##### Table of Contents









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 March 31, 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: 333-102395


Dex Media East LLC


(Exact name of registrant as specified in its charter)


|                                                                   |  |                                      
|------------------------------------------------------------------ |  | -------------------------------------
|Delaware                                                           |  | 42-1554575                           
|(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)


þ o


o þ


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.










---










TABLE OF CONTENTS


|                                             |  |                                                                                                                  |    |  |    | 
|-------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------- | -- |  | -- | 
|PART I: FINANCIAL INFORMATION                |  |                                                                                                                  | 2  | 
|Item 1.                                      |  | Financial Statements                                                                                             |    |  | 2  | 
|                                             |  | Condensed Consolidated Balance Sheets
    (unaudited)  March 31, 2005 and
    December 31, 2004                 |    |  | 2  | 
|                                             |  | Condensed Consolidated Statements of
    Operations (unaudited)  Three months ended
    March 31, 2005 and 2004 |    |  | 3  | 
|                                             |  | Condensed Consolidated Statements of Cash
    Flows (unaudited)  Three months ended March 31,
    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                                                   |    |  | 21 | 
|Item 4.                                      |  | Controls and Procedures                                                                                          |    |  | 21 | 
|PART II: OTHER INFORMATION                   |  |                                                                                                                  | 22 | 
|Item 1.                                      |  | Legal Proceedings                                                                                                |    |  | 22 | 
|Item 2.                                      |  | Unregistered Sales of Equity Securities and
    Use of Proceeds                                                  |    |  | 22 | 
|Item 3.                                      |  | Defaults Upon Senior Securities                                                                                  |    |  | 22 | 
|Item 4.                                      |  | Submission of Matters to a Vote of Security
    Holders                                                          |    |  | 22 | 
|Item 5.                                      |  | Other Information                                                                                                |    |  | 22 | 
|Item 6.                                      |  | Exhibits                                                                                                         |    |  | 22 | 
|Signature                                    |  |                                                                                                                  | 23 | 
|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
    analysis of results of operations.

1



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##### Table of Contents






PART I.


FINANCIAL INFORMATION







|        |                     
|------- | --------------------
|Item 1. | Financial Statements

DEX MEDIA EAST LLC


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





CONDENSED CONSOLIDATED BALANCE SHEETS


(Dollars in thousands)


(Unaudited)


