~transactions~~be ~~occurring~~allocated ~~after~~among the ~~balance~~separate ~~sheet~~units ~~date~~of ~~in its~~accounting. ~~financial~~EITF ~~statements~~08-1 ~~and~~will ~~(3) the~~be ~~disclosures~~effective ~~that~~for anthe ~~entity~~Company ~~should~~in ~~make~~the ~~about~~annual ~~events~~reporting ~~or transactions~~period ~~that~~beginning ~~occurred~~January 1, 2011. ~~after~~EITF ~~the~~08-1 ~~balance~~may ~~sheet~~be ~~date.~~applied ~~SFAS~~retrospectively ~~No. 165~~or isprospectively ~~effective~~and ~~for~~early ~~interim~~adoption oris permitted. ~~annual~~The ~~financial~~Company ~~periods~~is ~~ending~~currently ~~after~~evaluating ~~June 15,~~the ~~2009~~impact ~~and~~of asEITF ~~such,~~08-1 weon ~~adopted~~its ~~SFAS~~financial ~~No. 165~~position, asresults of ~~June~~ 30operations, ~~2009.~~cash ~~See Note 12~~flows, ~~“Subsequent~~and ~~Events’ for additional information~~disclosures.

WeIn ~~have~~June 2009, ~~reviewed~~the ~~other~~FASB issued SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles — a replacement of FASB Statement No. 162 (FASB ASC 105-10) (“SFAS No. 168”). SFAS No. 168 establishes a single source of authoritative non-governmental GAAP, superseding existing FASB, AICPA, EITF and related accounting ~~pronouncements~~literature. SFAS ~~that~~No. 168 ~~were~~does ~~issued~~not asamend or replace rules and interpretive releases of ~~June~~the Securities and Exchange Commission (“SEC”), which are sources of authoritative GAAP for SEC registrants. SFAS No. 168 is effective for interim and annual periods ending after September 3015, 2009 and, ~~which~~as such, the Company has ~~not~~adopted ~~yet~~SFAS ~~adopted~~No. 168 as of September 30, ~~and~~2009. doThroughout ~~not~~this ~~believe~~Quarterly ~~that~~Report ~~these~~on ~~pronouncements~~Form 10-Q, ~~will~~the ~~have~~Company ahas ~~material impact~~provided oncitations ~~our~~to ~~financial~~the ~~position~~applicable orFASB ~~operating~~codification ~~results~~in addition to the original standard type and number.

1415

In May 2009, the FASB issued SFAS No. 165, Subsequent Events (FASB ASC 855-10) (“SFAS No. 165”), the objective of which is to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. In particular, SFAS No. 165 sets forth (1) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (2) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and (3) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. SFAS No. 165 is effective for interim or annual financial periods ending after June 15, 2009 and as such, we adopted SFAS No. 165 as of June 30, 2009. See Note 12, “Subsequent Events” for additional information.

We have reviewed other accounting pronouncements that were issued as of September 30, 2009, which the Company has not yet adopted, and do not believe that these pronouncements will have a material impact on our financial position or operating results.

3. Reorganization Items, Net and Liabilities Subject to Compromise

Reorganization Items, Net

For the three and ~~six~~nine months ended ~~June~~September 30, 2009, the Company has recorded $584.5 million ofand $54.0 million, respectively, of reorganization items on a separate line item on the condensed consolidated statement of operations in accordance with SOP 90-7. Reorganization items represent amounts that are directly associated with the process of reorganizing the business under Chapter 11 of the Bankruptcy Code. The following table displays the details of reorganization items for the three and ~~six~~nine months ended ~~June~~ September 30, 2009:

	Three and Six
	Three Months Ended			Nine Months Ended
	Months Ended June
	September 30, 2009			September 30, 2009
	30, 2009
Write-off of fair value adjustments	$	—		$	(78,511	)
Write-off of fair value adjustments	$	(78,511	)
Write-off of net premiums / discounts on long-term debt		—			(8,311	)
Write-off of net premiums / discounts on long-term debt		(8,311	)
Professional fees		5,346			33,703
Professional fees		28,357
Lease rejections, abandoned property and other		(855	)		(855	)
Total reorganization items	$	~~(58~~4,~~465~~491	)	$	(53,974	)

The write-off of unamortized fair value adjustments required by GAAP as a result of the RHD Merger of $78.5 million and unamortized net premiums / discounts of $8.3 million at May 28, 2009 relate to long-term debt classified as liabilities subject to compromise at ~~June~~September 30, 2009.

The Company has incurred professional fees associated with filing the Chapter 11 petitions of $285.4 3 million ~~associated~~and ~~with~~$33.7 million ~~filing~~during the ~~Chapter~~three and nine months ended September 1130, 2009, respectively, ~~petitions~~of which $0.8 million and $27.1 million, respectively, have been paid in cash. Professional fees include financial, legal and valuation services directly associated with the reorganization process.

The Company has recognized $0.9 million during the three and nine months ended September 30, 2009 associated with rejected leases and abandoned property, which have been approved by the Bankruptcy Court through September 30, 2009 as part of the Chapter 11 Cases.

As of September 30, 2009, the Company has not received any operating cash receipts as a result of filing the Chapter 11 petitions.

Liabilities Subject to Compromise

Liabilities subject to compromise refers to unsecured obligations that will be accounted for under a plan of reorganization. SOP 90-7 requires pre-petition liabilities, including those that became known after filing the Chapter 11 petitions, that are subject to compromise to be reported at the amounts expected to be allowed, even if they may be settled for lesser amounts. These liabilities represent the estimated amount expected to be resolved on known or potential claims through the Chapter 11 process, and remain subject to future adjustments from negotiated settlements, actions of the Bankruptcy Court and non-acceptance of certain executory contracts and unexpired leases. Liabilities subject to compromise also includes items that may be assumed under the plan of reorganization, and may be subsequently reclassified to liabilities not subject to compromise. The Company has classified all of its notes in default as liabilities subject to compromise. Liabilities subject to compromise also include certain pre-petition liabilities including accrued interest, accounts payable and accrued liabilities, intercompany liabilities, which includes $300.0 million of intercompany debt, tax related liabilities and lease related liabilities. The Company’s cash flow from operations was favorably impacted by the stay of payment related to accrued interest.

The table below identifies the principal categories of liabilities subject to compromise at ~~June~~ September 30, 2009:

	June 30, 2009
	September 30, 2009
Notes in default	$	2,405,227
Intercompany liabilities		419,576
Accrued interest		88,201
Lease related liabilities		23,132
Accounts payable and accrued liabilities		12,832
Accounts payable and accrued liabilities		17,391
Lease related liabilities		12,126
Tax related liabilities		~~1,134~~261
Total liabilities subject to compromise	$	2,~~954~~938,~~661~~223

4. Restructuring Charges

The table below shows the activity in our restructuring reserves for the three and ~~six~~nine months ~~ended~~ ~~June~~ended September 30, 2009.

Three months ended	~~2006 Restructuring~~			~~2007 Restructuring~~			~~2008 Restructuring~~			~~2009 Restructuring~~
June 30, 2009	Actions			Actions			Actions			Actions			Total
September 30, 2009	2006 Actions			2007 Actions			2008 Actions			2009 Actions			Total
Balance at March 31, 2009	$	484		$	69		$	2,791		$	—		$	3,344
Additions to reserve charged to earnings		—			—			1,244			1,144			2,388
Payments		(50	)		(20	)		(2,113	)		(155	)		(2,338	)
Reclass to liabilities subject to compromise		(434	)		—			(1,669	)		(989	)		(3,092	)
Balance at June 30, 2009	$	—		$	49		$	253		$	—		$	302
Net increase (decrease) to reserve charged (credited) to earnings		—			(49	)		763			293			1,007
Payments		—			—			(414	)		(293	)		(707	)
Balance at September 30, 2009	$	—		$	—		$	602		$	—		$	602

Six months ended	2006 Restructuring			2007 Restructuring			2008 Restructuring			2009 Restructuring
Nine months ended
June 30, 2009	Actions			Actions			Actions			Actions			Total
September 30, 2009	2006 Actions			2007 Actions			2008 Actions			2009 Actions			Total
Balance at December 31, 2008	$	567		$	54		$	7,282		$	—		$	7,903
Additions to reserve charged to earnings		—			32			4,394			1,144			5,570
Net increase (decrease) to reserve charged (credited) to earnings		—			(17	)		5,157			1,437			6,577
Payments		(133	)		(37	)		(910,~~754~~168	)		(~~155~~448	)		(10,~~079~~786	)
Reclass to liabilities subject to compromise		(434	)		—			(1,669	)		(989	)		(3,092	)
Balance at June 30, 2009	$	—		$	49		$	253		$	—		$	302
Balance at September 30, 2009	$	—		$	—		$	602		$	—		$	602

During the second quarter of 2009, RHD initiated a restructuring plan that included vacating leased facilities (“2009 ~~Restructuring~~ Actions”). During the three and ~~six~~nine months ended ~~June~~September 30, 2009, we recognized a restructuring charge to earnings associated with the 2009 ~~Restructuring~~ Actions of $0.3 million and $1.14 million, respectively, and made payments of $0.23 million and $0.4 million, respectively. Remaining lease obligations of $1.0 million have been reclassed to liabilities subject to compromise on the condensed consolidated balance sheet at ~~June~~ September 30, 2009.

~~During the first quarter of 2009, RHD initiated a restructuring plan that included outside~~17 consulting services to assist with the evaluation of its capital structure, including various balance sheet restructuring alternatives. Professional fees of $1.4 million, which were previously charged to 2009 Restructuring Actions during the first quarter of 2009, have been reclassed to reorganization items, net on the condensed consolidated statement of operations for the three and six months ended June 30, 2009.

During the second quarter of 2008, RHD initiated a restructuring plan that included planned headcount reductions, consolidation of responsibilities and vacated leased facilities (“2008 Restructuring Actions”) that occurred during 2008 and will continue into 2009. During the three months ended June 30, 2009 and 2008, we recognized a restructuring charge to earnings associated with the 2008 Restructuring Actions of $1.2 million and $2.4 million, respectively, and $4.4 million and $2.4 million during the six months ended June 30, 2009 and 2008, respectively. Payments of $2.1 million and $0.7 million were made with respect to outside consulting services, severance, and vacated leased facilities during the three months ended June 30, 2009 and 2008, respectively, and $9.8 million and $0.7 million during the six months ended June 30, 2009 and 2008, respectively. Remaining lease obligations of $1.7 million have been reclassed to liabilities subject to compromise on the condensed consolidated balance sheet at June 30, 2009.

During the year ended December 31, 2007, RHD initiated a restructuring plan that included planned headcount reductions and consolidation of responsibilities to be effectuated during 2008 (“2007 Restructuring Actions”). The Company did not recognize a restructuring charge to earnings associated with the 2007 Restructuring Actions during the three months ended June 30,2009. During the three months ended June 30, 2008, we recognized a restructuring charge to earnings associated with the 2007 Restructuring Actions of $0.1 million and less than $0.1 million and $0.5 million during the six months ended June 30, 2009 and 2008, respectively. Severance payments of less than $0.1 million and $0.5 million associated with the 2007 Restructuring Actions were made during the three months ended June 30, 2009 and 2008, respectively, and less than $0.1 million and $1.5 million during the six months ended June 30, 2009 and 2008, respectively.

AsDuring athe ~~result~~first quarter of ~~the~~2009, RHD ~~Merger,~~initiated ~~we completed~~ a restructuring ~~and~~plan ~~vacated~~that ~~certain~~included ~~of our leased Dex~~outside ~~Media~~consulting ~~facilities.~~services ~~The~~to ~~costs~~assist ~~associated~~ with ~~these actions are shown in~~ the ~~table~~evaluation ~~above~~of ~~under~~our ~~the caption~~capital ~~“2006~~structure, ~~Restructuring Actions.” No payments were made with respect to severance during the~~including ~~three~~various ~~and~~balance ~~six~~sheet ~~months~~restructuring ~~ended June 30, 2009~~alternatives. ~~Payments~~Professional ~~made~~fees ~~with~~of ~~respect to severance during the three and six months ended June 30, 2008 were~~ $0.1 ~~million and $0~~.24 million, ~~respectively.~~which ~~Payments made~~were ~~with~~previously ~~respect~~charged to ~~the~~2009 ~~vacated~~Actions ~~leased Dex Media facilities were less than $0.1 million and $0.5 million~~ during the ~~three~~first ~~months~~quarter ~~ended~~of ~~June 30,~~ 2009 ~~and 2008~~, ~~respectively,~~have ~~and~~been ~~$0.1 million~~reclassed ~~and~~to ~~$1.0 million~~reorganization ~~for the six months ended June 30~~items, ~~2009~~net ~~and~~on ~~2008,~~the ~~respectively.~~condensed ~~Remaining~~consolidated ~~lease obligations~~statement of ~~$0.4 million~~operations ~~have~~for ~~been~~the ~~reclassed~~nine ~~to liabilities subject to compromise on the~~months ~~condensed~~ended ~~consolidated balance sheet at June~~September 30, 2009.

~~Restructuring~~During ~~charges~~the second quarter of 2008, RHD initiated a restructuring plan that ~~are~~included ~~charged~~planned headcount reductions, consolidation of responsibilities and vacated leased facilities (“2008 Actions”) that occurred during 2008 and will continue into 2009. During the three months ended September 30, 2009 and 2008, we recognized a restructuring charge to earnings ~~are~~associated ~~included~~with inthe 2008 ~~general~~Actions of $0.8 million and ~~administrative~~$8.1 million, respectively, and $5.2 million and $10.2 million ~~expenses~~during the nine months ended September 30, 2009 and 2008, respectively. Payments of $0.4 million and $7.0 million were made with respect to outside consulting services, severance, and vacated leased facilities during the three months ended September 30, 2009 and 2008, respectively, and $10.2 million and $9.1 million during the nine months ended September 30, 2009 and 2008, respectively. Remaining lease obligations of $1.7 million have been reclassed to liabilities subject to compromise on the condensed consolidated ~~statements~~balance ofsheet ~~operations~~at September 30, 2009.

Restructuring charges that are charged (credited) to earnings are included in general and administrative expenses on the consolidated statements of operations.

