UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the quarterly period ended June 30, 2004
		For the quarterly period ended June 30, 2005
OR
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: 333-112694

Dex Media West LLC

(Exact name of registrant as specified in its charter)


Delaware		25-1903487
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

198 Inverness Drive West

Englewood, Colorado

80112

(Address of principal executive offices)

(303) 784-2900

(Registrant’s telephone number, including area code)

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 þ No o

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

~~INDEX~~THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS H(1)(a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.

		Page
		Nos.
PART I: FINANCIAL INFORMATION			2
Item 1.	Financial Statements		2
	Condensed Consolidated Balance Sheets (unaudited) — June 30, 2004 and December 31, 2003		2
	Condensed Consolidated Statements of Operations (unaudited) — Three Months and Six Months Ended June 30, 2004 and 2003		3
	Condensed Consolidated Statements of Cash Flows (unaudited) — Six Months Ended June 30, 2004 and 2003		4
	Notes to Condensed Consolidated Financial Statements (unaudited)		5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		32
Item 4.	Controls and Procedures		32
PART II: OTHER INFORMATION			33
Item 1.	Legal Proceedings		33
Item 2.	Changes in Securities and Use of Proceeds		33
Item 3.	Defaults upon Senior Securities		33
Item 4.	Submission of Matters to a Vote of Security Holders		33
Item 5.	Other Information		33
Item 6.	Exhibits and Reports on Form 8-K		33
Signature			35
Certification of CEO Pursuant to Section 302
Certification of CFO Pursuant to Section 302
Certification of CEO Pursuant to Section 906
Certification of CFO Pursuant to Section 906

TABLE OF CONTENTS


		Page
		No.

PART I: FINANCIAL INFORMATION			2
Item 1.	Financial Statements		2
	Condensed Consolidated Balance Sheets (unaudited) — June 30, 2005 and December 31, 2004		2
	Condensed Consolidated Statements of Operations (unaudited) — Three months and six months ended June 30, 2005 and 2004		3
	Condensed Consolidated Statements of Cash Flows (unaudited) — Six months ended June 30, 2005 and 2004		4
	Notes to Condensed Consolidated Financial Statements (unaudited)		5
Item 2.	Management’s Narrative Analysis of Results of Operations*		14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		22
Item 4.	Controls and Procedures		22
PART II: OTHER INFORMATION			23
Item 1.	Legal Proceedings		23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		23
Item 3.	Defaults Upon Senior Securities		23
Item 4.	Submission of Matters to a Vote of Security Holders		23
Item 5.	Other Information		23
Item 6.	Exhibits		23
Signature			25
Fourth Amendment to the Credit Agreement
Certification of CEO Pursuant to Section 302
Certification of CFO Pursuant to Section 302


*	Pursuant to General Instructions 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.

PART I.

FINANCIAL INFORMATION


Item 1.	*Financial Statements*

DEX MEDIA WEST LLC

AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF DEX MEDIA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)

				As of	~~As of~~			As of	~~As of~~
				June 30,	~~June 30,~~			December 31,	~~December 31,~~
					2004				2003
				2005				2004
ASSETS
Current assets:
Current assets
	Cash and cash equivalents			$	$—	~~1,802~~		$	$8,933	~~4,658~~
	Accounts receivable, net				65,890	~~60,138~~			48,109	~~53,114~~
	Deferred directory costs				165,520	~~162,992~~			155,819	~~142,293~~
	Current deferred taxes					4,595				3,876
	Current deferred income taxes				26,897				5,265
	Other current assets				9,092	~~2,906~~			7,259	~~5,461~~
		Total current assets			267,399	~~232,433~~			225,385	~~209,402~~
Property, plant and equipment, net					50,948	~~50,883~~			50,721	~~38,016~~
Goodwill					2,190,715	~~2,193,335~~			2,190,715	~~2,198,586~~
Intangible assets, net					1,573,975	~~1,785,643~~			1,669,985	~~1,901,300~~
Deferred income taxes					—	~~11,095~~			10,438	~~13,778~~
Deferred financing costs					67,342	~~91,345~~			75,962	~~102,794~~
Other assets					1,426	~~2,945~~			1,636	~~2,955~~
		Total Assets		$	$4,151,805	~~4,367,679~~		$	$4,224,842	~~4,466,831~~
LIABILITIES AND OWNER’S EQUITY
Current liabilities:
	Accounts payable			$	$13,335	~~16,294~~		$	$9,398	~~16,694~~
	Amounts due to affiliate					1,878				28,554
	Employee compensation				1,897				—
	Deferred revenue and customer deposits					116,390				68,232
	Amounts due to affiliate				20,249				30,022
	Accrued interest payable					43,393				49,405
	Deferred revenue and customer deposits				118,458				111,068
	Current portion of long-term debt					39,903				20,178
	Accrued interest payable				46,500				43,739
	Other accrued liabilities					3,472				6,113
	Current portion of long-term debt				146,597				84,302
		Total current liabilities				221,330				189,176
	Other accrued liabilities				6,116				8,295
Long-term debt						3,055,097				3,182,822
		Total current liabilities			353,152				286,824
Amounts due to affiliate related to post-retirement and other post-employment obligations						38,761				35,519
Long-term debt					2,652,477				2,836,498
Other liabilities						24				408
Post-retirement obligations					8,713				—
		Total Liabilities				3,315,212				3,407,925
Amounts due to affiliate related to post-retirement obligations					36,714				42,252
Commitments and contingencies (Note 9)
Deferred income taxes					33,689				—
Accumulated deficit						(24,822	)			(27,808	)
Other liabilities					40				135
Owner’s interest						1,077,289				1,086,714
		Total Liabilities			3,084,785				3,165,709
		Total Owner’s Equity				1,052,467				1,058,906
Commitments and contingencies (Note 9)
			Total Liabilities and Owner’s Equity		$	4,367,679			$	4,466,831
Owner’s interest					1,067,020				1,084,327
Accumulated deficit					—				(25,194	)
		Total Owner’s Equity			1,067,020				1,059,133
		Total Liabilities and Owner’s Equity		$	4,151,805			$	4,224,842

See accompanying notes to condensed consolidated ~~financial~~ financial statements.

DEX MEDIA WEST LLC

AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF DEX MEDIA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands)

(Unaudited)

			Company			Predecessor			Company			Predecessor
			Three Months Ended						Six Months Ended
			June 30,						June 30,
			2004			2003			2004			2003
			2005			2004			2005			2004
Revenue			$	~~216~~235,~~895~~347		$	~~228~~216,~~806~~895		$	~~424~~465,~~283~~812		$	~~457~~424,~~421~~283
Operating Expenses:
Operating expenses:
	Cost of revenue			6670,~~913~~785			7166,~~762~~913			~~129~~140,~~735~~529			~~139~~129,~~373~~735
	General and administrative expense			2326,~~708~~071			2123,~~491~~708			4649,~~458~~669			3846,~~562~~458
	Bad debt expense			5,~~719~~889			65,~~867~~719			1110,~~827~~956			1311,~~627~~827
	Depreciation and amortization expense			4,~~245~~440			24,~~740~~245			8,~~084~~463			48,~~814~~084
	Amortization of intangibles			5748,~~829~~005			—57,829			~~115~~96,~~658~~010			—115,658
		Total operating expenses		~~158~~155,~~414~~190			~~102~~158,~~860~~414			~~311~~305,~~762~~627			~~196~~311,~~376~~762
		Operating income		5880,~~481~~157			~~125~~58,~~946~~481			~~112~~160,~~521~~185			~~261~~112,~~045~~521
Other (income) expense:
	Interest income			(~~185~~538	)		(~~659~~185	)		(~~328~~705	)		(~~1,356~~328	)
	Interest expense			5247,~~723~~715			3252,~~796~~723			~~107~~104,~~899~~404			65107,~~151~~899
	Income before income taxes			5,943			93,809			4,950			197,250
	Other income, net			(1,122	)		—			(1,090	)		—
Income tax provision				2,358			35,315			1,964			74,105
		Income before income taxes		34,102			5,943			57,576			4,950
	Net income		$	3,585		$	58,494		$	2,986		$	123,145
Income tax provision				13,331			2,358			22,497			1,964
		Net income	$	20,771		$	3,585		$	35,079		$	2,986

See accompanying notes to condensed consolidated ~~financial~~ financial statements.

DEX MEDIA WEST LLC

AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF DEX MEDIA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

				Company			Predecessor
				Six Months Ended
				Six Months			Six Months
				June 30,
				Ended June 30,			Ended June 30,
				2005			2004
				2004			2003
Operating activities:
	Net income			$	235,~~986~~079		$	~~123~~2,~~145~~986
~~Adjustments to net income:~~	Adjustments to net income:
	~~Bad debt expense~~	Bad debt expense			1110,~~827~~956			1311,~~627~~827
	Stock option expense				177			—
		Depreciation and amortization expense			8,463			8,084
	Depreciation and amortization expense				8,084			4,814
		Amortization of intangibles			96,010			115,658
	Amortization of intangibles				115,658			—
		Amortization of deferred financing costs			10,750			13,108
	Amortization of deferred financing costs				13,108			13,756
		Stock-based compensation expense			514			177
	Loss on disposition of investment				9			—
		Loss on disposition of assets			28			9
	Deferred tax provision (benefit)				1,964			(145	)
		Deferred tax provision			22,497			1,964
	Contributions from Qwest in lieu of income taxes				—			61,009
	Changes in operating assets and liabilities:
		Accounts receivable			(1828,~~852~~737	)		23(18,~~550~~852	)
		Deferred directory costs			(209,~~698~~701	)		3(20,~~927~~698	)
		Other current assets			2(1,~~554~~833	)		~~(161~~2,554	)
		Accounts payable and other liabilities			(954	)		(1,220	)
		Other long term assets			210			—
		Accrued interest			(6,012	)		(1,497	)
		Accounts payable and other liabilities			1,685			(954	)
		Deferred revenue and customer deposits			48,158			(22,911	)
		Accrued interest			2,761			(6,012	)
		Amounts due to affiliates			(26,676	)		—
		Deferred revenue and customer deposits			7,390			48,158
		Amounts due to affiliates related to post-retirement and other post-employment obligations			3,242			—
		Amounts due to affiliates			(7,805	)		(26,676	)
		Employee benefit plan obligations and other long-term liabilities			(383	)		5,217
		Employee benefit plan obligations			577			—
			Cash provided by operating activities		134,192			223,111
		Other long-term liabilities			(95	)		(383	)
		Amounts due to affiliate related to post-retirement benefits			2,598			3,242
			Cash provided by operating activities		151,347			134,192
Investing activities:
		Acquisition of Dex West			5,251			—
	Expenditures for property, plant and equipment				(1,672	)		(3,795	)
		Expenditures for property, plant and equipment			(3,795	)		(8,181	)
	Capitalized software development costs				(7,046	)		(17,156	)
		Capitalized software development costs			(17,156	)		—
	Acquisition of Dex West				—			5,251
			Cash used for investing activities		(158,~~700~~718	)		(815,~~181~~700	)
Financing activities:
	Proceeds from borrowings of revolving credit facility				23,000			—
	Proceeds from borrowings on revolving credit facility				79,500			23,000
	Repayments on borrowings of revolving credit facility				(23,000	)		—
	Repayments of borrowings on revolving credit facility				(36,000	)		(23,000	)
	Borrowings from affiliates				—			14,000
	Payments on long-term debt				(165,226	)		(108,000	)
	Repayments on long-term debt				(108,000	)		—
	Payment of financing costs				(2,130	)		(1,659	)
	Payment of refinancing costs				(1,659	)		—
	Distribution to owner				(27,706	)		(11,689	)
	Distribution to Owner				(11,689	)		(190,395	)
			Cash used for financing activities		(151,562	)		(121,348	)
			Cash used for financing activities		(121,348	)		(176,395	)
Cash and cash equivalents:
	(Decrease) Increase				(2,856	)		38,535
	Decrease				(8,933	)		(2,856	)
	Beginning balance				48,~~658~~933			~~161~~4,~~338~~658
			Ending balance	$	~~1,802~~—		$	~~199~~1,~~873~~802
Supplemental cash flow disclosures:
Interest paid				$	94,185		$	100,857

See accompanying notes to condensed consolidated ~~financial~~ financial statements.

DEX MEDIA WEST LLC

AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF DEX MEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1). Description of ~~Business~~business

(a) ~~Dex~~The ~~Media Initial Public Offering~~Company

AsDex ~~more~~Media ~~fully~~West ~~described~~LLC in(“Dex ~~Note 12,~~Media ~~on July 27,~~West” ~~2004,~~or the “Company’s”) ~~indirect~~is ~~parent,~~a subsidiary of Dex Media ~~consummated~~West, ~~its~~Inc. ~~initial~~and an ~~public~~indirect ~~offering~~wholly-owned subsidiary of ~~common~~Dex ~~stock~~Media, Inc. (~~the~~ “~~Offering~~Dex Media”). ~~Immediately~~Dex ~~prior~~Media toWest is the ~~Offering,~~exclusive ~~Dex~~official ~~Media~~directory ~~completed~~publisher ~~a 10-~~for-1 ~~split~~Qwest ofCorporation, ~~all~~the ~~authorized~~local exchange ~~shares~~carrier of ~~common~~ ~~stock.~~Qwest ~~Share~~Communications ~~and~~International, ~~per share data~~ Inc. (~~except par value~~“Qwest”) ~~for all~~in ~~periods~~Arizona, ~~presented~~Idaho, ~~have~~Montana, ~~been~~Oregon, ~~restated~~Utah, Washington toand ~~reflect~~Wyoming (collectively, the ~~stock~~“Dex West ~~split~~States”).

Dex Media’s directory business was acquired from Qwest Dex, Inc. (b“Qwest Dex”) ~~Acquisition~~in a two phase purchase between Dex Holdings LLC (“Dex Holdings”), the former parent of Dex Media and Qwest Dex. Dex Holdings and Dex Media were formed by two private equity firms: The Carlyle Group and Welsh, Carson, Anderson & Stowe (“WCAS”) (collectively, the “Sponsors”).

OnIn ~~August~~the first phase of the purchase, which was consummated on November 198, 2002, Dex Holdings ~~LLC~~assigned to Dex Media East LLC (“Dex ~~Holdings~~Media East”), ~~the~~another ~~parent~~indirect wholly-owned subsidiary of Dex Media, ~~Inc. (“Dex~~its ~~Media”),~~right ~~new~~to ~~entities~~purchase ~~formed by~~ the ~~private~~directory ~~equity~~business ~~firms~~ of ~~The~~Qwest ~~Carlyle~~Dex ~~Group~~in ~~and~~Colorado, ~~Welsh~~Iowa, ~~Carson~~Minnesota, Nebraska, ~~Anderson &~~New ~~Stowe~~Mexico, ~~(“WCAS”)~~North ~~(together,~~Dakota ~~the “Sponsors”),~~and ~~entered~~South ~~into~~Dakota. ~~concurrent~~In ~~purchase~~the second phase ~~agreements~~of (the ~~“Dex~~purchase, ~~East~~which ~~Purchase~~was ~~Agreement”~~consummated ~~and~~on ~~the~~September 9, 2003 (the “Acquisition”), Dex ~~West~~Holdings ~~Purchase~~assigned ~~Agreement”)~~its right to purchase the directory business of Qwest Dex ~~Holdings,~~in ~~Inc.~~the ~~and~~Dex ~~its wholly-owned~~West ~~subsidiary~~States ~~Qwest Dex, Inc.~~ (~~together~~ “~~Qwest~~ Dex West”) ~~from Qwest~~to ~~Communications~~the ~~International Inc~~Company. ~~(“Qwest”)~~Dex inHoldings was ~~two~~dissolved ~~separate~~effective ~~phases~~January 1, 2005.

~~In the first phase, consummated on November 8, 2002, Dex Holdings assigned its right to purchase the directory business in the Dex East States~~ (~~as defined below~~b) to Dex Media East LLC (“Dex Media East”), an indirect wholly-owned subsidiary of Dex Media. Dex Media East now operates the directory business in Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota (the “Dex East States”). The total amount of consideration paid for Qwest Dex’s directory business in the Dex East States was $2.8 billion (excluding fees and acquisition costs). Operations

InThe ~~the~~Company ~~second~~is ~~phase (~~the ~~“Acquisition”),~~ ~~consummated~~largest ontelephone ~~September 9,~~directory ~~2003,~~publisher of ~~Qwest~~white ~~Dex~~and ~~contributed~~yellow ~~its~~pages ~~remaining~~directories ~~assets and liabilities relating~~ to ~~its~~businesses ~~directory~~and ~~business~~ residents in the Dex West States. ~~(as defined~~The ~~below)~~Company toprovides ~~GPP LLC~~directory, ~~a newly-formed limited liability~~Internet ~~company.~~and ~~Immediately~~direct ~~following~~marketing ~~this~~solutions ~~contribution,~~to ~~Dex~~local ~~Media~~and ~~West~~national ~~LLC,~~advertisers. ~~(“Dex~~Virtually ~~Media~~all ~~West”~~of or the “Company~~”),~~’s anrevenue is ~~indirect~~derived ~~wholly-owned~~from ~~subsidiary~~the ofsale ~~Dex Media, purchased all~~ of ~~the~~ ~~interests~~advertising in ~~GPP~~its ~~LLC~~various ~~for $4~~directories.~~3 billion (excluding fees,~~ ~~acquisition~~Published ~~costs~~directories ~~and~~are ~~subject~~distributed to ~~adjustments~~residents ~~relating to working~~and ~~capital~~businesses ~~levels). Immediately following such purchase, Dex Media West merged with GPP LLC. Dex Media West now operates the directory business acquired~~ in ~~Arizona, Idaho, Montana, Oregon, Utah, Washington and Wyoming (~~the “Dex West States~~”). In~~ ~~conjunction~~through ~~with~~third-party ~~the sale, Dex West employees became employees of Dex Media West and were immediately transferred to Dex Media East~~vendors. ~~On January 1, 2004, all employees of Dex~~ ~~Media~~The ~~East~~Company ~~were~~operates ~~transferred~~as toa ~~another~~single ~~indirect wholly-owned subsidiary of Dex Media, Dex Media Service LLC ( “Service Co~~segment.~~”).~~

~~The~~Effective ~~combined~~July 21, ~~financial~~2004, ~~statements~~Dex ofMedia ~~the~~consummated ~~acquired~~its initial ~~business~~public inoffering of common stock (the “Dex ~~West~~Media ~~States~~IPO”). Immediately prior to the ~~September 9~~Dex Media IPO, Dex Media effected a ~~2003~~10-for-1 ~~acquisition~~split ~~date~~of all authorized shares of common stock. On August 26, ~~referred~~2004, a portion of the net proceeds related to the asDex “Media IPO was used to redeem $18.2 million of Dex Media West”’s ~~or the~~senior ~~“Predecessor,”~~subordinated ~~represent~~notes at a ~~component~~redemption price of ~~Qwest~~109.875% ~~Dex~~ along with the accrued and ~~include~~unpaid interest. Also in connection with the ~~operating~~Dex ~~activities~~Media IPO, the Company paid $5.0 million to each of ~~Qwest~~the ~~Dex~~Sponsors ~~for~~to eliminate the $2.0 million ~~Dex~~aggregate annual advisory fees payable under Dex Media West’s ~~States~~management consulting agreements.

~~(d)~~2. ~~Operations~~Basis of Presentation

~~The Company is the exclusive official directory publisher for Qwest Corporation, Qwest’s local exchange carrier~~ (~~“Qwest LEC”~~a), in the Dex West States, which is the primary local exchange carrier in most service areas within the Dex West States. As a result, the Company is the largest telephone directory publisher of white and yellow pages directories to businesses and residents in the Dex West States. The Company provides directory and Internet solutions to local and national advertisers. Virtually all of the Company’s revenue is General

5 The accompanying condensed consolidated interim financial statements are unaudited. In compliance with the instruction of the Securities and Exchange Commission (“SEC”) for interim financial statements, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted. In management’s opinion, the condensed consolidated financial statements reflect all adjustments (which consist of normal recurring adjustments) necessary to fairly present the condensed consolidated statements of

~~Table of Contents~~5

DEXTable MEDIAof WEST LLC Contents

ANDEX ~~INDIRECT~~MEDIA ~~WHOLLY-OWNED~~WEST ~~SUBSIDIARY OF DEX~~LLC ~~MEDIA, INC.~~

~~NOTES~~AN TOINDIRECT ~~CONDENSED~~WHOLLY-OWNED ~~CONSOLIDATED~~SUBSIDIARY ~~FINANCIAL STATEMENTS —~~OF ~~(Continued)~~DEX MEDIA, INC.

~~derived~~NOTES ~~from~~TO ~~the~~CONDENSED ~~sale~~CONSOLIDATED ~~of advertising in its~~FINANCIAL ~~various directories. Published directories are distributed to~~STATEMENTS — (Continued) ~~businesses and residents in the Dex West States through third-party vendors.~~

~~(2)~~ financial ~~Basis~~position as of ~~Presentation~~June 30, 2005 and December 31, 2004, and the condensed consolidated statements of operations for the three and six months ended June 30, 2005 and 2004 and the condensed consolidated statements of cash flows for the six months ended June 30, 2005 and 2004.

~~(a)~~ These ~~The~~condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company as of December 31, 2004 and 2003 and for the year ended December 31, 2004, for the periods from September 10 to December 31, 2003 and from January 1 to September 9, 2003, and for the year ended December 31, 2002 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, as filed with the SEC. The condensed consolidated statements of operations for the six months ended June 30, 2005 are not necessarily indicative of the results expected for the full year.

The accompanying condensed consolidated ~~interim financial~~ statements are unaudited. In compliance with the Securities and Exchange Commission’s (the “SEC”) instructions for interim financial statements, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted. In management’s opinion, the condensed consolidated financial statements reflect all adjustments (which consist of normal recurring adjustments) necessary to fairly present the condensed consolidated statement of financial position as of June 30, 2004 and December 31, 2003, the condensed consolidated statements of operations for the three ~~months~~ and six months ended June 30, 2004 ~~and 2003~~include ~~and~~all ~~the~~material ~~condensed~~adjustments ~~consolidated~~required ~~statements~~under ofpurchase ~~cash flows for the~~accounting ~~six~~related ~~months~~to ~~ended June 30, 2004 and 2003. These condensed consolidated financial statements should be read in conjunction with~~ the ~~audited~~Acquisition ~~consolidated~~subsequent ~~financial statements of the Company and the Predecessor as of December 31, 2003 and 2002 and for the periods from September 10~~ to ~~December 31,~~ ~~2003 and from January 1 to~~ September 9, ~~2003,~~ ~~and for the years ended December 31, 2002 and 2001 included in the Company’s Form S-4 Amendment No~~2003. ~~2 as filed with the SEC. The condensed consolidated~~ ~~statements of operations for the three months and six months ended June 30, 2004 are not necessarily indicative of the results expected for the full year.~~

~~The~~(b) accompanying condensed consolidated statement of financial position of the Company as of June 30, 2004 and December 30, 2003, the condensed consolidated statements of operations for the three months and six months ended June 30, 2004, and the condensed consolidated statement of cash flows for the six months ended June 30, 2004, include all material adjustments required under purchase accounting. Reclassifications

~~Dex~~Certain ~~West~~prior isperiod ~~considered~~amounts the Predecessor to the Company. As such, the historical financial statements of Dex West are included in the accompanying condensed consolidated financial statements, including the combined statements of operations for the three months and six months ended June 30, 2003, and the combined statement of cash flows for the six months ended June 30, 2003 (together, the “Predecessor Financial Statements”). The Predecessor Financial Statements have ~~not~~ been ~~adjusted~~reclassified to ~~give effect to~~conform ~~the Acquisition. As such, the condensed consolidated financial statements of the Company after the Acquisition are not comparable~~ to the ~~Predecessor~~2005 ~~Financial Statements prior to the Acquisition~~presentation.

