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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 March 31, 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: 1-

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DEX MEDIA EAST LLC(Exact name of registrant as specified in its charter)

|Delaware(State or other
jurisdiction of
incorporation or
organization)                     |  | 42-1554575(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 o    No ý

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                                                                 
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|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                                                                               

2

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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.        Consolidated Balance Sheets        (Dollars in millions)        (unaudited)

|                                                              |                                        | March 31,
2003            |                                    | December 31,
2002 |      
|------------------------------------------------------------- | -------------------------------------- | ------------------------- | ---------------------------------- | ----------------- | -----
|Assets                                                        |                                        |                           |                                    |                   |      
|Current assets:                                               |                                        |                           |                                    |                   |      
|                                                              | Cash and cash equivalents              |                           | $                                  | 75                |      
|                                                              | Accounts receivable, net               |                           |                                    | 55                |      
|                                                              | Deferred directory costs               |                           |                                    | 117               |      
|                                                              | Current deferred taxes                 |                           |                                    | 2                 |      
|                                                              | Other current assets                   |                           |                                    | 7                 |      
|                                                              |                                        |                           |                                    |                   |      
|                                                              |                                        | Total current assets      |                                    |                   | 256  
|Property, plant and equipment, net                            |                                        |                           | 22                                 |                   |      
|Goodwill and intangible assets, net                           |                                        |                           | 2,609                              |                   |      
|Deferred income taxes                                         |                                        |                           | 31                                 |                   |      
|Deferred financing costs                                      |                                        |                           | 90                                 |                   |      
|Prepaid benefit obligations and other assets                  |                                        |                           | 7                                  |                   |      
|                                                              |                                        |                           |                                    |                   |      
|                                                              |                                        | Total assets              |                                    | $                 | 3,015
|                                                              |                                        |                           |                                    |                   |      
|Liabilities and Owner Equity                                  |                                        |                           |                                    |                   |      
|Current liabilities:                                          |                                        |                           |                                    |                   |      
|                                                              | Accounts payable                       |                           | $                                  | 20                |      
|                                                              | Employee compensation                  |                           |                                    | 14                |      
|                                                              | Deferred revenue and customer deposits |                           |                                    | 83                |      
|                                                              | Accrued interest payable               |                           |                                    | 51                |      
|                                                              | Current portion of long-term debt      |                           |                                    | 37                |      
|                                                              | Other accrued liabilities              |                           |                                    | 13                |      
|                                                              |                                        |                           |                                    |                   |      
|                                                              |                                        | Total current liabilities |                                    |                   | 218  
|Long-term debt                                                |                                        |                           | 2,146                              |                   |      
|Post-retirement and other post-employment benefit obligations |                                        |                           | 36                                 |                   |      
|Other liabilities                                             |                                        |                           | 9                                  |                   |      
|                                                              |                                        |                           |                                    |                   |      
|                                                              |                                        | Total liabilities         |                                    |                   | 2,409
|                                                              |                                        |                           |                                    |                   |      
|Commitments and contingencies (Note 6)                        |                                        |                           |                                    |                   |      
|Owner interest                                                |                                        |                           | 655                                |                   |      
|Accumulated deficit                                           |                                        |                           | (44                                | )                 |      
|Accumulated other comprehensive loss                          |                                        |                           | (5                                 | )                 |      
|                                                              |                                        |                           |                                    |                   |      
|                                                              |                                        | Total owner equity        |                                    |                   | 606  
|                                                              |                                        |                           |                                    |                   |      
|                                                              |                                        |                           | Total liabilities and owner equity |                   | $    
|                                                              |                                        |                           |                                    |                   |      

See
accompanying notes to consolidated financial statements.