5. Long-Term Debt

The following table presents the carrying value of our long-term debt at ~~June~~September 30, 2009 and ~~December~~ December 31, 2008. As a result of filing the Chapter 11 petitions, unamortized fair value ~~adjustments~~ adjustments required by GAAP as a result of the RHD Merger of $78.5 million and unamortized net premiums / discounts of $8.3 million at May 28, 2009 were written-off and recognized as reorganization items on the condensed consolidated statement of operations for the ~~three~~nine ~~and six~~ months ended ~~June~~September 30, 2009. Therefore, the carrying value of our long-term debt at ~~June~~September 30, 2009 represents par value. The carrying value of our long-term debt at December 31, 2008 includes $86.2 million of unamortized fair value adjustments.

	Notes in Default		Credit Facilities
	June 30, 2009				December 31, 2008
	September 30, 2009				December 31, 2008
Dex Media, Inc.
8% Senior Notes due 2013	$	500,000	$	—	$	510,408
9% Senior Discount Notes due 2013		749,857		—		771,488
Dex Media East
Credit Facility		—		1,~~082~~065,~~835~~286		1,081,500
Dex Media West
Credit Facility		—		1,~~101~~096,~~939~~616		1,080,000
8.5% Senior Notes due 2010		385,000		—		393,883
5.875% Senior Notes due 2011		8,720		—		8,761
9.875% Senior Subordinated Notes due 2013		761,650		—		815,791
Total Dex Media consolidated		2,405,227		2,~~184~~161,~~774~~902		4,661,831
Less current portion		—		117,929		99,625
Less current portion not subject to compromise		—		127,768		99,625
Long-term debt subject to compromise	$	2,405,227		—		—
Long-term debt not subject to compromise			$	2,~~066~~034,~~845~~134	$	4,562,206

Credit Facilities

As described in Note 1, “Business and Basis of Presentation — Chapter 11 Bankruptcy Proceedings and Plan of Reorganization,” the Plan includes modifications to certain terms and conditions of the Company’s credit facilities, which are not reflected below.

~~At June 30, 2009, total outstanding debt under our credit facilities was $2,184.8 million,~~18 ~~comprised of $1,082.8 million under the Dex Media East credit facility and $1,101.9 million under the Dex Media West credit facility.~~

Dex Media East

As of ~~June~~September 30, 2009, outstanding balances under the Dex Media East credit facility totaled $1,~~082~~065.8 3 million, comprised of $~~614~~597.26 million under Term Loan A, $~~376~~375.67 million under Term Loan B and $92.0 million under the Dex Media East Revolver, exclusive of $2.6 million utilized under three ~~standby~~ standby letters of credit. All Term Loans require quarterly principal and interest payments. The Dex Media East Revolver and Term Loan A will mature in October 2013, and the Term Loan B will mature in October 2014. The weighted average interest rate of outstanding debt under the Dex Media ~~East~~ East credit facility was 2.5211% and 3.83% at ~~June~~September 30, 2009 and December 31, 2008, respectively.

Dex Media West

As of ~~June~~September 30, 2009, outstanding balances under the Dex Media West credit facility totaled $1,~~101~~096.9 6 million, comprised of $~~119~~116.9 million under Term Loan A, $~~896~~894.85 million under Term Loan B and $85.2 million under the Dex Media West Revolver. All Term Loans require quarterly principal and interest payments. The Dex Media West Revolver and Term Loan A will mature in October 2013 and the Term Loan B will mature in October 2014. ~~All Term Loans require quarterly principal and interest payments.~~ The weighted average interest rate of outstanding debt under the Dex Media West credit facility was 6.9795% and 7.10% at ~~June~~September 30, 2009 and December 31, 2008, respectively.

6. Derivative Financial Instruments

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities —- an amendment of FASB Statement No. 133 (FASB ASC 815-10) (“SFAS No. 161”). SFAS No. 161 ~~amends SFAS No. 133 and~~ requires enhanced disclosures of derivative instruments and hedging activities such as the ~~fair~~ fair value of derivative instruments and presentation of gains or losses in tabular format, as well as as disclosures regarding credit risks and strategies and objectives for using derivative instruments. SFAS No. 161 is effective for fiscal years and interim periods beginning after November 15, 2008 and, as such, the Company adopted the provisions of this standard on January 1, 2009. Although SFAS No. 161 requires enhanced disclosures, its adoption did not impact the Company’s results of operations or financial condition.

As a result of filing the Chapter 11 petitions, the Company does not have any interest rate swaps designated as cash flow hedges as of ~~June~~September 30, 2009. The Company accounts for its derivative financial instruments and hedging activities in accordance with SFAS No. 133, as amended by SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities, an Amendment of FAS 133 and SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities. We do not use derivative financial instruments for trading or speculative purposes and our derivative financial instruments are limited to interest rate swap agreements. Our variable rate debt exposes the Company to variability in interest payments due to changes in interest rates. Management believes that it is prudent to mitigate the interest rate risk on a portion of its variable rate borrowings. Additionally, our credit ~~facility~~facilities ~~requires~~require that we maintain hedge agreements to provide a fixed rate on at least 33% of our indebtedness. To satisfy our objectives and requirements, the Company has entered into fixed interest rate swap agreements to manage fluctuations in cash flows resulting from changes in interest rates on variable rate debt. The Company has entered into the following interest rate swap that effectively converts approximately $100.0 million, or 5%, of the Company’s variable rate debt to fixed rate debt as of ~~June~~September 30, 2009. At ~~June~~September 30, 2009, approximately 4847% of our total debt outstanding consists of variable rate debt, excluding the effect of our interest rate ~~swaps~~ swap. Including the effect of our interest rate ~~swaps~~swap, total fixed rate debt comprised approximately 55% of our total debt portfolio as of ~~June~~September 30, 2009. ~~Our interest rate swap matures on March 29, 2013.~~

Effective Dates	Notional Amount			Pay Rates			Maturity Dates
(amounts in millions)
March 31, 2008	$	100	(1)		3.50	%	March 29, 2013
Total	$	100


(1)		Consists of one swap

The following table presents the fair value of our interest rate swap at ~~June~~September 30, 2009. The ~~fair~~ fair value of our interest rate swap is presented in accounts payable and accrued liabilities and ~~other~~ other non-current liabilities on the condensed consolidated balance sheet at ~~June~~September 30, 2009. The following table also presents the (gain) loss recognized in interest expense from the change in fair value of our interest rate swaps and (gain) loss recognized in accumulated other comprehensive loss from effective interest rate swaps for the three and ~~six~~nine months ended ~~June~~ September 30, 2009.

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				(Gain) Loss Recognized in							(Gain) Loss Recognized
											(Gain) Loss Recognized
				Interest Expense							in Accumulated
				(Gain) Loss Recognized in							in Accumulated
				From the Change in Fair Value of							Other Comprehensive
				Interest Expense							Other Comprehensive
				Interest Rate Swaps						Loss From Effective Interest Rate Swaps
				From the Change in Fair Value of							Loss From Effective Interest Rate
	Fair Value
				Interest Rate Swaps							Swaps
	Measurements			Three Months Ended			Six Months Ended				Three Months Ended			Six Months Ended
	Fair Value			Three Months			Nine Months				Three Months			Nine Months
	at June 30, 2009			June 30, 2009			June 30, 2009				June 30, 2009			June 30, 2009
	Measurements			Ended			Ended				Ended			Ended
Accounts Payable and Accrued Liabilities	$	(2,532	)	$	12,247		$	9,226			$	11,368		$	12,050
	at September 30,			September 30,			September 30,				September 30,			September 30,
Other Non-Current Liabilities		(1,023	)		(7,442	)		(7,442	)			(7,156	)		(8,166	)
	2009			2009			2009				2009			2009
Total Liabilities	$	(3,555	)	$	4,805		$	1,784			$	4,212		$	3,884
Accounts Payable and Accrued Liabilities	$	(2,798	)	$	4,097		$	13,323			$	(4,120	)	$	7,930
Other Non-Current Liabilities		(1,714	)		979			(6,463	)			—			(8,166	)
Total Liabilities	$	(4,512	)	$	5,076		$	6,860			$	(4,120	)	$	(236	)

During the three and ~~six~~nine months ended ~~June~~September 30, 2009, the Company reclassified $115.9 million ~~and~~ and $1824.86 million, respectively, of hedging losses related to our interest rate swaps into earnings. As of ~~June~~September 30, 2009, $1514.51 million of deferred losses, net of tax, on derivative instruments recorded in accumulated other comprehensive loss are expected to be reclassified into earnings during the next 12 months. Transactions and events are expected to occur over the next 12 months that will necessitate reclassifying these derivative losses to earnings as the hedged transactions occur.

Under the terms of the interest rate swap agreements, the Company receives variable interest based on three-month LIBOR and pays a weighted average fixed rate of 3.550%. The weighted average variable rate received on our interest rate swaps was 0.628% for the ~~six~~nine months ended ~~June~~September 30, 2009. ~~These~~ These periodic payments and receipts are recorded as interest expense.

On the day a derivative contract is executed, the Company may designate the derivative instrument as a hedge of the variability of cash flows to be received or paid (cash flow hedge). For all hedging relationships, the Company formally documents the hedging relationship and its risk-management objective and strategy for undertaking the hedge, the hedging instrument, the item, the nature of the risk being hedged, how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed, and a description of the method of measuring ineffectiveness. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items.

All derivative financial instruments were recognized as either assets or liabilities on the condensed consolidated balance sheets with measurement at fair value. On a quarterly basis, the fair values of the interest rate swaps were determined based on quoted market prices and, to the extent the swaps provided an effective hedge, the differences between the fair value and the book value of the swaps were recognized in accumulated other comprehensive loss, a component of shareholder’s equity. For derivative financial instruments that were not designated or did not qualify as hedged transactions, the initial fair value, if any, and any subsequent gains or losses on the change in the fair value were reported in earnings as a component of interest expense. Any gains or losses related to the quarterly fair value adjustments were presented as a non-cash operating activity on the condensed consolidated statements of cash flows.

The Company discontinues hedge accounting prospectively when it is determined that the derivative is no longer highly effective in offsetting changes in the cash flows of the hedged item, the derivative or hedged item is expired, sold, terminated, exercised, or management determines that designation of the derivative as a hedging instrument is no longer appropriate. In situations in which hedge accounting is discontinued, the Company continues to carry the derivative at its fair value on the condensed consolidated balance sheet and recognizes any subsequent changes in its fair value in earnings as a component of interest expense. Any amounts previously recorded to accumulated other comprehensive loss will be amortized to interest expense in the same period(s) in which the interest expense of the underlying debt impacts earnings.

By using derivative financial instruments to hedge exposures to changes in interest rates, the Company exposes itself to credit risk and market risk. Credit risk is the possible failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk for the Company. When the fair value of a derivative contract is negative, the Company owes the counterparty and, therefore, it is not subject to credit risk. The Company minimizes the credit risk in derivative financial instruments by entering into transactions with major financial institutions with credit ratings of AA- or higher.

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Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates. The market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

See Note 2, “Summary of Significant Accounting Policies —– Fair Value of Financial Instruments” for additional information regarding our interest rate swaps.

7. Income Taxes

The effective tax rate on income before income taxes of 4287.86% and 4254.95% for the three and ~~six~~nine months ended ~~June~~September 30, 2009, respectively, compares to an effective tax rate of 3478.30% and 3635.38% on ~~loss~~on income (loss) before income taxes for the three and ~~six~~nine months ended ~~June~~September 30, 2008, respectively. The change in the effective tax rate for the three ~~and~~months ~~six~~ended September 30, 2009 as compared to the three months ended ~~June~~September 30, 2008 is primarily due estimates of non-deductible reorganization costs during the three months ended September 30, 2009 as ~~compared~~well toas changes in estimates of state tax apportionment factors during the three ~~and~~months ended September 30, ~~six~~2008. The change in the effective tax rate for the nine months ended ~~June~~September 30, 2009 as compared to the nine months ended September 30, 2008 is primarily due to estimates of non-deductible reorganization costs as well as the tax consequences of goodwill impairment charges during the ~~three and six months~~nine months ended ~~June~~September 30, 2008.

8. Benefit Plans

Upon ratification of the new collective bargaining agreement with the International Brotherhood of Electrical Workers of America (“IBEW”) on June 15, 2009 and in conjunction with the comprehensive redesign of RHD’s and the Company’s employee retirement savings and pension plans approved by the Compensation & Benefits Committee of RHD’s Board of Directors on October 21, 2008, the following plan changes have been approved for IBEW employees:

	•		Effective as of December 31, 2009, the Company will freeze the Dex Media, Inc. Pension Plan covering IBEW employees. In connection with the freeze, all pension plan benefit accruals for IBEW plan participants will cease as of December 31, 2009, however, all plan balances remain intact and interest credits on participant account balances, as well as service credits for vesting and retirement eligibility, continue in accordance with the terms of the plan. In addition, supplemental transition credits have been provided to certain plan participants nearing retirement who would otherwise lose a portion of their anticipated pension benefit at age 65 as a result of freezing the current plan. Similar supplemental transition credits have been provided to certain plan participants who were grandfathered under a final average pay formula when the defined benefit plan was previously converted from a traditional pension plan to a cash balance plan.

	•		The elimination of all non-subsidized access to retiree health care and life insurance benefits effective January 1, 2010.

	•		The elimination of subsidized retiree health care benefits for any Medicare-eligible retirees effective January 1, 2010.

	•		The phase out of subsidized retiree health care benefits over a three-year period beginning January 1, 2010. With respect to the phase out of subsidized retiree health care benefits, if an eligible retiree becomes Medicare-eligible at any point in time during the phase out process noted above, such retiree will no longer be eligible for retiree health care coverage.

As a result of implementing the freeze on the Dex Media, Inc. Pension Plan covering IBEW employees, we have recognized a one-time net curtailment gain of $2.1 million during the ~~three~~nine ~~and six~~ months ~~ended~~ ~~June~~ended September 30, 2009, which has been entirely offset by losses incurred on plan assets and ~~previously~~ previously unrecognized prior service costs that had been charged to accumulated other comprehensive loss. As a result of eliminating retiree health care and life insurance benefits for IBEW employees, we have recognized a one-time curtailment gain of $13.5 million during the ~~three and~~nine ~~six~~ months ended ~~June~~September 30, 2009. As a result of these actions, we will no longer incur funding expenses and administrative costs associated with this plan for IBEW employees.