~~(b)~~3. ~~The~~Summary ~~Predecessor~~of Significant Accounting Policies

~~The~~(a) ~~accompanying~~Principles ~~combined financial statements~~ of ~~the~~ Predecessor include the activities of Qwest Dex for business conducted in the Dex West States. Because of Dex West’s relationship with Qwest Dex as well as Qwest and its other affiliates, the revenue and expenses are not necessarily indicative of what they would have been had Dex West operated without the shared resources of Qwest and its affiliates. Accordingly, these combined financial statements are not necessarily indicative of future results of operations. Consolidation

6 The condensed consolidated financial statements of the Company include the results of operations, financial position, and cash flows of Dex Media West and its wholly-owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation.

~~Table~~(b) Use of ~~Contents~~Estimates

~~DEX~~The ~~MEDIA~~preparation ~~WEST~~of ~~LLC~~financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts and disclosures reported in these condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

AN(c) ~~INDIRECT~~Revenue ~~WHOLLY-OWNED SUBSIDIARY OF DEX MEDIA, INC.~~ Recognition

~~NOTES~~The TOsale ~~CONDENSED~~of ~~CONSOLIDATED~~advertising ~~FINANCIAL~~in printed directories published by the ~~STATEMENTS —~~Company ~~(Continued)~~is its primary source of revenue. The Company recognizes revenue ratably over the life of each directory using the deferral and amortization method of accounting, with revenue recognition commencing in the month of delivery.

~~(c)~~ The ~~Reclassifications~~Company publishes white and yellow pages directories with primarily 12-month lives. From time to time, the Company may choose to change the publication dates of certain directories in order to more efficiently manage work and customer flow. The lives of the affected directories are expected to be 12 months thereafter. Such publication date changes do not have a significant impact on the Company’s recognized revenue as the Company’s sales contracts generally allow for the billing of additional monthly charges in the case of directories with extended lives. During the three months and six months ended June 30, 2005, the Company published 33 and 75 directories, respectively. During the three months and six months ended June 30, 2004, the Company published 28 and 69 directories, respectively.

~~Certain~~The ~~prior~~Company ~~period~~enters ~~amounts~~into ~~have~~transactions ~~been~~such as exclusivity ~~reclassified~~arrangements, tosponsorships, ~~conform~~and toother media access transactions, where the ~~2004~~Company’s ~~presentation.~~products and services are promoted by a third party and, in exchange, the Company carries the party’s advertisement. The Company accounts for these transactions in

~~(3) Summary of Significant Accounting Policies~~6

(a)Table Principles of ConsolidationContents

~~The~~DEX ~~condensed~~MEDIA ~~consolidated~~WEST ~~financial statements~~LLC ~~include the financial statements of Dex Media West and its wholly-owned subsidiary, Dex Media West Finance Co. All intercompany balances and transactions have been eliminated in consolidation.~~

~~(b)~~ AN ~~Use~~INDIRECT ofWHOLLY-OWNED ~~Estimates~~SUBSIDIARY OF DEX MEDIA, INC.

~~The~~NOTES ~~preparation~~TO ofCONDENSED ~~financial~~CONSOLIDATED ~~statements in~~FINANCIAL ~~conformity with accounting principles generally accepted in the~~STATEMENTS — (Continued) United States of America requires management to make estimates and assumptions that affect the amounts and disclosures reported in these consolidated financial statements and accompanying notes. Actual results could differ significantly from those estimates.

accordance with Emerging Issues Task Force (c“EITF”) Issue No. 99-17 “Accounting for Advertising Barter Transactions.” Revenue ~~Recognition~~and expense related to such transactions are included in the condensed consolidated statements of operations consistent with reasonably similar items sold or purchased for cash. Such barter transactions were not significant to the Company’s financial results for the three months and six months ended June 30, 2005 and 2004.

~~The~~In ~~sale~~certain of advertising in printed directories published by the Company and the Predecessor is the primary source of revenue. Revenue is recognized ratably over the life of each directory using the deferral and amortization method of accountingcases, ~~with revenue recognition commencing in~~ the ~~month of delivery. The~~ Company ~~and~~enters ~~the~~into ~~Predecessor~~agreements ~~publish white and yellow pages directories primarily~~ with ~~12-month lives. From~~ ~~time~~customers tothat ~~time,~~involve the ~~Company~~delivery ~~may choose to change the lives~~ of ~~certain~~ ~~directories in order to~~ more ~~efficiently~~than ~~manage~~one ~~work~~product ~~and~~or ~~account flow~~service. ~~During~~Revenue 2003, the Company determined it would extend the lives of eight directories published in December 2002 and publish the new editions of these directories in January 2004, in most cases. The lives of the new editions of these directories will be 12 months thereafter. These extensions did not have a significant impact on the Company’s results of operations for ~~the~~such ~~three~~arrangements ~~months~~is ~~and~~allocated ~~six months ended June 30, 2004 and are not expected to have a material effect on revenue or cost of revenue~~ in ~~future periods under the~~ ~~deferral~~accordance ~~and~~with ~~amortization~~EITF ~~method~~Issue ~~of accounting~~No. ~~For the three months ended June~~ ~~30,~~00-21 ~~2004 and 2003, the Company and its~~“Revenue ~~Predecessor~~Arrangements ~~each~~with ~~published~~Multiple ~~28 directories~~Deliverables. ~~For the six~~” ~~months ended June 30, 2004 and 2003, the Company and its Predecessor published 69 and 61 directories, respectively.~~

The Company enters into transactions where the Company’s products and services are promoted by the account and, in exchange, the Company carries the account’s advertisement. The Company accounts for these transactions in accordance with Emerging Issues Task Force (~~“EITF”~~d) ~~Issue~~ ~~No. 99-17,~~Cost ~~“Accounting~~of ~~for Advertising Barter Transactions.” Such transactions were not significant to the Company’s operations for the three months and six months ended June 30, 2004 and 2003.~~ Revenue

InThe ~~certain~~Company ~~cases,~~accounts ~~the~~for ~~Company~~cost ~~enters~~of ~~into~~revenue under the deferral and ~~agreements~~amortization ~~with~~method ~~accounts~~of ~~that~~accounting. ~~involve~~Accordingly, the Company’s ~~delivery~~cost of ~~more~~revenue ~~than~~recognized in a reporting period ~~one~~consists ~~product~~of: or(i) costs ~~service.~~incurred ~~Revenue~~in ~~for~~that ~~such~~period ~~arrangements~~and recognized isin that period, principally sales salaries and wages; ~~allocated~~(ii) costs incurred in ~~accordance~~a ~~with~~prior ~~EITF~~period, ~~Issue~~a ~~No.~~portion of which are amortized and recognized in the current period; and (iii) ~~00-21~~costs incurred in the current period, a portion of ~~“Revenue~~which ~~Arrangements~~are ~~with~~amortized ~~Multiple~~and recognized in that period and the ~~Deliverables~~balance of which are deferred until future periods.” Consequently, there will be a difference between the cost of revenue recognized in any given period and the costs incurred in the given period. Such differences may be significant.

~~(d)~~ Costs ~~Cost~~incurred in the current period and subject to deferral include direct costs associated with the publication of directories, ~~Revenue~~including sales commissions, paper, printing, transportation, distribution and pre-press production and employee and systems support costs relating to each of the foregoing. Sales commissions include commissions paid to employees for sales to local advertisers and to third-party certified marketing representatives which act as the Company’s channel to national advertisers. All deferred costs related to the sales and production of directories are recognized ratably over the life of each directory under the deferral and amortization method of accounting, with cost recognition commencing in the month of delivery. From time to time the Company has changed the publication dates of certain directories. In such cases, the estimated life of the related unamortized deferred cost of revenue is revised to amortize such cost over the new remaining estimated life. Changes in directory publication dates typically do not result in any additional direct incurred costs.

~~The Company and the Predecessor account for cost of revenue under the deferral and amortization method of accounting. Accordingly, the cost of revenue recognized in a reporting period consists of~~ (1e) ~~costs~~ ~~incurred~~Stock-Based in that period and recognized in that period, principally sales salaries and wages, (2) costs incurred in a prior period, a portion of which is amortized and recognized in the current period and (3) costs incurred in the current period, a portion of which is amortized and recognized in that period and the balance of which is Compensation

The Company accounts for the Stock Option Plan of Dex Media, Inc. and the Dex Media, Inc. 2004 Incentive Award Plan, as more fully discussed in Note 7, under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and related Interpretations. Had the Company accounted for employee stock option grants under the minimum value method for options issued prior to becoming a publicly traded company and the fair value method after becoming a publicly traded company, both of which are prescribed by Statement of Financial Accounting

~~Table of Contents~~7

DEXTable MEDIAof WEST LLC Contents

ANDEX ~~INDIRECT~~MEDIA ~~WHOLLY-OWNED~~WEST ~~SUBSIDIARY OF DEX~~LLC ~~MEDIA, INC.~~

~~NOTES~~AN TOINDIRECT ~~CONDENSED~~WHOLLY-OWNED ~~CONSOLIDATED~~SUBSIDIARY ~~FINANCIAL STATEMENTS —~~OF ~~(Continued)~~DEX MEDIA, INC.

~~deferred~~NOTES ~~until~~TO ~~future~~CONDENSED ~~periods.~~CONSOLIDATED ~~Consequently,~~FINANCIAL ~~there will be a difference between the cost of revenue~~STATEMENTS — (Continued) ~~recognized in any given period and the costs incurred in the given period, which may be significant.~~

~~Costs~~Standard ~~incurred~~(“SFAS”) ~~in the current period and subject to deferral include direct costs associated with the publication of directories~~No. 123, ~~including sales commissions, paper, printing,~~“Accounting ~~transportation,~~for ~~distribution and pre~~Stock-~~press~~Based production and employee and systems support costs relating to each of the foregoing. Sales commissions include commissions paid to employees for sales to local advertisers and to third party certified marketing representativesCompensation,” ~~which act as~~ the ~~Company’s~~ ~~channel~~pro toforma ~~national~~results ~~advertisers. All deferred costs related to the sale and production~~ of ~~directories are~~ ~~recognized ratably over~~ the ~~life~~Company ofwould ~~each~~have ~~directory~~been ~~under~~as ~~the deferral~~follows ~~and amortization method of accounting, with cost recognition commencing~~ (in ~~the month of delivery.~~thousands):

(e) Stock-Based Compensation


		Three Months Ended						Six Months Ended
		June 30,						June 30,

		2005			2004			2005			2004

Net Income
	As reported	$	20,771		$	3,585		$	35,079		$	2,986
	Add: Stock-based employee compensation expense included in reported net income, net of related tax effects		160			95			314			107
	Deduct: Stock-based employee compensation expense determined under minimum value or fair value based method, as applicable, for all awards, net of related tax effects		(246	)		(164	)		(496	)		(238	)

	Pro forma	$	20,685		$	3,516		$	34,897		$	2,855

~~Company. The Company accounts for the Stock Option Plan of Dex Media, Inc. under the recognition and measurement principles of Accounting Principles Board~~ (~~“APB”~~f) ~~Opinion~~Income ~~No. 25,~~Tax “Accounting for Stock Issued to Employees”, and related Interpretations. Had the Company accounted for employee stock option grants under the fair value method prescribed by Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation,” the pro forma results of the Company for the three months and six months ended June 30, 2004 would have been as follows (in thousands): Provision

		Three Months		Six Months
		Ended		Ended
		June 30,		June 30,
		2004		2004
Net Income:
	As reported	$	3,585	$	2,986
	Pro forma		3,601		2,931

The Company is included in the consolidated Federal income tax return and combined or consolidated state income tax returns, where permitted, for Dex Media, the Company’s indirect parent. Although the Company is a single member limited liability company and is disregarded as a taxable entity for income tax purposes, the Company calculates and records income taxes as if it filed a tax return on a stand-alone basis.

~~Predecessor.~~Income ~~Had~~taxes ~~the Predecessor~~are accounted for ~~Qwest~~under ~~employee~~the ~~stock~~asset ~~option~~and ~~grants~~liability ~~under~~method. Deferred tax assets and liabilities are recorded to reflect the ~~fair~~future ~~value~~tax ~~method~~consequences ~~prescribed~~of bytemporary differences ~~SFAS No. 123,~~between the ~~pro~~financial ~~forma~~reporting ~~net~~bases of assets and liabilities and their tax bases at each year end. Deferred tax assets and liabilities are measured using the enacted income oftax ~~Dex~~rates ~~West~~in effect for the year in which those temporary differences are expected to be recovered or settled. Deferred tax assets and liabilities are adjusted for future income tax rate changes in the ~~three~~year ~~months~~the changes are enacted. Deferred tax assets are recognized for operating loss and ~~six~~tax ~~months~~credit ~~ended~~carryforwards ~~June 30~~if management believes, ~~2003~~based ~~would~~upon existing evidence, that it is ~~have~~more ~~been~~likely asthan ~~follows~~not ~~(in~~that ~~thousands):~~the carryforwards will be utilized. All deferred tax assets are reviewed for realizability and valuation allowances are recorded if it is more likely than not that the deferred tax assets will not be realized. No valuation allowance has been established against deferred tax assets as of June 30, 2005 or December 31, 2004.

		Three Months		Six Months
		Ended		Ended
		June 30,		June 30,
		2003		2003
Net Income:
	As reported	$	58,494	$	123,145
	Pro forma		58,324		122,758


*(g)*	*New Accounting Standards*

On March 29, 2005, the SEC released Staff Accounting Bulletin (f“SAB”) No. 107, “Share-based ~~Income~~Payment”. ~~Tax~~SAB No. 107 provides ~~Provision~~an interpretation of SFAS No. 123R, “Share-based Payment” and its interaction with certain SEC rules and regulations and provides the SEC’s views regarding the valuation of share-based payment arrangements for public companies. SAB No. 107 provides guidance with regard to share-based payment transactions with non-employees, the transition from nonpublic to public entity status, valuation methods (including assumptions such as expected volatility and expected term), the accounting for certain redeemable financial instruments issued under share- based payment arrangements, the classification of compensation expense, non-GAAP financial measures, first-time adoption of SFAS No. 123R, the modification of employee share options prior to adoption of SFAS No. 123R and disclosures in Management’s Discussion and Analysis subsequent to the adoption of SFAS No. 123R. Based upon the options outstanding

8 ~~Income taxes are accounted for under the asset~~ ~~and liability method. Deferred tax assets and liabilities are~~ recorded to reflect the future tax consequences of temporary differences between the financial reporting bases of assets and liabilities and their tax bases at each year end. Deferred tax assets and liabilities are measured using the enacted income tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Deferred tax assets and liabilities are adjusted for future income tax rate changes in the year the changes are enacted. Deferred tax assets are recognized for operating losses and tax credit carry forwards if management believes, based upon existing evidence, that it is more likely than not that the carry forward will be utilized. All deferred tax assets are reviewed for realizability and valuation allowances are recorded if it is more likely than not that the deferred tax assets will not be realized.

8 Table of Contents

~~Table~~ DEX ofMEDIA ~~Contents~~WEST LLC

AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF DEX MEDIA, ~~WEST LLC~~INC.

ANNOTES ~~INDIRECT~~TO ~~WHOLLY-OWNED~~CONDENSED ~~SUBSIDIARY~~CONSOLIDATED ~~OF DEX~~FINANCIAL ~~MEDIA, INC.~~STATEMENTS — (Continued)

~~NOTES~~as TOof ~~CONDENSED~~June 30, ~~CONSOLIDATED~~2005, ~~FINANCIAL~~the Company has determined that the ~~STATEMENTS~~adoption of SAB —No. 107 ~~(Continued)~~will not have a material impact on the Company’s results of operations.

~~(4)~~ On ~~Goodwill~~April 14, ~~and~~2005, ~~Intangible~~the ~~Assets~~SEC announced the adoption of a new rule that amends the compliance dates for SFAS No. 123R. Under SFAS No. 123R, registrants would have been required to implement the standard as of the beginning of the first interim or annual period that begins after June 15, 2005. The SEC’s new rule requires companies to implement SFAS No. 123R at the beginning of their first fiscal year beginning on or after June 15, 2005, instead of the first reporting period that begins after June 15, 2005. As a result, the financial statements of the Company must comply with SFAS No. 123R beginning with the interim financial statements for the first quarter of 2006. The SEC’s new rule does not change the accounting required by SFAS No. 123R; it changes only the dates for compliance with the standard.

During May 2005, the ~~six~~Financial ~~months~~Accounting ~~ended~~Standards ~~June~~Board (“FASB”) issued SFAS 30No. 154, “Accounting ~~2004,~~Changes and Error Corrections — a ~~goodwill~~replacement ~~was~~of ~~decreased~~APB byOpinion No. 20 and FASB Statement No. 3.” This statement applies to all voluntary changes in accounting principle and requires retrospective application of the ~~following~~new ~~purchase~~accounting principle to prior accounting ~~adjustment~~periods (as if that principle had always been used. In addition, this statement requires that a change in ~~thousands):~~depreciation method be accounted for as a change in estimate. The requirements are effective for changes made in fiscal years beginning after December 15, 2005. The Company does not expect the adoption of SFAS No. 154 to have a material impact on the Company’s financial statements.

Balance at December 31, 2003	$	2,198,586
Working capital adjustment		(5,251	)
Balance at June 30, 2004	$	2,193,335


4.	Goodwill and Intangible Assets

~~The~~During ~~initial~~the ~~purchase~~six ~~price~~months ~~and~~ended ~~fair value estimates recorded upon the September~~June 930, ~~2003~~2005 ~~Acquisition were~~goodwill ~~adjusted~~was ~~upon settlement of the working capital adjustment~~not ~~with~~impaired ~~the~~or ~~seller~~otherwise ~~in 2004 pursuant to the provisions of the Dex West Purchase Agreement~~adjusted.

The gross carrying amount and accumulated amortization of other intangible assets and their estimated useful lives are as follows (dollars in thousands):

As of June 30, 2004


		As of June 30, 2005

		Gross
		Carrying		Accumulated			Net Book
Intangible Assets		Value		Amortization			Value		Life

Customer relationships — local		$	890,000	$	(295,269	)	$	594,731		20 years	⁽¹⁾
Customer relationships — national			252,000		(59,792	)		192,208		25 years	⁽¹⁾
Non-compete/publishing agreements			359,000		(16,598	)		342,402		39 years
Dex Trademark			385,000		—			385,000		Indefinite
Qwest Dex Trademark agreement			65,000		(28,048	)		36,952		4 years
Advertising agreement			26,000		(3,318	)		22,682		14 years

	Totals	$	1,977,000	$	(403,025	)	$	1,573,975

		As of December 31, 2004
		Gross
		Carrying		Accumulated			Net Book
Intangible Assets		Value		Amortization			Value		Life
Account relationships — local		$	890,000	$	(141,796	)	$	748,204		20 years	(1)
Customer relationships — local		$	890,000	$	(227,181	)	$	662,819		20 years	(1)
Account relationships — national			252,000		(28,062	)		223,938		25 years	(1)
Customer relationships — national			252,000		(45,102	)		206,898		25 years	(1)
Non-compete/publishing agreements			359,000		(712,~~440~~019	)		~~351~~346,~~560~~981		39 years
Dex Trademark			385,000		—			385,000		Indefinite
Qwest Dex Trademark agreement			65,000		(1220,~~572~~310	)		5244,~~428~~690		4 years
Advertising agreements			26,000		(1,487	)		24,513		14 years
Advertising agreement			26,000		(2,403	)		23,597		14 years
	Totals	$	1,977,000	$	(~~191~~307,~~357~~015	)	$	1,~~785~~669,~~643~~985

As(1) Amortization expense is calculated using a declining method in relation to estimated retention lives of ~~December 31,~~acquired ~~2003~~ customers.

		Gross
		Carrying		Accumulated			Net Book
Intangible Assets		Value		Amortization			Value		Life
Account relationships — local		$	890,000	$	(56,411	)	$	833,589		20 years	(1)
Account relationships — national			252,000		(11,023	)		240,977		25 years	(1)
Non-compete/publishing agreements			359,000		(2,860	)		356,140		39 years
Dex Trademark			385,000		—			385,000		Indefinite
Qwest Dex Trademark agreement			65,000		(4,834	)		60,166		4 years
Advertising agreements			26,000		(572	)		25,428		14 years
	Totals	$	1,977,000	$	(75,700	)	$	1,901,300

(1)Table Amortization is calculated using a declining method in relation to estimated retention lives of acquired accounts.Contents

9 DEX MEDIA WEST LLC

~~Table~~ AN ofINDIRECT ~~Contents~~WHOLLY-OWNED SUBSIDIARY OF DEX MEDIA, INC.

~~DEX~~NOTES ~~MEDIA~~TO ~~WEST~~CONDENSED ~~LLC~~CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

AN5. ~~INDIRECT WHOLLY~~Long-~~OWNED~~Term ~~SUBSIDIARY OF DEX MEDIA, INC.~~ Debt

~~NOTES~~Long-term TOdebt ~~CONDENSED~~is ~~CONSOLIDATED~~comprised ~~FINANCIAL STATEMENTS —~~of the following (~~Continued~~in thousands):

(5) Long-Term Debt


		June 30,			December 31,
		2005			2004

Notes Payable to Banks: (equal right of payment)
	Notes payable to banks, Tranche A term loan, bearing interest at adjusted London Interbank Offer Rates (“LIBOR”) plus the current applicable interest spread of 1.25% (weighted average of 4.57% at June 30, 2005)	$	391,841		$	492,848
	Notes payable to banks, Tranche B term loan, bearing interest at adjusted LIBOR plus the current applicable interest spread of 1.75% (weighted average of 4.93% at June 30, 2005)		916,933			981,152
Revolving loan bearing interest at Alternative Base Rate (“ABR”) plus the current applicable interest spread of 0.25% and at adjusted LIBOR plus the current applicable interest spread of 1.25% (weighted average interest rate of 4.75% at June 30, 2005)			43,500			—
Unsecured Notes Payable: (in descending order of right of payment; senior notes equal right of payment)
	Unsecured senior notes payable, due August 2010, bearing interest at 8.5%		385,000			385,000
	Unsecured senior notes payable, due November 2011, bearing interest at 5.875%		300,000			300,000
	Unsecured senior subordinated notes payable, due August 2013, bearing interest at 9.875%		761,800			761,800

			2,799,074			2,920,800
Less: current portion of long-term debt			(146,597	)		(84,302	)

		$	2,652,477		$	2,836,498

~~Long-term~~Dex ~~debt~~Media isWest ~~comprised~~registered its 57/8% senior notes with the SEC through an exchange offer completed on March 8, 2005. As of June 30, 2005, there were $43.5 million of borrowings under the ~~following~~revolving ~~(in~~loan. The ~~thousands~~Company paid interest and fees on the revolving loan, ininterest rate ~~descending~~swaps ~~order~~and outstanding notes of ~~right~~$93.3 million and $99.6 million during the six months ended June 30, 2005 and 2004, respectively. As of ~~payment):~~June 30, 2005 the Company was in compliance with all covenants under its credit facility.