3

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DEX MEDIA EAST LLC  An Indirect Wholly-Owned Subsidiary of Dex Media, Inc.        Consolidated Statements of Operations        (Dollars in millions)        (unaudited)

|                               |                                       | Company                           |     | Predecessor
|------------------------------ | ------------------------------------- | --------------------------------- | --- | -----------
|
|
|Revenue                        |                                       | $                                 | 153 |            
|Operating Expenses:            |                                       |                                   |     |            
|                               | Cost of revenue                       |                                   |     | 47         
|                               | General and administrative expense    |                                   |     | 17         
|                               | Bad debt expense                      |                                   |     | 7          
|                               | Depreciation and amortization expense |                                   |     | 56         
|                               |                                       |                                   |     |            
|                               |                                       | Total operating expenses          |     |            
|                               |                                       |                                   |     |            
|                               |                                       | Operating income                  |     |            
|Other expense:                 |                                       |                                   |     |            
|                               | Interest expense, affiliate           |                                   |     |           
|                               | Interest expense                      |                                   |     | 48         
|                               | Other expensenet                     |                                   |     | 5          
|                               |                                       |                                   |     |            
|                               |                                       | (Loss) income before income taxes |     |            
|Income tax (benefit) provision |                                       |                                   | (11 | )          
|                               |                                       |                                   |     |            
|                               | Net (loss) income                     |                                   | $   | (16        
|                               |                                       |                                   |     |            

See
accompanying notes to consolidated financial statements.

4

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DEX MEDIA EAST LLC  An Indirect Wholly-Owned Subsidiary of Dex Media, Inc.        Consolidated Statements of Cash Flows        (Dollars in millions)        (unaudited)

|                                  |                                                     | Company                                          |                                       | Predecessor |   
|--------------------------------- | --------------------------------------------------- | ------------------------------------------------ | ------------------------------------- | ----------- | --
|
|
|Operating activities:             |                                                     |                                                  |                                       |             |   
|                                  | Net (loss) income                                   |                                                  | $                                     | (16         | ) 
|Adjustments to net (loss) income: |                                                     |                                                  |                                       |             |   
|                                  | Depreciation and amortization                       |                                                  |                                       | 56          |   
|                                  | Employee benefit credit                             |                                                  |                                       |            |   
|                                  | Deferred tax (benefit) provision                    |                                                  |                                       | (11         | ) 
|                                  | Bad debt expense                                    |                                                  |                                       | 7           |   
|                                  | Loss on foreign currency translation                |                                                  |                                       | 1           |   
|                                  | Amortization of deferred financing costs            |                                                  |                                       | 4           |   
|                                  | Changes in operating assets and liabilities:        |                                                  |                                       |             |   
|                                  |                                                     | Accounts receivable                              |                                       |             | 5 
|                                  |                                                     | Deferred directory costs                         |                                       |             | (6
|                                  |                                                     | Other assets                                     |                                       |             | (7
|                                  |                                                     | Deferred revenue and customer deposits           |                                       |             | 20
|                                  |                                                     | Accounts payable and other liabilities           |                                       |             | 11
|                                  |                                                     | Employee benefit plan obligations and other, net |                                       |             | 1 
|                                  |                                                     |                                                  |                                       |             |   
|                                  |                                                     |                                                  | Cash provided by operating activities |             |   
|                                  |                                                     |                                                  |                                       |             |   
|Investing activities:             |                                                     |                                                  |                                       |             |   
|                                  | Expenditures for property, plant and equipment      |                                                  |                                       |            |   
|                                  | Capitalized software development costs              |                                                  |                                       | (3          | ) 
|                                  |                                                     |                                                  |                                       |             |   
|                                  | Cash used for investing activities                  |                                                  |                                       | (3          | ) 
|                                  |                                                     |                                                  |                                       |             |   
|Financing activities:             |                                                     |                                                  |                                       |             |   
|                                  | Repayments of short-term borrowings from affiliates |                                                  |                                       |            |   
|                                  | Payments on long-term debt                          |                                                  |                                       | (25         | ) 
|                                  | Contributions from Qwest in lieu of income taxes    |                                                  |                                       |            |   
|                                  |                                                     |                                                  |                                       |             |   
|                                  | Cash used for financing activities                  |                                                  |                                       | (25         | ) 
|                                  |                                                     |                                                  |                                       |             |   
|Cash and cash equivalents:        |                                                     |                                                  |                                       |             |   
|                                  | Increase (decrease)                                 |                                                  |                                       | 37          |   
|                                  | Beginning balance                                   |                                                  |                                       | 38          |   
|                                  |                                                     |                                                  |                                       |             |   
|                                  |                                                     |                                                  | Ending balance                        |             | $ 
|                                  |                                                     |                                                  |                                       |             |   

See
accompanying notes to consolidated financial statements.