On May 31, 2009, settlements of the Dex Media, Inc. Pension Plan occurred ~~as defined by SFAS No. 88, Employers’ Accounting for Settlements~~ and ~~Curtailments~~at ~~of Defined Benefit Plans and for Termination Benefits. At~~ that time, lump sum payments to participants exceeded the sum of the service cost plus interest cost component of the net periodic benefit costs. These settlements resulted in the recognition of an actuarial loss of $3.6 million for the ~~three~~nine ~~and six~~ months ended ~~June~~ September 30, 2009.

In accordance with SFAS No. 132, Employers’ Disclosures About Pension and Other Postretirement Benefits (Revised 2003), the following table provides the components of net periodic benefit cost for the three and six months ended June 30, 2009 and 2008:

	Pension Benefits
	Three Months						Six Months
	Ended June 30,						Ended June 30,
	2009			2008			2009			2008
Service cost	$	890		$	1,730		$	2,331		$	3,748
Interest cost		1,781			2,597			3,871			5,187
Expected return on plan assets		(2,172	)		(2,737	)		(4,403	)		(5,435	)
Amortization of net gain		(27	)		—			(27	)		—
Settlement loss		3,593			—			3,593			—
Net periodic benefit cost	$	4,065		$	1,590		$	5,365		$	3,500

	Postretirement Benefits
	Three Months						Six Months
	Ended June 30,						Ended June 30,
	2009			2008			2009			2008
Service cost	$	146		$	286		$	414		$	622
Interest cost		630			1,212			1,389			2,242
Amortization of net gain		(39	)		—			(39	)		—
Amortization of prior service cost		(1	)		(1	)		(3	)		(1	)
Curtailment Gain		(13,461	)		—			(13,461	)		—
Net periodic benefit (credit) cost	$	(12,725	)	$	1,497		$	(11,700	)	$	2,863

Net periodic pension benefit cost for the three and six months ended June 30, 2009 has declined when compared to the prior corresponding periods, excluding the settlement charge, due to the freeze of the Company’s defined benefit plans covering non-union employees. In connection with the freeze, all pension plan benefit accruals for non-union plan participants have ceased as of December 31, 2008, however, all plan balances remained intact and interest credits on participant account balances, as well as service credits for vesting and retirement eligibility, continue in accordance with the terms of the respective plans. In addition, supplemental transition credits have been provided to certain plan participants nearing retirement who would otherwise lose a portion of their anticipated pension benefit at age 65 as a result of freezing the current plans. Similar supplemental transition credits have been provided to certain plan participants who were grandfathered under a final average pay formula when the defined benefit plans were previously converted from traditional pension plans to cash balance plans.

Net periodic postretirement benefit cost for the three and six months ended June 30, 2009 has declined when compared to the prior corresponding periods, due to the following curtailment related to non-union employees: (i) the elimination of all non-subsidized access to retiree health care and life insurance benefits effective January 1, 2009, (ii) the elimination of subsidized retiree health care benefits for any Medicare-eligible retirees effective January 1, 2009 and (iii) the phase out of subsidized retiree health care benefits over a three-year period beginning January 1, 2009 (with all non-union retiree health care benefits terminating January 1, 2012). With respect to the phase out of subsidized retiree health care benefits, if an eligible retiree becomes Medicare-eligible at any point in time during the phase out process noted above, such retiree will no longer be eligible for retiree health care coverage.

During the three months ended June 30, 2009 and 2008, the Company made contributions of $3.0 million and $2.2 million, respectively, to its pension plan. During the six months ended June 30, 2009 and 2008, the Company made contributions of $18.5 million and $4.0 million, respectively, to its pension plan. During the three months ended June 30, 2009 and 2008, the Company made contributions of $1.1 million and $0.6 million, respectively, to its postretirement plan. During the six months ended June 30, 2009 and 2008, the Company made contributions of $1.7 million and $1.4 million, respectively, to its postretirement plan. The Company expects to make total contributions of approximately $48.0 million and $5.6 million to its pension plan and postretirement plan, respectively, in 2009.

The following table provides the components of net periodic benefit cost for the three and nine months ended September 30, 2009 and 2008:


	Pension Benefits
	Three Months						Nine Months
	Ended September 30,						Ended September 30,
	2009			2008			2009			2008
Service cost	$	1,009		$	1,664		$	3,384		$	5,412
Interest cost		1,724			2,517			5,594			7,704
Expected return on plan assets		(2,026	)		(2,494	)		(6,429	)		(7,929	)
Amortization of net gain		(81	)		—			(108	)		—
Settlement loss		—			—			3,593			—

Net periodic benefit cost	$	626		$	1,687		$	6,034		$	5,187


	Postretirement Benefits
	Three Months						Nine Months
	Ended September 30,						Ended September 30,
	2009			2008			2009			2008
Service cost	$	122		$	312		$	525		$	934
Interest cost		596			1,121			1,985			3,363
Amortization of net gain		(63	)		—			(102	)		—
Amortization of prior service cost		(1	)		(2	)		(4	)		(3	)
Curtailment gain		—			—			(13,461	)		—

Net periodic benefit cost (credit)	$	654		$	1,431		$	(11,057	)	$	4,294

Net periodic pension benefit cost for the three and nine months ended September 30, 2009 has declined when compared to the prior corresponding periods, excluding the settlement charge, due to the freeze of the Company’s defined benefit plans covering non-union employees. In connection with the freeze, all pension plan benefit accruals for non-union plan participants have ceased as of December 31, 2008, however, all plan balances remained intact and interest credits on participant account balances, as well as service credits for vesting and retirement eligibility, continue in accordance with the terms of the respective plans. In addition, supplemental transition credits have been provided to certain plan participants nearing retirement who would otherwise lose a portion of their anticipated pension benefit at age 65 as a result of freezing the current plans. Similar supplemental transition credits have been provided to certain plan participants who were grandfathered under a final average pay formula when the defined benefit plans were previously converted from traditional pension plans to cash balance plans.

Net periodic postretirement benefit cost for the three and nine months ended September 30, 2009 has declined when compared to the prior corresponding periods, due to the following curtailment related to non-union employees: (i) the elimination of all non-subsidized access to retiree health care and life insurance benefits effective January 1, 2009, (ii) the elimination of subsidized retiree health care benefits for any Medicare-eligible retirees effective January 1, 2009 and (iii) the phase out of subsidized retiree health care benefits over a three-year period beginning January 1, 2009 (with all non-union retiree health care benefits terminating January 1, 2012). With respect to the phase out of subsidized retiree health care benefits, if an eligible retiree becomes Medicare-eligible at any point in time during the phase out process noted above, such retiree will no longer be eligible for retiree health care coverage.

During the three months ended September 30, 2009 and 2008, the Company made contributions of $8.5 million and $3.4 million, respectively, to its pension plan. During the nine months ended September 30, 2009 and 2008, the Company made contributions of $27.0 million and $7.4 million, respectively, to its pension plan. During the three months ended September 30, 2009 and 2008, the Company made contributions of $1.0 million and $1.2 million, respectively, to its postretirement plan. During the nine months ended September 30, 2009 and 2008, the Company made contributions of $2.7 million and $2.6 million, respectively, to its postretirement plan. The Company expects to make total contributions of approximately $27.6 million and $5.6 million to its pension plan and postretirement plan, respectively, in 2009.

9. Business Segments

Management reviews and analyzes its business of providing local search solutions as one operating segment.

10. Legal Proceedings

On the Petition Date, the RHD Entities filed voluntary petitions for Chapter 11 relief under the Bankruptcy Code in the Bankruptcy Court in order to consummate a balance sheet restructuring. The cases are being jointly administered. The Company continues to operate its businesses as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. As of the Petition Date, all pending litigation wherein the Company is named as a defendant is generally stayed by operation of federal bankruptcy law, and absent further order of the Bankruptcy Court, no party, subject to certain exceptions, may take any action, also subject to certain exceptions, to recover on pre-petition claims against the Company. At this time, it is not possible to predict the outcome of the Chapter 11 Cases or its effect on our business or the actions described below.

We are involved in various legal proceedings arising in the ordinary course of our business, as well as certain litigation and tax matters. In many of these matters, plaintiffs allege that they have suffered damages from errors or omissions in their advertising or improper listings, in each case, contained in directories published by us.

We are also exposed to potential defamation and breach of privacy claims arising from our publication of directories and our methods of collecting, processing and using advertiser and telephone subscriber data. If such data were determined to be inaccurate or if data stored by us were improperly accessed and disseminated by us or by unauthorized persons, the subjects of our data and users of the data we collect and publish could submit claims against the Company. Although to date we have not experienced any material claims relating to defamation or breach of privacy, we may be party to such proceedings in the future that could have a material adverse effect on our business.

We periodically assess our liabilities and contingencies in connection with these matters based upon the latest information available to us. For those matters where it is probable that we have incurred a loss and the loss or range of loss can be reasonably estimated, we record a liability in our condensed consolidated financial statements. In other instances, we are unable to make a reasonable estimate of any liability because of the uncertainties related to both the probable outcome and amount or range of loss. As additional information becomes available, we adjust our assessment and estimates of such liabilities accordingly.

Based on our review of the latest information available, we believe our ultimate liability in connection with pending or threatened legal proceedings will not have a material adverse effect on our results of operations, cash flows or financial position. No material amounts have been accrued in our condensed consolidated financial statements with respect to any such matters.

11. Related Party Transactions

Certain transactions are managed by RHD on a centralized basis. Under the centralized cash management program, RHD and the Company advance funds and allocate certain operating expenditures to each other. These net intercompany balances have been classified as a current asset at ~~June~~ September 30, 2009 and current liability at December 31, 2008, as the Company intends to settle these ~~balances~~ balances with RHD during the next twelve months. Changes in net intercompany balances resulting ~~from~~ from operating transactions have been presented as operating activities on the condensed ~~consolidated~~ consolidated statements of cash flows for the ~~six~~nine months ended ~~June~~September 30, 2009 and 2008.

On March 19, 2009, Dex Media East and Dex Media West each entered into a loan agreement (“loan agreements”) with RHD Service LLC (“RHD Service”), a direct wholly-owned subsidiary of RHD, for $50.0 million and $75.0 million, respectively. The loan agreements have a stated maturity date of March 31, 2010 and interest is payable on a quarterly basis commencing June 30, 2009 at an annual rate of 8.75%. Funds for the loans made to RHD Service were obtained from amounts borrowed under the unused portions of the Dex Media East Revolver and Dex Media West Revolver on February 13, 2009. These intercompany loans have been classified as a current asset at ~~June~~ September 30, 2009 based on the stated maturity date and are presented as an investing activity on the condensed consolidated statements of cash flows for the ~~six~~nine months ended ~~June~~September 30, 2009. ~~Interest~~ Interest income resulting from these loans is included in interest expense, net on the condensed consolidated statement of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2009.

2223

In general, substantially all of the net assets of the Company and its subsidiaries are restricted from being paid as dividends to any third party, and our subsidiaries are restricted from paying dividends, loans or advances to RHD with very limited exceptions, under the terms of the Dex Media East and Dex Media West credit facilities. We paid dividends to our parent during the ~~six~~nine months ended ~~June~~September 30, 2009 and 2008 of $84.6 million and $~~125~~258.41 million, respectively. These dividends are presented as a financing activity on the condensed consolidated statements of cash flows for the ~~six~~ nine months ended ~~June~~September 30, 2009 and 2008.

12. Subsequent Events

The Company has evaluated subsequent events having an accounting or reporting impact as of ~~August~~November 76, 2009, which represents the filing date of this Quarterly Report on Form 10-Q. ~~On July 27, 2009,~~ the RHD Entities filed the Plan together with the Disclosure Statement. See Note 1, “Business and Basis of Presentation — Chapter 11 Bankruptcy Proceedings and Plan of Reorganization” for additional information.

23On October 3, 2009, Dex Media entered into a Memorandum of Agreement with the Communications Workers of America (“CWA”) regarding a tentative three year collective bargaining agreement. A ratification vote by CWA members is expected to be completed in early November 2009.

The RHD Entities filed an amended Plan and an amended Disclosure Statement on October 7, 2009, October 19, 2009 and October 21, 2009. On October 21, 2009, the Bankruptcy Court held a hearing, during which it approved the Disclosure Statement and granted the RHD Entities the authority to begin soliciting votes on the Plan.

On October 23, 2009, a putative securities class action lawsuit was commenced in Delaware Federal Court on behalf of all persons who purchased or otherwise acquired RHD’s publicly traded securities between July 2007 and the time the RHD Entities filed for bankruptcy at the end of May 2009, alleging that certain RHD officers issued false and misleading statements regarding RHD’s business and financial condition. RHD believes the allegations set forth in the putative class action lawsuit are without merit and intends to vigorously defend any such action pursued against RHD and its officers.

Item 2. Management’s Narrative Analysis of Results of Operations

Pursuant to General Instruction H(2)(a) of Form 10-Q: (i) the information called for by Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, has been omitted and (ii) we are providing the following Management’s Narrative Analysis of Results of Operations.

Forward-Looking Information

Certain statements contained in this Quarterly Report on Form 10-Q regarding our future operating results, performance, business plans or prospects and any other statements not constituting historical fact are “forward-looking statements” subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Where possible, words such as “believe,” “expect,” “anticipate,” “should,” “will,” “would,” “planned,” “estimated,” “potential,” “goal,” “outlook,” “may,” “predicts,” “could,” or the negative of those words and other comparable expressions, are used to identify such forward-looking statements. All forward-looking statements reflect our current beliefs and assumptions with respect to our future results, business plans and prospects, based on information currently available to us and are subject to significant risks and uncertainties. Accordingly, these statements are subject to significant risks and uncertainties and our actual results, business plans and prospects could differ significantly from those expressed in, or implied by, these statements. We caution readers not to place undue reliance on, and we undertake no obligation to update, other than as imposed by law, any forward-looking statements. Such risks, uncertainties and contingencies include, but are not limited to, statements about Dex Media, Inc.’s (“Dex Media”) future financial and operating results, Dex Media’s plans, objectives, expectations and intentions and other statements that are not historical facts. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: (1) the impact of the RHD Entities’ bankruptcy filings and the related Chapter 11 bankruptcy process on our business, financial condition or results of operations; (2) changes in directory advertising spend and consumer usage; (3) regulatory and judicial rulings; (4) competition and other economic conditions; (5) changes in the Company’s and the Company’s subsidiaries’ credit ratings; (6) changes in accounting standards; (7) adverse results from litigation, governmental investigations or tax related proceedings or audits; (8) the effect of labor strikes, lock-outs and negotiations; (9) successful integration and realization of ~~the~~ the expected benefits of acquisitions; (10) the continued enforceability of the commercial ~~agreements~~ agreements with Qwest; (11) our reliance on third-party vendors for various services; and (12) other events beyond our control that may result in unexpected adverse operating results. Additional risks and uncertainties are described in detail in Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2008 and ~~this~~our Quarterly Report on Form 10-Q for the three and six months ended June 30, 2009. Unless otherwise indicated, the terms “Dex Media,” the “Company,” “we,” “us” and “our” refer collectively to Dex Media, Inc., its direct and indirect wholly-owned subsidiaries and its and their predecessors.

