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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

|ý                                                             | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 
|------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|For the quarterly period ended September 30, 2003            
|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)

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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 ý    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 ý

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INDEX



|               |  |                                                                                                                           
|-------------- |  | --------------------------------------------------------------------------------------------------------------------------
|PART I:        |  | FINANCIAL INFORMATION                                                                                                     
|Item 1.        |  | Financial Statements                                                                                                      
|               |  | Condensed Consolidated Balance Sheets (unaudited)September 30, 2003 and December 31, 2002                                
|               |  | Condensed Consolidated Statements of Operations (unaudited)Three Months and Nine Months Ended September 30, 2003 and 2002
|               |  | Condensed Consolidated Statements of Cash Flows (unaudited)Nine Months Ended September 30, 2003 and 2002                 
|               |  | Notes to Condensed Consolidated Financial Statements (unaudited)                                                          
|Item 2.        |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                                     
|Item 3.        |  | Quantitative and Qualitative Disclosures about Market Risk                                                                
|Item 4.        |  | Controls and Procedures                                                                                                   
|PART II:       |  | OTHER INFORMATION                                                                                                         
|Item 1.        |  | Legal Proceedings                                                                                                         
|Item 2.        |  | Changes in 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 and Reports on Form 8-K                                                                                          
|Signatures    
|Certifications

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PART I.  FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS

DEX MEDIA EAST LLC  An Indirect Wholly-Owned Subsidiary of Dex Media, Inc.        Condensed Consolidated Balance Sheets        (Dollars in thousands)        (unaudited)

|                                                                  |                                        | September 30,
2003        |                                      | December 31,
2002 |          
|----------------------------------------------------------------- | -------------------------------------- | ------------------------- | ------------------------------------ | ----------------- | ---------
|Assets                                                            |                                        |                           |                                      |                   |          
|Current assets:                                                   |                                        |                           |                                      |                   |          
|                                                                  | Cash and cash equivalents              |                           | $                                    | 41,220            |          
|                                                                  | Accounts receivable, net               |                           |                                      | 46,563            |          
|                                                                  | Deferred directory costs               |                           |                                      | 111,962           |          
|                                                                  | Current deferred taxes                 |                           |                                      | 3,428             |          
|                                                                  | Amounts due from affiliate             |                           |                                      | 16,265            |          
|                                                                  | Other current assets                   |                           |                                      | 3,964             |          
|                                                                  |                                        |                           |                                      |                   |          
|                                                                  |                                        | Total current assets      |                                      |                   | 223,402  
|Property, plant and equipment, net                                |                                        |                           | 35,541                               |                   |          
|Goodwill                                                          |                                        |                           | 911,350                              |                   |          
|Intangible assets, net                                            |                                        |                           | 1,598,390                            |                   |          
|Deferred income taxes                                             |                                        |                           | 40,071                               |                   |          
|Deferred financing costs                                          |                                        |                           | 83,899                               |                   |          
|Amounts due from affiliate related to post-retirement obligations |                                        |                           | 35,134                               |                   |          
|Other assets                                                      |                                        |                           | 6,205                                |                   |          
|                                                                  |                                        |                           |                                      |                   |          
|                                                                  |                                        | Total assets              |                                      | $                 | 2,933,992
|                                                                  |                                        |                           |                                      |                   |          
|Liabilities and Owners' Equity                                    |                                        |                           |                                      |                   |          
|Current liabilities:                                              |                                        |                           |                                      |                   |          
|                                                                  | Accounts payable                       |                           | $                                    | 10,436            |          
|                                                                  | Employee compensation                  |                           |                                      | 28,708            |          
|                                                                  | Deferred revenue and customer deposits |                           |                                      | 87,103            |          
|                                                                  | Accrued interest payable               |                           |                                      | 47,706            |          
|                                                                  | Current portion of long-term debt      |                           |                                      | 34,986            |          
|                                                                  | Other accrued liabilities              |                           |                                      | 4,571             |          
|                                                                  |                                        |                           |                                      |                   |          
|                                                                  |                                        | Total current liabilities |                                      |                   | 213,510  
|Long-term debt                                                    |                                        |                           | 2,186,257                            |                   |          
|Post-retirement and other post-employment benefit obligations     |                                        |                           | 70,640                               |                   |          
|Other liabilities                                                 |                                        |                           | 9,983                                |                   |          
|                                                                  |                                        |                           |                                      |                   |          
|                                                                  |                                        | Total liabilities         |                                      |                   | 2,480,390
|                                                                  |                                        |                           |                                      |                   |          
|Commitments and contingencies (Note 7)                            |                                        |                           |                                      |                   |          
|Owners' interest                                                  |                                        |                           | 518,536                              |                   |          
|Accumulated deficit                                               |                                        |                           | (59,262                              | )                 |          
|Accumulated other comprehensive loss                              |                                        |                           | (5,672                               | )                 |          
|                                                                  |                                        |                           |                                      |                   |          
|                                                                  |                                        | Total owners' equity      |                                      |                   | 453,602  
|                                                                  |                                        |                           |                                      |                   |          
|                                                                  |                                        |                           | Total liabilities and owners' equity |                   | $        
|                                                                  |                                        |                           |                                      |                   |          

See
accompanying notes to condensed consolidated financial statements.

3

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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)

|                               |                                    | Company                           |         | Predecessor |         | Company |        | Predecessor |        
|------------------------------ | ---------------------------------- | --------------------------------- | ------- | ----------- | ------- | ------- | ------ | ----------- | -------
|
|
|Revenue                        |                                    | $                                 | 175,259 |             | $       | 173,765 |        | $           | 492,410
|Operating Expenses:            |                                    |                                   |         |             |         |         |        |             |        
|                               | Cost of revenue                    |                                   |         | 50,150      |         |         | 51,325 |             |        
|                               | General and administrative expense |                                   |         | 18,666      |         |         | 12,799 |             |        
|                               | Bad debt expense                   |                                   |         | 5,687       |         |         | 4,984  |             |        
|                               | Depreciation expense               |                                   |         | 2,707       |         |         | 2,602  |             |        
|                               | Amortization expense               |                                   |         | 53,590      |         |         |       |             |        
|                               |                                    |                                   |         |             |         |         |        |             |        
|                               |                                    | Total operating expenses          |         |             | 130,800 |         |        | 71,710      |        
|                               |                                    |                                   |         |             |         |         |        |             |        
|                               |                                    | Operating income                  |         |             | 44,459  |         |        | 102,055     |        
|Other expense (income):        |                                    |                                   |         |             |         |         |        |             |        
|                               | Interest income                    |                                   |         | (118        | )       |         | (228   | )           |        
|                               | Interest expense, affiliate        |                                   |         |            |         |         | 24,231 |             |        
|                               | Interest expense                   |                                   |         | 47,449      |         |         |       |             |        
|                               | Other expense (income), net        |                                   |         | 2,769       |         |         | (33    | )           |        
|                               |                                    |                                   |         |             |         |         |        |             |        
|                               |                                    | (Loss) income before income taxes |         |             | (5,641  | )       |        | 78,085      |        
|Income tax (benefit) provision |                                    |                                   | (2,259  | )           |         | 31,477  |        |             | (20,816
|                               |                                    |                                   |         |             |         |         |        |             |        
|                               | Net (loss) income                  |                                   | $       | (3,382      | )       | $       | 46,608 |             | $      
|                               |                                    |                                   |         |             |         |         |        |             |        

See
accompanying notes to condensed consolidated financial statements.

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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)