	June 30,			December 31,
	2004			2003
Notes payable to banks, Tranche A term loan, bearing interest at adjusted London Interbank Offer Rates (“LIBOR”) plus the current applicable interest spread of 2.0% (weighted average of 3.33% at June 30, 2004)	$	857,778		$	905,778
Notes payable to banks, Tranche B term loan, bearing interest at adjusted LIBOR plus the current applicable interest spread of 2.25% (weighted average of 3.57% at June 30, 2004)		1,072,222			1,132,222
Unsecured senior notes, due August 2010, bearing interest at 8.5%		385,000			385,000
Unsecured senior subordinated notes, due August 2013, bearing interest at 9.875%		780,000			780,000
		3,095,000			3,203,000
Less: current portion of long-term debt		(39,903	)		(20,178	)
	$	3,055,097		$	3,182,822


6.	Derivative Instruments and Hedging Activities

AsIn ofOctober ~~June 30,~~ 2004, ~~there~~the ~~were~~Company noentered into four fixed interest ~~borrowings~~rate ~~under~~swap ~~the~~agreements ~~revolving~~to ~~credit~~hedge ~~facility.~~against ~~The~~the ~~Company~~effects ~~paid~~of increases in the interest ~~and~~rates ~~fees~~associated onwith the ~~bank~~floating ~~facility,~~rate ~~senior~~debt ~~notes~~on its ~~and~~term ~~senior~~loans. The interest rate swap agreements have an ~~subordinated~~aggregate ~~notes~~notional amount of $99300.60 million, ~~during~~applicable preset monthly fixed rates ranging from 1.901% to 3.61% and expire in October 2006. The Company has not designated these interest rate swap agreements as hedging instruments and therefore reports all gains and losses in the ~~six~~change ~~months~~in fair value directly in earnings as a component of interest expense. For the three months ended June 30, ~~2004.~~2005, Asthe Company recorded a loss of $1.1 million, which has been recorded as an increase to interest expense. For the six months ended June 30, ~~2004~~2005, the Company ~~was~~ inrecorded ~~compliance~~a ~~with~~gain ~~all~~of $1.4 million, ~~debt~~which ~~covenants~~has ~~under~~been ~~its~~recorded ~~credit~~as a reduction to ~~facilities~~interest expense.

In ~~connection~~May ~~with~~2005 and June 2005, the ~~amendment~~Company ~~and~~terminated ~~restatement~~the six offloating ~~our~~interest ~~Credit~~rate ~~Agreement,~~swap ~~the~~agreements ~~applicable~~entered ~~margins~~into onin ~~the revolving~~November ~~credit~~2004. ~~facility,~~Under ~~Tranche A~~the ~~term~~terms ~~loan~~of ~~and~~the ~~Tranche B term~~floating ~~loan~~interest ~~have~~rate ~~been~~swaps, ~~reduced.~~the Company ~~The~~received ~~commitment~~fixed ~~fee~~interest onpayments that match the ~~unused~~interest ~~portion~~obligations of the 57/8% notes issued ~~revolving~~in ~~credit~~November ~~facility~~2004 ~~has~~and ~~been~~made ~~reduced~~floating tointerest payments, ~~0.375%~~thereby ~~from~~converting ~~0.5%.~~the ~~The~~fixed ~~price~~interest ~~reductions~~rate ~~have~~notes ~~been~~into ~~effective since~~floating ~~June 11,~~rate ~~2004.~~debt

10 ~~As discussed in Note 12(a), a portion of the~~ ~~net proceeds from Dex Media’s initial public offering of~~ ~~common stock will be used to redeem $18.2 million of the Company’s Senior Subordinated Notes at a redemption price of 109.875% plus accrued and unpaid interest.~~

(6)Table Short-termof BorrowingsContents

InDEX ~~September~~MEDIA ~~2002,~~WEST ~~Qwest Dex, Inc. issued to the~~LLC Predecessor $750.0 million in debt with a two-year maturity. The loan consisted of a fixed interest rate component, at a rate of 14% per annum, and a floating interest rate component, at LIBOR plus 11.50% which was 12.8% at June 30, 2003. The loan was guaranteed by Qwest Dex Holdings, Inc. and Qwest Services Corporation (“QSC”), and the obligations were secured by a first priority pledge of the stock of Qwest Dex, a first priority pledge of substantially all of the assets of Qwest Dex and a second priority pledge of the stock of Qwest Corporation (“QC”), a wholly owned subsidiary of Qwest. The loan agreement included certain financial covenants, including an interest coverage ratio based on earnings before interest, taxes, depreciation and amortization (“EBITDA”) to interest expense with a minimum ratio of 4.75:1 and a debt to EBITDA ratio of 1.75:1 and other covenants limiting Dex’s ability to incur additional debt or liens, pay dividends and make investments. Upon the completion of the sale of Dex West, the entire $750 million debt balance was repaid. The Predecessor paid interest of approximately $52 million for the six months ended June 30, 2003.

InAN ~~addition,~~INDIRECT ~~Qwest~~WHOLLY-OWNED ~~granted~~SUBSIDIARY aOF ~~secondary~~DEX ~~priority pledge of the stock of Qwest Dex Holdings~~MEDIA, ~~Inc~~INC. ~~and Qwest Dex,~~ ~~Inc. and certain assets of Qwest Dex, Inc. to its banks in connection with an amendment of its~~

10 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~Table~~ instruments. The floating interest rate swaps had an aggregate notional amount of ~~Contents~~$300.0 million, floating rate LIBOR that reset semi-annually in May and November, plus applicable margins ranging from 1.4975% to 1.57%, and were to expire in November 2011. The Company had not designated these interest rate swap agreements as hedged instruments and therefore, reported all gains and losses in the change in fair value directly in earnings as a component of interest expense. For the three months and six months ended June 30, 2005, the Company recorded net gains, as a reduction to interest expense, of $7.8 million and $2.2 million, respectively, of which $7.1 million represents the gain recognized upon termination of the swaps resulting in a cumulative net gain of $0.4 million during the life of those swaps. The Company paid $2.1 million upon termination of the swaps.

~~DEX~~7. ~~MEDIA~~Stock-Based ~~WEST LLC~~ Awards

ANOn ~~INDIRECT~~November 8, ~~WHOLLY~~2002, Dex Media adopted the Stock Option Plan of Dex Media, Inc. (the “2002 Plan”), which permits the grant of nonqualified and incentive stock options to its employees, consultants and independent directors or those of its wholly owned subsidiaries. In May 2004, Dex Media adopted the Dex Media, Inc. 2004 Incentive Award Plan (the “2004 Plan”). The 2004 Plan provides for a variety of stock-~~OWNED~~based awards, ~~SUBSIDIARY~~including OFnon-qualified ~~DEX~~stock options, incentive stock ~~MEDIA~~options, ~~INC~~stock appreciation rights, restricted stock awards, restricted stock unit awards, deferred stock awards, dividend equivalents, performance-base awards and other stock-based awards. Effective with the adoption of the 2004 Plan, Dex Media discontinued grants under the 2002 Plan while the options outstanding under the 2002 Plan remain outstanding pursuant to the terms of that plan. As of June 30, 2005, 6,100,386 shares of Dex Media common stock were available for grant under the 2004 Plan and 2002 Plan, with 67,500 shares of restricted stock issued pursuant to restricted stock agreements. As of December 31, 2004, the maximum number of shares of Dex Media common stock available for grant under the 2004 Plan and 2002 Plan was 6,251,650, with 25,000 shares of restricted stock issued pursuant to restricted stock agreements.

~~NOTES~~Dex TOMedia’s ~~CONDENSED~~Compensation ~~CONSOLIDATED~~Committee ~~FINANCIAL~~determines the exercise ~~STATEMENTS~~price for each option awarded. Outstanding options issued pursuant to the 2002 Plan vest in two segments. Subject to the optionee’s continued employment with the Company: (i) —25% of the options granted will vest in equal annual installments of 5% each on each December 31 beginning in the year of grant or the following year, depending upon when during the calendar year the options are granted, and ending five years after and (~~Continued~~ii) 75% of the options granted will vest in full on the eighth anniversary of the grant date; however, an installment equal to 15% of the options granted shall become vested following each of the fiscal years beginning in the year of grant or the following year, depending upon when during the calendar year the options are granted, and ending five years after if certain earnings before interest, taxes, depreciation and amortization (“EBITDA”) targets are met with respect to each year. Options outstanding issued pursuant to the 2004 Plan vest in equal annual installments over four years.

~~credit facility~~8. ~~Qwest~~Pension ~~Dex, Inc.~~ and ~~Qwest~~Other ~~Dex Holdings,~~Post-Retirement Inc. were guarantors of the credit facility. The amount of the guarantee was limited to the maximum amount outstanding under the loan. The credit facility, as amended, included several restrictive covenants which, among other things, limited Qwest’s ability to incur additional debt or liens; pay dividends; repurchase Qwest’s common stock; sell, lease, transfer or dispose of assets; make investments; and merge with another company. Benefits

(7a) ~~Stock~~General ~~Options~~description

~~Company.~~Effective On November 8, 2002, Dex Media adopted ~~the~~a ~~Stock Option Plan~~pension ofplan ~~Dex Media, Inc. (the “2002 Plan”) that permits the grant of nonqualified~~ and ~~incentive~~effective ~~stock options to its employees, consultants and independent directors or those of its wholly-owned subsidiaries. As of June~~December 301, ~~2004, the maximum number of shares of common stock available for issuance under the~~ 2002 ~~Plan was 6~~,~~230,000,~~ ~~with 5,066,540 shares underlying outstanding options and 1,163,460 shares available for issuance pursuant to new awards. As more fully discussed in Note 13(d), effective July 27, 2004,~~ Dex Media adopted ~~the Dex Media, Inc. 2004 Incentive Award Plan~~an ~~under~~other ~~which~~post-retirement ~~there~~benefit ~~are~~plan ~~1,000,000 shares~~providing ofretiree ~~common stock available for grant~~healthcare. ~~The Compensation Committee of~~ Dex Media ~~determines~~ ~~the~~has ~~terms~~filed for ~~each~~a ~~option.~~determination ~~Generally,~~letter all outstanding stock options have an exercise price that was equal to the estimated fair value of the common stock on the date the stock option was granted. However, in certain instances stock options have been granted with ~~an exercise price below~~ the ~~fair~~IRS ~~value of~~for ~~the~~its ~~common~~pension ~~stock on the date of grant~~plan. ~~All~~The ~~outstanding~~pension ~~options have~~plan is a ~~term~~noncontributory ~~of ten years. Outstanding options vest in two~~defined ~~segments.~~benefit ~~Subject~~pension toplan ~~the~~covering ~~optionee’s~~substantially ~~continued~~all ~~employment with~~management the Company (1) 25% of the options granted will vest in equal annual installments of 5% each on each December 31 beginning in the year of grant or the following year, depending upon when during the calendar year the options are granted, and ~~ending~~occupational ~~five~~employees ~~years after; and (2) 75%~~ of the ~~options~~Company. ~~granted will~~The ~~vest~~other ~~on the eighth anniversary of the grant date; however,~~post-retirement anbenefit ~~installment~~plan ~~equal~~provides tohealthcare 15% of the options granted shall become vested following each of the fiscal years beginning the year of grant or the following year, depending upon when during the calendar year the options are granted, and ~~ending~~life ~~five~~insurance ~~years after~~for if certain ~~EBITDA targets are met with respect to each~~ ~~year~~retirees.

OnPension ~~November 3,~~costs ~~2003, Dex Media declared a distribution to its parent of $750.2 million. As a result of the distribution~~ and asother ~~provided~~post-retirement ~~under~~benefit ~~the~~costs ~~Plan, Dex Media~~are ~~adjusted~~recognized ~~the~~over ~~exercise price of all outstanding options to $6.00, effective November 10, 2003. As~~ the ~~aggregate~~periods ~~intrinsic value of the awards immediately after the change~~ in ~~exercise price~~which ~~was not greater than~~ the ~~aggregate~~employee ~~intrinsic value of the~~renders ~~awards~~services ~~immediately~~and ~~prior~~becomes eligible to ~~the~~receive ~~change~~benefits ~~in exercise price, and~~ as determined ~~the~~by ~~ratio~~using of the ~~exercise~~projected ~~price~~unit ~~per~~credit ~~share~~method. toDex ~~the market price~~Media’s ~~per~~funding ~~share~~policy ~~was~~is ~~not reduced, the adjustment~~ to ~~the~~make ~~exercise~~contributions ~~price of~~with the ~~options~~objective ~~did not result in any accounting recognition in the Company’s consolidated statements~~ of ~~operations in~~ ~~accordance with APB Opinion No. 25 and FASB Interpretation~~accumulating ~~No. (“FIN”) 44, “Accounting for Certain Transactions Involving Stock Compensation.”~~

11 ~~On January 28, 2004, Dex Media declared~~ ~~another distribution to its parent of $250.5 million. As a~~ result of the distribution and as allowed under the Plan, Dex Media adjusted the exercise price of outstanding options to $4.64 and increased the number of outstanding options by 9.3587%, effective March 3, 2004. As the aggregate intrinsic value of the awards immediately after the change in exercise price was not greater than the aggregate intrinsic value of the awards immediately prior to the change in exercise price, and as the ratio of the exercise price per share to the market price per share was not reduced, the adjustment to the exercise price of the options did not result in any accounting recognition in the Company’s consolidated statements of operations in accordance with APB Opinion No. 25 and FIN 44.

Predecessor. EmployeesTable of the Predecessor participated in the Qwest employee stock incentive plans. The Qwest stock incentive plans were accounted for using the intrinsic value method of APB Opinion No. 25 under which no compensation expense is recognized for options granted to employees when the strike price of Contents

11 DEX MEDIA WEST LLC

~~Table~~ AN ofINDIRECT ~~Contents~~WHOLLY-OWNED SUBSIDIARY OF DEX MEDIA, INC.

~~DEX~~NOTES ~~MEDIA~~TO ~~WEST~~CONDENSED ~~LLC~~CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

ANsufficient ~~INDIRECT~~assets ~~WHOLLY-OWNED~~to ~~SUBSIDIARY~~pay OFall ~~DEX~~benefits when due. No pension ~~MEDIA~~funding was required for Dex Media for the three months ended June 30, ~~INC~~2005 and 2004. The other post-retirement benefit plan is pay-as-you go and is funded out of Dex Media’s operating cash as the costs are incurred.

~~NOTES~~(b) TOComponents ~~CONDENSED~~of ~~CONSOLIDATED~~net ~~FINANCIAL STATEMENTS —~~periodic ~~(Continued)~~ benefit cost

~~those~~The ~~options~~components ~~equals~~of ornet ~~exceeds~~periodic ~~the~~benefit ~~value~~cost offor the ~~underlying~~ ~~security~~Company ~~on the measurement date. Generally, options~~are ~~granted~~as tofollows ~~current~~(in ~~Dex Media West employees under this plan~~thousands): ~~expired 90 days after the Acquisition.~~

(8) Pension and Other Post-Retirement Benefits


	Three Months Ended June 30,

	2005						2004

	Pension			Post-Retirement			Pension			Post-Retirement
	Benefit			Benefits			Benefit			Benefits

Service cost	$	1,281		$	285		$	1,471		$	343
Interest cost		1,722			562			1,713			414
Expected return on plan assets		(2,195	)		—			(2,184	)		—
Amortization of prior service costs		(54	)		(51	)		—			(57	)
Amortization of net (gain) loss		—			18			—			—

Total net periodic benefit cost	$	754		$	814		$	1,000		$	700

(a) General Description


	Six Months Ended June 30,

	2005						2004

	Pension			Post-Retirement			Pension			Post-Retirement
	Benefit			Benefits			Benefit			Benefits

Service cost	$	2,837		$	656		$	2,942		$	686
Interest cost		3,435			1,033			3,426			828
Expected return on plan assets		(4,322	)		—			(4,368	)		—
Amortization of prior service costs		(54	)		(108	)		—			(114	)
Amortization of net (gain) loss		—			18			—			—

Total net periodic benefit cost	$	1,896		$	1,599		$	2,000		$	1,400

~~Company. Effective November 8, 2002,~~ Dex Media ~~adopted~~does anot ~~pension~~expect ~~plan and effective December 1, 2002, Dex Media adopted a post-retirement benefit plan providing retiree healthcare (together, the “Dex Media Plans”) with features similar~~ to ~~the~~make ~~Qwest~~any ~~plans~~contributions described below. All individuals who became employees of Dex Media in connection with the Acquisition and who previously participated in the Qwest plans now participate in the Dex Media Plans. Employees of Qwest Dex who retired prior to ~~the date of the Acquisition became retirees of Qwest and as such receive benefits under the Qwest Plans. Dex Media has filed for a determination letter with the IRS for~~ its pension plan in 2005.

~~Pension~~As ~~costs~~a ~~and~~result ~~other~~of ~~post-retirement~~employee ~~costs~~terminations, ~~are recognized~~Dex ~~over~~Media ~~the~~expects ~~periods~~that lump insum ~~which~~settlement ~~the~~payments ~~employee~~of ~~renders services~~pension ~~and~~liabilities ~~becomes~~will ~~eligible~~exceed pension toservice ~~receive~~and ~~benefits~~interest ascosts ~~determined by~~during ~~using~~ the ~~projected~~three ~~unit~~months ~~credit~~ended September 30, ~~method~~2005. Dex Media~~’s funding~~ ~~policy~~expects is to ~~make~~record ~~contributions~~a settlement ~~with~~as ~~the~~defined ~~objective~~in ofSFAS No. 88, ~~accumulating~~“Employers’ ~~sufficient~~Accounting ~~assets~~for toSettlements ~~pay all benefits when due. No~~and ~~pension~~Curtailments ~~funding~~of ~~was~~Defined ~~required~~Benefit ~~for~~Pension ~~Dex~~Plans ~~Media~~and for ~~the three months~~ ~~and~~Termination ~~six months ended June 30, 2004~~Benefits.” The ~~post-retirement benefit~~result ~~plan~~of isthis ~~pay-as-you~~settlement accounting gowill ~~and~~be isto ~~funded~~record ~~out~~a portion of ~~Dex Media~~the company’s unrecognized ~~operating~~actuarial ~~cash~~gain asor ~~the~~loss ~~costs~~to ~~are incurred~~income. NoThe ~~other post-retirement~~Company ~~benefit funding was required for Dex Media for~~can ~~the~~not ~~three~~estimate ~~months~~that ~~and~~gain ~~six~~or ~~months~~loss ~~ended~~at ~~June 30,~~this ~~2004~~time.

OnIn ~~September 9,~~December 2003, ~~Dex~~the ~~West~~Medicare ~~employees~~Prescription Drug, Improvement ~~became~~and ~~employees~~Modernization Act of ~~Dex~~2003 ~~Media~~(“Medicare ~~East~~Act”) was signed into law. ~~Effective~~The ~~January 1, 2004,~~Medicare ~~all~~Act ~~employees~~provides offor ~~Dex~~a ~~Media~~federal ~~East~~subsidy to ~~were~~be ~~transferred~~paid to ~~Service~~ ~~Co.~~employers Asbeginning ~~such,~~in ~~all~~2006 ~~employee-related~~if ~~liabilities,~~an ~~including~~employer ~~pension~~provides ~~and~~alternative ~~other~~prescription ~~post-retirement~~drug ~~obligations,~~coverage ~~are~~for ~~now included~~Medicare ineligible ~~Service~~retirees ~~Co.’s~~where ~~reported~~that ~~liabilities.~~alternative ~~The~~coverage ~~Company~~is ~~records~~at least anactuarially ~~affiliate~~equivalent ~~payable~~to ~~for~~ the ~~portion~~standard ofcoverage provided under the ~~liability~~Medicare ~~associated with~~Act. Final regulations regarding the ~~employees~~calculation ~~who~~of actuarial ~~provide~~equivalence ~~services~~were toissued ~~Dex~~on ~~Media~~January 21, ~~West.~~2005 ~~Under~~and ~~the~~it ~~Shared~~was ~~Services~~subsequently ~~and~~determined ~~Employees~~that ~~Agreement~~the ~~dated~~plan’s prescription ~~September 9,~~drug ~~2003,~~benefit ~~costs~~for ~~related~~certain tooccupational (union) employees ~~providing~~is ~~services~~projected ~~entirely~~to ~~for~~satisfy ~~Dex~~the ~~Media~~requirements ~~West~~to ~~are~~receive ~~allocated~~the ~~100%~~federal subsidy tofor ~~Dex Media~~approximately ~~West~~eight years beginning in 2006. ~~Shared~~The expected ~~employee~~savings ~~costs~~was ~~are~~not ~~allocated~~included ~~and~~in ~~charged~~the to2004 financial results, ~~Dex~~but ~~Media~~is ~~West~~expected ~~based~~to ~~upon~~be ~~Dex~~reflected ~~Media~~in ~~West’s~~the ~~proportional share~~net ofperiodic ~~consolidated~~benefit ~~Dex~~cost for ~~Media~~2005 ~~revenue~~and later years.

12 ~~Predecessor. Qwest~~ ~~Dex employees participated in the Qwest pension, other~~ post-retirement and other post-employment benefit plans. The amounts contributed by Qwest Dex to these plans were not segregated or restricted to pay amounts due to Qwest Dex employees and could be used to provide benefits to other employees of Qwest or its affiliates. The cost of pension and post-retirement health care and life insurance benefits and required contributions were apportioned to Qwest Dex based upon demographic information provided by the plan administrator.

TheTable noncontributoryof defined benefit pension plan included substantially all management and occupational (union) employees. Post-retirement healthcare and life insurance plans provided medical, dental, and life insurance benefits for certain retirees. Qwest also provided post-employment benefits to certain former employees. Contents

~~Pension~~DEX ~~credits~~MEDIA ~~and~~WEST ~~other post-retirement costs~~LLC are recognized over the period in which the employee renders services and becomes eligible to receive benefits as determined by using the projected unit credit method. Qwest’s funding policy is to make contributions with the objective of accumulating sufficient assets to pay all benefits when due. No pension funding was required for Qwest or Qwest Dex for the three months and six months ended June 30, 2003 and neither Qwest nor Qwest Dex made any contributions to the other post-retirement benefit plan for the three months and six months ended June 30, 2003.

12 AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF DEX MEDIA, INC.

~~Table~~ NOTES ofTO ~~Contents~~CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~DEX~~In ~~MEDIA~~accordance ~~WEST~~with ~~LLC~~FASB Staff Position No. 106-2, “Accounting for Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003,” the reduction in plan liability was recognized as an actuarial gain as of January 1, 2005. This reduced the plan’s liability by approximately $0.1 million as of January 1, 2005. The impact of the subsidy on the total 2005 net periodic benefit cost was immaterial. In addition, the amount of federal subsidies projected to be received by us for the periods 2006 through 2013 are also expected to be immaterial.

AN9. ~~INDIRECT~~Commitments ~~WHOLLY-OWNED~~and ~~SUBSIDIARY OF DEX MEDIA, INC.~~ Contingencies

~~NOTES~~The TOCompany ~~CONDENSED~~is ~~CONSOLIDATED~~involved, ~~FINANCIAL~~from time to time, in litigation ~~STATEMENTS —~~arising ~~(Continued)~~in the normal course of business. The outcome of this litigation is not expected to have a material adverse impact on the Company.