5

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DEX MEDIA EAST LLC  An Indirect Wholly-Owned Subsidiary of Dex Media, Inc.        Notes to consolidated financial statements        (unaudited)

(1)   Description of Business



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. (collectively "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. 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. The Company operates the directory business acquired in Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota, which we
refer to as the Dex East States. In the second phase, a separate indirect subsidiary of Dex Media will operate the directory business that the Dex Buyer plans to acquire in Arizona, Idaho, Montana,
Oregon, Utah, Washington and Wyoming, or the Dex West States.

The
acquisition is to be executed in two phases to accommodate the regulatory requirements in the applicable states. In the first phase, consummated on November 8, 2002, 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.



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 East is not a separate legal entity but represents the business
of Qwest Dex in or attributable to the Dex East States.



The Company is the exclusive official directory publisher for 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 its region. The Company provides
local and national advertisers directory, Internet and direct marketing solutions. Virtually all of the 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.

6

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(2)   Basis of Presentation



The 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, all adjustments (which consist of normal recurring adjustments) necessary to fairly present the consolidated results of operations, financial position and cash flows of the Company as of and
for the three month period ended March 31, 2003 were made. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the
Company and Predecessor, respectively, 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 two 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 ended March 31, 2003 are not necessarily indicative of the results expected for the full year.

The
accompanying consolidated balance sheets as of March 31, 2003 and December 31, 2002, and the consolidated statements of operations and cash flows for the three months
ended March 31, 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 and cash flows for the three months ended March 31, 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.



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. Management believes
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 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.

7

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(3)   Summary of Significant Accounting Policies



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 the consolidation.



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.



The sale of advertising in telephone 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, with revenue recognition commencing in the month of delivery. During the three months ended March 31, 2003 and 2002, the Company
published 28 and 27 white and yellow pages directories, respectively, in the Dex East States. All directories published during the three months ended March 31, 2003 and 2002 had 12 month
lives.

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 the Company accounts for these transactions in accordance with Emerging Issues Task Force ("EITF") Issue 99-17, "Accounting for Advertising Barter
Transactions."



The Company accounts for cost of revenue under the deferral and amortization method. 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, (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 costs relating to each of the foregoing. Sales commissions include commissions paid to third party certified marketing
representatives, or CMRs, 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, with cost recognition commencing in the month of delivery.

8

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



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.

(4)   Long-Term Debt

Long-term debt is comprised of the following (in millions, in descending order of right of payment):

March 31,
2003Tranche A Term Loan, bearing interest at adjusted LIBOR plus 3% (4.54% at March 31, 2003).

$
519Tranche B Term Loan, bearing interest at adjusted LIBOR plus 4% (5.56% at March 31, 2003).


647Tranche B-Euros Term Loan, bearing interest at EURIBOR plus 4% (6.91% at March 31, 2003).


42Unsecured senior notes payable due in November 2009.


450Unsecured senior subordinated notes payable due in November 2012.


5252,183Less: current portion of long-term debt


(37
)$
2,146


As
of March 31, 2003, there were no borrowings under the revolving credit facility. The Company paid interest and fees on the bank facility of $17 million for the three
months ended March 31, 2003. As of March 31, 2003, the Company was in compliance with the debt covenants under the bank facility.

9

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(5)   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 have forward starting dates of May 8, 2003. Due to the forward starting dates, the
Company has not reclassified any amounts into earnings for the three months ended March 31, 2003. For the three months ended March 31, 2003, the Company had $1 million in
unrealized losses, net of tax, all of which is included in accumulated other comprehensive income (loss). As of March 31, 2003, $5 million of deferred losses, net of tax, on derivative
instruments, are recorded in accumulated other comprehensive income, of which $3 million 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 fluctuations between the US Dollar and the Euro
on its Tranche B-Euro Term Loans. For the three months ended March 31, 2003, the Company recognized a $2 million gain in earnings on foreign currency swap agreements, which
offset a foreign currency translation loss of $1 million.

During
November 2002, the Company entered into an interest rate cap agreement. The amount reported in earnings for the three months ended March 31, 2003 amounted to less
than $1 million.