|                                  |                                                           | Company                                          |                                       | Predecessor |        
|--------------------------------- | --------------------------------------------------------- | ------------------------------------------------ | ------------------------------------- | ----------- | -------
|
|
|Operating activities:             |                                                           |                                                  |                                       |             |        
|                                  | Net (loss) income                                         |                                                  | $                                     | (31,158     | )      
|Adjustments to net (loss) income: |                                                           |                                                  |                                       |             |        
|                                  | Employee benefit credit                                   |                                                  |                                       |            |        
|                                  | Bad debt expense                                          |                                                  |                                       | 19,814      |        
|                                  | Depreciation expense                                      |                                                  |                                       | 8,074       |        
|                                  | Amortization expense                                      |                                                  |                                       | 160,770     |        
|                                  | Unrealized gain on foreign currency derivative instrument |                                                  |                                       | (4,857      | )      
|                                  | Unrealized loss on translation of foreign currency debt   |                                                  |                                       | 3,776       |        
|                                  | Amortization of deferred financing costs                  |                                                  |                                       | 12,985      |        
|                                  | Deferred tax benefit                                      |                                                  |                                       | (20,816     | )      
|                                  | Changes in operating assets and liabilities:              |                                                  |                                       |             |        
|                                  |                                                           | Accounts receivable                              |                                       |             | (10,770
|                                  |                                                           | Deferred directory costs                         |                                       |             | (589   
|                                  |                                                           | Other current assets                             |                                       |             | 1,431  
|                                  |                                                           | Other long-term assets                           |                                       |             | (3,348 
|                                  |                                                           | Accounts payable and other liabilities           |                                       |             | 16,796 
|                                  |                                                           | Deferred revenue and customer deposits           |                                       |             | 24,582 
|                                  |                                                           | Employee benefit plan obligations and other, net |                                       |             | 5,627  
|                                  |                                                           |                                                  |                                       |             |        
|                                  |                                                           |                                                  | Cash provided by operating activities |             |        
|                                  |                                                           |                                                  |                                       |             |        
|Investing activities:             |                                                           |                                                  |                                       |             |        
|                                  | Additional consideration for the acquisition of Dex East  |                                                  |                                       | (4,472      | )      
|                                  | Expenditures for property, plant and equipment            |                                                  |                                       | (8,305      | )      
|                                  | Capitalized software development costs                    |                                                  |                                       | (15,434     | )      
|                                  | Escrow deposits                                           |                                                  |                                       | (2,000      | )      
|                                  | Escrow funds released                                     |                                                  |                                       | 4,000       |        
|                                  |                                                           |                                                  |                                       |             |        
|                                  | Cash used for investing activities                        |                                                  |                                       | (26,211     | )      
|                                  |                                                           |                                                  |                                       |             |        
|Financing activities:             |                                                           |                                                  |                                       |             |        
|                                  | Proceeds from issuance of short-term debt                 |                                                  |                                       | 5,000       |        
|                                  | Repayment of short-term debt                              |                                                  |                                       | (5,000      | )      
|                                  | Proceeds from issuance of long-term debt                  |                                                  |                                       | 160,000     |        
|                                  | Payments on long-term debt                                |                                                  |                                       | (149,873    | )      
|                                  | Payment of deferred financing costs                       |                                                  |                                       | (2,639      | )      
|                                  | Member distributions                                      |                                                  |                                       | (210,000    | )      
|                                  | Member contributions                                      |                                                  |                                       | 50,000      |        
|                                  | Repayments of short-term borrowings from affiliates       |                                                  |                                       |            |        
|                                  | Contributions from Qwest in lieu of income taxes          |                                                  |                                       |            |        
|                                  |                                                           |                                                  |                                       |             |        
|                                  | Cash used for financing activities                        |                                                  |                                       | (152,512    | )      
|                                  |                                                           |                                                  |                                       |             |        
|Cash and cash equivalents:        |                                                           |                                                  |                                       |             |        
|                                  | Increase                                                  |                                                  |                                       | 3,594       |        
|                                  | Beginning balance                                         |                                                  |                                       | 37,626      |        
|                                  |                                                           |                                                  |                                       |             |        
|                                  |                                                           | Ending balance                                   |                                       | $           | 41,220 
|                                  |                                                           |                                                  |                                       |             |        

See accompanying notes to condensed consolidated financial statements.

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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) Acquisition

On August 19, 2002, Qwest Communications International Inc. ("Qwest") entered into concurrent purchase agreements (the "Dex East Purchase Agreement"
and the "Dex West Purchase Agreement") to sell the business of Qwest Dex Holdings, Inc. and its wholly-owned subsidiary Qwest Dex, Inc. (together "Qwest Dex") to Dex Holdings LLC (the
"Dex Buyer"), the parent of Dex Media, Inc. ("Dex Media"), new entities formed by the private equity firms of The Carlyle Group and Welsh, Carson, Anderson & Stowe (together, the
"Sponsors"), in two separate phases.

In
the first phase, consummated on November 8, 2002, the Dex Buyer assigned its right to purchase the directory business in the Dex East States (defined below) to Dex Media East
LLC ("Dex Media East" or the "Company"), a subsidiary of Dex Media East, Inc. Qwest Dex contributed substantially all of its assets and liabilities relating to its directory business in the Dex
East States to SGN LLC, a newly-formed limited liability company, and, following that contribution, Dex Media East purchased all of the interests in SGN LLC. Immediately following such purchase, Dex
Media East merged with SGN LLC. Dex Media East now operates the directory business acquired 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 $2.754 billion (excluding fees and acquisition costs).

In
the second phase, consummated on September 9, 2003, Qwest Dex contributed its remaining assets and liabilities relating to its directory business in the Dex West States
(defined below) to GPP LLC, another newly-formed limited liability company, and following that contribution, Dex Media West LLC, an indirect wholly-owned subsidiary of Dex Media and an affiliate of
the Company ("Dex Media West"), purchased all of the interests in GPP LLC for $4.297 billion (excluding fees and expenses, and subject to adjustments relating to working capital levels).
Immediately following such purchase, Dex Media West merged with GPP LLC. Dex Media West now operates the directory businesses acquired in Arizona, Idaho, Montana, Oregon, Utah, Washington and Wyoming,
(the "Dex West States").

(b) Predecessor Business

The combined financial statements of the acquired business in the Dex East States prior to the November 8, 2002 acquisition date, referred to as "Dex East"
or the "Predecessor," represent a component of Qwest Dex and include the operating activities of Qwest Dex for the Dex East States. "Dex West" represents a component of Qwest Dex and includes the
operating activities of Qwest Dex for the Dex West States. Dex East is not a separate legal entity but represents the business of Qwest Dex in or attributable to the Dex East States.

(c) Operations

The Company is the exclusive official directory publisher for Qwest local exchange carrier ("Qwest LEC") in the Dex East States, which is the primary local
exchange carrier in most service areas within the Dex East 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 East States. The Company provides directory, Internet and direct marketing solutions to local and national advertisers. Virtually all of the

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Company's
revenue is derived from the sale of advertising in its various directories. Published directories are distributed to residents and businesses in the local service area through third-party
vendors.

(2)   Basis of Presentation

(a) The Company

The accompanying condensed consolidated interim financial statements are unaudited. In compliance with the Securities and Exchange Commission's ("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 results of operations and financial position of the Company as of and for the three months and nine months ended
September 30, 2003 and the condensed consolidated cash flows for the nine months ended September 30, 2003. These condensed financial statements should be read in conjunction with the
audited consolidated financial statements of the Company and the Predecessor as of December 31, 2002 and 2001 and for the periods from November 9 to December 31, 2002,
January 1 to November 8, 2002 and the years ended December 31, 2001 and 2000 included in the Company's Form S-4, Amendment No. 2, as filed with the SEC
on March 20, 2003. The consolidated results of operations for the three months and nine months ended September 30, 2003 are not necessarily indicative of the results expected for the
full year.

The
accompanying condensed consolidated balance sheets as of September 30, 2003 and December 31, 2002, and the condensed consolidated statements of operations for the three
months and nine months ended September 30, 2003 and the condensed consolidated statements of cash flows for the nine months ended September 30, 2003, reflect the consolidated financial
position, results of operations and cash flows of the Company and include all material adjustments required under purchase accounting. Dex East is considered the Predecessor to the Company. As such,
the historical financial statements of Dex East are included in the accompanying consolidated financial statements, including the combined statements of operations for the three months and nine months
ended September 30, 2002 and the combined statement of cash flows for the nine months ended September 30, 2002 (collectively, the "Predecessor Financial Statements"). The Predecessor
Financial Statements have not been adjusted to give effect to the acquisition. As such, the consolidated financial statements of the Company after the acquisition are not comparable to the Predecessor
Financial Statements prior to the acquisition.

(b) The Predecessor

The accompanying combined financial statements of the Predecessor include the activities of Qwest Dex for business conducted in the Dex East States. To prepare
these financial statements, management of Qwest Dex either specifically identified, assigned or apportioned all revenue and expenses of Qwest Dex to either Dex East or Dex West, and believed such
specific identifications, assignments or apportionments are reasonable; however, the resulting amounts could differ from amounts that would be determined if Dex East and Dex West operated on a
stand-alone basis. Because of Dex East's and Dex West's relationship with Qwest Dex as well as Qwest and its other affiliates, revenue and expenses

7

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are
not necessarily indicative of what they would be had Dex East and Dex West operated without the shared resources of Qwest and its affiliates. Accordingly, these financial statements are not
necessarily indicative of future results of operations.

(3)   Summary of Significant Accounting Policies

(a) Principles of Consolidation

The consolidated financial statements include the financial statements of Dex Media East and its two wholly-owned subsidiaries, Dex Media East Finance Co. and Dex
Media International Inc. All intercompany balances and transactions have been eliminated in consolidation.

(b) Use of Estimates

The preparation of 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 consolidated financial statements and accompanying notes. Actual results could differ significantly from those
estimates.

(c) Revenue Recognition

The sale of advertising in printed directories published by the Company is the 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. During each of the three months ended September 30, 2003
and 2002, the Company published 26 white and yellow pages directories in the Dex East States. During the nine months ended September 30, 2003 and 2002, the Company published 114 and 112 white
and yellow pages directories, respectively, in the Dex East States. All directories published during the three months and nine months ended September 30, 2003 and 2002 had 12-month
lives.