~~(b)~~10. ~~Components~~Related ofParty ~~Net Periodic Benefit Cost~~Transactions

~~The~~Upon ~~components~~consummation of ~~net~~the ~~periodic~~Acquisition, ~~benefit~~all ~~cost~~Dex ~~for~~West employees became employees of Dex Media East. Effective January 1, 2004, all employees of Dex Media East were transferred to Dex Media Service LLC (“Service Co.”). Effective January 1, 2005, all non-senior management employees in the state ~~Company~~of Washington became employees of Dex Media West. As such, as of June 30, 2005, all employee-related liabilities, including pension and other post-retirement obligations, related to non-senior management employees in the ~~Predecessor~~state of Washington are asincluded ~~follows~~in (the Company’s liabilities. All employee-related liabilities for Service Co.’s employees are included in ~~thousands):~~Service Co.’s liabilities, with an offsetting asset recorded as an affiliate receivable for the portion of the liability associated with employees providing services to Dex Media West and Dex Media East. Under the Shared Services and Employees Agreement dated September 9, 2003, costs related to Service Co. employees providing services entirely for Dex Media West are allocated 100% to Dex Media West. Shared employee costs are allocated and charged to Dex Media West based upon Dex Media West’s proportional share of consolidated Dex Media revenue. All cash related affiliate balances are settled at least monthly.

	Company						Predecessor
	Three Months Ended						Three Months Ended
	June 30, 2004						June 30, 2003
	Pension			Post-Retirement			Pension			Post-Retirement
	Benefit			Benefits			Benefit			Benefits
Service cost	$	1,471		$	343		$	763		$	90
Interest cost		1,713			414			2,687			1,642
Expected return on plan assets		(2,184	)		—			(3,839	)		(572	)
Amortization of prior service cost		—			(57	)		—			(75	)
Amortization of transition asset		—			—			(318	)		—
Amortization of net loss		—			—			—			421
Net periodic benefit cost	$	1,000		$	700		$	(707	)	$	1,506

In connection with the Acquisition, the Company entered into management consulting agreements with each of the Sponsors. Each agreement allows the Company access to the Sponsors’ expertise in areas such as corporate management, financial transactions, product strategy, investment, acquisitions and other matters that relate to the Company’s business, administration and policies. Each of the Sponsors received a one-time transaction fee for structuring the transactions related to the Acquisition of $20.1 million. In addition, each of the Sponsors received an annual advisory fee of $1.0 million for advisory, consulting and other services. The annual advisory fees payable under the agreements were terminated for a one-time fee of $5.0 million paid to each of the Sponsors, for an aggregate of $10.0 million, in conjunction with the Dex Media IPO. The Sponsors maintain the right to act as Dex Media’s financial advisor or investment banker in conjunction with any merger, acquisition, disposition, financing or similar transaction in return for additional reasonable compensation and expenses as may be agreed upon by the parties. Pursuant to these management consulting agreements, the Company incurred $1.0 million in advisory fees for the six months ended June 30, 2004.

	Company						Predecessor
	Six Months Ended						Six Months Ended
	June 30, 2004						June 30, 2003
	Pension			Post-Retirement			Pension			Post-Retirement
	Benefit			Benefits			Benefit			Benefits
Service cost	$	2,942		$	686		$	1,526		$	180
Interest cost		3,426			828			5,374			3,284
Expected return on plan assets		(4,368	)		—			(7,678	)		(1,144	)
Amortization of prior service cost		—			(114	)		—			(150	)
Amortization of transition asset		—			—			(636	)		—
Amortization of net loss		—			—			—			842
Net periodic benefit cost	$	2,000		$	1,400		$	(1,414	)	$	3,012

During February 2003, Dex Media entered into a five year agreement with Amdocs, Inc. (“Amdocs”) for the complete modernization of the Company’s core production platform. This project was designed to upgrade the Company’s existing software system to enhance its functionality. WCAS, one of the Sponsors, was a shareholder of Amdocs at the time the Company entered into the agreement and ceased to be a shareholder of Amdocs during 2004. For the six months ended June 30, 2005 and 2004, the Company paid Amdocs $17.8 million and $30.5 million, respectively, under this agreement and for other related on-going support.

~~(9) Commitments and Contingencies~~13

(a)Table Litigationof Contents

~~The~~Item ~~Company~~2. isManagement’s ~~involved,~~Narrative ~~from~~Analysis ~~time to time, in litigation arising in the normal course~~ of ~~business.~~Results ~~The outcome~~ of ~~this litigation is not expected to have a material adverse impact on the Company.~~ Operations

Pursuant to General Instructions H(b2)(a) ~~Amdocs~~of ~~Agreement~~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.

~~During~~Executive ~~February 2003, Dex Media entered into a~~Overview five year agreement with Amdocs, Inc. (“Amdocs”) for the complete modernization of the Company’s and Dex Media East’s core production platform and related on-going support. Upon the consummation of the Dex West Acquisition, Dex Media’s obligation under the agreement totaled approximately $108.0 million. This project is designed to upgrade Dex Media’s existing software system to enhance its functionality. The Company will be allocated its proportional share of these charges in accordance with its Shared Services and Employees Agreement as the charges are incurred over the five year period. In the event that the Company is unable to meet its obligation, Dex Media East is required to assume the obligation for charges incurred, and in the event Dex Media East is unable to meet its obligation under the agreement, the Company may be required to assume the portion of the obligation currently

13 Our Company

~~Table~~ In ofthe ~~Contents~~following discussion and analysis, “we,” “our” or “us” refers to Dex Media West.

~~DEX~~We ~~MEDIA~~are ~~WEST~~the ~~LLC~~exclusive publisher of the “official” yellow pages and white pages directories for Qwest in the following states where Qwest is the primary incumbent local exchange carrier: Arizona, Idaho, Montana, Oregon, Utah, Washington and Wyoming. We have been publishing directories for over 100 years. Our contractual agreements with Qwest grant us the right to be the exclusive incumbent publisher of the “official” yellow pages and white pages directories for Qwest in the Dex West States until November 2052 and prevent Qwest from competing with us in the directory products business in the Dex West States until November 2042.

ANWe ~~INDIRECT~~are ~~WHOLLY~~the largest directory publisher in the Dex West States and, collectively with Dex Media East, are the fourth largest directory publisher in the U.S. During the six months ended June 30, 2005 and 2004, we published 75 and 69 directories, respectively, and printed approximately 17.5 million and 15.5 million copies, respectively, of these directories for distribution to virtually all business and residential consumers throughout the Dex West States. In addition, our Internet-~~OWNED~~based ~~SUBSIDIARY~~directory, DexOnline.comtm, which OFis ~~DEX~~bundled with our print product to provide web-based ~~MEDIA~~access to our directories, ~~INC~~further extends the distribution of our advertisers’ content. DexOnline.com includes approximately 21 million business listings and 129 million residential listings from across the United States. Our other products and services include the sale of direct marketing lists and the sale of Dex directories and other publishers’ directories outside the normal delivery schedule.

~~NOTES~~We TOseek ~~CONDENSED~~to ~~CONSOLIDATED~~bring ~~FINANCIAL~~buyers together with our advertising customers ~~STATEMENTS~~through a cost-effective, bundled advertising solution that includes print, Internet-based and CD-ROM directories. The majority of our advertising customers are small and medium-sized local businesses and national businesses with a local presence. We believe that our advertising customers value: (i) —our ability to provide consumers with an authoritative and diverse reference source to search for products and services across multiple platforms; (~~Continued~~ii) our broad distribution to potential buyers of our advertisers’ products and services; (iii) our lower cost per usage compared with most other directories and a higher return on investment than other forms of local advertising; and (iv) the quality of our client service and support.

~~attributable~~For tothe ~~Dex~~six ~~Media~~months ~~East.~~ended ~~As of~~ June 30, ~~2004~~2005, ~~Dex~~we ~~Media~~generated approximately ~~East~~98% ~~and~~of ~~the~~our ~~Company~~total ~~collectively have~~revenue ~~approximately~~from ~~$64 million~~the sale of ~~obligations remaining~~bundled ~~under~~print ~~this~~and ~~agreement~~Internet directory advertising. InOur ~~addition,~~other products and services account for the ~~Company~~remaining ~~and~~2% ~~Dex~~of ~~Media~~our total revenue. For ~~East~~the ~~are~~six ~~obligated~~months toended ~~collectively~~June 30, ~~pay~~2005 ~~Amdocs~~and ~~approximately~~2004, we generated $10465.28 million ~~through~~and ~~2008~~$424.3 million ~~related~~in tototal revenue, respectively. Excluding the ~~outsourcing~~effects of purchase accounting ~~certain~~adjustments ~~information~~to ~~technology~~deferred ~~resources~~revenue, our total revenue for the six months ended June, 2004 would have been $462.4 million. See “Results of Operations” in this Item 2.

~~(10) Transactions with Affiliates~~Background

AsThe ~~also~~following ~~described~~discussion ~~in Note 1(c)~~ and ~~8(a), upon~~analysis ~~consummation~~ of ~~the~~our ~~acquisition~~financial ~~of Dex West on~~condition ~~September 9,~~and ~~2003,~~results ~~all Dex West employees transferred to Dex Media West became legal employees~~ of ~~Dex~~operations ~~Media~~covers ~~East. Effective~~periods ~~January 1,~~subsequent ~~2004, all employees of Dex Media East were transferred~~ to ~~Service Co. As such, all employee-related~~the ~~liabilities,~~consummation including pension and other post-retirement obligations, are now included in Service Co.’s liabilities, with an offsetting asset recorded as an affiliate receivable. Dex Media West is charged and carries an affiliate payable for the portion of the ~~liability~~Acquisition ~~associated~~on ~~with employees providing services to Dex Media West. Pursuant to the Shared Services and Employees Agreement dated~~ September 9, 2003~~, costs related to employees providing services entirely for Dex Media West are allocated 100% to Dex Media West~~. ~~Shared employee costs are~~ ~~allocated and charged to Dex Media West based upon Dex Media West’s proportional share of consolidated Dex Media revenue. All cash related affiliate balances are settled at least monthly.~~

~~(11)~~ The ~~Related~~Acquisition ~~Party~~was ~~Transactions~~accounted for under the purchase method of accounting. Under this method, ~~Other~~the ~~Than~~pre-acquisition ~~Affiliates~~deferred revenue and related deferred costs associated with directories that were published prior to the Acquisition were not carried over to our balance sheet. The effect of this accounting treatment was to reduce revenue and related costs that would otherwise have been recognized during the twelve months subsequent to the acquisition date.

14 ~~In connection with the Acquisition, the Company~~ ~~entered into a management consulting agreement with each of the~~ Sponsors. Each agreement allows the Company access to the Sponsors’ expertise in areas such as corporate management, financial transactions, product strategy, investment, acquisitions and other matters that relate to the Company’s business, administration and policies. Each of the Sponsors will receive an annual advisory fee of $1.0 million for advisory, consulting and other services. These annual payments shall continue until the agreements are terminated. Pursuant to these management consulting agreements, the Company incurred $0.5 million and $1.0 million in pro-rated annual advisory fees for the three months and six months ended June 30, 2004, respectively. As discussed in Note 12(a), the annual advisory fees payable under the agreements were terminated in conjunction with Dex Media’s initial public offering. The Sponsors maintain the right to act as the Company’s financial advisor or investment banker in connection with any merger, acquisition, disposition, finance or the like in return for additional reasonable compensation and expenses as may be agreed upon by the parties.

DexTable Media has entered into a two year network services agreement with SAVVIS Communications Corporation (“SAVVIS”), pursuant to which SAVVIS will provide network connections and other services to support the Company’s integrated production system and other systems. SAVVIS is an affiliate of WCAS. The Company and Dex Media East expect to pay SAVVIS approximately $2.2 million, collectively, over the two-year term of the contract, although the Company has the option to purchase additional services for which the Company would pay SAVVIS additional fees. As of June 30, 2004, approximately $1.5 million was not yet incurred under the contract. Contents

~~(12)~~ The ~~Subsequent~~non-historical ~~Events~~statements in this Item 2, including statements regarding industry outlook and our expectations regarding the future performance of our business, are forward-looking statements. Such forward-looking statements are subject to numerous risks and uncertainties, and our results may differ materially from those contained in any such forward-looking statements. See “Disclosure Regarding Forward-Looking Statements” in this Item 2.

~~(a)~~ Results ~~Dex~~of ~~Media Initial Public Offering~~Operations

Effective July 27, 2004, the Company’s indirect parent, Dex Media, consummated its initial public offering of common stock. Part of the proceeds related to this offering will be used to redeem $18.2 million of the Company’s Senior Subordinated Notes on August 26, 2004 at a redemption price of 109.875% along with the accrued and unpaid interest. In connection with this offering, the Company paid $5.0 million to each of the Sponsors to eliminate the $2.0 million annual fee payable under the management consulting agreements. Overview

14 Our consolidated financial statements included in this quarterly report have been prepared on the basis of the deferral and amortization method of accounting, under which revenue and cost of revenue related to the publication of directories are initially deferred and then recognized ratably over the life of each directory, commencing in the month of delivery. From time to time, we have determined that the publication dates of certain directories will be extended. These publication date changes are made to more efficiently manage work and customer flow. The lives of the affected directories are expected to be 12 months following the new publication date. Generally, we are able to bill and collect for additional periods related to directory extensions and under the deferral and amortization method of accounting, our related cost of revenue is amortized over the extended estimated useful life of the directory. Certain prior period amounts have been reclassified to conform to the 2005 presentation.

~~Table of Contents~~Revenue

~~DEX~~We ~~MEDIA~~derive ~~WEST~~virtually ~~LLC~~all our revenue from the sale of advertising in our printed directories, which we refer to as directory services revenue. The sale of advertising in our printed directories also includes the replication of listings and display advertisements in DexOnline.com, our Internet-based directory. We also provide related services, including other Internet-related products, direct marketing lists and the sale of Dex directories and other publishers’ directories outside of the normal delivery schedule, which we refer to collectively as other revenue. Directory services revenue is affected by several factors, including changes in the quantity and size of advertisements sold, defectors and new advertisers, as well as the proportion of premium advertisements sold, changes in the pricing of advertising, changes in the quantity and mix of advertising purchased per account and the introduction of additional products which generate incremental revenue. Directory services revenue may also increase through the publication of new printed directories. Revenue recognized on sales under our Advertising Commitment Agreement with Qwest consists primarily of directory services revenue.

ANOur ~~INDIRECT~~revenue ~~WHOLLY-OWNED~~and ~~SUBSIDIARY~~cost OFof ~~DEX~~revenue for the twelve months following ~~MEDIA~~the consummation of the Acquisition were lower than they otherwise would have been because the Acquisition was accounted for under the purchase method of accounting. Under the purchase method of accounting, ~~INC~~deferred revenue and deferred directory costs associated with the directories published and distributed prior to the Acquisition were not carried over to our balance sheet at the time of purchase. The effect of this accounting treatment was to reduce revenue and related costs that would otherwise be recognized in the twelve months subsequent to the Acquisition. The purchase method of accounting did not affect our revenue and directory costs in periods subsequent to September 30, 2004. These purchase accounting adjustments are non-recurring and have no impact on cash flows.

~~NOTES~~We TOenter ~~CONDENSED~~into ~~CONSOLIDATED~~transactions ~~FINANCIAL~~such as exclusivity arrangements, ~~STATEMENTS~~sponsorships and other media access transactions whereby our products and services are promoted by a third party and, in exchange, we carry that party’s advertisement. We account for these transactions in accordance with EITF Issue No. —99-17. ~~(Continued)~~Revenue and expense related to such transactions are included in the condensed consolidated statements of operations consistent with reasonably similar items sold or purchased for cash. These related revenue items are currently included in local directory services revenue. The revenue from such transactions for the six months ended June 30, 2005 and 2004 represented less than 1% of total revenue in each period and is expected to continue at this level for the foreseeable future. The revenue and related expense have no impact on net income or cash flow over the life of the bartered advertisement.

~~(b) Dex Media Common Stock Split~~15

AsTable discussed in Note 1(a), immediately prior to the initial public offering, Dex Media issued a 10-for-1 common stock split. The share and per share data in this report have been adjusted to reflect the effects of the stock split. Contents

~~(c)~~ In ~~Notice~~certain tocases, ~~Bond~~we ~~Holders~~enter into agreements with accounts that involve the delivery of more than one product or service. We allocate revenue for such arrangements in accordance with EITF Issue No. 00-21.

InCost ~~connection with the initial public offering~~ of ~~common~~ stock by Dex Media, the Company provided irrevocable notice to the holders of its 9 7/8% Senior Subordinated Notes that it would redeem $18.2 million of the outstanding notes on August 26, 2004. The funds required to meet the redemption obligation has been set aside using a portion of the proceeds from the initial public offering. Revenue

We account for cost of revenue under the deferral and amortization method of accounting. Accordingly, our cost of revenue recognized in a reporting period consists of: (di) costs ~~Dex~~incurred ~~Media~~in that period and recognized in that period, ~~Inc~~principally sales salaries and wages; (ii) costs incurred in a prior period, a portion of which are amortized and recognized in the current period; and (iii) costs incurred in the current period, a portion of which are amortized and recognized in that period and the balance of which are deferred until future periods. ~~2004~~Consequently, ~~Incentive~~there ~~Award~~will ~~Plan~~be a difference between the cost of revenue recognized in any given period and the costs incurred in that period. Such differences may be significant.

~~Upon~~Costs ~~consummation~~incurred ofin ~~Dex~~the ~~Media’s~~current ~~initial~~period and subject to deferral ~~public~~include ~~offering~~direct costs associated with the publication of directories, ~~common~~including ~~stock~~sales ~~effective~~commissions, ~~July 27~~paper, ~~2004~~printing, ~~Dex~~transportation, ~~Media~~distribution ~~adopted~~and pre-press production, as well as employee and systems support costs relating to each of the foregoing. ~~Dex~~Sales ~~Media~~commissions include commissions paid to employees for sales to local advertisers and to certified marketing representatives, ~~Inc~~which act as our channel to national advertisers. ~~2004~~All ~~Incentive~~deferred ~~Award~~costs ~~Plan~~related to the sale and ~~under~~production ~~which~~of ~~there~~directories are ~~1,000,000 shares~~recognized ratably over the life of ~~common~~each ~~stock~~directory under the deferral and amortization method of ~~available~~accounting, ~~for~~with ~~grant~~cost recognition commencing in the month of delivery.

15 General and Administrative Expense

~~Table~~ Our general and administrative expense consists primarily of ~~Contents~~the costs of advertising, promotion and marketing, administrative staff, pension and other post-retirement benefits, information technology, training, account billing, corporate management, office and facilities expense and bad debt expense. All our general and administrative expense is recognized in the period in which it is incurred.

~~Item~~Income 2.Tax ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~Provision

~~Executive~~We ~~Overview~~account for income taxes under the asset and liability method of accounting. Deferred tax assets and liabilities are recorded to reflect the future tax consequences of temporary differences between the financial reporting bases of assets and liabilities and their tax bases at each year end. Deferred tax assets and liabilities are measured using the enacted income tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Deferred tax assets and liabilities are adjusted for future income tax rate changes in the year the changes are enacted. Deferred tax assets are recognized for operating loss and tax credit carry forwards if management believes, based upon existing evidence, that it is more likely than not that the carry forward will be utilized. All deferred tax assets are reviewed for realizability, and valuation allowances are recorded if it is more likely than not that the deferred tax assets will not be realized.

~~Background~~ Items Affecting Comparability Between Periods

~~The~~Our ~~following~~revenue ~~discussion~~ and ~~analysis~~cost of ~~our financial~~revenue ~~condition~~for ~~and~~the ~~results~~twelve ofmonths ~~operations covers periods~~following ~~prior to and subsequent to~~ the ~~acquisition~~consummation of ~~Dex~~the ~~West~~Acquisition on September 9, 2003 were ~~(“the Acquisition”)~~$120.6 million Inand ~~this~~$31.6 million lower, ~~section~~respectively, ~~references~~than toour ~~“Dex~~revenue ~~West”~~and ~~or “Predecessor”~~cost ~~refer~~of torevenue ~~the~~would ~~historical operations of~~have ~~Qwest~~been ~~Dex~~otherwise ~~Holdings,~~because ~~Inc.~~the ~~and~~Acquisition ~~its~~was ~~subsidiary~~accounted infor ~~Arizona, Idaho,~~under ~~Montana,~~the ~~Oregon,~~purchase ~~Utah,~~method ~~Washington~~of ~~and~~accounting. ~~Wyoming~~For ~~(collectively~~ the ~~“Dex~~ ~~West~~six ~~States”)~~months ~~prior to the Acquisition.~~ended ~~References~~June 30, ~~to “we~~2004,” “our” orrevenue ~~“us” refers~~and tocost ~~Dex~~of ~~Media~~revenue ~~West,~~were $38.1 million ~~the~~and ~~successor to Dex West~~$9.7 million Welower, ~~have~~respectively, ~~operated~~than asthey awould ~~stand-alone~~have ~~company since the Acquisition. The Acquisition has~~ been ~~accounted~~due ~~for~~to ~~under~~ the ~~purchase~~effects ~~method~~ of purchase accounting. Under ~~this~~the purchase method, ~~the~~of ~~pre-acquisition~~accounting, deferred revenue and related deferred directory costs associated with ~~directories~~ directories that ~~were~~had ~~published~~previously ~~prior~~been topublished ~~the~~and ~~acquisition date~~ distributed were not carried over to ~~Dex~~our ~~Media West’s~~ balance sheet. The effect of this accounting treatment is to reduce revenue and related costs that would otherwise have been recognized ~~during~~in the twelve months subsequent to the ~~acquisition~~Acquisition. ~~date~~These purchase accounting adjustments are non-recurring and have no historical or future cash impact. The purchase method of accounting will not affect our revenue or directory costs subsequent to September 30, 2004.

~~The~~Prior ~~discussion~~to ~~and analysis of historical predecessor periods does not reflect~~ the ~~significant~~Dex ~~impact~~Media ~~that the~~IPO, ~~Acquisition~~we ~~has~~paid ~~had~~an onannual ~~us,~~management ~~including~~fee ~~significantly increased~~of ~~leverage and liquidity requirements~~$2.0 million ~~The~~to ~~statements in~~ the ~~discussion~~ ~~and~~Sponsors. ~~analysis~~In ~~regarding~~connection ~~industry~~with ~~outlook, our expectations regarding future performance of our business and~~ the ~~other non-historical statements are forward-looking~~Dex ~~statements.~~Media ~~These~~IPO, ~~forward-looking~~we ~~statements~~made ~~are~~a ~~subject~~lump ~~to numerous~~sum ~~risks~~payment ~~and~~of ~~uncertainties~~$10.0 million ~~Our actual results may differ materially from those contained~~ in ~~any forward-looking~~ ~~statements.~~aggregate ~~See~~to ~~“— Disclosure Regarding Forward-Looking Statements.” You should read~~ the ~~following~~ ~~discussion together with our condensed consolidated financial statements and related notes thereto included elsewhere herein.~~

16 ~~Upon consummation of the Acquisition, Dex West~~ ~~employees became employees of Dex Media East. Effective~~ ~~January 1, 2004, all employees of Dex Media East were transferred to another indirect wholly owned subsidiary of Dex Media, Dex Media Service Co. (“Service Co.”).~~

AsTable a result of our conversion to the Amdocs software system, certain of our account categories will be reclassified, which may result in a change in how we report our total number of customer accounts. Contents

~~Our~~ Sponsors ~~Business~~to terminate our obligation to pay such annual advisory fees. For the six months ended June 30, 2004, the Company incurred $1.0 million of annual management fees.

