##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2009
 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 001-07155
 R.H. DONNELLEY CORPORATION
  Delaware
    
    13-2740040(State or Other Jurisdiction of Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)
 1001 Winstead Drive, Cary, N.C.
    
    27513(Address of principal executive offices)
    
    (Zip Code)
 (919) 297-1600
 (Registrants telephone number, including area code)
  (Former Name, Former Address and Former
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ
  Title of class
    
    Shares Outstanding at July15, 2009Common Stock, par value $1 per share
    
    68,924,438




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##### 



R.H. DONNELLEY CORPORATION
 INDEX TO FORM 10-Q
 PAGEPART I. FINANCIAL INFORMATIONItem 1. Financial Statements (Unaudited)Condensed Consolidated Balance Sheets at June 30, 2009 and December 31, 2008
    
    
    3Condensed Consolidated Statements of Operations and Comprehensive Loss for the
three and six months ended June 30, 2009 and 2008
    
    
    4Condensed Consolidated Statements of Cash Flows for the six months ended June 30,
2009 and 2008
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    28Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    50Item 4. Controls and Procedures
    
    
    52PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    53Item 1A. Risk Factors
    
    
    53Item 3. Defaults Upon Senior Securities
    
    
    57Item 6. Exhibits
    
    
    58SIGNATURES
    
    
    59EX-10.1EX-10.2EX-31.1EX-31.2EX-32.1
  2




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##### Table of Contents



Part I. FINANCIAL INFORMATION
 
  R.H. Donnelley Corporation and Subsidiaries
Debtor and Debtor-In-Possession as of May 28, 2009
Condensed Consolidated Balance Sheets (Unaudited)
 June 30,
    
    December 31,(in thousands, except share data)
    
    2009
    
    2008AssetsCurrent AssetsCash and cash equivalents
    
    $
    406,947
    
    
    $
    131,199Accounts receivableBilled
    
    
    267,205
    
    
    
    303,338Unbilled
    
    
    734,796
    
    
    
    777,684Allowance for doubtful accounts and sales claims
    
    
    (50,240
    )
    
    
    (53,995
    )Net accounts receivable
    
    
    951,761
    
    
    
    1,027,027Deferred directory costs
    
    
    165,662
    
    
    
    164,248Short-term deferred income taxes, net
    
    
    51,743
    
    
    
    97,973Prepaid expenses and other current assets
    
    
    62,764
    
    
    
    95,084Total current assets
    
    
    1,638,877
    
    
    
    1,515,531Fixed assets and computer software, net
    
    
    170,502
    
    
    
    188,695Other non-current assets
    
    
    75,491
    
    
    
    167,222Intangible assets, net
    
    
    9,752,562
    
    
    
    10,009,261Total Assets
    
    $
    11,637,432
    
    
    $
    11,880,709Liabilities and Shareholders DeficitCurrent Liabilities Not Subject to CompromiseAccounts payable and accrued liabilities
    
    $
    125,716
    
    
    $
    216,093Accrued interest
    
    
    5,028
    
    
    
    181,102Deferred directory revenues
    
    
    978,007
    
    
    
    1,076,271Current portion of long-term debt
    
    
    592,023
    
    
    
    113,566Total current liabilities not subject to compromise
    
    
    1,700,774
    
    
    
    1,587,032Long-term debt
    
    
    3,023,411
    
    
    
    9,508,690Deferred income taxes, net
    
    
    1,077,172
    
    
    
    998,071Other non-current liabilities
    
    
    356,049
    
    
    
    280,291Total liabilities not subject to compromise
    
    
    6,157,406
    
    
    
    12,374,084Liabilities subject to compromise
    
    
    6,430,031
    
    
    
    Commitments and contingenciesShareholders DeficitCommon stock, par value $1 per share, authorized - 400,000,000 shares; issued
- 88,169,275 shares
at June 30, 2009 and December 31, 2008; outstanding - 68,923,948
shares and 68,807,446 shares at June 30, 2009 and December 31, 2008,
respectively
    
    
    88,169
    
    
    
    88,169Additional paid-in capital
    
    
    2,437,994
    
    
    
    2,431,411Accumulated deficit
    
    
    (3,160,559
    )
    
    
    (2,683,867
    )Treasury stock, at cost, 19,245,327 shares at June 30, 2009 and 19,361,829
shares at December 31, 2008
    
    
    (256,146
    )
    
    
    (256,277
    )Accumulated other comprehensive loss
    
    
    (59,463
    )
    