In
October 2003, the Company determined that it would extend the lives of six directories that were published in December 2002 from 12 months to 13 months and
publish them in January 2004 in most cases. These extensions were made as a one-time event to more efficiently manage work and customer flow. The lives of the affected directories
will be 12 months, thereafter.

The
Company enters into nonmonetary transactions where the Company's products and services are promoted by the customer during the same period that the Company carries the customer's
advertisement and accounts for these transactions in accordance with Emerging Issues Task Force ("EITF") Issue No. 99-17, "Accounting for Advertising Barter
Transactions."

In
certain cases, the Company enters into agreements with customers that involve the delivery of advertisements in more than one directory. Revenue for such arrangements is allocated in
accordance with EITF Issue No. 00-21, "Revenue Arrangements with Multiple Deliverables."

(d) Cost of Revenue

The Company accounts for cost of revenue under the deferral and amortization method of accounting. Accordingly, the Company's 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,

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(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 difference may be significant.

Costs
incurred in the current period and subject to deferral include direct costs associated with the publication of directories, 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.

(e) Stock-Based Compensation

Company.The Company accounts for the Stock Option Plan under the recognition and measurement principles of Accounting
Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and related Interpretations. Had the Company accounted for
employee stock options 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 nine months ended September 30, 2003, would have been as follows (in thousands):

For the Three Months Ended

For the Nine Months EndedSeptember 30, 2003Net LossAs reported

$
(3,382
)
$
(31,158
)Pro forma


(3,474
)

(31,415
)


Predecessor.Had the Predecessor accounted for Qwest employee stock option grants under the fair value method prescribed by
SFAS No. 123, the pro forma net income of Dex East for the three months and nine months ended September 30, 2002 would have been as follows (in thousands):

For the Three Months Ended

For the Nine Months EndedSeptember 30, 2002Net IncomeAs reported

$
46,608

$
141,921Pro forma


46,495


141,581


(f) Income Tax Provision

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

9

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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.

(g) Predecessor Financial Statements

In order to divide the Qwest Dex consolidated financial statements between Dex East and Dex West, it was necessary for Qwest Dex management to make certain
assignments and apportionments. Wherever possible, account balances and specific amounts that directly related to Dex East or Dex West were assigned directly to Dex East or Dex West, as appropriate.
When no direct assignment was feasible, account balances were apportioned using a variety of factors based on a revenue and/or cost causative relationship to the account balance being apportioned.

(h) New Accounting Standards

SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities"was issued in
April 2003. This statement amends the accounting and reporting for derivative instruments and hedging activities originally provided for by SFAS No. 133 for certain decisions reached by
the Financial Accounting Standards Board ("FASB") Derivatives Implementation Group. This Statement is effective generally for contracts entered into or modified after June 30, 2003. The Company
has not entered into or modified any contracts subsequent to June 30, 2003.

In
May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and
Equity." This statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Many financial instruments were previously classified as equity.
This statement is effective for financial instruments entered into or modified after May 31, 2003, except for mandatorily redeemable financial instruments of nonpublic companies. Management
expects that the adoption of this statement will not have a material impact on the Company's financial statements.

(4)   Goodwill and Intangible Assets

During the three months and nine months ended September 30, 2003 goodwill was increased by the following purchase accounting adjustments (in thousands):

Balance at December 31, 2002

$
903,347Adjustments:Working capital adjustment


4,210Fair value adjustments to assets and liabilities acquired


3,531Other purchase accounting adjustments


262Balance at September 30, 2003

$
911,350


10

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The
Company evaluates the carrying value of goodwill in the third quarter of each fiscal year and for the three months and nine months ended September 30, 2003, no
goodwill was impaired.

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

|Intangible Assets                 |        | Gross Carrying
Value |         | Accumulated
Amortization |   | Net Book
Value as of
September 30,
2003 |          | Life
|--------------------------------- | ------ | -------------------- | ------- | ------------------------ | - | --------------------------------------- | -------- | ----
|Customer relationshipslocal      |        | $                    | 897,000 |                          | $ | (144,187                                | )        | $   
|Customer relationshipsnational   |        |                      | 241,000 |                          |   | (29,265                                 | )        |     
|Non-compete/publishing agreements |        |                      | 251,000 |                          |   | (5,620                                  | )        |     
|Dex Trademark                     |        |                      | 311,000 |                          |   |                                        |          |     
|Qwest Dex Trademark agreement     |        |                      | 68,000  |                          |   | (12,170                                 | )        |     
|Advertising agreements            |        |                      | 23,000  |                          |   | (1,368                                  | )        |     
|                                  |        |                      |         |                          |   |                                         |          |     
|                                  | Totals |                      | $       | 1,791,000                |   | $                                       | (192,610 | )   
|                                  |        |                      |         |                          |   |                                         |          |     

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(5)   Long-Term Debt

In conjunction with the consummation of the acquisition of Dex West on September 9, 2003, the Company initiated the $160.0 million delayed draw
provision of its Tranche A Term Loan. As of September 30, 2003, long-term debt is comprised of the following (in thousands):

September 30,
2003Tranche A Term Loan, bearing interest at adjusted LIBOR plus 2.5% (weighted average rate of 3.70% at September 30, 2003).

$
625,366Tranche B Term Loan, bearing interest at adjusted LIBOR plus 4.0% (weighted average rate of 5.20% at September 30, 2003).


580,127Tranche B-Euros Term Loan, bearing interest at EURIBOR plus 4.0% (weighted average rate of 6.40% at September 30, 2003).


40,750Unsecured senior notes due in November 2009 bearing interest at 97/8%.


450,000Unsecured senior subordinated notes due in November 2012 bearing interest at 121/8%.


525,0002,221,243Less: current portion of long-term debt


(34,986
)$
2,186,257


As
of September 30, 2003, there were no borrowings under the revolving credit facility. The Company paid interest and fees on the bank facility and interest on the interest rate
swap of $17.0 million and $106.8 million for the three months and nine months ended September 30, 2003, respectively. As of September 30, 2003, the Company was in
compliance with all the debt covenants

11

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under
its credit facility. Effective October 31, 2003, the Company amended its credit agreement as more fully described in Note 13(a).

(6)   Derivative Instruments and Hedging Activities

During November 2002, the Company entered into four interest rate swap agreements to hedge against the effects of increases in the interest rates
associated with floating rate debt on its bank financing. All interest rate related derivative instruments had forward starting dates of May 8, 2003. The Company has reclassified
$1.8 million and $2.8 million of hedging losses into interest expense for the three months and nine months ended September 30, 2003, respectively. For the three months and nine
months ended September 30, 2003, the Company had $1.8 million of unrealized gains and $2.2 million of unrealized losses, respectively, net of tax, which are included in
accumulated other comprehensive loss. As of September 30, 2003, $5.1 million of deferred losses, net of tax, on derivative instruments, are recorded in accumulated other comprehensive
loss, of which $3.5 million, net of tax, is expected to be reclassified to earnings during the next 12 months.

During
November 2002, the Company entered into a foreign currency swap agreement to hedge against the effects of foreign currency fluctuation between the US Dollar and the Euro on
its Tranche B-Euros. For the three months and nine months ended September 30, 2003, the Company recognized approximately $0.6 million and $4.9 million, respectively,
in unrealized gains on the foreign currency derivative instrument. These gains were offset by losses on foreign currency transaction adjustments to the underlying debt instrument of approximately
$0.4 million and $3.8 million for the three months and nine months ended September 30, 2003, respectively. In connection with the refinancing, as more fully described in
Note 13(a), the Company canceled its foreign currency swap agreement on November 10, 2003.

During
November 2002, the Company entered into an interest rate cap agreement. Losses of less than $0.1 million and $0.6 million are included in earnings for the
three months and nine months ended September 30, 2003, respectively, relating to this agreement.

(7)   Commitments and Contingencies

(a) Litigation

The Company is involved, from time to time, in litigation arising in the normal course of business. The outcome of this litigation is not expected to have a
material adverse impact on the Company.

(b) Collective Bargaining Agreement

As of September 30, 2003, 47% of the Company's employees were members of the Communication Workers of America. The collective bargaining agreement covering
their employment expired in October 2003. In October 2003, the Company reached a tentative agreement with the CWA for a new collective bargaining agreement that is subject to
ratification by its member employees. The Company has no assurance that the required majority of CWA represented employees will vote to ratify the tentative agreement. In January 2003, the
Company extended its collective bargaining agreement with the International Brotherhood of Electrical Workers until May 5, 2006. As of September 30, 2003, 15% of the Company's employees
were members of the International Brotherhood of Electrical Workers.

12

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(c) Dex West Acquisition

The acquisition of Dex West was consummated by Dex Media on September 9, 2003. In connection with the acquisition, the Company distributed
$210.0 million in the form of a dividend to its indirect parent, Dex Media, using proceeds from the delayed draw Tranche A Term Loan Facility of $160.0 million and $50.0 million
from member contributions. In addition, the Company's contingent obligation relating to Dex West financing fees was relieved, which was accounted for as a contribution to member equity.