|                                                                                              |                                        |                                      |           |         |              |  |           |         |           | 
|--------------------------------------------------------------------------------------------- | -------------------------------------- | ------------------------------------ | --------- | ------- | ------------ |  | --------- | ------- | --------- | 
|                                                                                              |                                        | As of                                |           |         | As of        | 
|                                                                                              |                                        | March 31,                            |           |         | December 31, | 
|                                                                                              |                                        | 2005                                 |           |         | 2004         | 
|                                                                                              |                                        |                                      |           |         |              | 
|ASSETS                                                                                       
|Current assets:                                                                               |                                        |                                      |           |         |              |  |           |        
|                                                                                              | Cash and cash equivalents              |                                      | $         |        |              |  | $         |        |          
|                                                                                              | Accounts receivable, net               |                                      |           | 40,548  |              |  |           | 56,123  |          
|                                                                                              | Deferred directory costs               |                                      |           | 126,463 |              |  |           | 135,417 |          
|                                                                                              | Current deferred income taxes          |                                      |           | 28,343  |              |  |           | 8,189   |          
|                                                                                              | Other current assets                   |                                      |           | 9,260   |              |  |           | 5,181   |          
|                                                                                              |                                        |                                      |           |         |              | 
|                                                                                              |                                        | Total current assets                 |           |         | 204,614      |  |           |         | 204,910   | 
|Property, plant and equipment, net                                                            |                                        |                                      | 52,721    |         |              |  | 50,750    |        
|Goodwill                                                                                      |                                        |                                      | 890,731   |         |              |  | 890,731   |        
|Intangible assets, net                                                                        |                                        |                                      | 1,325,253 |         |              |  | 1,363,673 |        
|Deferred income taxes                                                                         |                                        |                                      | 7,384     |         |              |  | 38,297    |        
|Deferred financing costs                                                                      |                                        |                                      | 46,110    |         |              |  | 50,924    |        
|Other assets                                                                                  |                                        |                                      | 1,819     |         |              |  | 1,180     |        
|                                                                                              |                                        |                                      |           |         |              | 
|                                                                                              |                                        | Total Assets                         |           | $       | 2,528,632    |  |           | $       | 2,600,465 | 
|                                                                                              |                                        |                                      |           |         |              | 
|                                                                                             
|LIABILITIES AND OWNERS EQUITY                                                               
|Current liabilities:                                                                          |                                        |                                      |           |         |              |  |           |        
|                                                                                              | Accounts payable                       |                                      | $         | 26,093  |              |  | $         | 38,997  |          
|                                                                                              | Amounts due to affiliate               |                                      |           | 2,152   |              |  |           | 6,311   |          
|                                                                                              | Deferred revenue and customer deposits |                                      |           | 86,927  |              |  |           | 96,587  |          
|                                                                                              | Accrued interest payable               |                                      |           | 37,316  |              |  |           | 14,463  |          
|                                                                                              | Current portion of long-term debt      |                                      |           | 110,861 |              |  |           | 105,232 |          
|                                                                                              | Other accrued liabilities              |                                      |           | 6,533   |              |  |           | 10,134  |          
|                                                                                              |                                        |                                      |           |         |              | 
|                                                                                              |                                        | Total current liabilities            |           |         | 269,882      |  |           |         | 271,724   | 
|Long-term debt                                                                                |                                        |                                      | 1,573,885 |         |              |  | 1,655,302 |        
|Amounts due to affiliate related to post-retirement and other
    post-employment obligations |                                        |                                      | 40,143    |         |              |  | 38,843    |        
|Other liabilities                                                                             |                                        |                                      | 140       |         |              |  | 1,028     |        
|                                                                                              |                                        |                                      |           |         |              | 
|                                                                                              |                                        | Total Liabilities                    |           |         | 1,884,050    |  |           |         | 1,966,897 | 
|                                                                                              |                                        |                                      |           |         |              | 
|Commitments and contingencies (Note 10)                                                       |                                        |                                      |           |         |              |  |           |        
|Owners interest                                                                              |                                        |                                      | 700,123   |         |              |  | 705,906   |        
|Accumulated deficit                                                                           |                                        |                                      | (56,333   | )       |              |  | (71,550   | )      
|Accumulated other comprehensive income (loss)                                                 |                                        |                                      | 792       |         |              |  | (788      | )      
|                                                                                              |                                        |                                      |           |         |              | 
|                                                                                              |                                        | Total Owners Equity                 |           |         | 644,582      |  |           |         | 633,568   | 
|                                                                                              |                                        |                                      |           |         |              | 
|                                                                                              |                                        | Total Liabilities and Owners Equity |           | $       | 2,528,632    |  |           | $       | 2,600,465 | 
|                                                                                              |                                        |                                      |           |         |              | 



2



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DEX MEDIA EAST LLC


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





CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


(Dollars in thousands)


(Unaudited)


|                        |                                       |                            |         |        |         |   |         |        |         | 
|----------------------- | ------------------------------------- | -------------------------- | ------- | ------ | ------- | - | ------- | ------ | ------- | 
|                        |                                       | Three Months Ended         |        
|                        |                                       | March 31,                  |        
|                        |                                       |                            |        
|                        |                                       | 2005                       |         |        | 2004    |  
|                        |                                       |                            |         |        |         |  
|Revenue                 |                                       | $                          | 181,195 |        |         | $ | 180,789 |       
|Operating expenses:     |                                       |                            |         |        |         |   |         |       
|                        | Cost of revenue                       |                            |         | 53,681 |         |   |         | 55,370 |        
|                        | General and administrative expense    |                            |         | 18,602 |         |   |         | 18,089 |        
|                        | Bad debt expense                      |                            |         | 5,329  |         |   |         | 6,311  |        
|                        | Depreciation and amortization expense |                            |         | 2,761  |         |   |         | 2,491  |        
|                        | Amortization of intangibles           |                            |         | 38,420 |         |   |         | 45,282 |        
|                        |                                       |                            |         |        |         |  
|                        |                                       | Total operating expenses   |         |        | 118,793 |   |         |        | 127,543 | 
|                        |                                       |                            |         |        |         |  
|                        |                                       | Operating income           |         |        | 62,402  |   |         |        | 53,246  | 
|Other (income) expense: |                                       |                            |         |        |         |   |         |       
|                        | Interest income                       |                            |         | (135   | )       |   |         | (110   | )      
|                        | Interest expense                      |                            |         | 37,472 |         |   |         | 50,284 |        
|                        | Other (income) expense, net           |                            |         | 90     |         |   |         | 33     |        
|                        |                                       |                            |         |        |         |  
|                        |                                       | Income before income taxes |         |        | 24,975  |   |         |        | 3,039   | 
|Income tax provision    |                                       |                            | 9,758   |        |         |   | 1,217   |       
|                        |                                       |                            |         |        |         |  
|                        |                                       | Net income                 |         | $      | 15,217  |   |         | $      | 1,822   | 
|                        |                                       |                            |         |        |         |  