    
    (72,811
    )Total shareholders deficit
    
    
    (950,005
    )
    
    
    (493,375
    )Total Liabilities and Shareholders Deficit
    
    $
    11,637,432
    
    
    $
    11,880,709
  3




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##### Table of Contents



R.H. Donnelley Corporation and Subsidiaries
Debtor and Debtor-In-Possession as of May 28, 2009
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
 Three months ended
    
    Six months endedJune 30,
    
    June 30,(in thousands, except per share data)
    
    2009
    
    2008
    
    2009
    
    2008Net revenues
    
    $
    565,628
    
    
    $
    663,750
    
    
    $
    1,167,615
    
    
    $
    1,338,404Expenses:Production and distribution expenses
(exclusive of depreciation and
amortization shown separately below)
    
    
    88,499
    
    
    
    103,453
    
    
    
    184,651
    
    
    
    212,630Selling and support expenses
    
    
    172,184
    
    
    
    175,591
    
    
    
    337,068
    
    
    
    361,906General and administrative expenses
    
    
    18,765
    
    
    
    30,109
    
    
    
    53,227
    
    
    
    64,998Depreciation and amortization
    
    
    142,322
    
    
    
    119,544
    
    
    
    285,167
    
    
    
    237,807Impairment charges
    
    
    
    
    
    
    660,239
    
    
    
    
    
    
    
    3,123,854Total expenses
    
    
    421,770
    
    
    
    1,088,936
    
    
    
    860,113
    
    
    
    4,001,195Operating income (loss)
    
    
    143,858
    
    
    
    (425,186
    )
    
    
    307,502
    
    
    
    (2,662,791
    )Interest expense, net
    
    
    (161,469
    )
    
    
    (234,230
    )
    
    
    (360,305
    )
    
    
    (430,104
    )Gain on debt transactions, net
    
    
    
    
    
    
    159,160
    
    
    
    
    
    
    
    159,160Loss before reorganization items, net and
income taxes
    
    
    (17,611
    )
    
    
    (500,256
    )
    
    
    (52,803
    )
    
    
    (2,933,735
    )Reorganization items, net
    
    
    (70,781
    )
    
    
    
    
    
    
    (70,781
    )
    
    
    Loss before income taxes
    
    
    (88,392
    )
    
    
    (500,256
    )
    
    
    (123,584
    )
    
    
    (2,933,735
    )(Provision) benefit for income taxes
    
    
    12,910
    
    
    
    161,352
    
    
    
    (353,108
    )
    
    
    971,721Net loss
    
    $
    (75,482
    )
    
    $
    (338,904
    )
    
    $
    (476,692
    )
    
    $
    (1,962,014
    )Loss per share:Basic and diluted
    
    $
    (1.10
    )
    
    $
    (4.93
    )
    
    $
    (6.92
    )
    
    $
    (28.51
    )Shares used in computing loss per share:Basic and diluted
    
    
    68,918
    
    
    
    68,812
    
    
    
    68,892
    
    
    
    68,811Comprehensive LossNet loss
    
    $
    (75,482
    )
    
    $
    (338,904
    )
    
    $
    (476,692
    )
    
    $
    (1,962,014
    )Unrealized (loss) gain on interest rate
swaps, net of tax
    
    
    (4,212
    )
    
    
    51,991
    
    
    
    (3,884
    )
    
    
    24,381Benefit plans adjustment, net of tax
    
    
    17,215
    
    
    
    259
    
    
    
    17,232
    
    
    
    514Comprehensive loss
    
    $
    (62,479
    )
    
    $
    (286,654
    )
    
    $
    (463,344
    )
    
    $
    (1,937,119
    )
  4




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R.H. Donnelley Corporation and Subsidiaries
Debtor and Debtor-In-Possession as of May 28, 2009


Condensed Consolidated Statements of Cash Flows (Unaudited)
 Six months endedJune 30,(in thousands)
    
    2009
    
    2008Cash Flows from Operating ActivitiesNet loss
    
    $
    (476,692
    )
    
    $
    (1,962,014
    )Reconciliation of net loss to net cash provided by operating activities:Impairment charges
    
    
    
    
    
    
    3,123,854Gain on debt transactions, net
    
    
    
    
    
    
    (159,160
    )Depreciation and amortization
    
    
    285,167
    
    
    
    237,807Deferred income tax provision (benefit)
    
    
    352,668
    
    
    
    (974,588
    )Provision for bad debts
    
    
    80,582
    
    
    
    64,153Stock based compensation expense
    
    
    6,806
    
    
    