(d) Amdocs Agreement

During February 2003, the Company entered into a five-year agreement with Amdocs, Inc. ("Amdocs") for the complete modernization of the
Company's core production platform. This project relates to upgrading the Company's existing software system to enhance its functionality. The Company expects to incur a total of approximately
$52.3 million in charges related to the agreement with Amdocs over the next five years. During the three months and nine months ended September 30, 2003, the Company incurred
$4.1 million and $10.9 million, respectively, related to this agreement.

(8)   Comprehensive Income (Loss)

Components of comprehensive income (loss) are changes in equity other than those resulting from investments by owners and distributions to owners. Net income
(loss) is the primary component of comprehensive income (loss). For the Company, the component of comprehensive income (loss) other than net income (loss) is the change in unrealized gain or loss on
derivatives qualifying for hedge accounting, net of tax. The aggregate amounts of such changes to equity that have not been recognized in net income are reported in the equity portion of the
consolidated balance sheets as accumulated other comprehensive income (loss). Comprehensive loss for the three months and nine months ended September 30, 2003 was $1.6 million and
$33.4 million, respectively.

(9)   Stock Options

Company.On November 8, 2002, Dex Media adopted a Stock Option Plan (the "Plan") that permits the grant of
nonqualified and incentive stock options to its employees, consultants and independent directors or those of its wholly-owned subsidiaries. As of September 30, 2003, the maximum number of
shares of common stock available for grant was 469,182. The Compensation Committee of Dex Media determines the exercise price for each option; however, all outstanding stock options have an exercise
price that is equal to the fair market value of the common stock on the date the stock option was granted and all outstanding options have a term of ten years. Outstanding options vest in two
segments. Subject to the optionee's continued employment with the Company (1) 25% of the options granted will vest in equal annual installments of 5% each on each December 31 beginning
in 2003 and ending in 2007; and (2) 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 2003 through 2007 if certain earnings before interest, taxes, depreciation and amortization ("EBITDA") targets are met with respect to such year.

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

13

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those
options equals or exceeds the value of the underlying security on the measurement date. Generally, options granted to current Dex Media East employees under this plan expired 90 days
after the acquisition of Dex East by the Company.

(10) Transactions with Dex Media West

(a) Shared Services

Upon consummation of the acquisition of Dex West by Dex Buyer on September 9, 2003, all Qwest employees transferred to Dex Media became legal employees of
Dex Media East. As such, all employee-related liabilities, including pension and other post-retirement obligations, are included in Dex Media East's reported liabilities, with an
offsetting asset recorded as an affiliate receivable from Dex Media West for the portion of the liability associated with Dex Media East employees providing services to Dex Media West. Per the Shared
Services and Employees Agreement dated September 9, 2003, costs related to Dex Media East 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.

(b) Due from (to) Dex Media West

As of September 30, 2003, amounts due from (to) Dex Media West in the accompanying condensed consolidated financial statements include the following (in
thousands):

CurrentAmounts due from Dex Media West, net

$
4,878Amounts due from Dex Media West related to employee compensation


11,38716,265Long-termAmounts due from Dex Media West related to post-retirement obligations


35,134Total net due from Dex Media West

$
51,399


(11) Transactions with Qwest and Its Affiliates

(a) Shared Services

Qwest and its affiliates provide services to the Company and its Predecessor for which reimbursement is determined based upon either (1) tariffed or
negotiated contract rates, (2) prevailing third party market prices or (3) fully distributed costs. Qwest's cost allocation policies are consistent with the cost allocation guidelines
established for reporting to its regulators. Prior to the November 8, 2002 acquisition, services provided by Qwest and its affiliates are considered affiliate transactions for the Predecessor,
and services provided after November 8, 2002 are considered shared services with a third party. Pursuant to the Dex East Purchase Agreement, Qwest will continue to provide these services to the
Company under certain Transaction Service Agreements ("TSAs") for a period of up to 18 months expiring no later than May 7, 2004. These services include property management, information
technology, general and administrative and other. Upon expiration of the TSAs, Qwest will

14

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continue
to provide billing and collection, telephony and data services as well as customer lists under separately negotiated third party contracts.

Shared
services included in cost of revenue amounted to $2.8 million and $10.8 million for the three months and nine months ended September 30, 2003, respectively.
Shared services included in general
and administrative expenses were $1.1 million and $7.4 million, for the three months and nine months ended September 30, 2003, respectively.

Affiliate
transactions included in cost of revenue for the three months and nine months ended September 30, 2002 were $1.0 million and $3.6 million, respectively.
Affiliate transactions included in general and administrative expenses for the three months and nine months ended September 30, 2002 were $14.7 million and $27.3 million,
respectively.

(b) Services Provided to Qwest and its Affiliates

Rates historically charged for advertising services provided by the Predecessor to Qwest and its affiliates are determined based upon prevailing third party
market prices. The Predecessor provided advertising services to Qwest and its affiliates of $1.4 million and $5.8 million during the three months and nine months ended
September 30, 2002, respectively.

As
part of the Dex East Purchase Agreement, Qwest agreed to purchase collectively from Dex Media East and Dex Media West, under a take-or-pay arrangement, a
minimum of $20 million annually in advertising services from the Company over a 15-year period beginning with the date of the acquisition of Dex East. If Qwest purchases more than
$20 million of advertising in any one year pursuant to such agreement, up to $5 million of the excess could be carried over to the subsequent year's minimum advertising purchase
requirement. Dex Media East and Dex Media West have agreed to allocate the $20 million in annual advertising services at 42% and 58%, respectively. For the three months and nine months ended
September 30, 2003, Qwest purchased from Dex Media East $3.2 million and $13.7 million, respectively, in advertising services under this arrangement. Upon entering into the
Advertising Commitment Agreement with Qwest dated September 9, 2003, Dex Media East agreed to allocate $2.4 million of advertising purchased in 2002 to the 2003 advertising purchase
commitment.

(c) Due from (to) Qwest and its Affiliates

Amounts due from (to) Qwest and its affiliates in the accompanying consolidated financial statements include the following (in thousands):

September 30,
2003

December 31,
2002Accounts receivable purchased by Qwest

$
4,078

$
3,381Accounts receivable from Qwest and its affiliates





3,417Accounts payable to Qwest and its affiliates


(258
)

(24,488
)


(12) Related Party Transactions, Other than Dex Media West

In connection with the acquisition of Dex East, the Company entered into a management consulting agreement with each of the Sponsors. Each agreement allows the
Company access to the

15

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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 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 paid $0.5 million and $1.5 million, respectively, in pro-rated annual advisory fees for the three
months and nine months ended September 30, 2003.

As
more fully described in Note 7(d), the Company entered into an agreement with Amdocs for the complete modernization of the Company's core production platform. Welsh, Carson,
Anderson & Stowe, one of the Sponsors, is a shareholder of Amdocs.

(13) Subsequent Events

(a) Credit Facility Amendment and Refinancing

Effective October 31, 2003, the Company amended its credit agreement for the Tranche A, Tranche B, and Tranche B-Euros Term Loans. In
connection with the amendment, the Tranche B and Tranche B-Euros Term Loans were refinanced on November 10, 2003 with proceeds of a new Tranche B Term Loan. A one-percent prepayment
fee was paid in conjunction with the refinancing. In addition, certain terms were amended including but not limited to terms related to indebtedness, restricted payments, prepayment provisions,
pricing and prepayment fees.

(b) Notes Issued by Dex Media

On November 10, 2003, the Company's indirect parent, Dex Media, issued $500.0 million in 8% Notes due 2013 and $389.0 million in 9% Discount
Notes due 2013 for total proceeds of $750.2 million. The proceeds of $750.2 million were paid by Dex Media as a dividend to its parent. Such notes are expected to be serviced and repaid
from dividends from the Company and its affiliate, Dex Media West, subject to any restrictions in their respective credit facilities.

16

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations covers periods prior and subsequent to the
consummation of the transactions related to the acquisition of Dex East (the "Acquisition"). In this section, references to "Dex East" or "Predecessor" refer to the historical operations of Qwest Dex
Holdings, Inc. and its subsidiary in Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota prior to November 8, 2002, the date that Dex Media East acquired Dex
East. References to "we," "our" or "us" refers to Dex Media East, the successor to Dex East. We have operated as a stand-alone company since the acquisition of Dex East on November 8, 2002. The
acquisition has been accounted for under the purchase method of accounting. Under this method, the pre-acquisition deferred revenue and related deferred costs associated with directories
that were published prior to the acquisition date were not carried over to Dex Media East's balance sheet. The effect of this accounting treatment is to reduce revenue and related costs that would
otherwise have been recognized during the twelve months subsequent to the acquisition date.