(6)   Commitments and Contingencies



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.



As of March 31, 2003, forty-seven percent of the Company's employees are members of the Communication Workers of America. The collective bargaining
agreement covering their employment is
scheduled to expire in October 2003. In January 2003, the Company extended its collective bargaining agreement with the International Brotherhood of Electrical Workers until
May 5, 2006.



In the event that the Dex West acquisition is consummated, the Company will incur additional loans in a total principal amount of up to $160 million under
the Tranche A term loan facility subject to certain conditions, the proceeds of which are to be distributed to Dex Media to fund a portion of the Dex West acquisition. If the acquisition of Dex West
is not consummated, the Company may be obligated to pay up to $24 million in fees to various financial institutions that have made financing commitments relating to the acquisition of Dex West.
As of March 31, 2003, the Company has accrued $11 million of the Dex West commitment fees as an obligation on its consolidated balance sheet.



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

10

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relates
to upgrading the Company's existing software system to enhance its functionality. The Company expects to incur approximately $48 million in charges related to the agreement with Amdocs
over the next five years. During the three months ended March 31, 2003, the Company incurred $3 million related to this agreement.

(7)   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 ended March 31, 2003 was $17 million.

(8)   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 March 31, 2003, the maximum number of shares of
common stock available for grant was 234,591. 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 one day before the tenth anniversary of the grant date; however, an installment equal to 15% of the options granted shall be
eligible to become vested following each of the fiscal years 2003 through 2007 if certain EBITDA targets are met with respect to such year.

Had
the Company accounted for employee stock options grants under the fair value method prescribed by SFAS No. 123, "Accounting for Stock-Based
Compensation," the pro forma results of the Company for the three months ended March 31, 2003, would have been a loss of $16 million, which is the same amount as
reported under APB No. 25.

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 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.

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 would have been
$48 million, which is the same amount as reported under APB No. 25.

11

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(9)   Transactions with Qwest and Affiliates



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 ("FDC"). 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 transactions, 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 for a period of up to 18 months from November 8, 2002. These services include billing and collection, property management, information
technology, general and administrative, telephony and data services, customer lists, and other.

Included
in statements of operations are the following shared services (in millions):

Company

PredecessorThree months ended
March 31,2003

2002Cost of revenue

$


$
1General and administrative expenses


3


8Total

$
3

$
9




Rates charged for advertising services provided by the Company and the Predecessor to Qwest and its affiliates are determined based upon prevailing third party
market prices. Included in the Predecessor's revenue is $2 million for advertising services provided by the Predecessor to Qwest and its affiliates during the three months ended
March 31, 2002.

As
part of the Dex East Purchase Agreement, Qwest has agreed to purchase from the Company, under a take-or-pay arrangement, $20 million annually in
advertising services from the Company over a 15-year period beginning with the date of sale. For the three months ended March 31, 2003, Qwest purchased $4 million in
advertising services under this arrangement. If the Dex West acquisition is consummated, the amount that Qwest purchases from the Company under the advertising agreement may be reduced based on the
relative size of the Company to Dex Media West or reduced in any other manner that Qwest chooses in apportioning its advertising purchases among the Company and Dex Media West. Therefore, if the Dex
West acquisition is consummated, Qwest may purchase more advertising from Dex Media West than the Company or may not purchase any advertising from the Company at all.

12

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

March 31,
2003

December 31,
2002Accounts receivable purchased by Qwest Corporation ("QC")

$
4

$
3Amounts due from Qwest and its affiliates


4


3Amounts due to Qwest and its affiliates


(3
)

(24
)


(10) Related Party Transactions

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 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 less than $1 million in pro-rated annual advisory fees for the three months
ended March 31, 2003.