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DEX MEDIA EAST LLC


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





CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


(Dollars in thousands)


(Unaudited)


|                                    |                                                       |                                                                                            |                                       |         |         |         |        |         |         |         |  
|----------------------------------- | ----------------------------------------------------- | ------------------------------------------------------------------------------------------ | ------------------------------------- | ------- | ------- | ------- | ------ | ------- | ------- | ------- | -
|                                    |                                                       | Three Months Ended                                                                         |                                      
|                                    |                                                       | March 31,                                                                                  |                                      
|                                    |                                                       |                                                                                            |                                      
|                                    |                                                       | 2005                                                                                       |                                       |         | 2004    |        
|                                    |                                                       |                                                                                            |                                       |         |         |        
|Operating activities:               |                                                       |                                                                                            |                                       |         |         |         |        |        
|                                    | Net income                                            |                                                                                            | $                                     | 15,217  |         |         | $      | 1,822   |        
|                                    | Adjustments to net income:                            |                                                                                            |                                       |         |         |         |        |         |        
|                                    |                                                       | Bad debt expense                                                                           |                                       |         | 5,329   |         |        |         | 6,311   |        
|                                    |                                                       | Depreciation and amortization expense                                                      |                                       |         | 2,761   |         |        |         | 2,491   |        
|                                    |                                                       | Amortization of intangibles                                                                |                                       |         | 38,420  |         |        |         | 45,282  |        
|                                    |                                                       | Amortization of deferred financing costs                                                   |                                       |         | 4,814   |         |        |         | 10,693  |        
|                                    |                                                       | Stock-based compensation expense                                                           |                                       |         | 196     |         |        |         |        |        
|                                    |                                                       | Loss on disposition of assets                                                              |                                       |         | 89      |         |        |         |        |        
|                                    |                                                       | Deferred tax provision                                                                     |                                       |         | 9,758   |         |        |         | 1,217   |        
|                                    | Changes in operating assets and liabilities:          |                                                                                            |                                       |         |         |         |        |         |        
|                                    |                                                       | Accounts receivable                                                                        |                                       |         | 10,246  |         |        |         | 1,621   |        
|                                    |                                                       | Deferred directory costs                                                                   |                                       |         | 8,954   |         |        |         | (5,209  | )      
|                                    |                                                       | Other current assets                                                                       |                                       |         | (3,637  | )       |        |         | 1,197   |        
|                                    |                                                       | Other long-term assets                                                                     |                                       |         | 174     |         |        |         | 421     |        
|                                    |                                                       | Accounts payable and other liabilities                                                     |                                       |         | (15,988 | )       |        |         | (30,381 | )      
|                                    |                                                       | Accrued interest                                                                           |                                       |         | 22,853  |         |        |         | 25,115  |        
|                                    |                                                       | Deferred revenue and customer deposits                                                     |                                       |         | (9,660  | )       |        |         | 4,198   |        
|                                    |                                                       | Amounts due to affiliates                                                                  |                                       |         | (4,159  | )       |        |         | 17,833  |        
|                                    |                                                       | Other long-term liabilities                                                                |                                       |         | (80     | )       |        |         |        |        
|                                    |                                                       | Amounts due to affiliate related to post-retirement and other
    post-employment benefits |                                       |         | 1,300   |         |        |         | 1,350   |        
|                                    |                                                       |                                                                                            |                                       |         |         |        
|                                    |                                                       |                                                                                            | Cash provided by operating activities |         |         | 86,587  |        |         |         | 83,961  |  
|                                    |                                                       |                                                                                            |                                       |         |         |        
|Investing activities:               |                                                       |                                                                                            |                                       |         |         |         |        |        
|                                    | Expenditures for property, plant and equipment        |                                                                                            |                                       | (3,690  | )       |         |        | (4,748  | )      
|                                    | Capitalized software development costs                |                                                                                            |                                       | (1,131  | )       |         |        | (6,860  | )      
|                                    |                                                       |                                                                                            |                                       |         |         |        
|                                    |                                                       |                                                                                            | Cash used for investing activities    |         |         | (4,821  | )      |         |         | (11,608 | )
|                                    |                                                       |                                                                                            |                                       |         |         |        
|Financing activities:               |                                                       |                                                                                            |                                       |         |         |         |        |        
|                                    | Proceeds from borrowings on revolving credit facility |                                                                                            |                                       | 6,000   |         |         |        | 2,000   |        
|                                    | Repayments of borrowings on revolving credit facility |                                                                                            |                                       | (1,000  | )       |         |        | (2,000  | )      
|                                    | Repayments on long-term debt                          |                                                                                            |                                       | (80,788 | )       |         |        | (75,000 | )      
|                                    | Distribution to owner                                 |                                                                                            |                                       | (5,978  | )       |         |        | (111    | )      
|                                    |                                                       |                                                                                            |                                       |         |         |        
|                                    |                                                       |                                                                                            | Cash used for financing activities    |         |         | (81,766 | )      |         |         | (75,111 | )
|                                    |                                                       |                                                                                            |                                       |         |         |        
|Cash and cash equivalents:          |                                                       |                                                                                            |                                       |         |         |         |        |        
|                                    | (Decrease) increase                                   |                                                                                            |                                       |        |         |         |        | (2,758  | )      
|                                    | Beginning balance                                     |                                                                                            |                                       |        |         |         |        | 2,758   |        
|                                    |                                                       |                                                                                            |                                       |         |         |        
|                                    |                                                       |                                                                                            | Ending balance                        |         | $       |        |        |         | $       |        |  
|                                    |                                                       |                                                                                            |                                       |         |         |        
|Supplemental cash flow disclosures: |                                                       |                                                                                            |                                       |         |         |         |        |        
|Interest paid                       |                                                       | $                                                                                          | 9,806                                 |         |         | $       | 14,454 |        