WeThe ~~are~~Six ~~the~~Months ~~largest~~Ended ~~directory publisher in the Dex West States and the fourth largest directory publisher in the U.S. For each of the three months ended~~ June ~~30,~~ 2004 and 2003, we and our Predecessor published 28 directories and distributed 4.9 million copies of these directories to business and residential consumers in the Dex West States. For the six months ended June 30, ~~2004~~2005 ~~and~~Compared ~~2003 we and our Predecessor published 69 and 61 directories, respectively, and distributed 15.5 million and 13.5 million copies of these directories, respectively,~~ to ~~business and residential consumers in~~ the ~~Dex~~Six ~~West~~Months ~~States.~~Ended We also provide related services, including an Internet-based directory, direct marketing lists and the sale of Dex directories and other publishers’ directories outside the normal delivery schedule. For the three months and six months ended June ~~30,~~ 2004 we generated $216.9 million and $424.3 million in revenue, respectively. Excluding the effects of purchase accounting adjustments to deferred revenue, our revenue for the three months and six months ended June 30, 2004 would have been $232.2 million and $462.4 million, respectively. Approximately 97.1% and 97.2% of our total revenue, excluding the effects of purchase accounting, for the three months and six months ended June 30, 2004, respectively, was generated from the publication of directories.

~~Stand-Alone~~The ~~Company~~results of operations for the six months ended June 30, 2004 include the effect of purchase accounting on revenue and cost of revenue related to the Acquisition. Accordingly, the periods presented are not comparable. Please refer to “Items Affecting Comparability Between Periods” in this Item 2 and the discussion below for detail regarding the effects of these adjustments.

Our Predecessor historically operated as the directory business of Qwest Dex in the Dex West States and not as a stand-alone company. The combined financial statements included for the three months and six months ended June 30, 2003 have been derived from the historical financial statements of Qwest Dex and include the activities of Qwest Dex for business conducted in the Dex West States prior to the Acquisition. Because of the Predecessor’s relationship with Qwest Dex as well as Qwest and its other affiliates, the


			Six Months Ended
			June 30,

			2005			2004

			(Dollars in thousands)
Revenue:
	Local directory services		$	386,125		$	378,757
	National directory services			64,693			31,416
	Qwest advertising			3,848			4,304
	Other revenue			11,146			9,806

		Total revenue		465,812			424,283
Cost of revenue				140,529			129,734

	Gross profit, excluding depreciation and amortization expense		$	325,283		$	294,549
	Gross margin			69.8	%		69.4	%
General and administrative expense, including bad debt expense			$	60,625		$	58,285

16 Revenue

~~Table~~ Total revenue increased $41.5 million, or 9.8%, to $465.8 million for the six months ended June 30, 2005 from $424.3 million for the six months ended June 30, 2004. Total revenue for the six months ended June, 2004 was $38.1 million lower than it would have been due to the effects of ~~Contents~~purchase accounting. Excluding the effects of purchase accounting in 2004, total revenue would have increased $3.4 million, or 0.7%, for the six months ended June 30, 2005. The increase in total revenue, excluding the effects of purchase accounting, was primarily due to an increase in local and national directory services revenue and an increase in other revenue relating to our Internet product line, and was partially offset by a decrease in Qwest advertising revenue.

~~Predecessor’s~~Local ~~historical~~and ~~results~~national ofdirectory services revenue is affected by a ~~operations~~variety of volume and ~~cash~~pricing ~~flows~~factors. ~~are~~Volume ~~not~~related ~~necessarily~~factors include ~~indicative~~quantity of ~~what~~advertisements sold, the change in mix of ~~they~~advertisements ~~would~~among ~~have~~our ~~been~~product ~~had~~families, the ~~Predecessor~~proportion ~~operated~~of advertisements ~~without~~sold with premium features, the volume of ~~shared~~promotional ~~resources~~services obtained from our advertisers in exchange for our publication of ~~Qwest~~their ~~and~~advertisements ~~its~~in ~~affiliates.~~our ~~Accordingly~~directories, the number of local advertisers’ disconnects and the number ~~combined~~of ~~statements~~new ~~for~~advertisers ~~the~~obtained ~~three~~during ~~months~~a ~~and~~period. ~~six~~Pricing ~~months~~factors include ~~ended~~price increases related to our standard rates that may ~~June 30~~be made from time to time in varying markets for varying categories, ~~2003~~and are ~~not~~offset ~~indicative~~by ofdiscount ~~our~~programs ~~future~~that ~~results~~may ofbe ~~operations~~initiated ~~and~~in ~~cash~~local ~~flows~~markets for certain advertiser headings. ~~The~~Such factors ~~historical~~generally ~~costs~~affect ~~for~~the ~~services~~dollar volume of orders initiated ~~provided~~in toa period which are recognized as revenue over the ~~Predecessor~~life byof ~~Qwest~~a given ~~and~~directory, ~~its~~beginning ~~affiliates~~in ~~may~~the ~~not~~month of delivery. ~~necessarily~~Fluctuations ~~reflect~~in product mix and pricing are among the ~~expenses~~multiple factors wethat ~~will~~contributed ~~incur~~to asthe achange ~~stand-alone~~in local and national ~~company~~directory services revenue.

~~Historically,~~Local ~~the~~directory ~~Predecessor reimbursed Qwest for~~ services itrevenue ~~and~~increased ~~its~~$7.4 million, ~~affiliates~~or 1.9%, ~~provided~~ to ~~Dex West based upon either (~~$386.1) ~~tariffed~~million orfor ~~negotiated~~the ~~contract~~six ~~rates,~~months ended ~~(2)~~June ~~market~~30, ~~prices~~2005 orcompared ~~(3) fully~~to ~~distributed costs (“FDC”)~~$378.8 million ~~FDCs~~for ~~include~~the ~~costs associated with employees~~six ofmonths ~~Qwest~~ended orJune 30, ~~Qwest~~2004. ~~affiliates~~Local ~~that~~directory ~~are~~service ~~entirely~~revenue for ~~dedicated~~the ~~to functions~~six ~~within~~months ~~Dex~~ended ~~West~~June 30, ~~many~~2004 ofwas $5.9 million ~~whom~~lower ~~became~~than ~~employees~~it ~~of Service~~would ~~Co.~~have ~~upon~~been ~~consummation~~due ofto the ~~Acquisition. Such fully~~ ~~distributed~~effects ~~employee~~of ~~costs~~purchase ~~were~~accounting. ~~paid~~Excluding bythe ~~Dex~~effects ~~West through shared~~of ~~payroll~~purchase ~~and~~accounting ~~benefit~~in ~~systems~~2004, aslocal ~~incurred.~~directory ~~Other~~services ~~affiliate service~~revenue ~~costs~~increased ~~were~~$1.4 million, ~~paid~~or by0.4%, ~~Dex~~for ~~West~~the ~~based~~six ~~upon~~months ~~presentation of periodic~~ended ~~billings~~June 30, ~~from~~2005. ~~Qwest~~Local ordirectory ~~affiliates~~services ofrevenue, ~~Qwest. The allocation~~excluding ~~methodologies~~the ~~are~~effects ~~consistent~~of ~~with~~purchase ~~the~~accounting ~~guidelines~~in ~~established~~2004, accounted for ~~Qwest~~ ~~reporting to federal~~ 82.9% and ~~state regulatory bodies~~83.2% ~~The historical~~of ~~costs~~revenue for ~~services provided to~~ the ~~Predecessor~~six ~~by Qwest~~months ~~affiliates~~ended ~~may~~June 30, ~~not necessarily reflect the expenses that~~2005 weand ~~will~~2004, ~~incur as an independent entity~~respectively.

17 ~~After the Acquisition, Qwest and Qwest LEC~~ ~~continued to provide certain services to us that they had~~ historically provided to the Predecessor, including but not limited to support services relating to information technology services and payroll services, pursuant to a transition services agreement. We have terminated the transition services agreement with Qwest and Qwest LEC as of December 31, 2003 with services provided internally or through arrangements with third parties.

OurTable Strategy of Contents

~~Our~~Revenue ~~strategy~~from isnational ~~centered~~advertisers onincreased ~~building~~$33.3 million ~~relationships~~to ~~with~~$64.7 million ~~our~~for ~~major~~the ~~account~~six ~~groups:~~months ~~small~~ended ~~and~~June 30, ~~medium-sized~~2005 ~~local~~compared ~~businesses~~to ~~and~~$31.4 million ~~national~~for ~~companies doing business in~~ the ~~Dex~~six ~~West~~months ~~States~~ended June 30, 2004. WeRevenue ~~plan~~from tonational ~~continue~~advertisers tofor ~~build~~the ~~our~~six ~~knowledge~~months ofended ~~their~~June 30, ~~businesses~~2004 ~~and~~was ~~develop~~$32.2 million ~~value-added~~lower ~~content~~than ~~that~~it ~~can~~would behave ~~distributed~~been indue ato ~~variety~~the effects of ~~forms.~~purchase ~~Currently,~~accounting. Excluding the ~~primary~~effects ~~method~~ of ~~distribution~~purchase isaccounting ~~our print~~in ~~directories.~~2004, Werevenue ~~also~~from ~~use~~national ~~the~~advertisers ~~Internet~~increased $1.1 million, ~~and~~or ~~CD-ROMs~~1.7%, tofor ~~deliver~~the ~~our content.~~six Wemonths ~~plan~~ended June 30, to2005. ~~continue~~Revenue ~~evaluating~~from ~~different~~national ~~methods~~advertisers, ofexcluding ~~distribution~~the aseffects ~~markets~~of ~~and~~purchase ~~electronic~~accounting ~~device~~in ~~acceptance change~~2004, ~~particularly~~ inaccounted ~~the~~for ~~digital~~13.9% and ~~space~~13.8% ~~Additionally,~~of werevenue ~~will~~for ~~look~~the ~~to enhance~~six ~~product~~months ~~offerings~~ended ~~such~~June 30, ~~as bundled print~~ 2005 and ~~Internet~~2004, respectively.

~~Maximizing~~Revenue ~~the~~from ~~utility~~Qwest ofadvertising ~~our~~decreased ~~content~~$0.5 million, ~~is an~~or ~~important~~10.6% ~~aspect~~to of$3.8 million ~~our~~for ~~overall~~the ~~strategy~~six months ended June 30, 2005 from $4.3 million Tofor ~~accomplish~~the ~~this~~six months ended June 30, we2004. This decrease in Qwest advertising ~~plan~~revenue towas ~~continue:~~a ~~innovating~~result ~~new~~of ~~products~~the ~~such~~timing asof ~~advertising~~Qwest’s onpurchases ~~book~~under ~~spines,~~its ~~covers~~Advertising ~~and~~Commitment ~~tabs;~~Agreement ~~expanding~~with onus. ~~market~~Under ~~segmentation~~the ~~such~~Advertising asCommitment ~~bilingual~~Agreement, ~~directories~~Qwest is obligated to purchase $20.0 million collectively in ~~select~~advertising ~~markets;~~annually ~~and~~from ~~enhancing~~us ~~our~~and ~~distribution~~Dex ~~platforms~~Media East. InHowever, ~~addition~~if in any given year Qwest exceeds the $20.0 million of advertising purchases, weup ~~plan~~to $5.0 million of the excess will be credited to ~~continue~~the ~~evaluating~~following ~~our~~year’s ~~related~~purchase ~~businesses~~commitment. ~~based~~As ona ~~the~~result ~~utility~~of purchases in excess of ~~these~~the $20.0 million for the year ended ~~product~~December 31, ~~offerings~~2003, toQwest ~~our~~purchased ~~advertisers~~less than $20.0 million of Dex advertising in 2004, of which a portion is deferred and ~~consumers~~recognized over the life of the related directory in 2005.

~~Also,~~Other ~~now~~revenue ~~that~~increased weby ~~are~~$1.3 million, aor ~~stand-alone company~~13.7%, ~~our strategy is~~ to ~~focus on improving our infrastructure in order to~~ ~~achieve~~$11.1 million afor ~~more efficient cost structure and improve revenue opportunities in~~ the ~~long-term.~~six ~~Beginning~~months inended ~~2004~~June 30, ~~we expect to~~2005 ~~replace~~from ~~our entire production system with Amdocs technology in a phased deployment~~$9.8 million ~~The~~for ~~first~~the ~~phase~~six ~~was~~months ~~deployed~~ended on June 130, 2004. ~~with~~This ~~the~~increase ~~last phase expected to be completed~~ in ~~the~~other ~~first quarter~~revenue ofwas ~~2005. Costs~~ related toprimarily ~~the phased deployment and~~due ~~related on-going support~~ to bean ~~incurred~~increase byin usInternet ~~and Dex Media East~~revenue, ~~through~~and ~~2008, include a $108.0 million contract with Amdocs of which $63.9 million~~ was ~~not~~partially ~~yet~~offset ~~incurred as of~~by ~~June 30,~~a ~~2004,~~decrease ~~and~~in todirect ~~date~~marketing ~~we have incurred other costs of approximately $16 million~~revenue.

~~Results~~Cost of ~~Operations~~ revenue

~~Overview~~ Cost of revenue recognized was $140.5 million for the six months ended June 30, 2005 compared to $129.7 million for the six months ended June 30, 2004. Cost of revenue recognized for the six months ended June 30, 2004 was $9.7 million lower than it would have been due to the effects of purchase accounting. Cost of revenue recognized, excluding the effects of purchase accounting in 2004, represented 30.2% and 30.1% of revenue for the six months ended June 30, 2005 and 2004, respectively. The cost of revenue recognized does not include any depreciation and amortization expense.

~~Our~~For ~~condensed consolidated financial statements included herein have been prepared on~~ the ~~basis~~six ofmonths ~~the~~ended ~~deferral and amortization method of accounting~~June 30, ~~under~~2005 ~~which revenue~~ and ~~expenses~~ ~~are initially deferred and then recognized ratably over the life of each directory~~2004, ~~commencing in the month of delivery.~~we Inincurred ~~2003,~~costs wesubject ~~determined~~to ~~that~~deferral ~~the~~and ~~12-month~~amortization ~~lives~~ of ~~eight~~ ~~directories published in December 2002 would be extended~~$146.9 million ~~The new~~and ~~editions of these eight directories were published~~$147.0 million, ~~in most cases, in January 2004~~respectively. ~~These extensions were~~

17 Employee costs incurred decreased by $3.0 million, or 4.9%, to $57.7 million for the six months ended June 30, 2005 from $60.7 million for the six months ended June 30, 2004. This decrease primarily resulted from a reduction in the number of employees, which related primarily to planned workforce reductions.

~~Table~~ Direct publishing costs incurred, which primarily include paper, printing and distribution, increased $0.2 million, or 0.4%, to $56.0 million for the six months ended June 30, 2005 from $55.8 million for the six months ended June 30, 2004. The increase primarily was a result of ~~Contents~~the introduction of new directories, and was partially offset by a decrease in printing costs due to the implementation of a new printing agreement with one of the two outside providers of printing services.

~~made~~Contracting toand ~~more~~professional ~~efficiently~~fees ~~manage~~incurred ~~work~~increased $4.5 million, ~~and~~or ~~account flow~~72.6%, ~~The~~to ~~lives~~$10.7 million offor the ~~new editions of these directories are~~six ~~expected~~months toended ~~be 12~~June ~~months~~30, ~~thereafter.~~2005 ~~These~~from ~~extensions~~$6.2 million ~~did not have a significant impact on our results of operations~~ for ~~the~~ ~~three months and~~ the six months ended June 30, 2004. ~~and~~This ~~are not~~increase ~~expected~~was primarily due to ~~have~~costs arelated ~~material~~to ~~effect~~supporting onour ~~revenue~~new orproduction ~~cost of~~system, ~~revenue~~which inwe ~~future~~began ~~periods~~to ~~under~~incur in the ~~deferral~~second ~~and~~quarter ~~amortization method~~ of ~~accounting~~2004.

~~Revenue~~ National commissions was $15.5 million for the six months ended June 30, 2005 and for the same period in 2004.

WeOther ~~derive~~cost ~~virtually all~~ of ~~our~~ revenue ~~from the sale of advertising in our printed directories~~incurred, which weprimarily ~~refer to~~includes ~~as directory services revenue. We also provide related~~systems ~~services~~expense, ~~including an Internet-based directory, direct marketing lists~~ and ~~the~~office ~~sale of Dex directories~~ and ~~other publishers’~~facilities ~~directories outside of the normal delivery schedule~~expense, ~~which we refer to collectively as other revenue.~~was ~~Growth~~$7.0 million infor ~~directory~~the ~~services~~six ~~revenue~~months isended ~~affected by several factors~~June 30, ~~including changes in the quantity and size of~~2005 ~~advertisements~~compared ~~sold~~to as$8.8 million ~~well~~for as the ~~proportion~~six ofmonths ~~premium~~ended ~~advertisements sold~~June 30, ~~changes in the pricing of advertising, changes in the quantity and mix of advertising purchased per account and the introduction of additional products which generate incremental revenue~~2004. ~~Directory services revenue may~~ ~~also increase through the publication of new printed directories.~~

18 ~~We estimate that our revenue and cost of revenue~~ ~~for the twelve months following the consummation of the~~ Acquisition will be lower than they would have been had the Acquisition not occurred because the Acquisition has been accounted for under the purchase method of accounting. Under the purchase method of accounting, deferred revenue and deferred directory costs associated with the directories published and distributed prior to the Acquisition were not carried over to our balance sheet at the time of purchase. The effect of this accounting treatment is to reduce revenue and related costs that would otherwise be recognized in the twelve months subsequent to the Acquisition. The purchase method of accounting will not affect our revenue and directory costs in periods subsequent to September 2004. This purchase accounting adjustment is non-recurring and has no impact on cash flows.

WeTable enterof into transactions where our products and services are promoted by an account and, in exchange, we carry that account’s advertisement. We account for these transactions in accordance with Emerging Issues Task Force (“EITF”) Issue No. 99-17, “Accounting for Advertising Barter Transactions.” Such transactions were not significant to our operations for the three months and six months ended June 30, 2004 and 2003. Contents

InGross certain cases, we enter into agreements with accounts that involve the delivery of more than one product or service. We allocate revenue for such arrangements in accordance with EITF Issue No. 00-21, “Revenue Arrangements with Multiple Deliverables.” profit

~~Cost~~ Our gross profit was $325.3 million for the six months ended June 30, 2005 compared to $294.5 million for the six months ended June 30, 2004. Excluding the effects of purchase ~~Revenue~~accounting in 2004, gross profit for the six months ended June 30, 2004 would have been $322.9 million. Gross margin, excluding the effects of purchase accounting in 2004, was 69.8% and 69.9% for the six months ended June 30, 2005 and 2004, respectively.

WeGeneral ~~account for cost of revenue under the deferral~~ and ~~amortization~~administrative method of accounting. Accordingly, our cost of revenue recognized in a reporting period consists of (1) costs incurred in that period and recognized in that period, principally sales salaries and wages, (2) costs incurred in a prior period, a portion of which is amortized and recognized in the current period and (3) costs incurred in the current period, a portion of which is amortized and recognized in that period and the balance of which is deferred until future periods. Consequently, there will be a difference between the cost of revenue recognized in any given period and the costs incurred in the given period, which may be significant. expense

~~Costs~~General ~~incurred in the current period~~ and ~~subject to~~administrative ~~deferral include direct costs associated with the publication of directories~~expense, including ~~sales~~bad ~~commissions,~~debt ~~paper~~expense, ~~printing,~~ ~~transportation,~~increased ~~distribution~~$2.3 million ~~and~~or ~~pre-press production~~3.9%, ~~and employee and systems support costs relating~~ to ~~each~~$60.6 million ~~of the~~for ~~foregoing.~~the ~~Sales~~six ~~commissions~~months ~~include~~ended ~~commissions~~June 30, ~~paid~~2005 ~~to employees~~from $58.3 million for ~~sales~~the tosix ~~local~~months ~~advertisers~~ended ~~and to certified marketing representatives (“CMRs”)~~June 30, ~~which~~2004. ~~act~~The asincrease ~~our~~was ~~channel~~primarily due to ~~national~~increases ~~advertisers.~~in ~~All~~employee ~~deferred~~ costs ~~related to the sale~~ and ~~production~~in ~~of directories are recognized ratably~~contracting ~~over the life of each directory under the deferral~~ and ~~amortization~~ ~~method~~professional offees ~~accounting,~~offset ~~with~~by ~~cost~~decreases ~~recognition commencing~~ in ~~the~~advertising ~~month~~expense and ofbad ~~delivery~~debt expense.

Employee costs increased $3.0 million, or 18.2%, to $19.5 million for the six months ended June 30, 2005 compared to $16.5 million for the six months ended June 30, 2004. Employee costs include salaries and wages, benefits and other employee costs. Salaries and wages were $10.6 million for the six months ended June 30, 2005 compared to $10.4 million for the six months ended June 30, 2004. Benefits increased $0.3 million, or 5.8%, to $5.5 million for the six months ended June, 2005 from $5.2 million for the six months ended June 30, 2004. Other employee costs increased $2.5 million for the six months ended June 30, 2005 to $3.4 million from $0.9 million for the six months ended June 30, 2004. This increase was primarily related to recognition of net accrued severance costs of $2.2 million in connection with planned workforce reductions during the three months ended June 30, 2005.

~~Table~~ Advertising expense decreased $0.2 million, or 2.3%, to $8.6 million for the six months ended June 30, 2005 from $8.8 million for the six months ended June 30, 2004. Advertising expense as a percentage of ~~Contents~~revenue, excluding the effects of purchase accounting in 2004, decreased to 1.8% for the six months ended June 30, 2005 from 1.9% for the six months ended June 30, 2004.

~~General~~ Contracting and ~~Administrative~~professional ~~Expense~~fees increased $0.7 million, or 6.7%, to $11.2 million for the six months ended June 30, 2005 from $10.5 million for the six months ended June 30, 2004. For the six months ended June 30, 2004, contracting and professional fees included $1.0 million of annual advisory fees paid to our Sponsors. This fee was terminated in conjunction with the Dex Media IPO and therefore was not incurred in the six months ended June 30, 2005. The decrease in such advisory fees was offset by an increase in on-going support costs related to our new production system, which we began incurring in the second quarter of 2004.

~~Our~~Bad ~~general~~debt ~~and administrative~~ expense ~~consists primarily~~decreased ~~of the costs of advertising~~$0.9 million, ~~promotion~~or ~~and marketing~~7.4%, to ~~administrative~~$11.0 million ~~staff,~~for ~~information~~the ~~technology,~~six ~~training,~~months ~~account billing,~~ended ~~corporate management~~June 30, ~~office and facilities expense and~~2005 ~~bad~~from ~~debt expense~~$11.8 million ~~All~~for ~~of our general and administrative expense is recognized in~~ the ~~period~~six inmonths ~~which~~ended ~~it is incurred. Historically~~June 30, 2004. ~~our~~Bad ~~general~~debt ~~and administrative~~ expense ~~has included~~as ~~the~~a ~~costs~~percentage of ~~other~~total ~~services~~revenue, ~~that were shared among~~ ~~Qwest~~excluding ~~affiliates,~~the ~~including~~effects ~~real~~of ~~estate,~~purchase ~~information technologies,~~accounting ~~finance~~in ~~and human resources. However~~2004, ~~since~~was we2.4% ~~have~~for ~~terminated~~ the ~~transition~~six ~~services~~months ~~agreements~~ended ~~with Qwest as of December~~June 3130, ~~2003,~~2005 weand ~~now incur these costs directly~~2. ~~Our~~6% ~~general~~for ~~and~~the ~~administrative expense has increased as a~~six ~~stand-alone~~months ~~company~~ended ~~and~~June 30, ~~may continue to increase~~2004.