As
more fully described in Note 6(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

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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. 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 and the standard metropolitan statistical area of El Paso, Texas, 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 print directory publisher in the Dex East States and the sixth largest print directory publisher in the United States. We are the exclusive
official directory publisher in our region for Qwest Communications, Inc. (the successor to U S WEST Communications Group), the local exchange carrier subsidiary of Qwest, which we refer to as 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 print directories for over 100 years. In 2002,
we had an aggregate 86% market share in our top 10 geographic markets, which accounted for approximately 76% of our directory services revenue in that year. For the three months ended March 31,
2003 and 2002, we and our Predecessor published 28 and 27 directories,
respectively, and distributed approximately four million copies of these directories for each of the three months ended March 31, 2003 and 2002, to business and residential consumers in our
region. As of March 31, 2003, we had a total of approximately 200,000 local advertising customers, consisting primarily of small and medium-sized businesses, and approximately 5,200 national
advertisers. We also provide related services, including an Internet-based directory and direct marketing services. For the three months ended March 31, 2003 and 2002, we and our Predecessor
generated $153 million and $170 million in revenue, respectively. Excluding the effects of purchase accounting adjustments to deferred revenue, our revenue for the three months ended
March 31, 2003 would have been $178 million. Approximately 97% of our total revenue for the three months ended March 31, 2003 was generated from the publication of print
directories.

Stand-alone company

Our Predecessor historically operated as the directory business of Qwest Dex, Inc. in our region and not as a stand-alone company. The financial statements
included in this quarterly report for the three months ended March 31, 2002, have been derived from the historical financial statements of Qwest Dex Holdings, Inc., the parent company of
Qwest Dex, Inc., and include the activities of Qwest

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Dex
for business conducted in our region 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 and cash flows for the three months ended March 31, 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 will incur as a stand-alone company.

Qwest
and Qwest LEC will continue to provide certain services that they have historically provided to the Predecessor, including support services relating to information technology, real
estate, human resources and legal matters, pursuant to the transition services agreement for a maximum of 18 months from November 8, 2002. 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 transactions on November 8, 2002, the Predecessor historically operated the directory business of Qwest
Dex, Inc. in our region prior to the acquisition of Dex East. We will incur incremental costs associated with operating as a stand-alone company. We have identified two broad categories of
incremental stand-alone operating costs. The first category of operating costs consists of those costs associated with operating the Company as a separate entity from Qwest. The second category of
costs consists of those costs we believe we will incur if the acquisition of Dex West by Dex Media is not consummated. These second category costs are those that will result from operating Dex Media
East as a separate entity from Qwest Dex. If the acquisition of Dex West is consummated, we do not expect to incur any of these second category costs. There can be no assurance that the acquisition of
Dex West will be consummated or that the anticipated synergies from such acquisition will be realized.

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 growth in advertising customers,
increases in the pricing of advertising, increases 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 transactions related to the acquisition of Dex East will be lower than they would
have been had the transactions not occurred because the transactions have 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

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distributed
are not carried over to our balance sheet. 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, under which revenue and expense are
recognized ratably over the life of each directory, commencing in the month of delivery.

Cost of revenue

We account for cost of revenue under the deferral and amortization method. 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 costs relating to each of the foregoing. Sales commissions include commissions paid to third party certified marketing
representatives, or CMRs, 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, with cost recognition commencing in the month of delivery.

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, after the
consummation of the transactions related to the acquisition of Dex East and the termination of the transition services agreement, we will incur 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.

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Results of operations

Three months ended March 31, 2003 (unaudited) compared to the three months ended March 31, 2002 (unaudited)

|                                   |              | Dex Media East LLC |     | Predecessor |   |     |      |   |    
|---------------------------------- | ------------ | ------------------ | --- | ----------- | - | --- | ---- | - | ---
|
|
|Revenue                            |              | $                  | 153 |             | $ | 170 |      | $ | (17
|Cost of revenue                    |              | $                  | 47  |             | $ | 53  |      | $ | (6 
|                                   |              |                    |     |             |   |     |      |   |    
|                                   | Gross profit |                    | $   | 106         |   | $   | 117  |   | $  
|                                   | Gross margin |                    |     | 69.3        | % |     | 68.8 | % |    
|                                   |              |                    |     |             |   |     |      |   |    
|General and administrative expense |              | $                  | 24  |             | $ | 10  |      | $ | 14 
|                                   |              |                    |     |             |   |     |      |   |    

Revenue

Revenue decreased by $17 million, or 10.0%, to $153 million for the three months ended March 31, 2003 from $170 million for the same
period in 2002. Excluding the effects of purchase accounting for deferred revenue, which totaled $25 million, revenue for the three months ended March 31, 2003 would have been
$178 million, an $8 million or 4.4% increase compared to the three months ended March 31, 2002. Total revenue, excluding the effects of purchase accounting, included
$173 million in directory services revenue and $5 million for all other products for the three months ended March 31, 2003.