Corporate Overview

	•		We provide simple, cost effective marketing solutions to our advertisers that generate a large volume of ready-to-buy consumers for their local businesses.

	•		We provide local search solutions to consumers that are easy to use and deliver highly relevant search results through a variety of print and online media platforms.

Through our Dex^® Advantage, customers’ business information is collected and marketed through a single profile and distributed via a variety of local search products. Dex ensures advertisers’ business content and messages are found wherever, whenever and however consumers choose to search. The Dex Advantage spans multiple media platforms for local advertisers including print with the Dex directories, which we co-brand with Qwest, a recognizable brand in the industry, online and mobile devices with dexknows.com ^®, voice-activated directory search at 1-800-Call-Dex™ and leading search engines and other online sites via DexNet™.

We believe our ability to effectively compete in our industry is supported and enhanced by our local marketing consultants, who serve as trusted advisors for marketing support and service in the local markets we serve. Our local marketing consultants work closely with advertisers to first discover their needs and goals, assess their unique situations, and then recommend customized, cost-effective, directional local search solutions to help their businesses grow. Additional factors that support our ability to effectively compete in our industry include:

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	•		Brand: Our Dex brand provides differentiation and an ability to leverage the capabilities of our print products into other media, such as online and mobile;

	•		Advertisers: Strong, long-term relationships with our advertisers;

	•		Products: Our multiple media local search solutions target consumers who are closer to making purchase decisions;

	•		Channel: We manage a large, established local sales organization; and

	•		Content: Our proprietary database contains up-to-date information for national and local businesses in 14 states and an infrastructure to service these national and local advertisers.

Dex Media, a wholly-owned subsidiary of R.H. Donnelley Corporation (“RHD” or “parent”), is the exclusive publisher of the “official” yellow pages and white pages directories for Qwest Corporation, the local exchange carrier of Qwest Communications International Inc. (“Qwest”), in Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota (collectively, the “Dex East States”) and Arizona, Idaho, Montana, Oregon, Utah, Washington and Wyoming (collectively, the “Dex West States,” and, together with the Dex East States, the “Dex States”). We are the indirect parent of Dex Media East LLC (“Dex Media East”) and Dex Media West LLC (“Dex Media West”). Dex Media East operates the directory business in the Dex East States and Dex Media West operates the directory business in the Dex West States.

Chapter 11 Bankruptcy Proceedings and Plan of Reorganization

Filing of Voluntary Petitions in Chapter 11

On May 28, 2009 (the “Petition Date”), RHD, the Company and RHD’s other subsidiaries (~~the~~collectively the “RHD Entities”) filed voluntary petitions for Chapter 11 relief under Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) in order to consummate a balance sheet restructuring. The cases are being jointly administered under the caption In re: R.H. Donnelley, Corporation, et al., Case No. 09-11833 (KG) (Bankr. D. Del. 2009) (the “Chapter 11 Cases”). Promptly after filing the Chapter 11 petitions, the Company began notifying all known current or potential creditors of the commencement of the Chapter 11 Cases.

Commencement of Chapter 11 Cases

2526

Proposed Plan of Reorganization

26 (i) Elimination of approximately $6.4 billion of the RHD Entities’ indebtedness, including the payment of $700.0 million of secured indebtedness, and $500.0 million of annual interest expense; (ii) The exchange of all pre-petition publicly issued unsecured note debt for (a) 100% of the reorganized RHD equity that is subject to dilution pursuant to a stock-based management incentive plan, which is expected to permit equity-based compensation in an amount of not less than 10% of the fully diluted RHD equity, if approved in accordance with the Plan and (b) in the case of the holders of the Dex Media West 8.5% Senior Notes due 2010 and 5.875% Senior Notes due 2011, $300.0 million of new seven-year RHD unsecured notes on a pro rata basis in addition to their share of the reorganized RHD equity; (iii) The obligations of the lenders under the R.H. Donnelley Inc. (“RHDI”) revolving credit facility (the “RHDI Revolver”) to make additional advances terminated on the Petition Date and the outstanding loans under the RHDI Revolver will be converted to a term loan with a maturity date of October 2014 and an interest rate of LIBOR plus 625 basis points (“bps”), subject to a reduction upon satisfaction of a specified financial covenant threshold, and the current RHDI term loans will be amended to extend the maturity date to October 2014 with an interest rate of LIBOR plus 625 bps, subject to a reduction upon satisfaction of a specified financial covenant threshold; (iv) The obligations of the lenders under the Dex Media East revolving credit facility (“Dex Media East Revolver”) to make additional advances terminated on the Petition Date, and the outstanding loans under the Dex Media East Revolver will be converted to a term loan with a maturity date of October 2014 and an interest rate of LIBOR plus 250 bps, subject to reductions upon satisfaction of certain financial covenant thresholds, the current Dex Media East Term Loan A will be amended to extend the maturity date to October 2014 and increase the interest rate to LIBOR plus 250 bps, subject to reductions upon satisfaction of certain financial covenant thresholds, and the Dex Media East Term Loan B will be amended to increase the interest rate to LIBOR plus 250 bps, subject to reductions upon satisfaction of certain financial covenant thresholds; (v) The obligations of the lenders under the Dex Media West revolving credit facility (“Dex Media West Revolver”) to make additional advances terminated on the Petition Date and the outstanding loans under the Dex Media West Revolver will be converted to a term loan with a maturity date of October 2014 and an interest rate of LIBOR plus 450 bps, subject to reductions upon satisfaction of certain financial covenant thresholds, the current Dex Media West Term Loan A will be amended to extend the maturity date to October 2014 and increase the interest rate to LIBOR plus 450 bps, subject to reductions upon satisfaction of certain financial covenant thresholds, and the Dex Media West Term Loan B will be amended to increase the interest rate to LIBOR plus 450 bps, subject to reductions upon satisfaction of certain financial covenant thresholds; and (vi) Enhancement of the collateral and guarantees of the Dex Media East, Dex Media West and RHDI secured debt. As of emergence, the RHD Entities’ proposed Plan would, if adopted in its present form, result in consolidated debt of approximately $3.4 billion, of which $3.1 billion would be secured.

On May 29, 2009, RHD announced that the RHD Entities had reached pre-petition agreements in principle with a substantial majority of its unsecured noteholders and a substantial majority of their pre-petition secured lenders on a restructuring plan. The terms of ~~the~~ RHD Entities’ restructuring plan are evidenced by (i) Support Agreements dated as of May 21, 2009 and executed by certain of the RHD Entities and lenders holding in excess of two-thirds in principal amount and one-half in number of claims under each of the RHDI, Dex Media East, and Dex Media West pre-petition credit facilities and (ii) the Restructuring Support Agreement dated as of May 28, 2009 executed by the RHD Entities and noteholders holding in excess of a majority of the aggregate principal amount of the pre-petition unsecured note debt (together, the “Plan Support Agreements”). The Plan is consistent with the terms and conditions of the Plan Support Agreements and applicable related term sheets. The Plan Support Agreements, together with the applicable terms sheets, form the basis for the Plan. There can be no assurance, however, that the Plan will be approved by all requisite holders of claims or interests or by the Bankruptcy Court or that all conditions precedent to the implementation of the Plan will be satisfied. Each Plan Support Agreement is subject to certain material conditions. Moreover, each Plan Support Agreement may be terminated upon the occurrence of certain events, including if ~~the~~a ~~Plan~~plan of reorganization is not confirmed by ~~the Bankruptcy Court by~~ January 15, 2010.

Recent Trends Related to Our Business

RHD and the Company have been experiencing lower advertising sales primarily as a result of declines in new and recurring business, including both renewal and ~~increases~~incremental sales to existing advertisers, mainly driven by (1) declines in overall advertising spending by businesses, (2) the ~~significant~~ significant impact of the weaker economy on smaller businesses in the markets in which we do business and (3) an increase in competition and more fragmentation in the local business search market. ~~In addition~~These factors, ~~RHD~~along ~~and~~with the ~~Company~~significant ~~have~~decline ~~been~~in ~~experiencing~~the ~~adverse~~trading ~~bad~~value ~~debt~~of ~~trends~~our ~~attributable~~debt ~~to many~~and ofRHD’s ~~these~~debt ~~same~~and ~~economic~~equity ~~challenges~~securities induring ~~our~~2008 ~~markets.~~and Weresulting ~~expect~~increase ~~that these economic challenges will continue~~ in ~~our~~the ~~markets,~~discount ~~and~~rate, aswere ~~such,~~the primary ~~our~~drivers ~~advertising~~in ~~sales,~~determining ~~bad~~the ~~debt~~discounted ~~experience~~expected ~~and~~future ~~operating results~~cash ~~will~~flows ~~continue~~and toresulting begoodwill impairment ~~adversely~~charges ~~impacted~~ in ~~the foreseeable future~~2008.

InWe ~~response~~currently toproject ~~these~~our ~~economic~~future ~~challenges~~operating results, wecash ~~continue~~flow toand ~~actively~~liquidity ~~manage~~will ~~expenses~~be ~~and are~~negatively ~~considering~~impacted ~~and~~by ~~acting~~the ~~upon~~aforementioned aconditions. ~~host~~During ofthe ~~initiatives~~nine tomonths ~~streamline~~ended ~~operations~~September 30, ~~and~~2009, ~~contain~~we experienced ~~costs~~a $175.4 million, ~~At the~~or ~~same time~~14.6%, wedecline ~~are~~in ~~improving~~total net revenues from the ~~value~~prior wecorresponding period. ~~deliver~~During tothe ~~our~~nine ~~advertisers~~months byended ~~expanding~~September 30, 2009, excluding the ~~number~~effects of ~~platforms~~ ~~and~~filing ~~media~~the Chapter 11 ~~through~~petitions, ~~which~~ we ~~deliver~~also ~~their~~experienced ~~message~~a todecrease ~~consumers~~in asoperating ~~well~~cash asflow ~~adjusting~~from the prior ~~pricing~~corresponding toperiod. ~~give~~In ~~advertisers~~addition, ~~more~~we ~~exposure~~have ~~for~~been ~~the~~experiencing ~~same~~adverse ~~price.~~bad Wedebt ~~are~~trends ~~also committing our sales~~attributable ~~force~~ to ~~focus~~many onof ~~selling~~these ~~the~~same ~~value~~economic ~~provided~~challenges toin ~~local~~our ~~businesses~~markets. ~~through~~We expect that these ~~expanded~~economic ~~platforms,~~challenges ~~including~~will continue in our ~~Dex~~markets, ~~directories~~and, ~~online~~as ~~and~~such, ~~mobile~~our ~~devices~~advertising sales, ~~voice-activated~~bad ~~directory~~debt ~~search~~experience and ~~leading~~operating ~~search~~results ~~sites.~~will ~~In addition, we~~ continue to ~~invest~~be inadversely ~~our~~impacted ~~future~~for ~~through~~the ~~initiatives~~foreseeable ~~such~~future. ~~as new~~As ~~sales~~a ~~force automation~~result, our anhistorical ~~advertiser~~operating ~~self~~results ~~service~~will ~~system~~not ~~and~~be ~~portal,~~indicative ~~new~~of ~~mobile~~future ~~and~~operating ~~voice~~performance, although ~~search~~our ~~platforms~~long-term ~~and~~financial ~~associated~~forecast ~~employee~~currently ~~training.~~anticipates Asa ~~economic~~gradual ~~conditions~~improvement ~~recover~~ in ~~our~~the ~~markets,~~economy wecommencing ~~believe~~in ~~these~~the ~~investments~~second ~~will~~half ~~drive~~of ~~future revenue growth~~2010.

As amore ~~result~~fully ofdescribed ~~the~~below ~~credit and liquidity crisis~~ in ~~the United States and throughout the global financial system~~Item 2, ~~substantial~~“Management’s ~~volatility~~Narrative inAnalysis ~~world~~of ~~capital~~Results ~~markets~~of ~~and the banking industry has~~Operations ~~occurred.~~– ~~Several~~Net ~~large~~Revenues”, ~~banking~~our ~~and~~method ~~financial~~of ~~institutions~~recognizing ~~have~~revenue ~~received~~under ~~funding from~~ the ~~federal government,~~deferral ~~been~~and ~~granted~~amortization ~~government loan guarantees, been taken over by federal regulators, merged~~method ~~with~~results ~~other~~in ~~financial~~a ~~institutions,~~delayed orrecognition ~~have~~of ~~initiated~~declining ~~bankruptcy~~advertising ~~proceedings.~~sales ~~These~~whereby ~~and~~recognized ~~other~~revenues ~~events~~reflect ~~have~~the ~~had~~amortization aof ~~significant~~advertising ~~negative~~sales ~~impact~~consummated onin ~~financial~~prior ~~markets,~~periods as well as ~~the~~advertising ~~overall economy. This~~sales ~~unprecedented~~consummated ~~instability~~in ~~has made it difficult for RHD and us to access~~ the ~~credit~~current ~~market and to obtain financing or refinancing~~period. ~~As such~~Accordingly, ~~the~~our ~~RHD~~projected ~~Entities~~decline ~~filed~~in ~~voluntary~~advertising ~~petitions~~sales ~~for~~will ~~reorganization under Chapter 11 on May 28, 2009, as noted above. In addition, as a~~ result ofin ~~the global economic instability, our pension plan’s investment portfolio has experienced significant volatility and~~ a decline in ~~fair~~revenue ~~value~~recognized ~~during~~in ~~2008~~future ~~and into 2009~~periods. ~~However,~~We ~~because~~expect ~~the~~these ~~values~~negative ~~of our~~trends ~~pension plan’s individual investments have and will fluctuate in response~~ to ~~changing market~~ ~~conditions,~~continue ~~the~~into ~~amount of gains or losses that will be recognized in subsequent periods and~~ the ~~impact~~ onforeseeable ~~the funded status of the pension plan and~~ future ~~minimum required cash contributions, if any, cannot be determined at this time~~.