~~Income~~ All ~~Tax~~other ~~Provision~~general and administrative expense was $10.3 million and $10.7 million for the six months ended June 30, 2005 and 2004, respectively.

WeAmortization ~~account for income taxes under the asset and liability method~~ of accounting. Deferred tax assets and liabilities are recorded to reflect the future tax consequences of temporary differences between the financial reporting bases of assets and liabilities and their tax bases at each year end. Deferred tax assets and liabilities are measured using the enacted income tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Deferred tax assets and liabilities are adjusted for future income tax rate changes in the year the changes are enacted. Deferred tax assets are recognized for operating losses and tax credit carry forwards if management believes, based upon existing evidence, that it is more likely than not that the carry forward will be utilized. All deferred tax assets are reviewed for realizability and valuation allowances are recorded if it is more likely than not that the deferred tax assets will not be realized. intangibles

~~Items~~For ~~Affecting~~the ~~Comparability~~six ~~Between~~months ended June 30, 2005 and 2004 we ~~Periods~~recognized $96.0 million and $115.7 million, respectively, in amortization expense related to our identifiable intangible assets. The decrease in amortization expense from the prior year was the result of a declining method used to amortize the value of the acquired customer accounts in proportion with their estimated retention lives.

~~Our~~Interest revenue and cost of revenue for the twelve months following the consummation of the Acquisition will be approximately $120.6 million and $31.6 million lower, respectively, than our revenue and cost of revenue would have been because the Acquisition was accounted for under the purchase method of accounting. As such, the results of operations for the three months and six months ended June 30, 2004 and 2003 are not comparable. expense

~~Dex~~Interest ~~West~~expense ~~financial~~was ~~information~~$104.4 million ~~for~~and ~~the period~~$107.9 million ~~prior~~for to the ~~consummation~~six ofmonths ~~the~~ended ~~Acquisition on September~~June 930, ~~2003~~2005 ~~reflects~~and ~~a historic basis of accounting.~~2004, ~~Financial~~respectively. ~~information~~Interest expense for the ~~period~~six ~~subsequent~~months toended ~~the~~June, ~~consummation~~2005 ofand ~~the~~2004 ~~Acquisition~~includes ~~reflects~~$10.7 million ~~a purchase accounting~~and ~~basis of accounting~~$13.1 million, Asrespectively, ~~a result~~ of ~~the~~amortization ~~change in basis~~ of ~~assets,~~ ~~the financial information for these respective periods~~deferred ~~are~~financing ~~not comparable~~costs.

19 ~~Upon the consummation of the Acquisition, we~~ ~~became a stand-alone company. Operating as a separate entity~~ from Qwest would have increased our costs for the three months and six months ended June 30, 2003. In addition, we have incurred incremental pension and benefit costs as a stand-alone entity. The increase in pension costs results from the elimination of pension credits included in Dex West’s historical results related to Qwest’s over-funded pension plan from which Dex Media West will no longer benefit. Additionally, we have incurred increased employee benefit costs due to separation from Qwest’s larger employee base. In addition, we pay an annual management fee of $2.0 million to the Sponsors. Future stand-alone costs incurred are unpredictable due to various factors. In connection with Dex Media’s initial public offering, the annual management consulting fees payable under the management consulting agreements with the Sponsors were terminated.

Historically,Table Dex West was included in the consolidated federal income tax returns filed by Qwest. Dex West had an informal agreement with Qwest pursuant to which Dex West was required to compute its provision for income taxes on a separate return basis and pay to, or receive from, Qwest the separate U.S. federal income tax return liability or benefit so computed, if any. For federal income tax purposes, the Acquisition is treated as an asset purchase and we generally have a tax basis in the acquired assets equal to the purchase price. As a result, for tax purposes, we will be able to depreciate assets, primarily intangibles, with a higher tax basis after the consummation of the Acquisition. These step-ups in tax basis for intangibles, which will be amortized over 15 years, should significantly reduce our cash income taxes over that period. Contents

19 Income taxes

~~Table~~ SFAS No. 109 requires that we recognize deferred income tax assets on net operating losses to the extent realization of ~~Contents~~these assets is more likely than not. As of June 30, 2005 we have recorded $6.8 million of net deferred income tax liabilities. Included in the net deferred tax liability is a deferred tax asset of $34.0 million relating to estimated net operating loss carryforwards of $87.1 million. As of December 31, 2004 we recorded $15.7 million of net deferred income tax assets, of which $42.5 million resulted from estimated net operating loss carryforwards of $110.6 million, pending the filing of the 2004 income tax return. Net operating loss carryforwards do not begin to expire until 2023. Based upon current projections of income and expenses, we have determined that it is more likely than not that we will utilize these deferred tax assets before the expiration of the net operating loss carryforward periods. Accordingly, no valuation allowance has been recorded.

InMaterial ~~connection with the Acquisition~~Trends, weKnown ~~incurred substantial~~Facts ~~indebtedness. As a result, we incur significant interest expense~~ and ~~we have significant repayment obligations.~~Uncertainties ~~The interest expense relating to this debt adversely affects our net income.~~

~~Results~~Directory ofServices ~~Operations~~ Revenue

~~The~~ For ~~Three~~the ~~Months~~six ~~Ended~~months ~~June~~ended June 30, ~~2004~~2005, ~~Compared~~approximately to98% of ~~the~~our ~~Three~~revenue ~~Months~~came ~~Ended~~from ~~June~~directory 30services, ~~2003~~our bundled advertising solution that includes print, Internet-based directories and CD-ROMs. Our ability to increase directory services revenue is dependent on our ability to attract and retain advertisers or increase revenue per advertiser account through a change in advertising volume and/or rates.

			Dex Media West			Predecessor
			Three Months			Three Months
			Ended			Ended
			June 30,			June 30,
			2004			2003			$ Change			% Change
			(Dollars in thousands)
Revenue:
	Local directory services		$	190,164		$	189,128		$	1,036			(0.5	)%
	National directory services			21,719			34,112			(12,393	)		(36.3	)%
		Total directory services		211,883			223,240			(11,357	)		(5.1	)%
Other revenue				5,012			5,566			(554	)		(10.0	)%
		Total revenue		216,895			228,806			(11,911	)		(5.2	)%
Cost of revenue				66,913			71,762			(4,849	)		(6.8	)%
	Gross profit			149,982			157,044			(7,062	)		(4.5	)%
	Gross margin			69.2	%		68.6	%
General and administrative expense, including bad debt expense			$	29,427		$	28,358		$	1,069			3.8	%

While we do not believe there has been any material change in our advertiser account renewal rate, we were unable to report our renewal rate in 2004 or to date in 2005 due to our conversion to the Amdocs software system. The Amdocs conversion has resulted in certain of our customer account categories being reclassified, which may result in a change in how we report our total number of customer accounts, thereby having an effect on our reported renewal rate. Further, we believe that our revenue per advertiser account has likely increased primarily as a result of the inherent value in our products resulting in a continued ability to increase prices.

~~Revenue~~Segmented Pricing

~~Total~~We ~~revenue~~are ~~decreased~~continuing ~~by $11.9 million or 5.2%,~~ to ~~$216.9 million~~implement ~~for~~a ~~the~~more ~~three~~sophisticated ~~months ended~~segmented ~~June 30,~~pricing ~~2004 from $228.8 million for the three months ended June 30~~strategy, ~~2003.~~which ~~Excluding~~prices ~~the~~advertisements ~~effects~~by ~~of purchase~~heading ~~accounting for deferred revenue, which totaled $15~~category.~~4 million,~~ ~~total~~We ~~revenue~~believe ~~for~~that ~~the~~implementing ~~three~~this ~~months~~strategy ~~ended~~will ~~June 30,~~improve ~~2004~~advertiser ~~would~~retention ~~have~~ultimately ~~been~~improving ~~$232.3 million, a $3.5 million, or 1.5% increase from the same period in 2003. Total~~ revenue, ~~excluding the effects of purchase~~growth ~~accounting,~~as ~~included~~we ~~$227.3 million~~better inalign ~~directory~~our ~~services revenue~~pricing ~~and~~with ~~$5.0 million~~our ~~in revenue for all other products.~~customers’ ~~The~~perception ~~increase in total revenue, excluding the effects~~ of ~~purchase accounting, is substantially due to increases in local directory services revenue offset by decreases in revenue from national advertisers, as discussed below~~value.

Total directory services revenue, which consists of local and national directory services revenue, decreased $11.4 million, or 5.1% to $211.9 million for the three months ended June 30, 2004 from $223.2 million for the three months ended June 30, 2003. Excluding the effects of purchase accounting, total directory services revenue increased by $4.1 million to $227.3 million for the three months ended June 30, 2004. Competition

~~Directory~~The ~~services~~U.S. directory ~~revenue~~advertising isindustry ~~affected~~continues byto abe ~~variety~~very ~~of volume and pricing factors~~competitive. ~~Volume~~There ~~related~~are ~~factors include~~a ~~the~~number ~~quantity~~ of ~~advertisements~~independent ~~sold, the change in mix~~directory ofpublishers ~~advertisements among our product families~~ and ~~the~~publishers ~~proportion of~~affiliated ~~advertisements sold~~ with ~~premium~~local ~~features and the volume of~~exchange ~~promotional~~carriers ~~services~~with ~~obtained~~which ~~from~~we ~~our~~compete ~~advertisers~~ in ~~exchange for~~one ~~our~~or ~~publication~~more of ~~their~~the ~~advertisement~~Dex ~~in our directories.~~West ~~Pricing~~States. ~~factors~~On ~~include~~average, ~~certain~~there ~~price increases that~~ are ~~applied by~~two ~~product~~to ~~and~~three ~~market~~competing ~~and that are offset by discount programs~~directories ~~that~~(including ~~may~~Dex) bein ~~offered~~each inof ~~selected~~our local markets ~~for targeted products or headings~~. ~~Such~~Competition ~~factors generally affect the dollar~~from ~~volume~~other ofyellow ~~orders~~pages ~~initiated~~publishers inaffects aour ~~period~~ability ~~which are recognized as revenue over the life of a given directory, beginning in the month of delivery. Multiple factors contribute~~ to ~~changes~~attract ~~in revenue,~~ and ~~although no single factor can be distinguished as~~ ~~the~~retain ~~primary~~advertisers ~~cause, improvements in product mix~~ and ~~pricing, combined with stable account renewal, contributed~~ to ~~our increased~~increase ~~directory~~advertising ~~services revenue~~rates.

20 Through our Internet-based directory, DexOnline.com, we compete with these publishers and with other Internet sites providing search and classified directory information. In addition, we compete against other forms of media, including newspapers, radio, television, the Internet, billboards and direct mail for business advertising.

~~Table of Contents~~Internet

~~Local~~We ~~directory~~believe ~~services~~that ~~revenue~~our ~~increased $1.0 million~~Internet-based directory, ~~or 0~~DexOnline.5%com, ~~to $190.2 million for the three~~is ~~months~~an ~~ended~~extension ~~June 30,~~of ~~2004~~our ~~compared~~printed ~~to $189~~directories.~~1 million for~~ ~~the~~We ~~three~~believe ~~months~~that ~~ended June 30, 2003. Local directory~~any ~~services~~decline ~~revenue,~~in ~~excluding~~ the ~~effects~~usage of ~~purchase~~our ~~accounting which~~printed ~~totaled~~directories ~~$3.5 million,~~could ~~increased~~be offset by ~~$4.6 million to~~an ~~$193.7 million~~increase ~~for~~in ~~the~~usage ~~three~~of ~~months~~our ~~ended~~Internet-based ~~June 30~~directory, ~~2004 from $189~~DexOnline.~~1 million~~com, ~~for~~which was the ~~three~~number ~~months~~one ~~ended June 30,~~rated ~~2003.~~Internet ~~Local~~Yellow Pages ~~directory~~local ~~services~~search ~~revenue~~site ~~for~~during ~~the three~~2004 ~~months~~and ~~ended~~in ~~June 30,~~the ~~2004~~first ~~accounted~~quarter ~~for 83.4%~~ of ~~revenue,~~2005 ~~excluding~~in the ~~effects~~Dex ofStates ~~purchase~~as ~~accounting,~~reported asby comScore. Additionally, ~~compared~~the tofull ~~82.6%~~roll-out ~~for~~of ~~the~~our ~~three~~Search ~~months~~Engine ~~ended~~Marketing (“SEM”) ~~June 30~~product, ~~2003.~~Dex Web Clickstm, will

20 ~~Revenue from national advertisers decreased~~ ~~$12.4 million, or 36.3%, to $21.7 million for the~~ three months ended June 30, 2004, as compared to $34.1 million for the three months ended June 30, 2003. Revenue from national advertisers excluding the effects of purchase accounting which totaled $11.9 million, decreased $0.5 million, or 1.5% to $33.6 million for the three months ended June 30, 2004 compared to $34.1 million for the three months ended June 30, 2003. Revenue from national advertisers for the three months ended June 30, 2004 accounted for 14.5% of revenue, excluding the effects of purchase accounting, as compared to 14.9% for three months ended June 30, 2003.

OtherTable revenueof decreased by $0.6 million, or 10.0%, to $5.0 million for the three months ended June 30, 2004 from $5.6 million for the three months ended June 30, 2003. Contents

~~Cost~~ serve to provide our advertisers with a simplified solution to their participation in the complex area of ~~Revenue~~auction-based internet advertising and could provide us with incremental revenue growth. However, if we are unsuccessful in monetizing increased usage from our Internet-based directory or are not able to effectively deliver our SEM product, our business could be negatively impacted.

~~Cost~~Paper of revenue recognized was $66.9 million for the three months ended June 30, 2004 compared to $71.8 million for the three months ended June 30, 2003. Excluding the effects of purchase accounting for deferred costs, which totaled $3.3 million, cost of revenue recognized would have been $70.2 million for the three months ended June 30, 2004. Cost of revenue recognized represented 30.2% of revenue, excluding the effects of purchase accounting, for the three months ended June 30, 2004, compared to 31.4% of revenue for the three months ended June 30, 2003. Prices

~~For~~Paper is our principal raw material. Substantially all of the paper ~~three~~that ~~months~~we ~~ended~~use ~~June 30~~(other than for covers) is supplied by two companies: Nippon Paper Industries USA, ~~2004~~Co., Ltd. and Norske ~~2003~~Skog Canada (USA), weInc. ~~and~~Prices ~~our~~under ~~Predecessor~~the ~~incurred~~two ~~costs~~agreements ~~subject~~are negotiated toeach ~~deferral~~year based on prevailing market rates, which ~~and~~have ~~amortization~~been ofdeclining ~~$64~~consistent with general U.8S. ~~million~~market trends ~~and~~for ~~$65~~directory paper over the last three years.~~1 million~~ After recent favorable trends, beginning in the second half of 2004, ~~respectively~~pulp prices have been increasing at rates higher than the general inflation rate. This has resulted in upward pressure on our paper prices. The effect of such upward price pressure, however, will be moderated due to the fact that prices under both our paper agreements are subject to certain price escalation limits.

~~Employee~~New ~~costs~~Accounting incurred decreased by $2.4 million, or 7.4%, to $29.9 million for the three months ended June 30, 2004 from $32.3 million for the three months ended June 30, 2003. This decrease is primarily a result of changes to sales incentives and a reduction in the number of employees. Standards

~~Direct~~On ~~costs~~March 29, 2005, the SEC released SAB No. 107, which provides an interpretation of ~~publishing~~SFAS No. 123R ~~incurred~~and its interaction with certain SEC rules and regulations and provides the SEC’s views regarding the valuation of share-based payment arrangements for public companies. SAB No. 107 provides guidance with regard to share-based payment transactions with non-employees, ~~which~~the ~~primarily~~transition ~~include~~from ~~paper~~nonpublic to public entity status, ~~printing~~valuation methods (including assumptions such as expected volatility and expected ~~distribution~~term), ~~were~~the accounting for certain redeemable financial ~~$20~~instruments issued under share-based payment arrangements, the classification of compensation expense, non-GAAP financial measures, first-time adoption of SFAS No.2 ~~million~~123R, the modification of employee share options prior to adoptions of SFAS No. 123R and ~~$20~~disclosures in Management’s Discussion and Analysis subsequent to the adoption of SFAS No.5 ~~million~~123R. ~~for~~Based ~~three~~upon ~~months~~the ~~ended~~number of stock options outstanding as of June 30, ~~2004~~2005, ~~and~~the ~~2003,~~Company ~~respectively~~has determined that the adoption of SAB No. 107 will not have a material impact on its results of operations.

~~Contracting~~On ~~and~~April 14, ~~professional~~2005, ~~fees~~the ~~incurred~~SEC announced the adoption of a new ~~increased~~rule $2that amends the compliance dates for SFAS No.1 ~~million~~123R. toUnder $3SFAS No.5 ~~million~~123R, registrants ~~from~~would have been required to implement the standard ~~$1.4 million~~as ~~for~~of the ~~three~~beginning ~~months~~of ~~ended~~the ~~June 30,~~first ~~2004~~interim or annual period that ~~and~~begins ~~2003~~after June 15, ~~respectively~~2005. The ~~increase~~SEC’s isnew ~~primarily~~rule requires ~~due~~companies to implement SFAS No. 123R at the ~~increased~~beginning ~~on-going~~of ~~support~~their ~~related~~first tofiscal ~~our~~year ~~production~~beginning ~~system~~on or after ~~conversion~~June 15, ~~for~~2005, ~~which~~instead of the first ~~phase~~reporting ~~was~~period ~~deployed~~that begins inafter June 15, 2005. As a result, the ~~second~~financial statements of the Company must comply with SFAS No. 123R beginning with the interim financial statements for the first quarter of ~~2004~~2006. The SEC’s new rule does not change the accounting required by SFAS No. 123R; it changes only the dates for compliance with the standard.

~~Other~~During ~~costs~~May of2005, ~~revenue~~the ~~incurred,~~FASB ~~which~~issued ~~primarily~~SFAS No. 154. This ~~includes~~statement ~~systems~~applies ~~expense,~~to ~~national~~all ~~commissions,~~voluntary ~~office~~changes in accounting principle and requires retrospective application of the new ~~facilities~~accounting ~~expense~~principle to prior accounting periods as if that principle has always been used. In addition, ~~and~~this ~~professional~~statement requires ~~fees~~that ~~were~~a change in depreciation method be accounted for ~~$11~~as a change in estimate.~~2 million~~ The requirements are effective for changes ~~the~~made ~~three~~in ~~months~~fiscal ~~ended~~years ~~June~~beginning after December 3015, ~~2004~~ ~~compared~~2005. toThe ~~$10~~Company does not expect the adoption of SFAS No.9 ~~million~~154 ~~for~~to ~~the~~have ~~three~~a ~~months~~material ~~ended~~impact on the ~~June 30,~~Company’s ~~2003~~financial statements.

~~Gross~~ Cautionary ~~Profit~~Note Regarding Forward-Looking Statements

~~Our~~This ~~gross~~quarterly ~~profit~~report ~~was~~contains ~~$150.0~~“forward-looking statements,” within the meaning of Section ~~million~~27A ~~for~~of the ~~three~~Securities ~~months~~Act ~~ended~~of ~~June 30~~1933, ~~2004~~as ~~compared~~amended ~~to $157.0~~and Section ~~million~~21E ~~for~~of the Securities ~~three~~Exchange ~~months~~Act ~~ended~~of ~~June 30~~1934, as amended (the “Exchange ~~2003~~Act”). ~~Excluding~~These ~~the~~statements ~~effects~~relate ofto ~~purchase~~future ~~accounting,~~events ~~gross~~or ~~profit~~our ~~for~~future ~~the~~financial ~~three~~performance, ~~months~~and ~~ended~~involve ~~June 30~~known and unknown risks, ~~2004~~uncertainties ~~would~~and ~~have~~other ~~been~~factors that may cause our actual ~~$162.1 million.~~results, ~~Gross~~levels ~~margin~~of activity, ~~excluding~~performance ~~the~~or ~~effects~~achievements ofto be ~~purchase~~materially ~~accounting~~different from any future results, ~~increased~~levels toof activity, 69performance or achievements expressed or implied by these forward-looking statements.8% ~~for~~Such ~~the~~risks ~~three~~and ~~months~~uncertainties ~~ended~~are ~~June 30,~~described ~~2004~~in ~~from~~detail ~~68.6%~~in ~~from~~our ~~the~~Annual ~~three~~Report ~~months~~on ~~ended~~Form 10-K ~~June~~for the year ended December 3031, ~~2003.~~2004 and include,

~~General~~ but are not limited to: (i) our substantial indebtedness, which could impair our ability to operate our business; (ii) the terms of our subsidiaries’ credit facilities and ~~Administrative~~indentures, ~~Expense~~which may restrict our access to cash flow and our ability to pursue our business strategies; (iii) increased competitive pressure from other directory publishers or media companies; (iv) the loss of any of our key agreements with Qwest; (v) declining usage of printed yellow page directories; (vi) our inability to renew customer advertising contracts; (vii) risks related to the start-up of new print or Internet directories and media services; (viii) our practice of extending credit to small and medium-sized businesses; (ix) our dependence on third-party providers of printing, distribution and delivery services; (x) the impact of fluctuations in the price or availability of paper; (xi) our failure to successfully convert to the Amdocs software system; (xii) the impact of turnover among sales representatives or the loss of key personnel; (xiii) the occurrence of work stoppages; and (xiv) general economic, market or business conditions. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” “assumption” or the negative of these terms or other comparable terminology. These statements are only predictions.

~~General~~In ~~and administrative expense~~particular, ~~excluding depreciation~~forward-looking ~~and~~statements ~~amortization~~include, ~~increased~~but ~~$1.1 million,~~are ornot ~~3.8%,~~limited to, ~~$29.4 million~~statements ~~for~~made under the ~~three~~heading “Management’s ~~months~~Narrative ~~ended~~Analysis of Results of ~~June 30,~~Operations” ~~2004~~relating ~~from~~to ~~$28.4 million~~our ~~for~~strategies, ~~the~~revenue ~~three~~and ~~months~~cost ~~ended June 30~~trends, ~~2003.~~gross ~~The~~margins, ~~increase~~cost ~~was~~savings ~~primarily~~benefits, ~~due~~industry toand ~~increases~~competitive inforces, ~~employee~~our ~~costs~~segmented pricing strategy, ~~advertising~~usage of DexOnline.com and ~~contracting~~Dex Web Clicks and the impact on the Company ~~professional~~of ~~fees~~recent accounting pronouncements.