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DEX MEDIA EAST LLC


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





NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)




|   |                        
|-- | -----------------------
|1. | Description of Business



|    |            
|--- | -----------
|(a) | The Company









|    |           
|--- | ----------
|(b) | Operations





|    |                                  
|--- | ---------------------------------
|(c) | Dex Media Initial Public Offering





|   |                      
|-- | ---------------------
|2. | Basis of Presentation



|    |        
|--- | -------
|(a) | General



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DEX MEDIA EAST LLC


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


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|    |                  
|--- | -----------------
|(b) | Reclassifications





|   |                                           
|-- | ------------------------------------------
|3. | Summary of Significant Accounting Policies



|    |                            
|--- | ---------------------------
|(a) | Principles of consolidation





|    |                 
|--- | ----------------
|(b) | Use of estimates





|    |                    
|--- | -------------------
|(c) | Revenue recognition





Accounting for
Advertising Barter Transactions.


Revenue
Arrangements with Multiple Deliverables.


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DEX MEDIA EAST LLC


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


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                
|--- | ---------------
|(d) | Cost of revenue







|    |                         
|--- | ------------------------
|(e) | Stock-based compensation

Accounting for Stock Issued to
Employees, Accounting for
Stock-Based Compensation,


|           |                                                                                                                                                                                |                    |   |        |      |  |   |       |  
|---------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------ | - | ------ | ---- |  | - | ----- | -
|           |                                                                                                                                                                                | For the            |  
|           |                                                                                                                                                                                | Three Months Ended |  
|           |                                                                                                                                                                                | March 31,          |  
|           |                                                                                                                                                                                |                    |  
|           |                                                                                                                                                                                | 2005               |   |        | 2004 | 
|           |                                                                                                                                                                                |                    |   |        |      | 
|Net Income |                                                                                                                                                                                |                    |   |        |      |  |   |      
|           | As reported                                                                                                                                                                    |                    | $ | 15,217 |      |  | $ | 1,822 |  
|           | Add: Stock-based employee compensation expense included in
    reported net income, net of related tax effects                                                                 |                    |   | 120    |      |  |   | 9     |  
|           | 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 |                    |   | (194   | )    |  |   | (57   | )
|           |                                                                                                                                                                                |                    |   |        |      | 
|           | Pro forma                                                                                                                                                                      |                    | $ | 15,143 |      |  | $ | 1,774 |  
|           |                                                                                                                                                                                |                    |   |        |      | 