OnIn ~~June 15,~~response ~~2009~~to these economic challenges, we ~~agreed~~continue onto actively manage expenses and are considering and acting upon a ~~new~~host ~~three~~of ~~year~~initiatives ~~collective~~to ~~bargaining~~streamline ~~agreement~~operations ~~with~~and ~~the~~contain costs. At ~~International~~the ~~Brotherhood~~same oftime, ~~Electrical~~we ~~Workers~~are improving the value we deliver to our advertisers by expanding the number of platforms ~~America~~and ~~(“IBEW”)~~media through which we deliver their message to consumers. ~~The~~We ~~collective~~are ~~bargaining~~also committing our ~~agreement~~sales ~~with~~force to focus on selling the ~~Communications~~value ~~Workers~~provided to local businesses through these expanded platforms, including our Dex directories, online and mobile devices, voice-activated directory search as well as our network of ~~America~~owned ~~(“CWA”)~~and ~~expires~~operated inand ~~October 2009~~partner online search sites. WeIn ~~intend~~addition, the Company continues to ~~engage~~ invest in ~~good~~its ~~faith~~future ~~bargaining~~through ~~with~~initiatives ~~the~~such ~~CWA~~as its overall digital product and service offerings, ~~however~~sales force automation, ~~the~~an ~~results~~advertiser ofself ~~negotiations~~service ~~cannot~~system ~~yet~~and portal, benew mobile and voice search platforms and associated employee training. As economic ~~determined~~conditions recover in our markets, we believe these investments will drive future revenue growth.

27On October 3, 2009, we entered into a Memorandum of Agreement with the Communications Workers of America (“CWA”) regarding a tentative three year collective bargaining agreement. A ratification vote by CWA members is expected to be completed in early November 2009. On June 15, 2009, we agreed on a new three year collective bargaining agreement with the International Brotherhood of Electrical Workers of America (“IBEW”). The collective bargaining agreement with the IBEW expires in June 2012.

Going Concern

Item 1, “Financial Statements — Unaudited” — Note 1, “Business and Basis of Presentation” contains a statement indicating that certain events could impact our ability to continue as a going concern. The assessment of our ability to continue as a going concern was made by management considering, among other factors: (i) our Chapter 11 bankruptcy filing on May 28, 2009; (ii) the current global credit and liquidity crisis; (iii) the significant negative impact on our operating results and cash flows from the overall downturn in the global economy and an increase in competition and more fragmentation in the local business search market; (iv) that certain of our credit ratings have been ~~recently~~ downgraded; and (v) that RHD’s common stock ceased trading on the New York Stock ~~Exchange~~ Exchange (“NYSE”) on December 31, 2008 and is now traded over-the-counter on the Pink Sheets. These considerations are further reflected by our goodwill impairment charges of $2.6 billion and intangible asset impairment charges of $603.0 million recorded for the year ended December 31, 2008. In management’s view, these circumstances and events raise substantial doubt as to whether the Company will be able to continue as a going concern for a reasonable period of time.

Accounting Matters

Other Significant Financing Developments


Description	Amount

Dex Media West
Term Loan A	$	6,971
Term Loan B		50,941
Revolver		4,826

Dex Media East
Term Loan A		34,176
Term Loan B		20,454
Revolver		4,985

Total repayment	$	122,353

On May 14, 2009, the Company exercised a 30-day grace period on $54.0 million in interest payments due on the following senior notes and senior discount notes:


Description	Amount

Dex Media, Inc.
8% Senior Notes due 2013	$	20,000
9% Senior Discount Notes due 2013		33,744

Dex Media West
5.875% Senior Notes due 2011		256

Total interest payments	$	54,000

On April 15, 2009, RHD exercised a 30-day grace period on $54.6 million in interest payments due on its 8.875% Series A-4 Senior Notes due 2017. As a result of exercising the 30-day grace period, certain existing interest rate swaps associated with the Dex Media East credit facility having a notional amount of $350.0 million were required to be settled on May 28, 2009. Cash settlement payments of $26.4 million were made during the ~~three~~second ~~and~~quarter ~~six~~of ~~months ended June 30,~~ 2009 associated with these interest rate swaps.

Employee Retirement Savings and Pension Plans

Upon ratification of the new collective bargaining agreement with the IBEW on June 15, 2009 and in conjunction with the comprehensive redesign of RHD’s and the Company’s employee retirement savings and pension plans approved by the Compensation & Benefits Committee of RHD’s Board of Directors on October 21, 2008, the following plan changes have been approved for IBEW employees:

	•		Effective as of December 31, 2009, the Company will freeze the Dex Media, Inc. Pension Plan covering IBEW employees. In connection with the freeze, all pension plan benefit accruals for IBEW plan participants will cease as of December 31, 2009, however, all plan balances remain intact and interest credits on participant account balances, as well as service credits for vesting and retirement eligibility, continue in accordance with the terms of the plan. In addition, supplemental transition credits have been provided to certain plan participants nearing retirement who would otherwise lose a portion of their anticipated pension benefit at age 65 as a result of freezing the current plan. Similar supplemental transition credits have been provided to certain plan participants who were grandfathered under a final average pay formula when the defined benefit plan was previously converted from a traditional pension plan to a cash balance plan.

	•		The elimination of all non-subsidized access to retiree health care and life insurance benefits effective January 1, 2010.

	•		The elimination of subsidized retiree health care benefits for any Medicare-eligible retirees effective January 1, 2010.

	•		The phase out of subsidized retiree health care benefits over a three-year period beginning January 1, 2010. With respect to the phase out of subsidized retiree health care benefits, if an eligible retiree becomes Medicare-eligible at any point in time during the phase out process noted above, such retiree will no longer be eligible for retiree health care coverage.

As a result of implementing the freeze on the Dex Media, Inc. Pension Plan covering IBEW employees, we have recognized a one-time net curtailment gain of $2.1 million during the three and six months ended June 30~~, 2009, which has been entirely offset by losses incurred on plan assets and~~ previously unrecognized prior service costs that had been charged to accumulated other comprehensive loss. As a result of eliminating retiree health care and life insurance benefits for IBEW employees, we have recognized a one-time curtailment gain of $13.5 million during the three and six months ended June 30, 2009. As a result of these actions, we will no longer incur funding expenses and administrative costs associated with this plan for IBEW employees.

As a result of implementing the freeze on the Dex Media, Inc. Pension Plan covering IBEW employees, we have recognized a one-time net curtailment gain of $2.1 million during the nine months ended September 30, 2009, which has been entirely offset by losses incurred on plan assets and previously unrecognized prior service costs that had been charged to accumulated other comprehensive loss. As a result of eliminating retiree health care and life insurance benefits for IBEW employees, we have recognized a one-time curtailment gain of $13.5 million for the nine months ended September 30, 2009. As a result of these actions, we will no longer incur funding expenses and administrative costs associated with this plan for IBEW employees.

Segment Reporting

Management reviews and analyzes its business of providing local search solutions as one operating segment.

New Accounting Pronouncements

In ~~May~~September 2009, the ~~Financial~~Emerging ~~Accounting~~Issues ~~Standards~~Task ~~Board~~Force (“~~FASB~~EITF”) ~~issued~~reached ~~Statement~~final ofconsensus ~~Financial Accounting~~on ~~Standards~~EITF ~~(“SFAS”)~~ Issue No. ~~165~~08-1, ~~Subsequent~~Revenue ~~Events~~Arrangements with Multiple Deliverables (“~~SFAS~~EITF ~~No. 165~~08-1”),. ~~the~~EITF ~~objective~~08-1 ofhas ~~which is~~not toyet ~~establish~~been incorporated ~~general~~into ~~standards~~the ofFASB’s ~~accounting~~Codification. ~~for~~EITF ~~and~~08-1 ~~disclosure~~updates ofthe ~~events~~current ~~that~~guidance ~~occur~~pertaining ~~after the~~to ~~balance~~multiple-element ~~sheet~~revenue ~~date~~arrangements ~~but~~included ~~before~~in ~~financial~~FASB ~~statements~~ASC ~~are~~605-25, ~~issued~~which ororiginated ~~are~~from ~~available~~EITF 00-21, toRevenue beArrangements ~~issued.~~with ~~In particular,~~Multiple ~~SFAS No~~Deliverables. ~~165~~ ~~sets~~EITF ~~forth (~~08-1~~) the~~ ~~period~~addresses ~~after~~how ~~the~~to ~~balance sheet date during which~~determine ~~management~~whether ofan aarrangement ~~reporting~~involving ~~entity~~multiple ~~should~~deliverables ~~evaluate~~contains ~~events~~more orthan ~~transactions~~one ~~that~~unit ~~may~~of ~~occur for~~accounting ~~potential~~and ~~recognition~~how orthe ~~disclosure~~arrangement inconsideration ~~the~~should ~~financial~~be ~~statements,~~allocated ~~(2)~~ among the ~~circumstances~~separate ~~under~~units ~~which~~of accounting. anEITF ~~entity~~08-1 ~~should~~will ~~recognize~~be ~~events~~effective orfor ~~transactions~~the ~~occurring~~Company ~~after~~in the ~~balance~~annual ~~sheet~~reporting ~~date~~period inbeginning ~~its~~January 1, ~~financial~~2011. ~~statements~~EITF ~~and~~08-1 ~~(3) the~~may ~~disclosures~~be ~~that~~applied anretrospectively ~~entity should make about events~~ or ~~transactions~~ ~~that~~prospectively ~~occurred~~and ~~after~~early ~~the~~adoption ~~balance~~is ~~sheet date~~permitted. The ~~SFAS~~Company ~~No. 165~~ is ~~effective~~currently ~~for~~evaluating ~~interim~~the ~~or annual~~impact ~~financial~~of ~~periods~~EITF ~~ending~~08-1 ~~after~~on ~~June 15,~~its ~~2009~~financial ~~and~~position, asresults ~~such~~of operations, wecash ~~adopted~~flows, ~~SFAS~~and Nodisclosures. ~~165 as of June~~ ~~30, 2009.~~

WeIn ~~have~~June 2009, ~~reviewed~~the ~~other~~Financial ~~accounting~~Accounting ~~pronouncements~~Standards ~~that~~Board ~~were~~(“FASB”) issued asStatement of ~~June~~Financial Accounting Standards (“SFAS”) No. 30168, ~~2009,~~The ~~which~~FASB Accounting Standards Codification and the Hierarchy ~~Company~~of ~~has~~Generally ~~not~~Accepted ~~yet~~Accounting ~~adopted~~Principles — a replacement of FASB Statement No. 162 (FASB Accounting Standards Codification (“ASC”) 105-10) (“SFAS No. 168”). SFAS No. 168 establishes a single source of authoritative non-governmental U.S. generally accepted accounting principles (“GAAP”), superseding existing FASB, American Institute of Certified Public Accountants (“AICPA”), EITF and dorelated accounting literature. SFAS No. 168 does not ~~believe~~amend ~~that~~or ~~these~~replace ~~pronouncements~~rules ~~will~~and interpretive ~~have~~releases aof ~~material~~the Securities and Exchange Commission (“SEC”), which are sources of ~~impact~~authoritative GAAP for SEC registrants. SFAS No. 168 is effective for interim and annual periods ending after September 15, 2009 and, as such, the Company has adopted SFAS No. 168 as of September 30, 2009. Throughout this Quarterly Report on ~~our~~Form ~~financial~~10-Q, ~~position~~the orCompany ~~operating~~has ~~results~~provided citations to the applicable FASB codification in addition to the original standard type and number.

In May 2009, the FASB issued SFAS No. 165, Subsequent Events (FASB ASC 855-10) (“SFAS No. 165”), the objective of which is to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. In particular, SFAS No. 165 sets forth (1) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (2) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and (3) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. SFAS No. 165 is effective for interim or annual financial periods ending after June 15, 2009 and as such, we adopted SFAS No. 165 as of June 30, 2009.

RESULTS OF OPERATIONS ~~Six~~Nine months ended ~~June~~September 30, 2009 and 2008

Net Revenues

The components of our net revenues for the ~~six~~nine months ended ~~June~~September 30, 2009 and 2008 were as follows:

	Six months ended June 30,
	Nine months ended September 30,
(amounts in millions)	2009			2008			$ Change			% Change
Gross advertising revenues	$	~~712~~1,034.82		$	~~811~~1,204.23		$	(98170.41	)		(1214.1	)%
Sales claims and allowances		(1826.32	)		(1625.60	)		(1.72	)		(104.28	)
Net advertising revenues		~~694~~1,008.50			~~794~~1,179.63			(~~100~~171.13	)		(1214.65	)
Other revenues		1015.34			1319.05			(24.71	)		(2021.80	)
Total net revenues	$	~~704~~1,023.84		$	~~807~~1,198.68		$	(~~102~~175.84	)		(1214.76	)%

Our advertising revenues are earned primarily from the sale of advertising in yellow pages directories we publish, net of sales claims and allowances. Advertising revenues also include revenues for Internet-based advertising products including online directories, such as dexknows.com and DexNet. Advertising revenues are affected by several factors, including changes in the quantity and size of advertisements, acquisition of new customers, renewal rates of existing customers, premium advertisements sold, changes in advertisement pricing, the introduction of new products, an increase in competition and more fragmentation in the local business search market and general economic factors. Revenues with respect to print advertising and Internet-based advertising products that are sold with print advertising are recognized under the deferral and amortization method. Revenues related to our print advertising are initially deferred when a directory is published and recognized ratably over the directory’s life, which is typically 12 months. Revenues with respect to our Internet-based advertising products that are sold with print advertising are initially deferred until the service is delivered or fulfilled and recognized ratably over the life of the contract. Revenues with respect to Internet-based services that are not sold with print advertising, such as DexNet, are recognized as delivered or fulfilled.

As a result of the deferral and amortization method of revenue recognition, recognized gross advertising revenues reflect the amortization of advertising sales consummated in prior periods as well as advertising sales consummated in the current period. As noted further below, advertising sales have continued to deteriorate due to the overall economic instability as well as an increase in competition and more fragmentation in the local business search market, which will result in lower recognized advertising revenues in future periods because, as noted, such revenues are recognized ratably over the directory’s life.

Gross advertising revenues for the ~~six~~nine months ended ~~June~~September 30, 2009 decreased $98170.41 million, or 12or 14.1%, from the ~~six~~nine months ended ~~June~~September 30, 2008. The decrease in gross advertising revenues for the ~~six~~ nine months ended ~~June~~September 30, 2009 is due to declines in advertising sales over the past twelve months, primarily as a result of declines in new and recurring business, mainly driven by (1) declines in overall advertising spending by businesses, (2) the significant impact of the weaker economy on smaller businesses in the markets in which we do business and (3) an increase in competition and more fragmentation in the local business search market.