~~Employee~~Although ~~costs~~we ~~increased~~believe ~~$3.2 million,~~that ~~or 62.7%,~~the toexpectations ~~$8.3 million~~reflected ~~from~~in ~~$5.1 million for~~ the ~~three~~ ~~months~~forward-looking ~~ended~~statements ~~June 30,~~are ~~2004 and 2003~~reasonable, ~~respectively.~~we ~~Employee costs~~cannot ~~include salaries and wages, benefits and other employee~~guarantee ~~costs.~~future ~~Salaries and wages increased $2.0 million~~results, orlevels ~~64.5%, to~~of ~~$5.1 million for the three months ended June 30~~activity, ~~2004~~ ~~from~~performance ~~$3.1 million~~or ~~for the three months ended June 30, 2003~~achievements. ~~The increase in salaries and wages was due~~ ~~primarily~~These ~~to increases in stand~~forward-~~alone~~looking ~~costs~~statements ~~resulting~~are ~~from operating~~made ~~the Company~~ as aof ~~separate entity from Qwest. Prior to 2004,~~ the ~~functions~~date of ~~finance, human resources, real estate and~~this ~~information~~quarterly ~~technology~~report ~~were provided primarily by Qwest~~ and, ~~were included~~except ~~in other general and administrative expense~~ as ~~affiliate~~ ~~expenses.~~required ~~Benefits~~under ~~increased~~the ~~$1.3 million, or~~federal ~~92.9%,~~securities tolaws ~~$2.7 million~~and ~~for~~the ~~three~~rules ~~months~~and ~~ended~~regulations ~~June 30, 2004~~of ~~from $1.4 million for~~ the ~~three months ended June 30~~SEC, ~~2003. This increase is primarily due to higher~~we ~~costs~~assume ofno ~~medical~~obligation ~~benefits and~~ to ~~pension~~update ~~credits~~or ~~recognized~~revise ~~in 2003~~them ~~related~~or to ~~Qwest’s over-funded pension from which Dex~~provide ~~Media~~reasons ~~does~~why ~~not~~actual ~~benefit.~~results ~~Other~~may ~~employee costs were $0~~differ.~~5 million and $0.6 million for the three months~~ ~~ended June 30, 2004 and 2003, respectively.~~

~~Bad~~We ~~debt~~do ~~expense~~not ~~decreased~~undertake ~~$1.2 million,~~any ~~or 17.4%,~~responsibility to ~~$5.7 million~~release ~~for~~publicly ~~the three months ended~~any ~~June 30,~~revisions ~~2004~~to ~~from~~these ~~$6.9 million~~forward-looking ~~for~~statements ~~the~~to ~~three~~take ~~months~~into ~~ended~~account ~~June 30,~~events ~~2003.~~or ~~Bad~~circumstances ~~debt~~that ~~expense~~occur asafter athe ~~percent~~date of ~~total~~ ~~revenue,~~this ~~excluding~~quarterly ~~the~~report. ~~effects~~Additionally, ofwe ~~purchase~~do ~~accounting,~~not ~~was~~undertake ~~2.5%~~any ~~for~~responsibility ~~the~~to ~~three~~update ~~months~~you ~~ended~~on ~~June 30,~~the ~~2004~~occurrence ~~compared~~of ~~to 3.0%~~any ~~for~~unanticipated ~~the~~events ~~three~~which ~~months~~may ~~ended~~cause ~~June 30,~~actual ~~2003.~~results ~~The~~to ~~decrease in~~differ ~~bad~~from ~~debt~~those ~~expense~~expressed isor ~~primarily~~implied aby ~~result~~the offorward-looking statements ~~higher~~contained ~~expense~~ in ~~2003 relating~~this toquarterly ~~the bankruptcy of a specific CMR~~report.

~~Advertising~~Item ~~increased $1.7 million, or 53.1%, to $4.9 million for the three months ended June 30, 2004 from $~~3.~~2 million~~ ~~for~~Quantitative ~~the three months ended June 30, 2003 due to additional media advertisements~~ and ~~exclusivity~~Qualitative ~~arrangements~~Disclosures ~~designed~~About toMarket increase consumer awareness, including promoting the new Dex trademark and product offerings. Advertising as a percent of revenue, excluding the effects of purchase accounting, increased to 2.1% for the three months ended June 30, 2004 compared to 1.4% for the three months ended June 30, 2003. Risk

~~Contracting~~Omitted ~~and~~pursuant ~~professional~~to ~~fees~~General ~~increased $1.8~~Instructions ~~million, or 52.9%, to $5.~~H(2 ~~million~~)(c) ~~for the three~~of ~~months ended June~~Form ~~30, 2004 from $3~~10-Q.~~4 million for the~~ ~~three months ended June 30, 2003. The increase is primarily due to increased receivable collection efforts and accounting and legal fees.~~

~~All~~Item ~~other general and administrative expense, decreased $~~4.~~5 million,~~ orControls ~~45.9%, to $5.3 million for the three months ended June 30, 2004 from $9.8 million for the three months ended March 31, 2003. For the three months ended June 30, 2003, other general~~ and ~~administrative~~ ~~expense includes affiliate charges and overhead allocations from Qwest.~~ Procedures

~~Income~~ Dex ~~Taxes~~Media West maintains disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Exchange Act) that are designed to ensure that information that would be required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to Dex Media West’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

~~SFAS No. 109~~As ~~requires~~of ~~that~~the weend ~~recognize deferred~~of ~~income~~the ~~tax~~period ~~assets~~covered onby ~~net~~this ~~operating~~report, ~~losses~~Dex toMedia West carried out an evaluation, under the ~~extent~~supervision and with ~~realization~~the participation of ~~these~~Dex ~~assets~~Media isWest’s ~~more~~management, ~~likely~~including its ~~than~~Chief ~~not.~~Executive AsOfficer ~~of June 30,~~and ~~2004~~Chief weFinancial ~~have~~Officer, ~~recorded~~of ~~$15.7 million~~the effectiveness of ~~deferred~~ ~~income~~the ~~tax~~design ~~assets~~and ~~resulting~~operation ~~primarily~~of ~~from~~Dex ~~net~~Media ~~operating~~West’s ~~loss~~disclosure ~~carryforwards~~controls and procedures. Based ~~upon~~on ~~current projections of~~the ~~income and expenses~~foregoing, weDex ~~have~~Media ~~determined~~West’s ~~that~~Chief itExecutive isOfficer ~~more likely~~and ~~than~~Chief ~~not~~Financial Officer concluded that weDex ~~will~~Media ~~utilize~~West’s disclosure ~~these~~controls ~~deferred~~and ~~tax~~procedures ~~assets~~were ~~before the~~effective ~~expiration~~as of the ~~net operating loss carryforward periods.~~end ~~Accordingly,~~of nothe ~~valuation~~period ~~allowance~~covered ~~has~~by ~~been~~this ~~recorded~~report.

~~Amortization~~ During ofthe ~~Intangibles~~three months ended June 30, 2005, there was no change in Dex Media West’s internal controls or in other factors that has materially affected, or is reasonably likely to materially affect, Dex Media West’s internal controls over financial reporting.

22 ~~In connection with the Acquisition, we recorded~~ ~~significant intangible assets at the date of Acquisition.~~ Substantial portions of these assets have definite lives and are subject to amortization. For the three months ended June 30, 2004 we recognized $57.8 million in amortization expense related to our identifiable intangible assets. There were no comparable expenses in periods of the Predecessor.

22 Table of Contents

~~Table of Contents~~ PART II.

~~Interest~~ OTHER ~~Expense~~INFORMATION

WeItem ~~incurred significant indebtedness in connection with the Acquisition and did not acquire the indebtedness of our Predecessor~~1. AsLegal ~~such, interest expense subsequent to and prior to the Acquisition are not comparable. We recognized interest expense of $52.7 million for the three months ended June 30, 2004.~~ Proceedings

~~The~~ From ~~Six~~time ~~Months~~to ~~Ended~~time, ~~June~~we ~~30,~~are ~~2004~~a ~~Compared~~party to litigation matters arising in connection with the ~~Six~~normal ~~Months~~course ~~Ended~~of ~~June~~our 30business. In many of these matters, ~~2003~~plaintiffs allege that they have suffered damages from errors or omissions or improper listings contained in directories published by us. Although we have not had notice of any such claims that we believe to be material, any pending or future claim could have a material adverse effect on our business.

			Dex Media West			Predecessor
			Six Months			Six Months
			Ended			Ended
			June 30,			June 30,
			2004			2003			$ Change			% Change
			(Dollars in thousands)
Revenue:
	Local directory services		$	378,757		$	378,481			276			(0.1	)%
	National directory services			35,482			68,389			(32,907	)		(48.1	)%
		Total directory services		414,239			446,870			(32,631	)		(7.3	)%
Other revenue				10,044			10,551			(507	)		(4.8	)%
		Total revenue		424,283			457,421			(33,138	)		(7.2	)%
Cost of revenue				129,734			139,373			(9,639	)		(6.9	)%
	Gross profit			294,549			318,048			(23,499	)		(7.4	)%
	Gross margin			69.4	%		69.5	%
General and administrative expense, including bad debt expense			$	58,285		$	52,189			6,096			11.7	%

In addition, we are exposed to defamation and breach of privacy claims arising from our publication of directories and our methods of collecting, processing and using personal data. The subjects of our data and users of data that we collect and publish could have claims against us if such data were found to be inaccurate, or if personal data stored by us were improperly accessed and disseminated by unauthorized persons. Although to date we have not had notice of any material claims relating to defamation or breach of privacy claims, we may be party to litigation matters that could have a material adverse effect on our business.

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

~~Total~~Omitted ~~revenue~~pursuant ~~decreased~~to byGeneral ~~$33.1~~Instructions ~~million or 7.~~H(2%,)(b) ~~to $424.3 million for the six months ended June 30, 2004 from $457.4 million for the six months ended June 30, 2003. Excluding the effects~~ of ~~purchase~~ ~~accounting for deferred revenue, which totaled $38.1~~Form million, total revenue for the six months ended June 30, 2004 would have been $462.4 million, a $5.0 million, or 1.1% increase from the same period in 2003. Total revenue, excluding the effects of purchase accounting, included $452.3 million in directory services revenue and $10-Q.~~0 million in revenue for all other~~ products. The increase in total revenue, excluding the effects of purchase accounting, is substantially due to increases in local directory services revenue offset by decreases in revenue from national advertisers, as discussed below.

~~Total~~Item ~~directory services revenue, which consists of local and national directory services revenue, decreased $32.6 million, or 7.~~3~~% to $414~~.~~2 million~~ ~~for~~Defaults ~~the~~Upon ~~six months~~Senior ended June 30, 2004 from $446.9 million for the six months ended June 30, 2003. Excluding the effects of purchase accounting, total directory services revenue increased by $5.4 million to $452.3 million for the six months ended June 30, 2004. Securities

~~Directory~~Omitted ~~services~~pursuant ~~revenue~~to isGeneral ~~affected~~Instructions H(2)(b) ~~by a variety~~ of ~~volume and pricing factors. Volume related factors~~ include the quantity of advertisements sold, the change in mix of advertisements among our product families and the proportion of advertisements sold with premium features and the volume of promotional services obtained from our advertisers in exchange for our publication of their advertisement in our directoriesForm 10-Q. Pricing factors include certain price increases that are applied by product and market and that are offset by discount programs that may be offered in selected local markets for targeted products or headings. Such factors generally affect the dollar volume of orders initiated in a period which are recognized as revenue over the life of a given directory, beginning in the month of delivery. Multiple factors contribute to changes in revenue, and although no single factor can be distinguished as the primary cause, improvements in product mix and pricing, combined with stable account renewal, contributed to our increased directory services revenue.

~~Local~~Item ~~directory services revenue increased $0~~4.~~3 million,~~ orSubmission ~~0.1%~~of toMatters ~~$378.8 million for the six months ended June 30, 2004 compared~~ to ~~$378.5 million for~~a ~~the~~Vote ~~six~~of ~~months~~Security ~~ended June 30, 2003. Local directory~~ Holders

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

~~Table~~Item of5. ~~Contents~~Other Information

~~services~~On ~~revenue~~June 16, ~~excluding~~2005, ~~the~~Dex ~~effects~~Media ofWest amended its Credit ~~purchase~~Agreement, ~~accounting~~as ~~which~~amended ~~totaled~~and ~~$5.9 million~~restated, ~~increased by~~to, ~~$6.2 million~~among toother ~~$384.7~~things: (i) ~~million~~permit ~~for~~Dex ~~the~~Media ~~six~~West ~~months~~to engage in accounts receivable ~~ended~~securitization ~~June 30,~~transactions ~~2004~~not ~~from~~exceeding $~~378~~232.50 million ~~for~~ in the ~~six months~~aggregate ~~ended~~at ~~June 30,~~any ~~2003.~~time; ~~Local~~(ii) increase ~~directory~~the ~~services~~restricted ~~revenue,~~payment ~~excluding~~basket ~~the~~for ~~effects~~cash ofdividends ~~purchase~~by ~~accounting,~~the ~~accounted for~~Company 83from $40.2%6 million ofto ~~revenue~~$58.0 million ~~for~~annually; and (iii) reduce the ~~six~~applicable ~~months~~margins ~~ended~~for ~~June~~Tranche ~~30,~~A ~~2004~~term ~~compared~~loans toand ~~82.8%~~revolving ~~for~~loans ~~2003~~made under such Credit Agreement.

~~Revenue~~Item from national advertisers decreased $32.9 million, or 48.1%, to $35.5 million for the six months ended June 30, 2004, as compared to $68.4 million for the six months ended June 30, 2003. Revenue from national advertisers excluding the effects of purchase accounting which totaled $32.2 million, decreased $0.7 million, or 1.0% to $67.7 million for the six months ended June 30, 2003 compared to $68.4 million for the six months ended June 30, 2003. Revenue from national advertisers for the six months ended June 30, 2004 accounted for 14.6~~% of revenue, excluding the effects of purchase accounting, as compared to 15~~.0% ~~for six months ended June 30, 2003.~~ Exhibits

Other revenue decreased by $0.5 million, or 4.8%, to $10.0 million for the six months ended June 30, 2004 from $10.6 million for the six months ended June 30, 2003.


Exhibits		Description

	Exhibit 10.1	Dex Media, Inc. Deferred Compensation Plan (incorporated by reference to Dex Media, Inc.’s Current Report on Form 8-K dated May 17, 2005).

	Exhibit 10.2	Dex Media, Inc. Corporate Aircraft Policy (incorporated by reference to Dex Media, Inc.’s Current Report on Form 8-K dated May 17, 2005).

	Exhibit 10.3	Dex Media, Inc. Financial Planning Benefit (incorporated by reference to Dex Media, Inc.’s Current Report on Form 8-K dated May 17, 2005).

	Exhibit 10.4	Dex Media, Inc. 2005 Bonus Plan Targets (incorporated by reference to Dex Media, Inc.’s Current Report on Form 8-K dated May 17, 2005).

	Exhibit 10.5	Fourth Amendment, dated as of June 16, 2005, to the Credit Agreement, dated as of September 9, 2003, as amended and restated as of July 27, 2004, by and among Dex Media, Inc., Dex Media West, Inc., Dex Media West LLC, JPMorgan Chase Bank, N.A. as administrative agent, J.P. Morgan Securities Inc. and Banc of America Securities LLC, as joint bookrunners and co-lead arrangers, and Bank of America, N.A., Wachovia Bank, National Association, Lehman Commercial Paper Inc. and Deutsche Bank Trust Company Americas, as co-syndication agents.

~~Cost of Revenue~~23

CostTable of revenue recognized was $129.7 million for the six months ended June 30, 2004 compared to $139.4 million for the six months ended June 30, 2003. Excluding the effects of purchase accounting for deferred costs, which totaled $9.7 million, cost of revenue recognized would have been $139.4 million for the six months ended June 30, 2004. Cost of revenue recognized represented 30.1% of revenue, excluding the effects of purchase accounting, for the six months ended June 30, 2004, compared to 30.5% of revenue for the six months ended June 30, 2003. Contents

For the six months ended June 30, 2004 and 2003, we and our Predecessor incurred costs subject to deferral and amortization of $147.0 million and $135.0 million, respectively. The increase in incurred costs is primarily due to increased contracting and professional fees related to on-going support costs for our product system conversion and to the shifts in publication schedules of eight directories from December 2003 to the first quarter of 2004, which impacted direct costs of publishing and national commissions by $9.8 million.


Exhibits		Description


	Exhibit 31.1	Certification of Chief Executive Officer of Dex Media West LLC pursuant to Section 302 of the Sarbanes Oxley Act of 2002.

	Exhibit 31.2	Certification of Chief Financial Officer of Dex Media West LLC pursuant to Section 302 of the Sarbanes Oxley Act of 2002.

24 ~~Employee costs incurred decreased by~~ ~~$3.1 million, or 4.9% to $60.7 million for the six~~ ~~months ended June 30, 2004 from $63.8 million for the six months ended June 30, 2003. The decrease is primarily a result of changes to sales incentives and a reduction in the number of employees.~~

DirectTable costs of publishing incurred, which primarily include paper, printing and distribution, were $55.8 million and $45.7 million for six months ended June 30, 2004 and 2003, respectively. The differences in directory publication schedules between the periods contributed to $7.1 million of the increase. Contents

~~Contracting and professional fees increased~~SIGNATURE $3.9 million to $6.2 million from $2.3 million for the six months ended June 30, 2004 and 2003, respectively. The increase is primarily due to on-going support related to our production system conversion for which the first phase was deployed in the second quarter of 2004.

~~Other~~Pursuant ~~costs~~to ofthe ~~revenue~~requirements ~~incurred,~~of ~~which~~Section 13 ~~primarily includes~~or ~~systems~~15(d) ~~expense,~~of ~~national~~the Securities ~~commissions,~~Exchange ~~office~~Act ~~and facilities~~of ~~expense~~1934, ~~and~~the ~~professional~~registrant ~~fees~~has ~~was~~duly ~~$24.3 million~~caused ~~for~~this ~~the~~report ~~six~~to ~~months~~be ~~ended~~signed ~~June 30,~~by ~~2004 compared to $23.2 million for~~ the ~~six months ended June 30~~undersigned, ~~2003~~thereunto duly authorized.

~~Gross~~DEX ~~Profit~~MEDIA WEST LLC

~~Our~~By: ~~gross~~/s/ ~~profit~~ROBERT ~~was $294~~M.~~5 million~~ ~~for the six months ended June 30~~NEUMEISTER, ~~2004 compared to $318~~JR.0 million for the six months ended June 30, 2003. Excluding the effects of purchase accounting, gross profit for the six months ended June 30, 2004 would have been $322.9 million compared to $318.0 million for six months ended June 30, 2003. Gross margin, excluding the effects of purchase accounting, increased to 69.8% for the six months ended June 30, 2004 from 69.5% for the six months ended June 30, 2003.

24 Robert M. Neumeister, Jr. Executive Vice President and Chief Financial Officer (Principal Financial Officer and Duly Authorized Officer)

~~Table~~ Date: ofAugust ~~Contents~~8, 2005

~~General and Administrative Expense~~25

GeneralTable andof administrative expense, excluding depreciation and amortization, increased $6.1 million, or 11.7%, to $58.3 million for the six months ended June 30, 2004 from $52.2 million for the six months ended June 30, 2003. The increase was primarily due to increases in employee costs, advertising and contracting and professional fees. Contents

~~Employee~~EXHIBIT ~~costs increased $6.9 million, or~~INDEX 69.0%, to $16.9 million from $10.0 million for the six months ended June 30, 2004 and 2003, respectively. Employee costs include salaries and wages, benefits and other employee costs. Salaries and wages increased $4.3 million, or 70.5%, to $10.4 million for the six months ended June 30, 2004 from $6.1 million for the six months ended June 30, 2003. The increase in salaries and wages was due to additional stand-alone costs resulting from operating the Company as a separate entity from Qwest. Prior to 2004, the functions of finance, human resources, real estate and information technology were provided primarily by Qwest and were included in other general and administrative expense as affiliate expenses. Benefits increased $2.5 million, or 80.6%, to $5.6 million for six months ended June 30, 2004 from $3.1 million for the six months ended June 30, 2003. This increase is primarily due to high costs of medical benefits and to pension credits recognized in 2003 related to Qwest’s over-funded pension plan from which Dex Media does not benefit. Other employee costs were $0.9 million and $0.8 million for the six months ended June 30, 2004 and 2003, respectively.

Bad debt expense decreased $1.8 million, or 13.2%, to $11.8 million for the six months ended June 30, 2004 from $13.6 million for the six months ended June 30, 2003. Bad debt expense as a percent of total revenue, excluding the effects of purchase accounting, was 2.6% for the six months ended June 30, 2004 compared to 3.0% for the six months ended June 30, 2003. The decrease in bad debt expense is primarily a result of higher expense in 2003 relating to the bankruptcy of a specific CMR.


Exhibits		Description

	Exhibit 10.1	Dex Media, Inc. Deferred Compensation Plan (incorporated by reference to Dex Media, Inc.’s Current Report on Form 8-K dated May 17, 2005).

	Exhibit 10.2	Dex Media, Inc. Corporate Aircraft Policy (incorporated by reference to Dex Media, Inc.’s Current Report on Form 8-K dated May 17, 2005).

	Exhibit 10.3	Dex Media, Inc. Financial Planning Benefit (incorporated by reference to Dex Media, Inc.’s Current Report on Form 8-K dated May 17, 2005).

	Exhibit 10.4	Dex Media, Inc. 2005 Bonus Plan Targets (incorporated by reference to Dex Media, Inc.’s Current Report on Form 8-K dated May 17, 2005).

	Exhibit 10.5	Fourth Amendment, dated as of June 16, 2005, to the Credit Agreement, dated as of September 9, 2003, as amended and restated as of July 27, 2004, by and among Dex Media, Inc., Dex Media West, Inc., Dex Media West LLC, JPMorgan Chase Bank, N.A. as administrative agent, J.P. Morgan Securities Inc. and Banc of America Securities LLC, as joint bookrunners and co-lead arrangers, and Bank of America, N.A., Wachovia Bank, National Association, Lehman Commercial Paper Inc. and Deutsche Bank Trust Company Americas, as co-syndication agents.

	Exhibit 31.1	Certification of Chief Executive Officer of Dex Media West LLC pursuant to Section 302 of the Sarbanes Oxley Act of 2002.

	Exhibit 31.2	Certification of Chief Financial Officer of Dex Media West LLC pursuant to Section 302 of the Sarbanes Oxley Act of 2002.

26 ~~Advertising increased $3.4 million, or~~ ~~63.0%, to $8.8 million for the six months ended~~ ~~June 30, 2004 from $5.4 million for the six months~~ ~~ended June 30, 2003 due to additional media advertisements~~ and exclusivity arrangements designed to increase consumer awareness, including promoting the new Dex trademark and product offerings. Advertising as a percent of revenue, excluding the effects of purchase accounting, increased to 1.9% for the six months ended June 30, 2004 compared to 1.2% for the six months ended June 30, 2003.

Contracting and professional fees increased $5.1 million to $10.5 million for the six months ended June 30, 2004 from $5.4 million for the six months ended June 30, 2003. The increase is primarily due to increased receivable collection efforts and accounting and legal fees.

All other general and administrative expense, decreased $7.5 million, or 42.1%, to $10.3 million for the six months ended June 30, 2004 from $17.8 million for the comparable period in 2003. For the six months ended June 30, 2003, other general and administrative expense includes affiliate charges from Qwest, including finance, human resources, real estate and information technology with the costs of such services incurred directly in salaries and wages for the six months ended June 30, 2004.