Total
directory services revenue, which consists of local and national directory services revenue, decreased by $18 million, or 10.8% to $148 million for the three months
ended March 31, 2003 from $166 million for the same period in 2002. Excluding the effects of purchase accounting, total directory services revenue increased by $7 million, or
4.2%, to $173 million for the three months ended March 31, 2003. Local directory services revenue decreased by $3 million, or 2.2%, to $136 million for the three months
ended March 31, 2003 from $139 million for the same period in 2002. Local directory services revenue, excluding the effects of purchase accounting, increased by $6 million, or
4.3%, to $145 million for the three months ended March 31, 2003. Local directory services revenue, excluding the effects of purchase accounting, accounted for 81.5% of revenue, excluding
the effects of purchase accounting, for the three months ended March 31, 2003 compared to 81.8% for the same period in 2002. While the number of local advertisers declined by 2.4% over the last
twelve months ended March 31, 2003, the average annual revenue per local advertiser increased 7.2% over the last twelve months ended March 31, 2003 compared to the twelve month period
ended March 31, 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 by $15 million, or 55.6%, to $12 million for the three months ended March 31, 2003 from $27 million for the same
period in 2002. Revenue from national advertisers, excluding the effects of purchase accounting, for the three months ended March 31, 2003 increased $1 million, or 3.7%, to
$28 million as a result of increases in prices, offset by lower advertising volume purchased by national advertisers. Revenue from national advertisers for the three months ended
March 31, 2003 accounted for 15.7% of revenue, excluding the effects of purchase accounting, for the period as compared to 15.9% for the same period in 2002. Other revenue increased by
$1 million, or 25%, to $5 million for the three months ended March 31, 2003 from $4 million for the same period in 2002.

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Cost of revenue

Cost of revenue recognized decreased by $6 million, 11.3% to $47 million for the three months ended March 31, 2003 when compared to the same
period in 2002. Excluding the effects of purchase accounting for deferred costs, which totaled $6 million, cost of revenue would have been $53 million in the three month period ended
March 31, 2003. Cost of revenue represented 29.8% of revenue, excluding the effects of purchase accounting, for the three months ended March 31, 2003, compared to 31.2% of revenue for
the same period in 2002. For the three months ended March 31, 2003 and 2002, we and our Predecessor incurred costs, subject to deferral and amortization, of $52 million and
$45 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 $3 million, or 15.8%, to $22 million for the three months ended March 31, 2003 from $19 million for the
same period in 2002. The increase was primarily a result of an increase in the number of employees, higher cost of medical insurance and higher sales commissions and incentives paid to employees.

Direct
costs of publishing incurred during the period, which include paper, printing and distribution, were $18 million for each of the three months ended March 31, 2003
and 2002.

Other
cost of revenue incurred during the period, which include sales commissions, professional services, office expenses and facilities, increased by $4 million, or 50%, to
$12 million for the three months ended March 31, 2003 from $8 million for the same period in 2002.

Gross profit

Our gross profit decreased by $11 million, or 9.4%, to $106 million for the three months ended March 31, 2003, from $117 million for
the same period in 2002, as a result of the decrease in revenue and cost of revenue due to the effects of purchase accounting adjustments. Excluding the effects of purchase accounting, gross profit
for the three months ended March 31, 2003 would have been $125 million, an $8 million, or 6.8%, increase compared to the three months ended March 31, 2002. Gross margin,
excluding the effects of purchase accounting, increased to 70.2% for the three months ended March 31, 2003 from 68.8% for the same period in 2002.

General and administrative expense

General and administrative expense, excluding depreciation and amortization, increased by $14 million, to $24 million for the three months ended
March 31, 2003 from $10 million for the same period in 2002. The increase was primarily due to increases in salaries and wages, benefits, bad debt expense, advertising and vendored
services.