Sales claims and allowances for the ~~six~~nine months ended ~~June~~September 30, 2009 increased $1.72 million, or 104.28%, from the ~~six~~nine months ended ~~June~~September 30, 2008. The increase in sales claims and allowances for the ~~six~~ nine months ended ~~June~~September 30, 2009 is primarily due to higher claims experience associated with our Internet-based advertising products.

Other revenues for the ~~six~~nine months ended ~~June~~September 30, 2009 decreased $24.71 million, or 2021.8 0%, from ~~the~~ ~~six~~the nine months ended ~~June~~September 30, 2008. Other revenues include late fees received on outstanding ~~customer~~ customer balances, barter revenues, commissions earned on sales contracts with respect to advertising placed into other publishers’ directories, and sales of directories and certain other advertising-related products.

3132

Expenses

The components of total expenses for the ~~six~~nine months ended ~~June~~September 30, 2009 and 2008 were as follows:

	Six months ended June 30,
	Nine months ended September 30,
(amounts in millions)	2009		2008		$ Change			% Change
Production and distribution expenses	$	~~101~~149.12	$	~~115~~173.16	$	(1424.04	)		(1214.21	)%
Selling and support expenses		~~191~~280.02		~~201~~304.93		(1024.91	)		(57.49	)
General and administrative expenses		3143.15		2545.28		5(2.93	)		23(5.40	)
Depreciation and amortization		~~198~~298.60		~~168~~258.6		3039.04			1715.82
Impairment charges		—		2,557.7		(2,557.7	)		N/M
Total	$	~~521~~770.89	$	3,~~068~~340.50	$	(2,~~546~~569.71	)		(8376.09	)%

(N/M: Not Meaningful)

Certain costs directly related to the selling and production of directories are initially deferred and recognized ratably over the life of the directory under the deferral and amortization method of accounting to match revenue recognized relating to such directories, with cost recognition commencing in the month directory distribution is substantially complete. These costs are specifically identifiable to a particular directory and include sales commissions and print, paper and initial distribution costs. Sales commissions include amounts paid to employees for sales to local advertisers and to certified marketing representatives (“CMRs”), which act as our channel to national advertisers. All other expenses, such as sales person salaries, sales manager compensation, sales office occupancy, publishing and information technology services, are not specifically identifiable to a particular directory and are recognized as incurred. Our costs recognized in a reporting period consist of: (i) costs incurred in that period and fully recognized in that period; (ii) costs incurred in a prior period, a portion of which is amortized and recognized in the current period; and (iii) costs incurred in the current period, a portion of which is amortized and recognized in the current period and the balance of which is deferred until future periods. Consequently, there will be a difference between costs recognized in any given period and costs incurred in the given period, which may be significant.

Production and Distribution Expenses

Total production and distribution expenses for the ~~six~~nine months ended ~~June~~September 30, 2009 and 2008 ~~were~~ were $~~101~~149.12 million and $~~115~~173.16 million, respectively. The primary components of the $1424.04 million, or 12or 14.21%, decrease in production and distribution expenses for the ~~six~~nine months ended ~~June~~September 30, 2009, were as follows:

	Six months ended
	Nine months ended
(amounts in millions)	~~June~~September 30, 2009
	$ Change
Decreased print, paper and distribution costs	$	(610.78	)
Decreased internet production and distribution costs		(2.9	)
Decreased information technology (“IT”) expenses		(5.5	)
Decreased information technology (“IT”) expenses		(2.0	)
Decreased internet production and distribution costs		(4.1	)
All other, net		(2.4.0	)
Total decrease in production and distribution expenses for the six months ended June 30, 2009	$	(14.0	)
Total decrease in production and distribution expenses for the nine months ended September 30, 2009	$	(24.4	)

During the ~~six~~nine months ended ~~June~~September 30, 2009, print, paper and distribution costs declined $610.78 million, compared to the ~~six~~nine months ended ~~June~~September 30, 2008. This decline is primarily due to ~~improved~~ ~~efficiencies~~lower inpage ~~the~~volumes ~~display~~associated ofwith ~~advertiser~~declines ~~content~~ in ~~our~~ print ~~products, the refinement of our distribution scope across all of our markets and negotiated price reductions in our print expenses~~advertisements. The decrease in print, paper and distribution costs is also due to ~~declines~~improved efficiencies in ~~print advertisements,~~the ~~which~~display ~~is a direct result~~ of ~~declines~~advertiser incontent ~~new and recurring business, mainly driven~~in byour ~~(1) declines~~print ~~in overall advertising spending by businesses~~products, ~~(2)~~ the ~~significant~~refinement ~~impact~~ of ~~the weaker~~our ~~economy~~distribution onscope ~~smaller~~across ~~businesses~~all inof ~~the~~our markets ~~in which we do business~~ and ~~(3) an increase in~~ ~~competition~~negotiated ~~and~~price ~~more~~reductions ~~fragmentation~~ in ~~the~~our ~~local~~print ~~business search market~~expenses.

During the ~~six~~nine months ended ~~June~~September 30, 2009, ~~internet~~ production and distribution ~~costs~~related IT expenses declined $25.9 5 million compared to the ~~six~~nine months ended ~~June~~September 30, 2008,. This decline is primarily due to alower ~~reduction~~spending inassociated ~~headcount~~with our IT infrastructure to support our products and services and ~~outside~~enhancements ~~contractor~~and ~~services,~~technical ~~partially~~support ~~offset~~of bymultiple ~~additional~~production ~~expenses~~systems ~~related~~during tothe ~~internet~~nine ~~distribution~~months ~~costs~~ended ~~due~~September 30, to2009, ~~traffic~~as ~~purchased~~compared to ~~generate~~the ~~usage~~nine ~~for~~months ~~our~~ended ~~advertisers’~~September 30, ~~business~~2008.

3233

During the ~~six~~nine months ended ~~June~~September 30, 2009, internet production and distribution ~~related IT expenses~~costs ~~decreased~~declined $24.01 million, compared to the ~~six~~nine months ended ~~June~~September 30, 2008, primarily due to a reduction in headcount and outside contractor services. ~~This decline is also due to additional~~ spending during the six months ended June 30, 2008 associated with our IT infrastructure to support our products and services and enhancements and technical support of multiple production systems as we continued to integrate to a consolidated IT platform.

Selling and Support Expenses

Total selling and support expenses for the ~~six~~nine months ended ~~June~~September 30, 2009 and 2008 were $~~191~~280.0 2 million and $~~201~~304.93 million, respectively. The primary components of the $1024.91 million, or 5 7.49%, decrease in selling and support expenses for the ~~six~~nine months ended ~~June~~September 30, 2009, were as follows:

	Six months ended
	Nine months ended
(amounts in millions)	~~June~~September 30, 2009
	$ Change
Decreased commissions and salesperson costs	$	(1220.51	)
Decreased directory publishing costs		(3.6.1	)
Increased bad debt expense		8.0
Decreased incentive compensation expense		(2.5	)
All other, net		(2.8	)
Decreased billing, credit, and collection expense		(2.2	)
Total decrease in selling and support expenses for the six months ended June 30, 2009	$	(10.9	)
Increased advertising expenses		4.4
Increased bad debt expense		4.0
All other, net		(1.6	)
Total decrease in selling and support expenses for the nine months ended September 30, 2009	$	(24.1	)

During the ~~six~~nine months ended ~~June~~September 30, 2009, commissions and salesperson costs declined $1220.51 million, compared to the ~~six~~nine months ended ~~June~~September 30, 2008, primarily due to lower advertising ~~sales~~ sales and its effect on variable-based commissions as well as headcount reductions and consolidation of responsibilities.

During the ~~six~~nine months ended ~~June~~September 30, 2009, directory publishing costs decreased $3.6.1 million, compared to the ~~six~~nine months ended ~~June~~September 30, 2008, primarily due to lower page volumes associated with declines in print advertisements as well as a reduction in headcount and ~~related~~ related expenses resulting from the consolidation of our publishing and graphics operations.

During the ~~six~~nine months ended ~~June~~September 30, 2009, ~~bad~~selling ~~debt~~and support related incentive compensation expense ~~increased~~declined $82.05 million, ~~or 19.3%,~~ compared to the ~~six~~nine months ended ~~June~~September 30, 2008, primarily due to ~~deterioration in accounts receivable aging categories and increased write-offs, resulting from~~ the ~~adverse~~fact ~~impact~~that onRHD ~~our advertisers~~did ~~from~~not ~~the~~grant ~~instability~~any ofstock-based ~~the~~awards ~~overall~~during ~~economy and tightening of~~ the ~~credit~~nine ~~markets. During the six~~ months ended ~~June~~ September 30, 2009, ~~our~~partially ~~bad~~offset ~~debt~~by compensation expense ~~represented~~associated ~~7.0%~~with ofRHD’s ~~our~~2009 ~~net~~Long-Term Incentive ~~revenue,~~Program ~~as compared to 5.2% for~~ (the ~~six~~“2009 ~~months ended June 30, 2008~~LTIP”). ~~If advertisers fail to pay~~ within specified credit terms, we may cancel their advertising in future directories, which could further impact our ability to collect past due amounts as well as adversely impact our advertising sales and revenue trends. We expect that these economic challenges will continue in our markets, and, as such, our bad debt experience will continue to be adversely impacted in the foreseeable future.

~~General~~During the nine months ended September 30, 2009, billing, credit and ~~Administrative~~collection ~~Expenses~~expenses decreased $2.2 compared to the nine months ended September 30, 2008, primarily due to lower costs resulting from a change in vendors during the later part of 2008 as well as headcount reductions and consolidation of responsibilities.

~~General~~During ~~and administrative (“G&A”) expenses for~~ the ~~six~~nine months ended ~~June~~September 30, 2009, ~~and~~advertising ~~2008~~expenses ~~were $31.1 million~~increased ~~and~~ $254.24 million, compared ~~respectively.~~to ~~The~~the ~~primary~~nine ~~components~~months ofended ~~the $5.9~~September ~~million~~30, ~~or 23.4%~~2008, ~~increase~~primarily indue ~~G&A~~to ~~expenses~~increased ~~for~~costs ~~the~~associated with ~~six~~traffic ~~months~~purchased ~~ended~~and ~~June 30,~~distributed ~~2009,~~to ~~were~~multiple asadvertiser ~~follows:~~landing pages.

	Six months ended
(amounts in millions)	June 30, 2009
	$ Change
Increase in restructuring expenses	$	2.9
Increased share of allocated expenses		2.8
All other, net		0.2
Total increase in G&A expenses for the six months ended June 30, 2009	$	5.9

During the nine months ended September 30, 2009, bad debt expense increased $4.0 million, or 6.3%, compared to the nine months ended September 30, 2008, primarily due to deterioration in accounts receivable aging categories and increased write-offs, resulting from the adverse impact on our advertisers from the instability of the overall economy and tightening of the credit markets. During the nine months ended September 30, 2009, our bad debt expense represented 6.7% of our net revenue, as compared to 5.4% for the nine months ended September 30, 2008. If advertisers fail to pay within specified credit terms, we may cancel their advertising in future directories, which could further impact our ability to collect past due amounts as well as adversely impact our advertising sales and revenue trends. We expect that these economic challenges will continue in our markets, and, as such, our bad debt experience will continue to be adversely impacted in the foreseeable future.

~~During the six months ended June 30, 2009, restructuring expenses increased $2.9 million, compared~~34 ~~to the six months ended June 30, 2008, primarily due to outside consulting fees, headcount reductions, consolidation of responsibilities and vacated leased facilities.~~

~~The~~General ~~increase in G&A expenses for the six months ended June 30, 2009 is also due to an increase in share of expenses allocated among RHD~~ and ~~its~~Administrative ~~subsidiaries, resulting in an increase of $2.8~~Expenses ~~million.~~

General and administrative (“G&A”) expenses for the nine months ended September 30, 2009 and 2008 were $43.5 million and $45.8 million, respectively. The primary components of the $2.3 million, or 5.0%, decrease in G&A expenses for the nine months ended September 30, 2009, were as follows:


	Nine months ended
(amounts in millions)	September 30, 2009
	$ Change
Decrease in restructuring expenses	$	(4.2	)
Increased share of allocated expenses		2.9
All other, net		(1.0	)

Total decrease in G&A expenses for the nine months ended September 30, 2009	$	(2.3	)

During the nine months ended September 30, 2009, restructuring expenses decreased $4.2 million compared to the nine months ended September 30, 2008, primarily due to lower costs associated with outside consultants, headcount reductions, consolidation of responsibilities and vacated leased facilities as well as a reclass of certain previously recognized expenses associated with filing the Chapter 11 petitions to reorganization items on the condensed consolidated statement of operations during nine months ended September 30, 2009.

The decrease in G&A expenses for the nine months ended September 30, 2009 is offset by an increase in share of expenses allocated among RHD and its subsidiaries, resulting in an increase of $2.9 million.

Depreciation and Amortization Expense

Depreciation and amortization (“D&A”) expense for the ~~six~~nine months ended ~~June~~September 30, 2009 and 2008 ~~was~~ was $~~198~~298.60 million and $~~168~~258.6 million, respectively. Amortization of intangible assets was $~~185~~278.53 million for the ~~six~~nine months ended ~~June~~September 30, 2009, compared to $~~153~~230.64 million reported for the ~~six~~ nine months ended ~~June~~September 30, 2008. In connection with ~~RHD~~Dex Media East’s and Dex Media West’s impairment testing of ~~its~~their definite-lived intangible assets and other long-lived assets at December 31, 2008, ~~RHD~~they evaluated the remaining useful lives of ~~its~~their intangible assets by considering, among other things, the effects of obsolescence, demand, competition, which takes into consideration the price premium benefit they have over competing independent publishers in their markets, and other economic factors, including the stability of the industry in which they operate, known technological advances, legislative actions that result in an uncertain or changing regulatory environment, and expected changes in distribution channels. Based on this evaluation, Dex Media East and Dex Media West recognized a reduction in the remaining useful lives of all directory services agreements associated with RHD’s acquisition of the Company on January 31, 2006 (the “RHD Merger”) due to compression of the price premium benefit over competing independent publishers in their respective markets as well as a decline in market share during the year ended December 31, 2008. As a result, the remaining useful lives of these directory services agreements were reduced to 33 years effective January 1, 2009 in order to better reflect the period these intangible assets are expected to contribute to ~~RHD’s~~their future cash flow. The increase in amortization expense for the ~~six~~nine months ended ~~June~~September 30, 2009 is a direct result of ~~reducing~~ reducing the remaining useful lives ofassociated with these directory services agreements, partially offset by a a reduction in amortization expense associated with a revision to the carrying values of ~~our~~the local and national customer relationships subsequent to impairment charges recorded during the fourth quarter of 2008.