Amortization of Intangibles

In connection with the Acquisition, we recorded significant intangible assets at the date of Acquisition. Substantial portions of these assets have definite lives and are subject to amortization. For the six months ended June 30, 2004 we recognized $115.7 million in amortization expense related to our identifiable intangible assets. There were no comparable expenses in periods of the Predecessor.

Interest Expense

We incurred significant indebtedness in connection with the Acquisition and did not acquire the indebtedness of our Predecessor. As such, interest expense subsequent to and prior to the Acquisition are not comparable. We recognized interest expense of $107.9 million for the six months ended June 30, 2004, which includes $13.1 million of amortization of deferred financing costs.

Income Taxes

SFAS No. 109 requires that we recognize deferred income tax assets on net operating losses to the extent realization of these assets is more likely than not. As of June 30, 2004 we have recorded $15.7 million of deferred income tax assets resulting primarily from net operating loss carryforwards. Based upon current projections of income and expenses, we have determined that it is more likely than not that we will utilize these deferred tax assets before the expiration of the net operating loss carryforward periods. Accordingly, no valuation allowance has been recorded.

Liquidity and Capital Resources

Overview

Following the transactions related to the Acquisition, our primary source of liquidity continues to be cash flow generated from operations. We also have availability under our revolving credit facility, subject to certain conditions.

In connection with the Acquisition, we incurred $2,213.0 million of borrowings under our credit facilities and $1,165.0 million of indebtedness with the issuance of the outstanding notes. As of June 30, 2004, we had outstanding $3,095.0 million in aggregate indebtedness due to aggregate debt repayments since the Acquisition of $283.0 million. As a result, we are significantly leveraged and our liquidity requirements will be significantly increased, primarily due to increased debt service obligations. In connection with the initial public offering of common stock by Dex Media, we provided irrevocable notice to the holders of our 9 7/8% Senior Subordinated Notes that we will redeem $18.2 million of the outstanding notes on August 26, 2004. The funds required to meet the redemption obligation has been set aside using a portion of the proceeds from the initial public offering.

Our credit facilities consist of a revolving credit facility and term loan facilities. The revolving credit facility expiring in September 2009 is comprised of total principal of up to $100.0 million available for general corporate purposes, subject to certain conditions. The term loan facilities consist of a Tranche A term loan facility and a Tranche B term loan facility, which mature in September 2009 and March 2010, respectively.

Our credit facilities bear interest, at our option, at either:

• a base rate used by JPMorgan Chase Bank, plus an applicable margin; or • a eurocurrency rate on deposits for one, two, three or six-month periods (or nine or twelve-month periods if, at the time of the borrowing, all lenders agree to make such a duration available), plus an applicable margin.

The applicable margins on loans under our revolving credit facility, the Tranche A term loan facility and the Tranche B term loan facility are subject to change depending on our leverage ratio.

In addition to paying interest on outstanding principal amounts under our credit facilities, we are required to pay an annual commitment fee of 0.375% (reduced from 0.5% when the credit facilities were amended on June 11, 2004) to the lenders for the unused commitments under our revolving credit facility. The commitment fee is payable quarterly in arrears and is subject to change depending on our leverage ratio.

On June 11, 2004, we entered into an amended and restated credit agreement to, among other things, (i) reduce the applicable margins on loans under our credit facilities and the commitment fee on the revolving credit facility, (ii) permit the redemption of all of Dex Media’s 5% Series A preferred stock, which is held by our Sponsors and management, plus accrued and unpaid dividends, (iii) permit the redemption of up to 35% of our outstanding 9?% senior subordinated notes due 2013 and its associated redemption premium, plus accrued and unpaid interest from proceeds from the initial public offering of Dex Media’s common stock, (iv) make a final lump sum payment to our Sponsors to terminate the annual advisory fee payable under the management consulting agreement, and (v) permit us to distribute to Dex Media the funds required to meet the quarterly dividends on its common stock if and when such dividends are declared, up to $40.6 million annually. The amendments to the credit agreement, except the repricing of the applicable margins and

commitment fee which were effective on June 11, 2004, were effective immediately upon the consummation of the initial public offering of Dex Media’s common stock on July 27, 2004.

Our credit facilities contain negative and affirmative covenants and requirements affecting us and domestic subsidiaries that we create or acquire, with certain exceptions set forth in our credit agreement. Our credit facilities contain the following negative covenants and restrictions, among others: restrictions on liens, sale-leaseback transactions, incurrence of debt, payment of dividends and other restricted junior payments, redemptions and stock repurchases, consolidations and mergers, acquisitions, asset dispositions, investments, loans, advances, changes in line of business, changes in fiscal year, restrictive agreements with subsidiaries, transactions with affiliates, capital expenditures, amendments to charter, by-laws and other material documents, hedging agreements and inter-company indebtedness. Our credit facilities also require us to meet certain financial covenants, including leverage ratios, an interest coverage ratio and a fixed charges coverage ratio.

We entered into a billing and collection services agreement with Qwest LEC upon the consummation of the Acquisition. Under this agreement, Qwest LEC will continue until November 7, 2004 subject to renewal, to bill and collect, on our behalf, amounts owed by our accounts, that are also Qwest local telephone customers, for our directory services. In 2003, Qwest LEC billed approximately 47% of our revenue, excluding the effects of purchase accounting, on our behalf, and we billed the remaining 53% directly. Qwest LEC bills the account on the same billing statement on which it bills the customer for local telephone service. In conjunction with the Acquisition, we developed and continue to maintain the ability to transition from the Qwest LEC billing and collection system to our own billing and collection system, for those accounts billed by Qwest, within approximately two weeks should we choose to do so.

Historically, our Predecessor’s principal source of liquidity has been cash flow generated from operations. Prior to the consummation of the Acquisition, Dex West’s primary liquidity requirements were for debt service on that portion of a Qwest Dex line of credit borrowing arrangement with an affiliate of Qwest which was apportioned to it, debt service on $750.0 million of debt issued by Qwest Dex, dividends to Qwest, income tax payments to Qwest for the estimated tax liability of Qwest Dex as well as capital expenditures and working capital. Our Predecessor has historically generated sufficient cash flow to fund operations and investments and to make payments to Qwest.

Sources of Liquidity

Net cash provided by operations was $134.2 million for the six months ended June 30, 2004. Cash provided by operations was generated primarily from cash receipts from the sale of directory advertisements, reduced by cash disbursements for cost of revenue incurred, general and administrative expenses and interest expense.

Net cash used for investing activities was $15.7 million for the six months ended June 30, 2004. The principal use of cash for investing activities was $21.0 million of expenditures for property, plant and equipment and software. The principal source of cash flows from investing activities was $5.3 million cash received in settlement of the working capital true up for assets acquired and liabilities assumed in the Acquisition.

Net cash used for financing activities was $121.3 million for the six months ended June 30, 2004. Significant uses of cash for financing activities for the six months ended June 30, 2004 include $108.0 million of repayments on long-term borrowings and $11.7 million of distributions paid to our parent.

Our ability to make payments on and to refinance our indebtedness and to fund planned capital expenditures will depend to a large extent on our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Based on our current level of operations, we believe our cash flow from operations, available cash and available borrowings under our credit facilities will be adequate to meet our future liquidity needs for at least the next 12 months.

We cannot assure you, however, that our business will generate cash flow from operations in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. The restrictive covenants under the note indentures and credit agreement prohibit us from commingling the funds of Dex Media East with ours. They also prohibit us from borrowing any funds from Dex Media East. Despite the restrictive covenants under the note indentures and credit agreement limiting our ability to incur additional indebtedness and dispose of our assets, the covenants allow for multiple sources of limited liquidity that we may access to meet our ongoing business needs, including:

i. Cash from operating cash flow. ii. Up to $100.0 million of the revolving credit facility available to us as of June 30, 2004. iii. Other unsecured indebtedness which we may incur up to an aggregate principal amount of $75.0 million. iv. We may sell, or dispose of, assets up to $15.0 million annually, subject to an aggregate amount of $30.0 million. v. The proceeds from any debt issuance which we may use as long as our leverage ratio is at or below 4.0 to 1.0. vi. We may use the proceeds from any equity offering as follows: a) 50%, if our leverage ratio is above 4.0 to 1.0 or b) 100%, if our leverage ratio is at or below 4.0 to 1.0. As a condition to the closing of Dex Media initial public offering, we amended our credit facility to, among other things, allow us access to a portion of the proceeds from this equity offering irrespective of our leverage ratio.

The credit agreement and indentures governing the notes permit us to pursue the option of financing our capital expenditures with capital leases as long as the aggregate outstanding balance of capital leases is not in excess of $45.0 million at any time. As of June 30, 2004, the outstanding balance of capital leases was $0.6 million.

Our access to liquidity will improve significantly when our leverage ratio drops below 4.0 to 1.0. The leverage ratio can be improved by reducing debt level or increasing the amount of earnings before interest, taxes, depreciation and amortization (“EBITDA”). When our leverage ratio is under 4.0 to 1.0, we may retain any proceeds from debt or equity issuances for any business purpose, except for optional repayment of non-credit facility related debt with equity proceeds. If we use equity proceeds to optionally repay a cumulative amount of non-credit facility related debt in excess of $20.0 million, we are required to repay equal amounts of debt under our term facilities with the proceeds from the same equity issuances.

Uses of Liquidity

We expect that our primary liquidity requirements will be for debt service on our credit facilities and notes, capital expenditures and working capital. During the six months ended June 30, 2004, we used the funds generated from operations in excess of liquidity requirements to make optional repayments under our credit facilities.

Our debt portfolio, consisting of the amounts borrowed under the credit facilities, senior notes and senior subordinated notes, is comprised of 37.6% fixed rate debt and 62.4% floating rate debt as of June 30, 2004. Mandatory repayments or optional repayments under the credit facilities in the future will cause the percentage of fixed rate debt in our debt portfolio to increase. As our fixed rate debt as a percentage of our total debt increases, the effective interest rate of our debt portfolio will rise. Due to the current low interest rate environment, the floating rate debt under the credit facilities has significantly lower interest rates than the fixed interest rates of our senior notes and senior subordinated notes. If short-term interest rates rise, the effective interest rate of our portfolio will also increase.

Tranche A and Tranche B of our term loan credit facilities have scheduled quarterly principal repayments starting June 30, 2004 and continue until the maturity dates of the facilities. Any optional repayment is

applied to reduce the subsequent scheduled repayments of each tranche, in direct order of the first four scheduled repayments, and thereafter, ratably. As a result of the optional repayments made since September 10, 2003, the required quarterly payments for Tranche A in the period from June 30, 2004 to September 30, 2004 and for Tranche B in the period from June 30, 2004 to March 31, 2005 have been reduced to zero. The first mandatory repayment is now due June 30, 2005 in the amount of $39.9 million.

On November 10, 2003, our indirect parent, Dex Media, issued $500.0 million of 8% Notes due 2013 and $389.0 million aggregate principal amount at maturity of 9% Discount Notes due 2013 for gross proceeds of $750.2 million. The gross proceeds of $750.2 million were paid by Dex Media as a distribution to its parent and ultimately to the Sponsors. These notes are expected to be serviced and repaid from distributions to Dex Media from us and our affiliate, Dex Media East, subject in each case to restrictions contained in our respective debt agreements. Accordingly, our cash requirements will increase in May 2009 when cash interest becomes payable on Dex Media’s 9% Discount Notes.

On February 11, 2004, our indirect parent, Dex Media, issued another $361.0 million aggregate principal amount at maturity of 9% Discount Notes due 2013 for gross proceeds of $250.5 million. The gross proceeds of $250.5 million were paid by Dex Media as a distribution to its parent and ultimately to the Sponsors. These discount notes defer interest until May 2009 at which time we, along with our affiliate, Dex Media East, will be expected to service and repay this debt in the form of distributions to Dex Media, subject in each case to restrictions contained in our respective debt agreements.

Dex Media has no operations of its own and derives all of its cash flow and liquidity from its subsidiaries. It depends on the earnings and the distribution of funds from us and Dex Media East to meet its business needs. Although we are not obligated to make funds available to Dex Media for any purpose, we are expected to make cash distributions of $11.6 million to Dex Media semi-annually to service its cash interest obligations on the 8% Notes due 2013, subject to certain covenant requirements under the note indentures and credit agreement. Although the terms of our credit facilities permit us to pay cash distributions to Dex Media in an amount not to exceed 58% of the regularly scheduled interest payments on the initial $250.0 million of the $500.0 million of 8% Notes due 2013, we must meet an interest coverage ratio for the four consecutive fiscal quarters prior to the payment of the distribution to Dex Media to cover our 58% portion of the regularly scheduled interest payments on the remaining $250.0 million of the $500.0 million of 8% Notes due 2013. The indentures relating to our senior notes and senior subordinated notes permit up to $50.0 million in any fiscal year to be distributed to Dex Media to make interest payments on Dex Media’s Discount Notes and Notes.

Material Trends, Known Facts and Uncertainties

Advertising Revenue

Directory services revenue is our most significant source of revenue. Competition from other yellow pages publishers affects our ability to attract and retain advertisers and to increase advertising rates.

Paper Prices

Paper is our principal raw material. Substantially all of the paper that we use (other than for covers) is supplied by two companies: Nippon Paper Industries USA Co., Ltd. (formerly Daishowa America Co., Ltd.) and Norske Skog Canada (USA), Inc. Prices under the two agreements are negotiated each year based on prevailing market rates, which have been declining consistent with general U.S. market trends for directory paper over the last three years.

Stand-Alone Costs

Historically, the Predecessor reimbursed Qwest for services Qwest and its affiliates provided to Dex West based upon either (1) tariffed or negotiated contract rates, (2) market prices or (3) fully distributed costs. The historical costs for services provided to the Predecessor by Qwest affiliates do not reflect the expenses that we have begun to incur as a stand-alone entity. As of December 31, 2003 we have completed the replacement of the services provided by Qwest and Qwest LEC with services provided internally or through arrangements

with third parties. We expect that the costs we incur on a stand-alone basis will be higher than historical costs for services previously provided by Qwest and its affiliates.

Usage

Based on industry sources, overall usage of printed yellow pages directories in the U.S. declined by a compound annual rate of approximately 2% between 1999 and 2003. Several factors, including the publication of competing directories and the increased usage of Internet-based directories, could cause usage of our printed directories to continue to decline. Any declines in usage could limit our ability to maintain or increase our advertising prices, cause businesses that purchase advertising in our yellow pages directories to reduce or discontinue those purchases and discourage businesses that do not purchase advertising in our yellow pages directories from doing so. Any of these factors could affect our ability to generate revenue and have a material adverse effect on our business.

On-Line Migration

Although we remain primarily focused on our printed directories, we also market an Internet-based directory service, DexOnline.com (formerly Qwestdex.com), to our advertisers. We view our Internet-based directory as a complement to our print product rather than as a stand-alone business. We believe that any decline in the usage of our printed directories could be offset in part by an increase in usage of our Internet-based directory. We also believe that increased usage of Internet-based directories will continue to support overall usage and advertising rates in the U.S. directory advertising industry and could provide us with growth in advertisements. However, if we cannot provide services over the Internet successfully or compete successfully with other Internet-based directory services, our business could be negatively impacted.

Bond Ratings

In anticipation of the initial public offering of common stock by Dex Media and the use of a portion of the proceeds to reduce debt, on May 17, 2004 Standard and Poors revised the outlook on our credit ratings to stable from negative.

On July 28, 2004, Moody’s Investor Service upgraded the credit ratings of our credit facilities, senior notes and senior subordinated notes by two notches. The rating upgrade does not have any immediate impact on our financing costs.

Competition

The U.S. directory advertising industry is competitive. There are a number of independent directory publishers and publishers affiliated with local exchange carriers with which we compete in one or more of the Dex West States. For example, new competitive directories were introduced in four of our top ten markets in 2003 compared to just one new competitive directory in 2002.

Through our Internet-based directory, we compete with these publishers and with other Internet sites providing search and classified directory information. In addition, we compete against other forms of media, including newspapers, radio, television, the Internet, billboards and direct mail, for business and professional advertising.

The foregoing list of factors should not be construed as exhaustive or as an admission regarding the adequacy of disclosure made by us. We disclaim any intention or obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise.

Critical Accounting Policies and Estimates

We have identified the policies below as critical to our business operations and the understanding of our results of operations. The effect and any associated risks related to these policies on our business operations is discussed throughout “Management’s Discussion and Analysis of Financial Condition and Results of Operations” where these policies affect our reported and expected financial results.

Revenue Recognition

The sale of advertising in printed directories published by us is our primary source of revenue. We recognize revenue ratably over the life of each directory using the deferral and amortization method of accounting, with revenue recognition commencing in the month of delivery. Our directories are initially published with an estimated 12-month useful life, although we may revise the estimate of a directory life subsequent to its publication in order to better manage account and production workflow as it relates to other directories published in the same period. Because we generally have the right to bill and collect revenue related to the extension of directory publishing dates, a revision in the estimated life of a given directory should not have a significant impact on our results of operations or cash flows.

Cost of Revenue

Direct costs related to the sales, production and distribution of directories are recognized ratably over the life of each directory under the deferral and amortization method of accounting, with cost recognition commencing in the month of delivery. Direct costs include sales commissions, graphics costs and the costs of printing, publishing and distribution. Revisions in the estimated useful lives of directories after their initial publication may cause the acceleration or deceleration of cost recognition related to the amortization of deferred directory costs. Although we cannot predict the extent such changes could have on future cost recognition, the movement of book publishing dates has historically had a minimal impact on cost recognition between periods.

Allowance for Doubtful Accounts and Bad Debt Expense

We periodically make judgments regarding the collectibility of outstanding receivables and provide appropriate allowances when collectibility becomes doubtful. Although we believe our allowance for doubtful accounts adequately reflects that portion of our receivables that are uncollectible, we may revise our estimates in future periods based upon new circumstances and such revisions may be material.

Income Taxes

It is our determination that it is more likely than not that we will utilize our deferred tax assets before the expiration of the net operating loss carryforward period. This determination is based upon our estimation of projected book and taxable income over the next several years. To the extent our projections vary significantly from actual results, a portion of our deferred tax benefits may not be realizable, resulting in a charge to income tax expense.

Disclosure Regarding Forward-Looking Statements

This Form 10-Q contains forward-looking statements. These statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. These forward-looking statements are made as of the date of this Form 10-Q and, except as required under the federal securities laws and the rules and regulations of the SEC, we assume no obligation to update or revise them or to provide reasons why actual results may differ.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Long-Term Debt

As of June 30, 2004, we had a total outstanding debt balance of $3,095.0 million comprised of $1,930.0 million of variable rate debt drawn under the secured credit facilities, $385.0 million of senior notes and $780.0 million of senior subordinated notes. The credit facilities were made up of $857.8 million of Tranche A term loan maturing in September 2009 and $1,072.2 million of Tranche B term loan maturing in March 2010. Due to the variable rate characteristics of the credit facilities, the carrying amounts of the Tranche A term loan and the Tranche B term loan approximated fair values.

The $385.0 million unsecured senior notes bearing a fixed interest rate of 8 1/2% matures in August 2010. Due to changes in interest rates and market conditions since the issuance of these fixed rate notes, the fair value of the notes was $419.7 million at June 30, 2004.

The $780.0 million unsecured senior subordinated notes bearing a fixed interest rate of 9?% matures in August 2013. Due to changes in interest rates and market conditions since the issuance of these fixed rate notes, the fair value of the notes was $856.1 million at June 30, 2004.

Interest Rate Risk

As of June 30, 2004, we had no borrowings outstanding under our revolving credit facility, $857.8 million of debt outstanding under our Tranche A term loan facility and $1,072.2 million of debt outstanding under our Tranche B term loan facility. Interest payable on our revolving credit facility and each of our term loan facilities are based upon variable rates. Accordingly, our earnings and cash flows are affected by changes in interest rates. Assuming the average level of borrowings with interest payable at variable rates and assuming a one percentage point increase in the average interest rate under these borrowings, we estimate that our interest expense for the three months and six months ended June 30, 2004 would have increased by approximately $4.9 million and $9.8 million, respectively.

Item 4. Controls and Procedures

Dex Media West maintains disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information that would be required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to Dex Media West’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of the end of the period covered by this report, Dex Media West carried out an evaluation, under the supervision and with the participation of Dex Media West’s management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of Dex Media West’s disclosure controls and procedures. Based on the foregoing, Dex Media West’s Chief Executive Officer and Chief Financial Officer concluded that Dex Media West’s disclosure controls and procedures were effective as of the end of the period covered by this report.

There have been no significant changes in Dex Media West’s internal controls or in other factors that could significantly affect the internal controls subsequent to the date Dex Media West completed its evaluation.

PART II.

OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are a party to litigation matters arising in connection with the normal course of our business. In many of these matters, plaintiffs allege that they have suffered damages from errors or omissions or improper listings contained in directories published by us. Although we have not had notice of any such claims that we believe to be material, any pending or future claim could have a material adverse effect on our business.

In addition, we are exposed to defamation and breach of privacy claims arising from our publication of directories and our methods of collecting, processing and using personal data. The subjects of our data and users of data that we collect and publish could have claims against us if such data were found to be inaccurate, or if personal data stored by us was improperly accessed and disseminated by unauthorized persons. Although we have not had notice of any material claims relating to defamation or breach of privacy claims to date, we may be party to litigation matters that could have a material adverse effect on our business.

Item 2. Changes in Securities and Use of Proceeds

None.

Item 3. Defaults upon Senior Securities

None.

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

None.

Item 5. Other Information

None.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits:

Exhibit 31.1	—	Certification of Chief Executive Officer of Dex Media West LLC pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2	—	Certification of Chief Financial Officer of Dex Media West LLC pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1	—	Certification of Chief Executive Officer of Dex Media West LLC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 32.2	—	Certification of Chief Financial Officer of Dex Media West LLC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibits 32.1 and 32.2 are being furnished solely to accompany this Report pursuant to 18 U.S.C. § 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by references into any of our filings, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

(b) Reports on Form 8-K:

On June 18, 2004, we filed a Current Report on form 8-K, relating to the press release announcing the completion of the repricing of our Tranche A and Tranche B term loan facilities as permitted under the Credit Agreement, dated as of September 9, 2003, as amended, among Dex Media, Inc., Dex Media West, Inc., Dex Media West LLC, the lenders thereto and JPMorgan Chase Bank, as administrative agent and collateral agent, pursuant to the Second Amendment thereto, dated as of the effective date of the initial public offering of common stock by our indirect parent, Dex Media, Inc.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, Dex Media West LLC has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

DEX MEDIA WEST LLC

By: /s/ ROBERT M. NEUMEISTER, JR.

Robert M. Neumeister, Jr. Chief Financial Officer and Executive Vice President (principal financial officer and duly authorized officer)

Date: August 12, 2004

EXHIBIT INDEX

Number		Description
Exhibit 31.1	—	Certification of Chief Executive Officer of Dex Media West LLC pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2	—	Certification of Chief Financial Officer of Dex Media West LLC pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1	—	Certification of Chief Executive Officer of Dex Media West LLC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 32.2	—	Certification of Chief Financial Officer of Dex Media West LLC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibits 32.1 and 32.2 are being furnished solely to accompany this Report pursuant to 18 U.S.C. § 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by references into any of our filings, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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