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DEX MEDIA EAST LLC


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


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                     
|--- | --------------------
|(f) | Income tax provision







|    |                         
|--- | ------------------------
|(g) | New accounting standards





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DEX MEDIA EAST LLC


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


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|   |                               
|-- | ------------------------------
|4. | Goodwill and Intangible Assets





As of March 31, 2005


|                                  |        |          |         |           |              |   |          |          |   |   |         |           |  |  |            |     | 
|--------------------------------- | ------ | -------- | ------- | --------- | ------------ | - | -------- | -------- | - | - | ------- | --------- |  |  | ---------- | --- | 
|                                  |        | Gross    |         |           |              |   |          |          |  
|                                  |        | Carrying |         |           | Accumulated  |   |          | Net Book |   |   |        
|Intangible Assets                 |        | Value    |         |           | Amortization |   |          | Value    |   |   | Life    |          
|                                  |        |          |         |           |              |   |          |          |   |   |         |          
|Customer relationships  local    |        | $        | 897,000 |           |              | $ | (342,745 | )        |   | $ | 554,255 |           |  |  | 20  years  | (1)
|Customer relationships  national |        |          | 241,000 |           |              |   | (71,729  | )        |   |   | 169,271 |           |  |  | 25  years  | (1)
|Non-compete/publishing agreements |        |          | 251,000 |           |              |   | (15,040  | )        |   |   | 235,960 |           |  |  | 40 years   |    
|Dex Trademark                     |        |          | 311,000 |           |              |   |         |          |   |   | 311,000 |           |  |  | Indefinite |    
|Qwest Dex Trademark agreement     |        |          | 68,000  |           |              |   | (32,570  | )        |   |   | 35,430  |           |  |  | 5 years    |    
|Advertising agreement             |        |          | 23,000  |           |              |   | (3,663   | )        |   |   | 19,337  |           |  |  | 15 years   |    
|                                  |        |          |         |           |              |   |          |          |   |   |         |          
|                                  | Totals |          | $       | 1,791,000 |              |   | $        | (465,747 | ) |   | $       | 1,325,253 |  |  |            |     | 
|                                  |        |          |         |           |              |   |          |          |   |   |         |          

As of December 31, 2004


|                                  |        |          |         |           |              |   |          |          |   |   |         |           |  |  |            |     | 
|--------------------------------- | ------ | -------- | ------- | --------- | ------------ | - | -------- | -------- | - | - | ------- | --------- |  |  | ---------- | --- | 
|                                  |        | Gross    |         |           |              |   |          |          |  
|                                  |        | Carrying |         |           | Accumulated  |   |          | Net Book |   |   |        
|Intangible Assets                 |        | Value    |         |           | Amortization |   |          | Value    |   |   | Life    |          
|                                  |        |          |         |           |              |   |          |          |   |   |         |          
|Customer relationships  local    |        | $        | 897,000 |           |              | $ | (315,787 | )        |   | $ | 581,213 |           |  |  | 20  years  | (1)
|Customer relationships  national |        |          | 241,000 |           |              |   | (65,620  | )        |   |   | 175,380 |           |  |  | 25  years  | (1)
|Non-compete/publishing agreements |        |          | 251,000 |           |              |   | (13,470  | )        |   |   | 237,530 |           |  |  | 40 years   |    
|Dex Trademark                     |        |          | 311,000 |           |              |   |         |          |   |   | 311,000 |           |  |  | Indefinite |    
|Qwest Dex Trademark agreement     |        |          | 68,000  |           |              |   | (29,170  | )        |   |   | 38,830  |           |  |  | 5 years    |    
|Advertising agreement             |        |          | 23,000  |           |              |   | (3,280   | )        |   |   | 19,720  |           |  |  | 15 years   |    
|                                  |        |          |         |           |              |   |          |          |   |   |         |          
|                                  | Totals |          | $       | 1,791,000 |              |   | $        | (427,327 | ) |   | $       | 1,363,673 |  |  |            |     | 
|                                  |        |          |         |           |              |   |          |          |   |   |         |          






|    |                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------
|(1) | Amortization expense is calculated using a declining method in
    relation to estimated retention lives of acquired customers.