    16,327Change in fair value of interest rate swaps
    
    
    (2,110
    )
    
    
    38,443Other non-cash items, net
    
    
    20,727
    
    
    
    26,493Non-cash reorganization items, net
    
    
    20,318
    
    
    
    Changes in assets and liabilities:Increase in accounts receivable
    
    
    (5,316
    )
    
    
    (128,851
    )Decrease in other assets
    
    
    38,212
    
    
    
    25,090Increase (decrease) in accounts payable and accrued liabilities
    
    
    47,824
    
    
    
    (71,266
    )(Decrease) increase in deferred directory revenues
    
    
    (98,264
    )
    
    
    36,491(Decrease) increase in other non-current liabilities
    
    
    (93,300
    )
    
    
    3,484Net cash provided by operating activities
    
    
    176,622
    
    
    
    276,263Cash Flows from Investing ActivitiesAdditions to fixed assets and computer software
    
    
    (9,846
    )
    
    
    (30,304
    )Equity investment disposition
    
    
    
    
    
    
    4,318Net cash used in investing activities
    
    
    (9,846
    )
    
    
    (25,986
    )Cash Flows from Financing ActivitiesAdditional borrowings under credit facilities, net of costs
    
    
    
    
    
    
    1,018,699Credit facilities repayments
    
    
    (229,415
    )
    
    
    (1,191,244
    )Revolver borrowings
    
    
    361,000
    
    
    
    373,100Revolver repayments
    
    
    (18,749
    )
    
    
    (396,150
    )Debt issuance costs in connection with debt transactions
    
    
    
    
    
    
    (8,497
    )Repurchase of common stock
    
    
    
    
    
    
    (6,112
    )Decrease in checks not yet presented for payment
    
    
    (3,864
    )
    
    
    (4,234
    )Proceeds from employee stock option exercises
    
    
    
    
    
    
    94Net cash provided by (used in) financing activities
    
    
    108,972
    
    
    
    (214,344
    )Increase in cash and cash equivalents
    
    
    275,748
    
    
    
    35,933Cash and cash equivalents, beginning of year
    
    
    131,199
    
    
    
    46,076Cash and cash equivalents, end of period
    
    $
    406,947
    
    
    $
    82,009Supplemental Information:Cash paid:Interest, net
    
    $
    282,839
    
    
    $
    378,435Income taxes, net
    
    $
    1,062
    
    
    $
    1,629Non-cash financing activities:Reduction of debt from debt transactions
    
    $
    
    
    
    $
    (172,804
    )
  5




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R.H. Donnelley Corporation and Subsidiaries
Debtor and Debtor-In-Possession as of May 28, 2009

Notes to Condensed Consolidated Financial Statements (Unaudited)  (tabular amounts in thousands, except share and per share data)
 1. Business and Basis of Presentation
  ®
  Chapter 11 Bankruptcy Proceedings and Plan of Reorganization
 Filing of Voluntary Petitions in Chapter 11
 et al.
   Commencement of Chapter 11 Cases
  6




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Proposed Plan of Reorganization
   7




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Going Concern
   Accounting Matters
   8




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##### Table of Contents



Accounting for Derivative Instruments and Hedging Activities
 Financial Reporting by Entities in Reorganization
Under the Bankruptcy Code
  Other Significant Financing Developments
  Description
    
    AmountRHDITerm Loan D-1
    
    $
    13,797Term Loan D-2
    
    
    54,912Revolver
    
    
    8,938Dex Media WestTerm Loan A
    
    
    6,971Term Loan B
    
    
    50,941Revolver
    
    
    4,826Dex Media EastTerm Loan A
    
    
    34,176Term Loan B
    
    
    20,454Revolver
    
    
    4,985Total repayment
    
    $
    200,000
 9




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##### Table of Contents



Description
    
    AmountRHDI11.75% Senior Notes due 2015
    
    $
    24,256Dex Media, Inc.8% Senior Notes due 2013
    
    
    20,0009% Senior Discount Notes due 2013
    
    
    33,744Dex Media West5.875% Senior Notes due 2011
    
    
    256Total interest payments
    
    $
    78,256
      2. Summary of Significant Accounting Policies
 Identifiable Intangible Assets and Goodwill
 Business Combinations Goodwill and Other
Intangible Assets
 10




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##### Table of Contents



Accounting for
the Impairment or Disposal of Long-Lived Assets
  Interest Expense and Deferred Financing Costs
    11




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##### Table of Contents



Gain on Debt Transactions, net
  Accreted or Par ValueRHD Notes Exchanged6.875% Senior Notes due 2013
    