The discussion and analysis of historical predecessor periods does not reflect the significant impact that the transactions have had on
us, including significantly increased leverage and liquidity requirements. The statements in the discussion and analysis regarding industry outlook, our expectations regarding future performance of
our business and the other non-historical statements in the discussion and analysis are forward-looking statements. These forward-looking statements are subject to numerous risks and
uncertainties. Our actual results may differ materially from those contained in any forward-looking statements. See "Disclosure Regarding Forward-Looking Statements." You should read the
following discussion together with our consolidated financial statements and related notes thereto included elsewhere herein.

Overview

We are the largest directory publisher in the Dex East States and the sixth largest directory publisher in the United States. We are the exclusive official
directory publisher in the Dex East States for Qwest LEC, which is the primary local exchange carrier in most service areas within the Dex East States. We, or our predecessors, have been publishing
directories for over 100 years. In 2002, we had an aggregate 86% market share in our top 10 geographic markets, which accounted for approximately 73% of our directory services revenue in that
year. For each of the three months ended September 30, 2003 and 2002, we and the Predecessor published 26 directories, respectively, and distributed approximately three million copies of these
directories to business and residential consumers in the Dex East States. For the nine months ended September 30, 2003 and 2002, we and the Predecessor published 114 and 112 directories,
respectively, and distributed approximately twelve million copies of these directories to business and residential consumers in the Dex East States. As of September 30, 2003, we had a total of
approximately 197,000 local advertising customers, consisting primarily of small and medium-sized businesses, and approximately 4,200 national advertisers. We also provide related services, including
an Internet-based directory and direct marketing services. For the three months ended September 30, 2003 and 2002, we and the Predecessor generated $175.3 million and
$173.8 million in revenue, respectively. For the nine months ended September 30, 2003 and 2002, we and the Predecessor generated $492.4 million and $515.8 million in
revenue, respectively. Excluding the effects of purchase accounting adjustments to deferred revenue, our revenue for the three and nine months ended September 30, 2003 would have been
$180.7 million and $536.1 million, respectively. Approximately 97.3% and 97.2% of our total revenue for the three months and nine months ended September 30, 2003, respectively,
was generated from the publication of directories.

17

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Stand-alone company

The Predecessor historically operated as the directory business of Qwest Dex in the Dex East States and not as a stand-alone company. The financial statements
included in this quarterly report for the three months and nine months ended September 30, 2002, have been derived from the historical financial statements of Qwest Dex Holdings, Inc.,
the parent company of Qwest Dex and include the activities of Qwest Dex for business conducted in the Dex East States prior to the acquisition of Dex East. To prepare the Predecessor financial
statements, management of Qwest Dex either specifically identified, assigned or apportioned all revenues and expenses of Qwest Dex to either Dex East or Dex West. Whenever possible, account balances
and specific amounts that directly related to Dex East or Dex West were assigned directly to Dex East or Dex West, as appropriate. Substantially all of the Predecessor's revenue and cost of revenue
have been directly assigned on a directory-by-directory basis. When no direct assignment was feasible, account balances were apportioned using a variety of factors based on
revenue and/or cost causative relationships to the account balance being apportioned. These specific identifications, assignments and apportionments are believed to be reasonable; however, the
resulting amounts could differ from amounts that would be determined if the Predecessor had operated on a stand-alone basis. Because of the Predecessor's relationship with Qwest Dex as well as Qwest
and its other affiliates, the Predecessor's historical results of operations, financial position and cash flows are not necessarily
indicative of what they would be had the Predecessor operated without the shared resources of Qwest and its affiliates. Accordingly, the unaudited statements of operations for the three months and
nine months ended September 30, 2002 and the unaudited statement of cash flows for the nine months ended September 30, 2002 are not indicative of our future results of operations and
cash flows. The historical costs for services provided to the Predecessor by Qwest affiliates may not necessarily reflect the expenses we incur as a stand-alone company.

Qwest
and Qwest LEC will continue to provide certain services to Dex Media East that they have historically provided to the Predecessor, including but not limited to support services
relating to information technology, human resources and finance, pursuant to the transition services agreement for a maximum of 18 months expiring no later than May 7, 2004. We believe
that we will be able to replace the services provided by Qwest and Qwest LEC prior to the termination of the transition services agreement with services provided internally or through arrangements
with third parties. However, there can be no assurances that we will be able to replace the services at comparable costs.

While
we have been a stand-alone company since the consummation of the sale transaction on November 8, 2002, the Predecessor historically operated the directory business of Qwest
Dex in the Dex East States prior to the acquisition of Dex East. We will incur incremental costs associated with operating as a stand-alone company.

Revenue

We derive virtually all of our revenue from the sale of advertising in our printed directories, which we refer to as directory services revenue. We also provide
related services, including an Internet-based directory and direct marketing services. Growth in directory services revenue is affected by several factors, including changes in advertising customers,
increases in the pricing of advertising, changes in the quantity of advertising purchased per customer and the introduction of additional products which generate incremental revenues. In the
aggregate, directory services revenue also may increase through the publication of new printed directories.

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 that had previously been published and distributed are not carried over to our

18

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balance
sheet at the time of purchase. The effect of this accounting treatment is to reduce revenue and related costs that would have otherwise been 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 2003. This purchase accounting adjustment is non-recurring and has
no impact on cash flows.

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
expense are recognized ratably over the life of each directory, commencing in the month of delivery.

In
October 2003, we determined that the 12 month lives of six directories published in December 2002 would be extended to 13 months and published in January 2004 in
most cases. These extensions were made as a one-time event to more efficiently manage work and customer flow. The lives of the affected directories will be 12 months, thereafter.
The change in estimated life is not expected to have a material effect on revenue or cost of revenue in future periods.

We
enter into nonmonetary transactions where our products and services are promoted by the customer during the same period that we carry the customer's advertisement. We account for
these transactions in accordance with EITF Issue No. 99-17, "Accounting for Advertising Barter Transactions."

In
certain cases, we enter into agreements with customers that involve the delivery of advertisements in more than one directory. We allocate revenue for such arrangements in accordance
with EITF Issue No. 00-21,"Revenue Arrangements with Multiple Deliverables."

As
part of the Dex East Purchase Agreement, Qwest agreed to purchase collectively from Dex Media East and Dex Media West, under a take-or-pay arrangement, a
minimum of $20 million annually in advertising services from us over a 15-year period beginning with the date of the acquisition of Dex East. If Qwest purchases more than
$20 million of advertising in any one year pursuant to such agreement, up to $5 million of the excess could be carried over to the subsequent year's minimum advertising purchase
requirement. Dex Media East and Dex Media West have agreed to allocate the $20 million in annual advertising services at 42% and 58%, respectively.

Cost of 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 (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 difference may be significant.

Costs
incurred in the current period and subject to deferral include direct costs associated with the publication of directories, 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 our 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.

19

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General and administrative expense

Our general and administrative expense consists primarily of the costs of advertising, promotion and marketing, administrative staff, information technology,
training, customer billing, corporate management and bad debt expense. All of our general and administrative expense is recognized in the period in which it is incurred. Historically, our general and
administrative expense has included the costs of other services, such as real estate, information technologies, finance and human resources, shared among Qwest affiliates. However, as we terminate the
transition services agreements, we are incurring these costs directly. Our general and administrative expense has increased as a stand-alone company and may further increase as we complete our
transition to a stand-alone entity.

Income Tax Provision

We 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.

Results of operations

Three months ended September 30, 2003 (unaudited) compared to the three months ended September 30, 2002 (unaudited)

|                                                               |                             | Dex Media East LLC
Three months ended
September 30, 2003 |                          | Predecessor
Three months ended
September 30, 2002 |         | $ Change |         | % Change |        
|-------------------------------------------------------------- | --------------------------- | -------------------------------------------------------- | ------------------------ | ------------------------------------------------- | ------- | -------- | ------- | -------- | -------
|
|Revenue                                                        |                             |                                                          |                          |                                                   |         |          |         |          |        
|                                                               | Local directory services    |                                                          | $                        | 145,756                                           |         | $        | 141,837 |          | $      
|                                                               | National directory services |                                                          |                          | 24,813                                            |         |          | 27,473  |          |        
|                                                               |                             |                                                          |                          |                                                   |         |          |         |          |        
|                                                               |                             |                                                          | Total directory services |                                                   |         | 170,569  |         |          | 169,310
|Other revenue                                                  |                             |                                                          | 4,690                    |                                                   |         | 4,455    |         |          | 235    
|                                                               |                             |                                                          |                          |                                                   |         |          |         |          |        
|                                                               | Total revenue               |                                                          |                          | 175,259                                           |         |          | 173,765 |          |        
|Cost of revenue                                                |                             |                                                          | 50,150                   |                                                   |         | 51,325   |         |          | (1,175 
|                                                               |                             |                                                          |                          |                                                   |         |          |         |          |        
|                                                               |                             | Gross profit                                             |                          | $                                                 | 125,109 |          | $       | 122,440  |        
|                                                               |                             | Gross margin                                             |                          |                                                   | 71.4    | %        |         | 70.5     | %      
|General and administrative expense, including bad debt expense |                             | $                                                        | 24,353                   |                                                   | $       | 17,783   |         | $        | 6,570  
|                                                               |                             |                                                          |                          |                                                   |         |          |         |          |        

Revenue

Revenue increased by $1.5 million, or 0.9%, to $175.3 million for the three months ended September 30, 2003 from $173.8 million for
the same period in 2002. Excluding the effects of purchase accounting for deferred revenue, which totaled $5.4 million, revenue for the three months ended September 30, 2003 would have
been $180.7 million, a $6.9 million or 4.0% increase compared to the three months ended September 30, 2002. Total revenue, excluding the effects of purchase accounting,

20

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included
$176.0 million in directory services revenue and $4.7 million for all other products for the three months ended September 30, 2003.