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DEX MEDIA EAST LLC


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


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|   |               
|-- | --------------
|5. | Long-Term Debt



|                                                                                                                                                                                                                                                  |  |           |           |   |              |   |           |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------- | --------- | - | ------------ | - | --------- | -
|                                                                                                                                                                                                                                                  |  | As of     |           |   | As of        |  
|                                                                                                                                                                                                                                                  |  | March 31, |           |   | December 31, |  
|                                                                                                                                                                                                                                                  |  | 2005      |           |   | 2004         |  
|                                                                                                                                                                                                                                                  |  |           |           |   |              |  
|Notes payable to banks, Tranche A term loan, bearing
    interest at adjusted London Interbank Offer Rates
    (LIBOR) plus the current applicable interest spread
    of 1.75% (weighted average interest rate of 4.69% at
    March 31, 2005) |  | $         | 427,151   |   |              | $ | 474,654   |  
|Notes payable to banks, Tranche B term loan, bearing
    interest at adjusted LIBOR plus the current applicable interest
    spread of 1.75% (weighted average interest rate of 4.62% at
    March 31, 2005)                                      |  |           | 461,345   |   |              |   | 494,630   |  
|Revolving loan bearing interest at Alternative Base Rate
    (ABR) plus the current applicable spread of 0.75%
    (interest rate of 6.50% at March 31, 2005)                                                                                   |  |           | 5,000     |   |              |   |          |  
|Unsecured senior notes, due November 2009, bearing interest at
    9.875%                                                                                                                                                                         |  |           | 450,000   |   |              |   | 450,000   |  
|Unsecured senior subordinated notes, due November 2012, bearing
    interest at 12.125%                                                                                                                                                           |  |           | 341,250   |   |              |   | 341,250   |  
|                                                                                                                                                                                                                                                  |  |           |           |   |              |  
|                                                                                                                                                                                                                                                  |  |           | 1,684,746 |   |              |   | 1,760,534 |  
|Less: current portion of long-term debt                                                                                                                                                                                                           |  |           | (110,861  | ) |              |   | (105,232  | )
|                                                                                                                                                                                                                                                  |  |           |           |   |              |  
|                                                                                                                                                                                                                                                  |  | $         | 1,573,885 |   |              | $ | 1,655,302 |  
|                                                                                                                                                                                                                                                  |  |           |           |   |              |  





|   |                                              
|-- | ---------------------------------------------
|6. | Derivative Instruments and Hedging Activities







10



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##### Table of Contents



DEX MEDIA EAST LLC


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


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|   |                     
|-- | --------------------
|7. | Comprehensive Income





|                                                 |  |              |        |  |              |   |        |  
|------------------------------------------------ |  | ------------ | ------ |  | ------------ | - | ------ | -
|                                                 |  | Three Months |        |  | Three Months |  
|                                                 |  | Ended        |        |  | Ended        |  
|                                                 |  | March 31,    |        |  | March 31,    |  
|                                                 |  | 2005         |        |  | 2004         |  
|                                                 |  |              |        |  |              |  
|Net income                                       |  | $            | 15,217 |  |              | $ | 1,822  |  
|Changes in fair value of derivatives, net of tax |  |              | 1,580  |  |              |   | (1,271 | )
|                                                 |  |              |        |  |              |  
|Comprehensive income                             |  | $            | 16,797 |  |              | $ | 551    |  
|                                                 |  |              |        |  |              |  



|   |                   
|-- | ------------------
|8. | Stock-Based Awards





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DEX MEDIA EAST LLC


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


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|   |                                           
|-- | ------------------------------------------
|9. | Pension and Other-Post Retirement Benefits



|    |                    
|--- | -------------------
|(a) | General description







|    |                                        
|--- | ---------------------------------------
|(b) | Components of net periodic benefit cost



|                                    |  |                    |        |   |                    |   |     |         |  |   |                 |   |  |   |     |  
|----------------------------------- |  | ------------------ | ------ | - | ------------------ | - | --- | ------- |  | - | --------------- | - |  | - | --- | -
|                                    |  | Three Months Ended |        |   | Three Months Ended |  
|                                    |  | March 31, 2005     |        |   | March 31, 2004     |  
|                                    |  |                    |        |   |                    |  
|                                    |  | Pension            |        |   | Post-Retirement    |   |     | Pension |  |   | Post-Retirement |  
|                                    |  | Benefit            |        |   | Benefits           |   |     | Benefit |  |   | Benefits        |  
|                                    |  |                    |        |   |                    |   |     |         |  |   |                 |  
|Service cost                        |  | $                  | 1,344  |   |                    | $ | 279 |         |  | $ | 1,254           |   |  | $ | 282 |  
|Interest cost                       |  |                    | 1,387  |   |                    |   | 429 |         |  |   | 1,387           |   |  |   | 386 |  
|Expected return on plan assets      |  |                    | (1,973 | ) |                    |   |    |         |  |   | (1,916          | ) |  |   |    |  
|Amortization of prior service costs |  |                    |       |   |                    |   | (43 | )       |  |   |                |   |  |   | (43 | )
|                                    |  |                    |        |   |                    |   |     |         |  |   |                 |  
|Net periodic benefit cost           |  | $                  | 758    |   |                    | $ | 665 |         |  | $ | 725             |   |  | $ | 625 |  
|                                    |  |                    |        |   |                    |   |     |         |  |   |                 |  