Annual amortization expense infor the full year 2009 is expected to increase by approximately $63.3 million as a result of the reduction of remaining useful lives associated with these directory ~~services~~ services agreements and revision to the carrying values of our local and national customer ~~relationships~~ relationships noted above.

Depreciation of fixed assets and amortization of computer software was $1319.15 million and $1528.02 million for the ~~six~~nine months ended ~~June~~September 30, 2009 and 2008, respectively. The decrease in ~~depreciation~~ depreciation expense for the ~~six~~nine months ended ~~June~~September 30, 2009 was primarily due to accelerated amortization during the ~~six~~nine months ended ~~June~~September 30, 2008 associated with software projects that were retired prior to their initial estimated service life.

Curtailment Gain, Net

During the ~~six~~nine months ended ~~June~~September 30, 2009, we recognized a one-time curtailment gain of $13.5 million associated with the elimination of certain union retiree health care and life insurance benefits.

Impairment Charges

As a result of the decline in the trading value of our debt and RHD’s debt and equity securities during the first and second quarters of 2008 and continuing negative industry and economic trends that have directly affected RHD’s and our business, ~~RHD~~Dex ~~performed~~Media East and Dex Media West performed impairment tests of ~~its~~their goodwill, definite-lived intangible assets and other long-lived assets ~~in accordance with SFAS No~~. ~~142,~~ ~~Goodwill~~Dex ~~and~~Media ~~Other~~East ~~Intangible Assets (“SFAS No. 142”)~~ and ~~SFAS~~Dex ~~No. 144,~~Media ~~Accounting~~West ~~for the Impairment or Disposal of Long-Lived Assets (“SFAS No. 144”), respectively. RHD~~ used estimates and assumptions in ~~its~~their impairment evaluations, including, but not limited to, projected future cash flows, revenue growth and customer attrition rates. Based upon ~~RHD~~Dex Media East’s ~~impairment~~and ~~test~~Dex ofMedia ~~its goodwill,~~West’s ~~RHD recognized goodwill~~ impairment ~~charges~~test of ~~$2.5 billion and $660.2 million during the three months ended March 31~~goodwill, ~~2008 and June 30, 2008, respectively, for total goodwill impairment charges of $3.1 billion during~~ the ~~six months ended June 30, 2008. The~~ Company’s recognized ~~share~~goodwill ~~of the~~ impairment charges, based on a discounted cash flow analysis, ~~was~~of $2.1 billion and $422.2 million during the three months ended March 31, 2008 and June 30, 2008, respectively, for total goodwill impairment charges of $2.6 billion for the ~~six~~nine months ended ~~June~~September 30, 2008. As a result of these impairment charges, we have no recorded goodwill at December 31, 2008 or ~~June~~ September 30, 2009. ~~RHD’s~~ The testing results of ~~its~~the definite-lived intangible assets and other long-lived assets indicated no impairment as of March 31, 2008, ~~and~~ June 30, 2008 or September 30, 2008.

IfDex ~~industry~~Media ~~and~~East ~~economic conditions in RHD’s markets continue to deteriorate, resulting in further declines in advertising sales~~ and ~~operating~~Dex ~~results,~~Media ~~and~~West ifperformed ~~the~~impairment ~~trading~~tests ~~value~~ of ~~our~~their ~~debt~~definite-lived ~~and RHD’s~~intangible ~~debt~~assets and ~~equity~~other ~~securities decline further, RHD will be required to assess the recoverability and useful lives of its~~ long-lived assets ~~and~~during ~~other~~the ~~intangible~~three ~~assets.~~and ~~This~~nine ~~could~~months ~~result~~ended ~~in additional impairment charges~~September 30, a2009. ~~reduction~~They utilized ofthe ~~remaining~~following ~~useful~~information ~~lives~~ and ~~acceleration~~assumptions ofto ~~amortization~~complete ~~expense.~~their impairment evaluation:

34 • Historical financial information, including revenue, profit margins, customer attrition data and price premiums enjoyed relative to competing independent publishers; • Long-term financial projections, including, but not limited to, revenue trends and profit margin trends; and • Intangible asset carrying values.

~~Table~~The results of ~~Contents~~these tests indicated no impairment. In connection with Dex Media East’s and Dex Media West’s impairment testing, they also evaluated the remaining useful lives of their definite-lived intangible assets and other long-lived assets by considering, among other things, the effects of obsolescence, demand, competition, which takes into consideration the price premium benefit Dex Media East and Dex Media West has over competing independent publishers in their markets, and other economic factors, including the stability of the industry in which Dex Media East and Dex Media West operates, known technological advances, legislative actions that result in an uncertain or changing regulatory environment, and expected changes in distribution channels. Based on this evaluation, Dex Media East and Dex Media West concluded the remaining useful lives of such assets reflect the period they are expected to contribute to their future cash flows and are therefore deemed appropriate.

If industry and economic conditions in our markets and RHD’s markets continue to deteriorate, resulting in further declines in advertising sales and operating results, and if the trading value of our debt and RHD’s debt and equity securities decline further, RHD, Dex Media East and Dex Media West will be required to again assess the recoverability and useful lives of its long-lived assets and other intangible assets. This could result in additional impairment charges, a reduction of remaining useful lives and acceleration of amortization expense.

Operating Income (Loss)

Operating income (loss) for the ~~six~~nine months ended ~~June~~September 30, 2009 and 2008 was as follows:

Six months ended June 30,

Nine months ended September 30,

(amounts in millions)

2009

2008

$ Change

% Change

Total

~~196~~265.59

(2,~~260~~141.93

)

2,~~457~~407.42

N/M

Operating income for the ~~six~~nine months ended ~~June~~September 30, 2009 was $~~196~~265.59 million, compared to an operating loss of $2.31 billion for the ~~six~~nine months ended ~~June~~September 30, 2008. The change to ~~operating~~ operating income for the ~~six~~nine months ended ~~June~~September 30, 2009 from operating loss for the ~~six~~ nine months ended ~~June~~September 30, 2008 is primarily due to the goodwill impairment charges noted above, as well as the revenue and expense trends described above.

Interest Expense, Net

Contractual interest expense that would have appeared on the condensed consolidated statement of operations if not for the filing of the Chapter 11 petitions was $~~180~~268.13 million for the ~~six~~nine months ended ~~June~~September 30, 2009. Net interest expense for the ~~six~~nine months ended ~~June~~September 30, 2009 and 2008 was $~~170~~205.12 million and $~~194~~286.50 million, respectively, and includes $57.37 million and $47.6 1 million, respectively, of non-cash amortization of deferred financing costs.

Interest expense for the ~~six~~nine months ended ~~June~~September 30, 2009 includes a non-cash charge of $56.1 ~~million~~ million associated with the change in fair value of the Dex Media East interest rate swaps that ~~were~~ were required to be settled and interest rate swaps no longer deemed financial instruments ~~under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (“SFAS No. 133”)~~ as a ~~result~~ result of filing the Chapter 11 petitions. Interest expense for the ~~six~~nine months ended ~~June~~September 30, 2009 also includes a non-cash charge of $26.01 million resulting from amounts previously charged to ~~accumulated~~ accumulated other comprehensive loss related to these interest rate swaps. The amounts previously charged to accumulated other comprehensive loss related to the Dex Media East interest rate swaps will be amortized to interest expense over the remaining life of the interest rate swaps based on ~~future~~ future interest payments, as it is not probable that those forecasted transactions will not occur.

As a result of the change in fair value of our interest rate swaps associated with the refinancing of the former Dex Media West credit facility on June 6, 2008 and settlement and termination of certain of these interest rate swaps during the second quarter of 2009, interest expense includes a reduction of $5.4 million for the ~~six~~nine months ended ~~June~~September 30, 2009 resulting from the change in ~~the~~ the fair value of these interest rate swaps. Interest expense for the ~~six~~nine months ended ~~June~~ September 30, 2008 includes a non-cash charge of $15.0 million resulting from amounts previously charged to accumulated other comprehensive loss related to these interest rate swaps, offset by a reduction to interest expense of $27.0 million resulting from the change in the fair value of these interest rate swaps since June 6, 2008. Interest expense for the ~~six~~nine months ended ~~June~~September 30, 2008 also includes the write-off of unamortized deferred financing costs of $2.1 million associated with the ~~refinancing~~ refinancing of the former Dex Media West credit facility, which has been accounted for as an extinguishment of debt.

In conjunction with the RHD Merger and as a result of purchase accounting required ~~under U.S. generally accepted accounting principles (“~~GAAP”), our debt was recorded at its fair value on January 31, 2006. We recognized an offset to interest expense in each period subsequent to the RHD Merger through May 28, 2009 for the amortization of the corresponding fair value adjustment. The offset to interest expense was $7.7 million and $813.6 1 million for the ~~six~~nine months ended ~~June~~September 30, 2009 and 2008, respectively. The offset to interest expense was to be recognized over the life of the respective debt, however due to filing the Chapter 11 petitions, unamortized fair value adjustments at May 28, 2009 of $78.5 million were written-off and recognized as a reorganization item on the condensed consolidated statement of operations for the ~~three~~nine ~~and six~~ months ended ~~June~~September 30, 2009.

The decrease in net interest expense of $2480.48 million, or 1228.53%, for the ~~six~~nine months ended ~~June~~ September 30, 2009 is primarily due to (1) ceasing interest expense on our notes in default as a result of filing the Chapter 11 petitions and (2) the non-cash charge of $15.0 million during the nine ~~six~~ months ended ~~June~~September 30, 2008 resulting from amounts previously charged to accumulated other comprehensive loss noted above. The decrease in net interest expense for the nine months ended September 30, 2009 is offset by (1) the non-cash ~~charge~~charges ~~of $5.1 million~~ associated with the change in fair value of the Dex Media East interest rate swaps and ~~$2.0 million associated with~~ amounts previously charged to accumulated other comprehensive loss related to the Dex Media East interest rate swaps noted above, (2) a reduction in interest income associated with our interest rate swaps due to a decline in interest rates, (3) additional interest expense associated with borrowing the unused portions of our revolving credit facilities on February 13, 2009 and (4) a decline in the offset to interest expense associated with the fair value adjustment of ~~our~~Dex Media’s debt noted above.

3537

Reorganization Items, Net

For the ~~six~~nine months ended ~~June~~September 30, 2009, the Company has recorded $5854.50 million of ~~reorganization~~ reorganization items on a separate line item on the condensed consolidated statement of operations in accordance with ~~American Institute of Certified Public Accountant’s Statement of Position 90-7, Financial Reporting by Entities in Reorganization Under the Bankruptcy Code (“~~SOP 90-7”). Reorganization items represent amounts that are directly associated with the process of reorganizing the business under Chapter 11 of the Bankruptcy Code. The following table displays the details of reorganization items for the ~~six~~nine months ended ~~June~~ September 30, 2009:

	Six Months Ended
	Nine months ended
	June 30, 2009
	September 30, 2009
Write-off of fair value adjustments	$	(78,511	)
Write-off of net premiums / discounts on long-term debt		(8,311	)
Professional fees		28,357
Lease rejections, abandoned property and other		(855	)
Total reorganization items	$	(58,465	)
Professional fees		33,703
Total reorganization items	$	(53,974	)

The Company has ~~incurred~~recognized ~~professional fees of~~ $280.49 million ~~associated~~during ~~with~~the ~~filing~~nine ~~the~~months ~~Chapter~~ended September 1130, 2009 associated ~~petitions.~~with ~~Professional~~rejected ~~fees~~leases ~~include~~and ~~financial~~abandoned property, ~~legal~~which ~~and~~have ~~valuation~~been ~~services~~approved ~~directly~~by ~~associated~~the Bankruptcy Court ~~with~~through September 30, 2009 as part of the ~~reorganization~~Chapter 11 ~~process~~Cases.

WeThe ~~anticipate~~Company ~~additional~~has ~~charges~~incurred toprofessional ~~reorganization~~fees ~~items,~~associated ~~net~~with ~~during~~filing the ~~remainder~~Chapter 11 petitions of $33.7 million during the nine months ended September 30, 2009, of which $27.1 million has been paid in cash. Professional fees include financial, legal and valuation services directly associated with the reorganization process.

As of September 30, 2009, the Company has not received any operating cash receipts as a result of filing the Chapter 11 petitions.

Income Taxes

The effective tax rate on income before income taxes of 4254.85% ~~and 42.9%~~ for the ~~three~~nine ~~and six~~ months ended ~~June~~ September 30, 2009, ~~respectively,~~ compares to an effective tax rate of 3435.38% ~~and 36.3%~~ on loss before income taxes for the ~~three~~nine ~~and six~~ months ended ~~June~~September 30, 2008. The change in the effective tax rate for the ~~three~~nine ~~and six~~ months ended ~~June~~ September 30, 2009 as compared to the ~~three~~nine ~~and six~~ months ended ~~June~~September 30, 2008 is primarily due to estimates of non-deductible reorganization costs as well as the tax consequences of goodwill impairment charges during the ~~three~~nine ~~and six~~ months ended ~~June~~September 30, 2008.

3638

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Omitted pursuant to General Instruction H(2)(c) of Form 10-Q.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Management conducted an evaluation, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of ~~June~~September 30, 2009. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s ~~disclosure~~ disclosure controls and procedures were not effective as of ~~June~~September 30, 2009, due to a material weakness in internal control over financial reporting related to certain deferred income tax assets ~~and~~ and liabilities and the resulting current and deferred income tax expense and related footnote disclosures that was identified and reported as a material weakness in our Annual Report on Form 10-K for the year ended December 31, 2008. As of ~~June~~September 30, 2009, this material weakness in ~~internal~~ internal control over financial reporting has not been remediated.