Total
directory services revenue, which consists of local and national directory services revenue, increased by $1.3 million, or 0.7%, to $170.6 million for the three
months ended September 30, 2003 from $169.3 million for the three months ended September 30, 2002. Excluding the effects of purchase accounting, total directory services revenue
increased by $6.7 million, or 4.0%, to $176.0 million for the three months ended September 30, 2003.

Local
directory services revenue increased $3.9 million, or 2.8%, to $145.8 million for the three months ended September 30, 2003, compared to the same period in
2002. Local directory services revenue, excluding the effects of purchase accounting which totaled $1.0 million, increased by $5.0 million, or 3.5%, to $146.8 million for the
three months ended September 30, 2003 from $141.8 million for the same period in 2002. Local directory services revenue, excluding the effects of purchase accounting, accounted for 81.2%
of revenue for the three months ended September 30, 2003 compared to 81.6% for the same period in 2002. While the number of local advertisers decreased by 2.7% for the twelve months ended
September 30, 2003, the average annual revenue per local advertiser, excluding the effects of purchase accounting, increased 6.7% for the twelve months ended September 30, 2003 compared
to the twelve months ended September 30, 2002. Growth in the average revenue per local advertiser resulted from price increases and additional revenue from premium products, such as color
advertisements and awareness products.

Revenue
from national advertisers decreased $2.7 million, or 9.7% to $24.8 million for the three months ended September 30, 2003 compared to $27.5 million for
the same period in 2002. Revenue from national advertisers, excluding the effects of purchase accounting which totaled $4.4 million, increased $1.7 million, or 6.2%, to
$29.2 million for the three months ended September 30, 2003 compared to the same period in 2002. Revenue from national advertisers, excluding the effects of purchase accounting,
accounted for 16.2% of revenue for the three months ended September 30, 2003 as compared to 15.8% for the same period in 2002. Other revenue increased by $0.2 million, or 5.3%, to
$4.7 million for the three months ended September 30, 2003 from $4.5 million for the same period in 2002.

Cost of revenue

Cost of revenue recognized decreased by $1.2 million, or 2.3%, to $50.2 million for the three months ended September 30, 2003 when compared
to the same period in 2002. Excluding the effects of purchase accounting for deferred costs, which totaled $1.4 million for the three months ended September 30, 2003, cost of revenue
would have been $51.6 million. Cost of revenue represented 28.6% of revenue, excluding the effects of purchase accounting, for the three months ended September 30, 2003, compared to
29.5% of revenue for the same period in 2002. For the three months ended September 30, 2003 and 2002, we and the Predecessor incurred costs, subject to deferral and amortization, of
$44.7 million and $43.3 million, respectively. Costs subject to deferral and amortization include employee costs, direct costs of publishing, sales commissions, services from Qwest and
its affiliates and other costs.

Employee
costs incurred during the period increased by $1.7 million, or 7.2%, to $25.3 million for the three months ended September 30, 2003 from
$23.6 million for the same period in 2002. These increases
were primarily a result of increases in the number of employees, higher cost of medical insurance and sales incentives paid to employees.

Direct
costs of publishing incurred during the period, which include paper, printing and distribution, were $11.1 million and $11.3 million for the three months ended
September 30, 2003 and 2002, respectively. The decrease is primarily a result of a reduction in the price of paper.

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Systems
costs incurred increased $0.8 million, or 44.4%, to $2.6 million from $1.8 million for the three months ended September 30, 2003 compared to the same
period in 2002 as a result of increased technology spending associated with being a stand-alone entity.

Other
cost of revenue incurred during the period, which include, office expenses and facilities, decreased by $0.9 million, or 13.6%, to $5.7 million for the three months
ended September 30, 2003 compared to $6.6 million for the same period in 2002.

Gross profit

Our gross profit increased by $2.7 million, or 2.2%, to $125.1 million for the three months ended September 30, 2003, from
$122.4 million for the same period in 2002. Excluding the effects of purchase accounting, gross profit for the three months ended September 30, 2003 would have been
$129.1 million, a $6.7 million or a 5.5% increase compared to the same period in 2002. Gross margin, excluding the effects of purchase accounting, increased to 71.4% for the three months
ended September 30, 2003 from 70.5% for the same period in 2002.

General and administrative expense

General and administrative expense, excluding depreciation and amortization, increased by $6.6 million, to $24.4 million for the three months ended
September 30, 2003 from $17.8 million for the same period in 2002. The increase was primarily due to increases in salaries and wages, benefits, bad debt expense, advertising and
professional services.

Salaries
and wages increased $4.7 million, to $6.4 million for the three months ended September 30, 2003 from $1.7 million for the same period in 2002. The
increase in salaries and wages was primarily due to
additional stand-alone costs resulting from operating the Company as a separate entity from Qwest, including additional employees in information technology, finance and human resources. In addition,
the 2003 period also includes an increase in accrued bonus compensation.

Benefits
increased $1.6 million to $2.3 million for the three months ended September 30, 2003 compared to $0.7 million for the same period in 2002. This
increase is primarily due to pension credits in 2002 compared to pension expense in 2003, and an increase in costs related to transitioning to a stand-alone entity.

Bad
debt expense increased by $0.7 million, or 14.1%, to $5.7 million for the three months ended September 30, 2003 from $5.0 million for the same period in
2002. Bad debt expense as a percent of total revenue, excluding the effects of purchase accounting, was 3.2% for the three months ended September 30, 2003 compared to 2.9% for the same period
in 2002. The increase in bad debt expense is the result of a general deterioration in overall economic conditions.

Advertising
increased $2.2 million to $2.6 million for the three months ended September 30, 2002 from $0.4 million for the same period in 2002. Advertising as
a percent of revenue, excluding the effects of purchase accounting increased to 1.4% from 0.2% for the three months ended September 30, 2003 compared to the three months ended
September 30, 2002, as a result of our advertising programs as compared to those of our Predecessor.

Professional
services increased $4.2 million to $5.0 million for the three months ended September 30, 2003 from $0.8 million for the same period in 2002. The
increase in professional services is primarily due to increased spending for consulting and contract labor in connection with transitioning to a stand-alone entity, as well as management fees for
which there was no comparable cost in 2002.

All
other general and administrative expense, which includes office expenses, facilities costs, and other, decreased by $6.8 million, or 73.9%, to $2.4 million for the
three months ended September 30, 2003 from $9.2 million for the same period in 2002.

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Income taxes

Our effective tax rate was 40.1% for the three months ended September 30, 2003 as compared to 40.3% for the same period in 2002. SFAF No. 109
requires that we recognize deferred income taxes to the extent realization of such assets is more likely than not. As of September 30, 2003 we have $43.4 million
of net deferred tax assets primarily related to tax loss carryforwards. Based upon current projections of income and expenses, we have determined that it is more likely than not that we will utilize
all of our deferred tax assets before the expiration of the carryforward period. Accordingly, no valuation allowance has been recorded.

Nine months ended September 30, 2003 (unaudited) compared to the nine months ended September 30, 2002 (unaudited):

|                                                               |                             | Dex Media East LLC
Nine months ended
September 30, 2003 |                          | Predecessor
Nine months ended
September 30, 2002 |         | $ Change |         | % Change |        
|-------------------------------------------------------------- | --------------------------- | ------------------------------------------------------- | ------------------------ | ------------------------------------------------ | ------- | -------- | ------- | -------- | -------
|
|Revenue                                                        |                             |                                                         |                          |                                                  |         |          |         |          |        
|                                                               | Local directory services    |                                                         | $                        | 423,067                                          |         | $        | 420,696 |          | $      
|                                                               | National directory services |                                                         |                          | 55,703                                           |         |          | 81,873  |          |        
|                                                               |                             |                                                         |                          |                                                  |         |          |         |          |        
|                                                               |                             |                                                         | Total directory services |                                                  |         | 478,770  |         |          | 502,569
|Other revenue                                                  |                             |                                                         | 13,640                   |                                                  |         | 13,191   |         |          | 449    
|                                                               |                             |                                                         |                          |                                                  |         |          |         |          |        
|                                                               | Total revenue               |                                                         |                          | 492,410                                          |         |          | 515,760 |          |        
|Cost of revenue                                                |                             |                                                         | 147,420                  |                                                  |         | 155,508  |         |          | (8,088 
|                                                               |                             |                                                         |                          |                                                  |         |          |         |          |        
|                                                               |                             | Gross profit                                            |                          | $                                                | 344,990 |          | $       | 360,252  |        
|                                                               |                             | Gross margin                                            |                          |                                                  | 70.1    | %        |         | 69.8     | %      
|General and administrative expense, including bad debt expense |                             | $                                                       | 71,649                   |                                                  | $       | 42,152   |         | $        | 29,497 
|                                                               |                             |                                                         |                          |                                                  |         |          |         |          |        

Revenue

Revenue decreased by $23.4 million or 4.5%, to $492.4 million for the nine months ended September 30, 2003 from $515.8 million for the
same period in 2002. Excluding the effects of purchase accounting for deferred revenue, which totaled $43.7 million, revenue for the nine months ended September 30, 2003 would have been
$536.1 million, a $20.3 million, or 3.9% increase from the same period in 2002. Total revenue, excluding the effects of purchase accounting, included $522.5 million in directory
services revenue and $13.6 million in revenue for all other products.