12



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DEX MEDIA EAST LLC


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


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                              
|--- | -----------------------------
|10. | Commitments and Contingencies





|    |                           
|--- | --------------------------
|11. | Related Party Transactions







13



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##### Table of Contents








|        |                                                             
|------- | ------------------------------------------------------------
|Item 2. | Managements Narrative Analysis of Results of
    Operations



Executive Overview




| |            
| | -----------
| | Our Company





tm








| |           
| | ----------
| | Background







14



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##### Table of Contents



Results of Operations




| |         
| | --------
| | Overview





| |        
| | -------
| | Revenue



Accounting for Advertising Barter
Transactions.


Revenue Arrangements with
Multiple Deliverables.




| |                
| | ---------------
| | Cost of Revenue





15



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##### Table of Contents







| |                                   
| | ----------------------------------
| | General and Administrative Expense





| |                     
| | --------------------
| | Income Tax Provision





| |                                                                                             
| | --------------------------------------------------------------------------------------------
| | The Three Months Ended March 31, 2005 Compared to the
    Three Months Ended March 31, 2004.

|                                                               |                                                               |                        |        |         |              |   |        |         |         | 
|-------------------------------------------------------------- | ------------------------------------------------------------- | ---------------------- | ------ | ------- | ------------ | - | ------ | ------- | ------- | 
|                                                               |                                                               | Three Months           |        |         | Three Months |  
|                                                               |                                                               | Ended                  |        |         | Ended        |  
|                                                               |                                                               | March 31,              |        |         | March 31,    |  
|                                                               |                                                               | 2005                   |        |         | 2004         |  
|                                                               |                                                               |                        |        |         |              |  
|                                                               |                                                               | (Dollars in thousands) |       
|Revenue:                                                       |                                                               |                        |        |         |              |   |        |        
|                                                               | Local directory services                                      |                        | $      | 149,319 |              |   | $      | 146,444 |        
|                                                               | National directory services                                   |                        |        | 25,889  |              |   |        | 25,765  |        
|                                                               | Qwest advertising                                             |                        |        | 2,243   |              |   |        | 4,452   |        
|                                                               | Other revenue                                                 |                        |        | 3,744   |              |   |        | 4,128   |        
|                                                               |                                                               |                        |        |         |              |  
|                                                               |                                                               | Total revenue          |        |         | 181,195      |   |        |         | 180,789 | 
|Cost of revenue                                                |                                                               |                        | 53,681 |         |              |   | 55,370 |        
|                                                               |                                                               |                        |        |         |              |  
|                                                               | Gross profit, excluding depreciation and amortization expense |                        | $      | 127,514 |              |   | $      | 125,419 |        
|                                                               | Gross margin                                                  |                        |        | 70.4%   |              |   |        | 69.4%   |        
|General and administrative expense, including bad debt expense |                                                               | $                      | 23,931 |         |              | $ | 24,400 |        



| |        
| | -------
| | Revenue



16



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##### Table of Contents















| |                
| | ---------------
| | Cost of revenue









17



---



##### Table of Contents











| |             
| | ------------
| | Gross profit





| |                                   
| | ----------------------------------
| | General and administrative expense











18



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##### Table of Contents







| |                            
| | ---------------------------
| | Amortization of intangibles





| |                 
| | ----------------
| | Interest expense





| |             
| | ------------
| | Income taxes



Material Trends, Known Facts and Uncertainties




| |                           
| | --------------------------
| | Directory Services Revenue







| |                  
| | -----------------
| | Segmented Pricing





| |            
| | -----------
| | Competition



19



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##### Table of Contents









| |         
| | --------
| | Internet

tm




| |             
| | ------------
| | Paper Prices





| |                         
| | ------------------------
| | New Accounting Standards





20



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##### Table of Contents



Cautionary Note Regarding Forward-Looking Statements













|        |                                                               
|------- | --------------------------------------------------------------
|Item 3. | Quantitative and Qualitative Disclosures About Market
    Risk








|        |                        
|------- | -----------------------
|Item 4. | Controls and Procedures







21



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##### Table of Contents






PART II.