(b) Changes in Internal Controls

Other than changes relating to the material weakness in internal control over financial reporting noted above, there have not been any changes in the Company’s internal controls over financial reporting during the Company’s most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

The Company’s disclosure controls and procedures were not effective as of ~~June~~September 30, 2009 due to a a material weakness in internal control over financial reporting related to certain deferred income tax assets and liabilities and the resulting current and deferred income tax expense and related footnote disclosures that was identified and reported as a material weakness in our Annual Report on Form 10-K for the year ended December 31, 2008. As of ~~June~~September 30, 2009, this material weakness in in internal control over financial reporting has not been remediated.

The Company has developed the following plan to remediate the material weakness in internal control over financial reporting described above:

	•		During 2008, the Company began to implement, and during 2009 it intends to fully implement controls to formalize its evaluation of deferred income tax balances including a comprehensive reconciliation between deferred income tax balances determined on a basis in conformity with U.S. generally accepted accounting principles for financial reporting purposes and those determined for tax reporting purposes;

	•		During 2008, the Company began to implement, and during 2009 it intends to fully implement an acceleration of the timing of certain tax review activities, including apportionment and allocation for income tax reporting purposes, during the financial statement closing process;

	•		The Company intends to improve documentation and institute more formalized review of tax positions taken, with senior management and external experts, to ensure proper evaluation and accounting treatment of complex tax issues; and

	•		The Company intends to evaluate and supplement and/or train internal resources, as necessary, and evaluate external experts.

We anticipate the actions described above and resulting improvements in controls will strengthen our internal control over financial reporting and will address the related material weakness identified as of December 31, 2008 that has remained as a material weakness as of ~~June~~September 30, 2009. However, because the institutionalization of the internal control processes requires ~~repeatable~~ repeatable process execution, and because many of these additional controls rely extensively on manual review and approval, the successful execution of these controls, for at least several quarters, may be required prior to management being able to definitively conclude that the material weakness has been fully remediated.

3739

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 (the “2008 10-K”) and Part II, “Item 1A. Risk Factors” of our Quarterly Report on Form 10-Q for the three and six months ended June 30, 2009, which could materially affect our business, financial condition or future results. ~~There~~ There have been no material changes or additions to the risk factors disclosed in the 2008 10-K, ~~except~~ except for the ~~following~~risk factors disclosed in the June 30, ~~primarily~~2009 ~~due~~Form to10-Q associated with the Chapter 11 filings by the ~~RHD Entities:~~Company.

Risks Related to the Chapter 11 Cases

1) The RHD Entities have filed voluntary petitions for reorganization under the Bankruptcy Code that may have an adverse effect on our businesses, financial condition and results of operation.

On May 28, 2009 (the “Petition Date”), the RHD Entities filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) in order to consummate a balance sheet restructuring. The cases are being jointly administered under the caption In re: R.H. Donnelley, Corporation, et al., Case No. 09-11833 (the “Chapter 11 Cases”). On July 27, 2009, the RHD Entities filed a proposed plan of reorganization with the Bankruptcy Court (the “Plan”). In addition to approval by the Bankruptcy Court, the Plan is subject to certain conditions that must be satisfied prior to its implementation. Although we believe that the Plan will satisfy all requirements for confirmation under the Bankruptcy Code, there can be no assurance that the Plan will be approved by the Bankruptcy Court or that the conditions precedent to its implementation will be satisfied or when, if ever, such confirmation and satisfaction will occur. Failure to obtain such confirmation or to satisfy such conditions to implementation may result in lengthier bankruptcy proceedings as we attempt to negotiate and implement an alternative plan of reorganization.

The timing of our emergence from bankruptcy and the terms of our emergence may affect our relationship with our creditors, customers, suppliers and employees and have a significant impact on our businesses, financial condition and results of operations. Our ability to continue to operate in bankruptcy and to emerge from bankruptcy will depend on various factors, including:

• our ability to comply with and operate under the terms of any cash management orders entered by the Bankruptcy Court from time to time, which subject us to restrictions on transferring cash and other assets; • our ability to maintain adequate cash on hand and to generate cash from operations; • our ability to fund emergence and to fund our operations after emergence from the bankruptcy process on reasonable terms; • our ability to retain key employees during the pendency of our bankruptcy proceedings; and • our ability to maintain good customer and supplier relationships in light of developments in our bankruptcy proceedings and the terms of our emergence.

For further information regarding our Chapter 11 proceedings and the Plan, see Note 1, “Business and Basis of Presentation — Chapter 11 Bankruptcy Proceedings and Plan of Reorganization” in Item 1 of this Quarterly Report on Form 10-Q.

2) Failure to obtain confirmation of the Plan may result in liquidation or alternative plan on less favorable terms.

Although the Company believes the Plan will satisfy all requirements for confirmation under the Bankruptcy Code, there can be no assurance that the Bankruptcy Court will reach the same conclusion. Moreover, there can be no assurance that modifications to the Plan will not be required for confirmation or that such modifications would not be sufficiently material as to necessitate the resolicitation of votes on the Plan.

In the event that any class of claims against the RHD Entities entitled to vote fails to accept the Plan in accordance with Section 1126(c) and 1129 (a)(8) of the Bankruptcy Code, the Company reserves the right: (i) to request that the Bankruptcy Court confirm the Plan in accordance with section 1129(b) of the Bankruptcy Code; and/or (ii) to modify the Plan in accordance with the terms of the Plan. While the Company believes that the Plan satisfies the requirements for non-consensual confirmation under section 1129(b) of the Bankruptcy Code because it does not “discriminate unfairly” and is “fair and equitable” with respect to the classes that reject or are deemed to reject the Plan, there can be no assurance that the Bankruptcy Court will reach the same conclusion. There can be no assurance that any such challenge to the requirements for non-consensual confirmation will not delay the Company’s emergence from Chapter 11 or prevent confirmation of the Plan.

If the Plan is not confirmed, there can be no assurance that the Chapter 11 Cases will continue rather than be converted into Chapter 7 liquidation cases or that any alternative plan or plans of reorganization would be on terms as favorable to the holders of claims against the Company as the terms of the Plan. If a liquidation or protracted reorganization of the Company’s estates were to occur, there is a substantial risk that the Company’s going concern value would be substantially eroded to the detriment of all stakeholders.

3) Failure of occurrence of the effective date may result in liquidation or alternative plan on less favorable terms.

There can be no assurance with respect to timing of the effective date of the Plan. The occurrence of the effective date is also subject to certain conditions precedent as described in the Plan. Failure to meet any of these conditions could result in the Plan not being consummated.

If the confirmation order with respect to the Plan is vacated, (i) the Plan shall be null and void in all respects; (ii) any settlement of claims or interests provided for in the Plan shall be null and void without further order of the Bankruptcy Court; and (iii) the time within which the Company may assume and assign or reject all executory contracts and unexpired leases shall be extended for a period of one hundred twenty (120) days after the date the confirmation order is vacated.

If the effective date of the Plan does not occur, there can be no assurance that the Chapter 11 Cases will continue rather than be converted into Chapter 7 liquidation cases or that any alternative plan or plans of reorganization would be on terms as favorable to the holders of claims against the Company as the terms of the Plan. If a liquidation or protracted reorganization of the Company’s estates were to occur, there is a substantial risk that the Company’s going concern value would be eroded to the detriment of all stakeholders.

4) We may have insufficient liquidity to successfully operate our businesses.

We expect to incur significant costs as a result of the Chapter 11 Cases. We are currently financing our operations during our reorganization using cash on hand and cash generated by operations which constitutes cash collateral pursuant to, and in accordance with, final cash collateral orders which were agreed to by our secured lenders and approved by the Bankruptcy Court. In the event that we lose our authority to use cash collateral and does not have sufficient liquidity to fund its operations such that it needs to obtain additional financing, there can be no assurance as to the Company’s ability to obtain sufficient financing on acceptable terms or at all. The challenges of obtaining financing, if necessary, would be exacerbated by adverse conditions in the general economy and the volatility and tightness in the financial and credit markets. These conditions and our Chapter 11 Cases would make it more difficult for the us to obtain financing.

5) The extent of the Company’s leverage may limit its ability to obtain additional financing for operations.

Although the Plan will result in the repayment of approximately $715.0 million of secured debt and the elimination of approximately $5.7 billion of unsecured debt of the RHD Entities, the Company will continue to have a significant amount of indebtedness.

Such levels of indebtedness may limit the ability of the Company to refinance, obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions and general corporate or other purposes. Such levels of indebtedness may also limit the ability of the Company to adjust to changing market conditions and to withstand competitive pressures, possibly leaving the Company vulnerable in a downturn in general economic conditions or in their businesses or unable to carry out capital spending that is important to their growth and productivity improvement programs.

6) Historical financial information may not be comparable.

As a result of the consummation of the Plan and the transactions contemplated thereby, the financial condition and results of operations of the Company from and after the effective date of the Plan may not be comparable to the financial condition or results of operations reflected in the Company’s historical financial statements.

7) Our businesses, financial condition and results of operations could be negatively impacted by the loss of customers and suppliers.

Difficulties of providing services while attempting to reorganize our businesses in bankruptcy may make it more difficult to maintain and promote our services and attract customers to our services and to keep our suppliers. Our suppliers, vendors and services providers may require stricter terms and conditions. The loss of any of our customers or suppliers during the pendency of the Chapter 11 Cases could have an adverse effect on our businesses, financial condition and results of operations. In addition, we may experience other adverse effects, including, without limitation, a loss of confidence by current and prospective suppliers. Any failure to timely obtain suitable supplies at competitive prices could materially adversely affect our businesses, financial condition and results of operations.

8) Our businesses could suffer from the loss of key personnel.

Among the Company’s most valuable assets are its highly skilled employees who have the ability to leave the Company and so deprive the Company of valuable skills and knowledge that contribute substantially to its business operations. Although the Company has attempted to maintain the confidence and dedication of its personnel through the pendency of the Chapter 11 Cases, the Company cannot be sure that it will ultimately be able to do so and, if not, that it will be able to replace such personnel with comparable personnel. In addition, the Company cannot be sure that such key personnel will not leave after consummation of the Plan and emergence from Chapter 11. Further attrition may hinder the Company’s ability to operate efficiently, which could have a material adverse effect on its results of operations and financial condition. In addition, so long as the Chapter 11 Cases continue, our senior management will be required to spend a significant amount of time and effort dealing with the reorganization instead of focusing exclusively on business operations.

9) Adverse publicity in connection with the Chapter 11 Cases or otherwise could negatively affect our businesses.

Adverse publicity or news coverage relating to us, including, but not limited to, publicity or news coverage in connection with the Chapter 11 Cases, may negatively impact our efforts to establish and promote name recognition and a positive image after emergence from the Chapter 11 Cases.

10) Pursuit of litigation by the parties in interest could disrupt the confirmation of the Plan and could have material adverse effects on the Company’s businesses and financial condition.

There can be no assurance that any parties in interest will not pursue litigation strategies to enforce any claims against the Company. Litigation is by its nature uncertain and there can be no assurance of the ultimate resolution of such claims. Any litigation may be expensive, lengthy, and disruptive to the Company’s normal business operations and the Plan confirmation process, and a resolution of any such strategies that is unfavorable to the Company could have a material adverse affect on the Plan confirmation process or their respective businesses, results of operations, financial condition, liquidity or cash flow.

11) Our inability to take advantage of business opportunities during the Chapter 11 Cases, without Bankruptcy Court approval.

Transactions outside the ordinary course of business are subject to the prior approval of the Bankruptcy Court, which may limit our ability to respond timely to certain events or take advantage of certain opportunities. In addition, the Bankruptcy Code limits our ability to incur additional indebtedness, make investments, sell assets, consolidate, merge or sell or otherwise dispose of all or substantially all of our assets or grant liens. These restrictions may place us at a competitive disadvantage. We may be unable to continue to grow our business through acquisitions and restrictions on our ability to pursue other business strategies, unless we obtain Bankruptcy Court approval for those transactions.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Omitted pursuant to General Instruction H(2)(b) of Form 10-Q.

Item 3. Defaults Upon Senior Securities

Omitted pursuant to General Instruction H(2)(b) of Form 10-Q.

Item 4. Submission of Matters to a Vote of Security Holders

Omitted pursuant to General Instruction H(2)(b) of Form 10-Q.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit
Number		Document
31.1*		Certification of Quarterly Report on Form 10-Q for the period ended ~~June~~September 30, 2009 by David C. Swanson, Chairman and Chief Executive Officer of Dex Media, Inc. under Section 302 of the Sarbanes-Oxley Act.
31.2*		Certification of Quarterly Report on Form 10-Q for the period ended ~~June~~September 30, 2009 by Steven M. Blondy, Executive Vice President and Chief Financial Officer of Dex Media, Inc. under Section 302 of the Sarbanes-Oxley Act.
32.1*		Certification of Quarterly Report on Form 10-Q for the period ended ~~June~~September 30, 2009 under Section 906 of the Sarbanes-Oxley Act by David C. Swanson, Chairman and Chief Executive Officer, and Steven M. Blondy, Executive Vice President and Chief Financial Officer of Dex Media, Inc.


*		Filed herewith.

4241

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	DEX MEDIA, INC.
Date: August 7, 2009	By:	/s/ Steven M. Blondy
Date: November 6, 2009	By:	/s/ Steven M. Blondy
		Steven M. Blondy
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)
	~~/s/ Sylvester J. Johnson~~	/s/ Sylvester J. Johnson
	~~Sylvester J. Johnson~~	Sylvester J. Johnson
	~~Vice President, Corporate Controller and Chief Accounting Officer (Principal Accounting Officer)~~	Vice President, Corporate Controller and Chief Accounting Officer (Principal Accounting Officer)

4342

Exhibit Index

Exhibit No.		Document
31.1*		Certification of Quarterly Report on Form 10-Q for the period ended ~~June~~September 30, 2009 by David C. Swanson, Chairman and Chief Executive Officer of Dex Media, Inc. under Section 302 of the Sarbanes-Oxley Act.
31.2*		Certification of Quarterly Report on Form 10-Q for the period ended ~~June~~September 30, 2009 by Steven M. Blondy, Executive Vice President and Chief Financial Officer of Dex Media, Inc. under Section 302 of the Sarbanes-Oxley Act.
32.1*		Certification of Quarterly Report on Form 10-Q for the period ended ~~June~~September 30, 2009 under Section 906 of the Sarbanes-Oxley Act by David C. Swanson, Chairman and Chief Executive Officer, and Steven M. Blondy, Executive Vice President and Chief Financial Officer of Dex Media, Inc.


*		Filed herewith

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