Total
directory services revenue, which consists of local and national directory services revenue, decreased $23.8 million, or 4.7%, to $478.8 million for the nine months
ended September 30, 2003 from $502.6 million for the nine months ended September 30, 2002. Excluding the effects of purchase accounting, total directory services revenue increased
by $19.9 million, or 4.0%, to $522.5 million for the nine months ended September 30, 2003.

Local
directory services revenue increased $2.4 million, or 0.6%, to $423.1 million for the nine months ended September 30, 2003 compared to $420.7 million
for the same period in 2002. Local directory services revenue, excluding the effects of purchase accounting which totaled $13.4 million, increased by $15.8 million, or 3.8%, to
$436.5 million for the nine months ending September 30, 2003 from $420.7 million for the same period in 2002. Local directory services revenue, excluding the effects of purchase
accounting, accounted for 81.4% and 81.6% of revenue the nine months ended September 30, 2003 and 2002, respectively. While the number of local advertisers decreased by 2.7% for the twelve
months ended September 30, 2003, the average annual revenue per local advertiser,

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excluding
the effects of purchase accounting, increased 6.7% for the twelve months ended September 30, 2003 compared to the twelve months ended September 30, 2002. Growth in the average
revenue per local advertiser resulted from price increases and additional revenue from premium products, such as color advertisements and awareness products.

Revenue
from national advertisers decreased $26.2 million, or 32.0%, to $55.7 million for the nine months ended September 30, 2003, as compared to the same period in
2002. Revenue from national advertisers, excluding the effects of purchase accounting which totaled $30.3 million, increased $4.1 million, or 5.0%, to $86.0 million for the nine
months ended September 30, 2003 compared to $81.9 million for the same period in 2002. Revenue from national advertisers, excluding the effects of purchase accounting, for the nine
months ended September 30, 2003 accounted for 16.0% of revenue for the period as compared to 15.9% for the same period in 2002.

Other
revenue increased by $0.4 million, or 3.4%, to $13.6 million for the nine months ended September 30, 2003 from $13.2 million for the same period in
2002.

Cost of revenue

Cost of revenue decreased by $8.1 million, or 5.2%, to $147.4 million for the nine months ended September 30, 2003 from $155.5 million
for the same period in 2002. Excluding the effects of purchase accounting for deferred costs, which totaled $11.3 million for the nine months ended September 30, 2003, cost of revenue
would have been $158.7 million. Cost of revenue represented 29.6% of revenue, excluding the effects of purchase accounting, for the nine months ended September 30, 2003, compared to
30.2% for the same period in 2002. For the nine months ended September 30, 2003 and 2002, we and the Predecessor incurred costs subject to deferral and amortization of $148.2 million and
$136.2 million, respectively. Costs subject to deferral and amortization include employee costs, direct costs of publishing, sales commissions, services from Qwest and its affiliates and other
costs.

Employee
costs incurred during the period increased by $7.8 million, or 12.4%, to $70.9 million for the nine months ended September 30, 2003 from
$63.1 million in the same period in 2002. These increases
were primarily a result of increases in the number of employees, higher cost of medical insurance and higher sales commissions and sales incentives paid to employees.

Direct
costs of publishing incurred during the period, which include paper, printing and distribution, were $44.9 million and $46.1 million for the nine months ended
September 30, 2003 and 2002, respectively. The decrease is primarily a result of a reduction in the price of paper.

Systems
costs incurred during the period increased by $4.7 million to $10.2 million for the nine months ended September 30, 2003 from $5.5 million in the same
period in 2002 as a result of increased technology spending associated with being a stand-alone entity.

Other
cost of revenue incurred during the period, which include office expenses and facilities, increased by $0.7 million, or 3.3%, to $22.2 million from
$21.5 million for the same period in 2002.

Gross profit

Our gross profit decreased $15.3 million, or 4.2%, for the nine months ended September 30, 2003 to $345.0 million compared to the same period
in 2002. Excluding the effects of purchase accounting, gross profit for the nine months ended September 30, 2003 would have been $377.4 million, a $17.1 million, or 4.7%, increase
compared to the same period in 2002. Gross margin, excluding the effects of purchase accounting, increased to 70.4% for the nine months ended September 30, 2003 from 69.8% for the same period
in 2002.

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General and administrative expense

General and administrative expense, excluding depreciation and amortization, increased $29.5 million, or 70.0%, to $71.6 million from
$42.2 million in the same period in 2002. The increase was primarily due to increases in salaries and wages, benefits, bad debt expense, advertising and professional services.

Salaries
and wages increased $12.8 million to $17.0 million for the nine months ended September 30, 2003 from $4.2 million in the same period in 2002. The
increase in salaries and wages was due to additional stand-alone costs resulting from operating the Company as a separate entity from Qwest,
including additional employees in information technology, finance and human resources. In addition, the 2003 period also includes an increase in accrued bonus.

Benefits
increased $6.5 million to $6.0 million for the nine months ended September 30, 2003 from a credit of $0.5 million in the same period in 2002. This
increase is primarily due to pension credits in 2002 as compared to pension expense in 2003, and an increase in costs related to transitioning to a stand-alone entity.

Bad
debt expense increased $6.2 million, or 45.6%, to $19.8 million for the nine months ended September 30, 2003 from $13.6 million in the same period in
2002. Bad debt expense as a percent of total revenue, excluding the effects of purchase accounting, was 3.7% for the nine months ended September 30, 2003 compared to 2.6% for the same period in
2002. The increase in bad debt expense is the result of an increase in local accounts receivable and a general deterioration in overall economic conditions.

Advertising
increased $3.6 million to $6.1 million for the nine months ended September 30, 2003 from $2.5 million for the same period in 2002. Advertising as
a percent of revenue, excluding the effects of purchase accounting, increased to 1.1% from 0.5% for the nine months ended September 30, 2003 and 2002, respectively.

Professional
services increased $8.7 million to $11.8 million for the nine months ended September 30, 2003 from $3.1 million for the same period in 2002. The
increase in professional services is primarily due to increased spending for consulting and contract labor in connection with transitioning to a stand-alone entity as well as management fees for which
there was no comparable cost in 2002.

All
other general and administrative expense, decreased $8.4 million, or 43.5%, to $10.9 million for the nine months ended September 30, 2003 from
$19.3 million for the comparable period in 2002.

Income taxes

Our effective tax rate was 40.1% for the nine months ended September 30, 2003 as compared to 40.4% for the same period in 2002. SFAF No. 109
requires that we recognize deferred income taxes to the extent realization of such assets is more likely than not. As of September 30, 2003 we have $43.4 million of deferred tax assets
primarily related to tax loss carryforwards. Based upon current projections of income and expenses, we have determined that it is more likely than not that we will utilize our entire deferred income
tax balance before the expiration of the carryforward period. Accordingly, no allowance has been recorded.

Liquidity and capital resources

Historically, our principal source of liquidity was cash flow generated from operations. Prior to the consummation of the transactions related to the acquisition
of Dex East, our 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 us,
dividend payments to Qwest, tax payments to Qwest to reflect our portion of the estimated taxes of Qwest Dex as well as capital

25

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expenditures
and working capital. We have historically generated sufficient cash flow to fund our operations and investments and to make payments to Qwest.

In
connection with the transactions related to the acquisition of Dex East, we incurred substantial indebtedness. As of September 30, 2003, we had outstanding $2.2 billion
in aggregate indebtedness, and $99.0 million of additional borrowing capacity available under our credit facilities. Following the transactions related to the acquisition of Dex East, 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. We expect that our
primary liquidity requirements will be for debt service on our credit facilities and the senior notes and the senior subordinated notes, capital expenditures and working capital.