OTHER INFORMATION







|        |                  
|------- | -----------------
|Item 1. | Legal Proceedings










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








|        |                                
|------- | -------------------------------
|Item 3. | Defaults Upon Senior Securities








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








|        |                  
|------- | -----------------
|Item 5. | Other Information








|        |         
|------- | --------
|Item 6. | Exhibits

|              |  |                                                                                                                                                                                                                                                                                                                                                             
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 10.1  |  | Senior Executive Incentive Bonus Plan of Dex Media, Inc.
    (incorporated by reference to Dex Media, Inc.s Current
    Report on Form 8-K dated February 17, 2005).                                                                                                                                                                                       
|Exhibit 10.2  |  | Form of Restricted Stock Agreement pursuant to the 2004
    Incentive Award Plan of Dex Media, Inc. (incorporated by
    reference to Dex Media, Inc.s Current Report on Form 8-K
    dated March 3, 2005).                                                                                                                                                
|Exhibit 10.3* |  | Master Agreement for Printing Services dated as of
    March 31, 2005, by and between Dex Media, Inc., on behalf
    of itself and its subsidiaries Dex Media East LLC and Dex Media
    West LLC, and Quebecor World (USA) Inc. (incorporated by
    reference to Dex Media Inc.s Quarterly Report on Form 10-Q
    for the quarter ended March 31, 2005).
|Exhibit 31.1  |  | Certification of Chief Executive Officer of Dex Media East LLC
    pursuant to Section 302 of the Sarbanes Oxley Act of 2002.                                                                                                                                                                                                                               
|Exhibit 31.2  |  | Certification of Chief Financial Officer of Dex Media East LLC
    pursuant to Section 302 of the Sarbanes Oxley Act of 2002.                                                                                                                                                                                                                               






|  |                                                                                                 
|- | ------------------------------------------------------------------------------------------------
|* | Portions of this exhibit have been omitted pursuant to a request
    for confidential treatment.

22



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##### Table of Contents






SIGNATURE






| |                   
| | ------------------
| | Dex Media East LLC



| |     |                                  
| | --- | ---------------------------------
| | By: | /s/ Robert M.
    Neumeister, Jr.

| |                            
| | ---------------------------
| |                            
| | Robert M. Neumeister, Jr.  
| | Executive Vice President   
| | and Chief Financial Officer



23



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##### Table of Contents



EXHIBIT INDEX


|              |  |                                                                                                                                                                                                                                                                                                                                                             
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibits      |  | Description                                                                                                                                                                                                                                                                                                                                                 
|              |  |                                                                                                                                                                                                                                                                                                                                                             
|Exhibit 10.1  |  | Senior Executive Incentive Bonus Plan of Dex Media, Inc.
    (incorporated by reference to Dex Media, Inc.s Current
    Report on Form 8-K dated February 17, 2005).                                                                                                                                                                                       
|Exhibit 10.2  |  | Form of Restricted Stock Agreement pursuant to the 2004
    Incentive Award Plan of Dex Media, Inc. (incorporated by
    reference to Dex Media, Inc.s Current Report on Form 8-K
    dated March 3, 2005).                                                                                                                                                
|Exhibit 10.3* |  | Master Agreement for Printing Services dated as of
    March 31, 2005, by and between Dex Media, Inc., on behalf
    of itself and its subsidiaries Dex Media East LLC and Dex Media
    West LLC, and Quebecor World (USA) Inc. (incorporated by
    reference to Dex Media Inc.s Quarterly Report on Form 10-Q
    for the quarter ended March 31, 2005).
|Exhibit 31.1  |  | Certification of Chief Executive Officer of Dex Media
    East LLC pursuant to Section 302 of the Sarbanes Oxley
    Act of 2002.                                                                                                                                                                                                                           
|Exhibit 31.2  |  | Certification of Chief Financial Officer of Dex Media
    East LLC pursuant to Section 302 of the Sarbanes Oxley
    Act of 2002.                                                                                                                                                                                                                           






|  |                                                                                                 
|- | ------------------------------------------------------------------------------------------------
|* | Portions of this exhibit have been omitted pursuant to a request
    for confidential treatment.