Salaries
and wages increased $4 million, to $5 million for the three months ended March 31, 2003 from $1 million for 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 information technology, finance and human resources new hires
and employees transferred to the Company from affiliates of the Predecessor. In addition, the 2003 period also includes accrued bonus compensation for which there was no corresponding expense in 2002.

Benefits
increased $3 million to $2 million for the three months ended March 31, 2003 compared to a credit of $1 million for the same period in 2002. This
increase is primarily due to the elimination in 2003 of pension credits in 2002 combined with an increase in costs related to transitioning to a stand-alone entity.

Bad
debt expense increased by $2 million, to $7 million for the three months ended March 31, 2003 from $5 million for the same period in 2002. Bad debt
expense as a percent of total revenue,

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excluding
the effects of purchase accounting, was 3.9% for the three months ended March 31, 2003 compared to 2.9% for the same period in 2002. The increase results primarily from the Company's
policy of reserving for accounts which reach a specified past due status. The increase in the level of accounts reaching this past due status is the result of an increase in local accounts receivable
and a general deterioration in overall economic conditions.

Advertising
increased $1 million, to $2 million for the three months ended March 31, 2002 from $1 million for the same period in 2002. Advertising as a
percent of revenue increased to 1.3% from 0.6% for the three months ended March 31, 2003 compared to the three months ended March 31, 2002.

Professional
services increased $2 million, to $3 million for the three months ended March 31, 2003 from $1 million for the same period in 2002. The increase
is mostly due to additional stand-alone costs resulting from operating the Company as a separate entity from Qwest.

All
other general and administrative expense, which includes office expenses, facilities costs, and other, increased by $3 million, to $5 million for the three months ended
March 31, 2003 from $2 million for the same period in 2002.

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,
dividends to Qwest, tax payments to Qwest to reflect our portion of the estimated taxes of Qwest Dex as well as capital 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 March 31, 2003, we had outstanding $2.184 billion in
aggregate indebtedness, and $99 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 $65 million for the three months ended March 31, 2003. Changes in working capital for the three months ended March 31, 2003,
relate primarily to changes in accounts receivable and accounts payable. Net accounts receivable decreased by $12 million, or 17.9%, to $55 million at March 31, 2003 from
$67 million at December 31, 2002. Accounts payable and other liabilities increased by $13 million, or 13.8%, to $107 million at March 31, 2003 from
$94 million at December 31, 2002.

Net
cash used for investing activities was $3 million for the three months ended March 31, 2003. The principal use of cash for investing activities was costs incurred for
software development, primarily related to the upgrade of our existing software system.

Net
cash used for financing activities was $25 million for the three months ended March 31, 2003. The principal use of cash for financing activities was the payment of
$25 million on the Company's term loans under its bank facility during the period.

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

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bill
and collect, on our behalf, amounts owed by customers, that 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.

We
will fund $210 million of the purchase price for Dex West to be paid by Dex Media to Qwest in connection with the acquisition of Dex West which, we believe, represents the fair
value of the ongoing benefit of the synergies to be realized by us in connection with that acquisition. Dex Media West will be an indirect, wholly-owned subsidiary of Dex Media and we will not own any
of the interest in Dex Media West. The $210 million will be paid to Dex Media in the form of a dividend to the extent of Dex Media East's retained earnings, with any remaining balance paid as a
return of capital, immediately prior to the consummation of the acquisition of Dex West. Dex Media will use the funds to pay a portion of the purchase price for Dex West to Qwest. We expect to fund
that portion of the Dex West purchase price through borrowings of $160 million pursuant to the delayed draw portion of the tranche A term loan facility and an additional $50 million cash
equity contribution to us from the Sponsors and their assignees and designees. The commitment under the delayed draw portion of the tranche A term
loan facility terminates if the acquisition of Dex West is not consummated. The acquisition of Dex West is subject to a number of conditions. In addition, certain shareholders of Qwest are seeking to
enjoin the sale of the Dex West assets. There can be no assurances that the acquisition of Dex West will be consummated or that the anticipated synergies will be realized. In the event that the
acquisition of Dex West is consummated, we will incur additional loans in a total principal amount of up to $160 million under the tranche A term loan facility, subject to certain conditions.
If the acquisition of Dex West is not consummated, we will be obligated to pay up to $24 million in fees to various financial institutions that have made financing commitments relating to the
acquisition of Dex West.