Net
cash provided by operations was $182.3 million for the nine months ended September 30, 2003. Changes in working capital for the nine months ended September 30,
2003, relate primarily to changes in accounts receivable and accounts payable. Net accounts receivable decreased by $20.8 million, or 30.9%, to $46.6 million at September 30, 2003
from $67.4 million at December 31, 2002. Accounts payable decreased by $35.8 million, or 77.4%, to $10.4 million at September 30, 2003 from $46.2 million at
December 31, 2002.

Net
cash used for investing activities was $26.2 million for the nine months ended September 30, 2003. The principal use of cash for investing activities was
$15.4 million of capitalized software development costs primarily related to the upgrade of our existing software system.

Net
cash used for financing activities was $152.5 million for the nine months ended September 30, 2003. The principal sources of cash flows from financing activities were
borrowings of $160.0 million and member equity contributions of $50.0 million to fund a distribution of $210.0 million to our indirect parent in connection with its acquisition of
Dex West. In addition to member distributions, significant uses of cash flows for financing activities include debt payments of $149.9 million on long-term borrowings.

In
connection with the transactions related to the acquisition of Dex East, we entered into a billing and collection services agreement with Qwest LEC. Under this agreement, Qwest LEC
will continue to bill and collect, on our behalf, amounts owed by customers, which are also Qwest local telephone customers, for our directory services. In 2002, Qwest LEC billed 49% of our revenues
on our behalf, and we billed the remaining 51% directly. Qwest LEC bills the customer on the same billing statement on which it bills the customer for local telephone service. Qwest LEC has completed
the preparation of its billing and collection system so that we will be able to transition from the Qwest LEC billing and collection system to our own billing and collection system within
approximately two weeks should we choose to do so.

In
connection with the acquisition, we distributed $210.0 million in the form of a dividend to our indirect parent, Dex Media, with the proceeds from additional loans in a total
principal amount of $160.0 million under the tranche A term loan facility and $50.0 million from member contributions. In addition, our contingent obligation relating to Dex West
financing fees was relieved, which was accounted for as a contribution to member equity.

Our
credit facilities consist of a revolving credit facility and term loan facilities. Our revolving credit facility comprises loans in a total principal amount of up to
$100 million available for general corporate purposes, subject to certain conditions. As of September 30, 2003, approximately $99 million was available for borrowing
(approximately $1 million was committed under a stand-by letter of credit and accordingly not available for borrowing). The term loan facilities consist of a tranche A term loan
facility in a total principal amount of $625.4 million and a tranche B term loan facility in a total principal amount of $620.9 million. The tranche A and tranche B term loan facilities
were available only to fund the transactions related to the acquisition of Dex East. As a result of the Dex West

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acquisition
consummated on September 9, 2003, additional loans in a total principal amount of up to $160.0 million were borrowed under the tranche A term loan facility.

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



The
applicable margin on loans under our revolving credit facility and the tranche A term loan facility is 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 a commitment fee 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.

Our
revolving credit facility and the tranche A term loan facility will mature in November 2008 and the tranche B term loan facility will mature in May 2009.

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 intercompany indebtedness. Our credit facilities also require us to meet certain financial covenants and ratios, including a leverage ratio, an interest coverage
ratio and a fixed charges coverage ratio.

Effective
October 31, 2003, we amended our credit agreement for the Tranche A, Tranche B, and Tranche B-Euros Term Loans. In connection with the amendment, the Tranche
B and Tranche B-Euros Term Loans were refinanced on November 10, 2003 with proceeds of a new Tranche B Term Loan. A one-percent prepayment penalty was paid in conjunction with the
refinancing. In addition, terms related to indebtedness, restricted payments, prepayment provisions, pricing, prepayment fees and other miscellaneous terms were amended.

Pursuant
to the acquisition agreement, Qwest is obligated to pay the cost of obtaining the right for us to use, on an interim basis for up to two years, the material software, databases
and web content currently licensed to Qwest by third parties, which we refer to as the material intellectual property products, without material interruption following the consummation of the
transactions. Under the acquisition agreement, any obligation on our part to pay the cost of obtaining the permanent right for us to use the material intellectual property products will be limited to
$40 million. We have paid approximately $2 million of such costs since the closing of the acquisition of Dex East, and believe that any remaining obligation will be paid during the next
year.

We
may from time to time seek to retire our outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or
otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. In addition, we may issue
additional debt if prevailing market conditions are favorable to doing so.

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Our
ability to make payments on and to refinance our indebtedness and to fund planned capital expenditures will depend 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 ensure, however, that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our revolving credit facility in
an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. If we consummate an acquisition, our debt service requirements could increase. We may need to refinance
all or a portion of our indebtedness on or before maturity. We cannot ensure that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all.

Critical accounting policies and estimates

Revenue recognition

The sale of advertising in printed directories published by us is our primary source of revenue. We recognize revenues ratably over the life of each directory
using the deferral and amortization method, with revenue recognition commencing in the month of delivery.

We
enter into nonmonetary transactions where our products and services are promoted by the customer during the same period that we carry the customer's advertisement. We account for
these transactions in accordance with EITF Issue No. 99-17, "Accounting for Advertising Barter Transactions."

In
certain cases, we enter into agreements with customers that involve the delivery of advertisements in more than one directory. We allocate revenue for such arrangements in accordance
with EITF Issue No. 00-21, "Revenue Arrangements with Multiple Deliverables."

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, with cost recognition commencing in the month of delivery. Direct costs include sales commissions, graphics costs and the costs of printing, publishing and distribution.

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.
Provisions relating to receivables billed and collected by Qwest LEC on our behalf are determined based upon our historical bad debt experience over the previous twelve month period. Provisions
relating to receivables billed and collected by us are determined based upon historical experience taking into account the age of receivables and general economic trends.

Basis of allocationPredecessor periods

In order to divide the Qwest Dex consolidated financial statements between Dex East and Dex West, it was necessary for management of Qwest Dex to make certain
assignments and apportionments. Wherever possible, account balances and specific amounts that directly related to Dex East or Dex West were assigned directly to Dex East or Dex West, as appropriate. A
substantial portion of the Predecessor's revenue and cost of revenue have been directly assigned on a directory-by-directory basis. When no direct assignment was feasible,
account balances were apportioned using a variety of factors based on cost relationships to the account balance being apportioned. Expense accounts subject to

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apportionment
primarily consisted of overhead costs and related items that have historically been shared with Qwest Dex.

We
believe that such specific identifications, assignments and apportionments are reasonable; however, the resulting amounts could differ from amounts that would be determined if Dex
East and Dex West operated on a stand-alone basis. Because of Dex East's and Dex West's relationship with Qwest Dex, as well as Qwest and its other affiliates, the revenues and expenses are not
necessarily indicative of what they would be had Dex East and Dex West operated without the shared resources of Qwest and its affiliates. Accordingly, the Predecessor's combined financial statements
are not necessarily indicative of future results of operations.

Disclosure Regarding Forward-Looking Statements

This quarterly report 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 quarterly report 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.

Interest rate risk

As of September 30, 2003, we had no debt outstanding under our revolving credit facility (although approximately $1 million was committed under a
standby letter or credit), $625.4 million of debt outstanding under our tranche A term loan facility and $620.9 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 is based upon variable rates. Accordingly, our earnings and cash flows are affected by changes in interest rates.
As required by the terms of our credit facilities, we have hedged a portion of our interest rate risk. The interest rate swap agreements became effective May 8, 2003, have an aggregate notional
amount of $370.0 million, applicable fixed rates ranging from 2.35% to 4.09% and expire in various terms ranging from two to five years. The notional amount of our interest rate cap totals
$200.0 million, has a cap interest rate of 4.75% and expires in December 2005. We do not plan to engage in hedging for speculative purposes. 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, excluding the amounts covered under our interest rate swap
agreements, we estimate that our interest expense for the three and nine months ended September 30, 2003 would have increased by approximately $2.2 million and $6.5 million,
respectively.

Foreign currency exchange risk

As of September 30, 2003, we had approximately €35.1 million outstanding under the Euro-denominated portion of our
tranche B term loan facility. We have entered into a forward exchange contract with a major financial institution as an economic hedge to manage the foreign

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currency
risk of this debt. While the foreign exchange contract is intended to limit the financial impact of fluctuations between the two currencies and the related effects on earnings and cash flows,
it does not qualify for hedge accounting treatment. The foreign currency swap has a notional amount of €39 million and expires in December 2005.

ITEM 4. CONTROLS AND PROCEDURES

Dex Media East maintains disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of
1934, as amended (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 East'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 East carried out an evaluation, under the supervision and with the participation of Dex Media East's management, including
its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of Dex Media East's disclosure controls and procedures. Based on the foregoing, Dex Media
East's Chief Executive Officer and Chief Financial Officer concluded that Dex Media East'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 East's internal controls or in other factors that could significantly affect the internal controls subsequent to the date Dex Media
East completed its evaluation.

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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





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SIGNATURES

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

| |  | DEX MEDIA EAST LLC
| |  | ------------------
| |  | By:               

Date:
November 12, 2003

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