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 March 31, 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 $519 million and a tranche B term loan facility in a total principal amount of $689 million. Except as described in the following sentence, the tranche A and
tranche B term loan facilities were available only to fund the transactions related to the acquisition of Dex East. In addition, in the event that the acquisition of Dex West is consummated,
additional loans in a total principal amount of up to $160 million may be borrowed under the tranche A term loan facility, subject to certain conditions.

Our
new 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

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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, debt, 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 new credit facilities also require us, and will require our existing and future subsidiaries, with certain exceptions set forth in our credit agreement, to meet
certain financial covenants and ratios, particularly a leverage ratio, an interest coverage ratio and a fixed charges coverage ratio.

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, together with our
obligation to pay certain separation costs in the event the acquisition of Dex West is not consummated will be limited to $40 million. We paid approximately $2 million of such costs upon
the closing of the acquisition of Dex East, and believe that any remaining obligation will be paid during the next year. The consummation of the acquisition of Dex West is subject to a number of
conditions. There can be no assurances that the acquisition of Dex West will be consummated.

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.

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 new credit facilities will be adequate to meet our future liquidity needs for at least the next 12 months.

We
cannot assure you, however, that our business will generate 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 assure you that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all.

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Critical accounting policies and estimates

Revenue recognition

The sale of advertising in telephone 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.

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

To prepare the Predecessor combined 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. 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.

In
order to divide the Qwest Dex Holdings Predecessor combined 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 apportionment primarily consisted of
overhead costs and related items that have historically been shared with Qwest Dex.

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,"

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"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 March 31, 2003, we had no debt outstanding under our revolving credit facility (although approximately $1 million was committed under a
standby letter or credit), $519 million of debt outstanding under our tranche A term loan facility and $689 million of debt outstanding under our tranche B term loan facility. Our
revolving credit facility and each of our term loan facilities are subject to variable rates. Accordingly, our earnings and cash flow 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 notional amounts of our interest rate swaps total $370 million and the notional amount of our interest
rate cap totals $200 million as of March 31, 2003. We do not plan to engage in hedging for speculative purposes. Assuming the current level of borrowings with interest payable at
variable rates and assuming a one percentage point increase in the average interest rate under these borrowings, we estimate that our interest expense for the three months ended March 31, 2003
would have increased by approximately $2 million, net of the effects of interest rate swaps.

Foreign currency exchange risk

As of March 31, 2003, we had approximately €39 million outstanding under the Euro-denominated portion of our tranche B
term loan facility. We have entered into a forward exchange contract, that does not qualify for hedge accounting, with a major financial institution as an economic hedge to manage the foreign currency
risk of this debt against the Euro-denominated portion of our tranche B term loan facility which is intended to limit the financial impact of fluctuations between the two currencies, and
the related effects on earnings or cash flows. 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 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.

Within
90 days prior to the date of 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, the
Dex Media East's Chief Executive Officer and Chief Financial Officer concluded that Dex Media East's disclosure controls and procedures were effective.

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:
May 15, 2003

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CERTIFICATIONS

I,
George Burnett, certify that:

1.     I
have reviewed this quarterly report on Form 10-Q of Dex Media East LLC;

2.     Based
on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.     Based
on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.     The
registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:



5.     The
registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent function):



6.     The
registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material
weaknesses.

|Date: May 15, 2003 | /S/GEORGE BURNETTGeorge Burnett President and Chief Executive Officer
(principal executive officer)
|------------------ | ---------------------------------------------------------------------------------------------------

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I,
Robert M. Neumeister, Jr., certify that:

1.     I
have reviewed this quarterly report on Form 10-Q of Dex Media East LLC;

2.     Based
on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.     Based
on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.     The
registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:



5.     The
registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent function):



6.     The
registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material
weaknesses.

|Date: May 15, 2003 | /S/ROBERT M. NEUMEISTER, JR.Robert M. Neumeister, Jr. Chief Financial Officer and Executive Vice President
(principal financial officer)
|------------------ | ----------------------------------------------------------------------------------------------------------------------------------------

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