    $
    47,6636.875% Series A-1 Senior Discount Notes due 2013
    
    
    29,1856.875% Series A-2 Senior Discount Notes due 2013
    
    
    93,0318.875% Series A-3 Senior Notes due 2016
    
    
    151,1198.875% Series A-4 Senior Notes due 2017
    
    
    264,677Total RHD Notes exchanged
    
    
    585,675RHDI Notes Issued11.75% Senior Notes due 2015
    
    
    412,871Reduction of debt from debt transactions
    
    
    172,804Write-off of unamortized deferred financing costs
    
    
    (11,489
    )Net gain on debt transactions
    
    $
    161,315
   12




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Advertising Expense
  Concentration of Credit Risk
    Earnings (Loss) Per Share
 Earnings Per
Share .
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2009
    
    2008
    
    2009
    
    2008Basic EPSNet loss
    

    $
    (75,482
    )
    
    $
    (338,904
    )
    
    $
    (476,692
    )
    
    $

    (1,962,014
    )Weighted average common shares outstanding
    
    
    68,918
    
    
    
    68,812
    
    
    
    68,892
    
    
    
    68,811Basic loss per share
    
    $
    (1.10
    )
    
    $
    (4.93
    )
    
    $
    (6.92
    )
    
    $
    (28.51
    )Diluted EPSNet loss
    
    $
    (75,482
    )
    
    $
    (338,904
    )
    
    $
    (476,692
    )
    
    $
    (1,962,014
    )Weighted average common shares outstanding
    
    
    68,918
    
    
    
    68,812
    
    
    
    68,892
    
    
    
    68,811Dilutive effect of stock awards (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted average diluted shares outstanding
    
    
    68,918
    
    
    
    68,812
    
    
    
    68,892
    
    
    
    68,811Diluted loss per share
    
    $
    (1.10
    )
    
    $
    (4.93
    )
    
    $
    (6.92
    )
    
    $
    (28.51
    )
 13




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##### Table of Contents



(1)
    
    Due to the reported net loss for the three and six months ended June 30, 2009 and 2008, the
effect of all stock-based awards was anti-dilutive and therefore not included in the
calculation of diluted EPS. For the three months ended June 30, 2009 and 2008, 5.7 million and
8.8 million shares, respectively, of stock-based awards had exercise prices that exceeded the
average market price of the Companys common stock for the respective period. For the six
months ended June 30, 2009 and 2008, 5.7 million shares and 6.2 million shares, respectively,
of stock based awards had exercise prices that exceeded the average market price of the
Companys common stock for the respective period. Stock-Based Awards
 Share-Based Payment
 Long-Term Incentive Program
  Fair Value of Financial Instruments
 Disclosures About Fair Value of Financial Instruments
 Fair Value Measurements
 14




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Fair Value Measurements atJune 30, 2009Description
    
    Using Significant Other Observable Inputs (Level 2)Derivatives  Liabilities
    
    $(7,618)
        15




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##### Table of Contents



Effective Date of FASB Statement No. 157
 Estimates
 Accounting for Uncertainty in Income Taxes: An Interpretation of FASB Statement No.
 New Accounting Pronouncements
 Subsequent Events
  3. Reorganization Items, Net and Liabilities Subject to Compromise
 Reorganization Items, Net
  Three and Six MonthsEnded June 30, 2009Write-off of unamortized deferred financing costs
    
    $
    64,475Professional fees
    
    
    50,463Write-off of net premiums / discounts on long-term
debt
    
    
    34,886Write-off of fair value adjustments
    
    
    (78,511
    )Lease rejections
    
    
    (532
    )Total reorganization items
    
    $
    70,781
  16




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##### Table of Contents



Liabilities Subject to Compromise
   June 30, 2009Notes in default
    
    $
    6,071,756Accrued interest
    
    
    240,989Tax related liabilities
    
    
    51,580Accounts payable and accrued liabilities
    
    
    35,760Lease related liabilities
    
    
    29,946Total liabilities subject to compromise
    
    $
    6,430,031
 4. Restructuring Charges
  2003
    
    2006
    
    2007
    
    2008
    
    2009Three months ended
    
    Restructuring
    
    Restructuring
    
    Restructuring
    
    Restructuring
    
    RestructuringJune 30, 2009
    
    Actions
    
    Actions
    
    Actions
    
    Actions
    
    Actions
    
    TotalBalance at March 31, 2009
    
    $
    557
    
    
    $
    484
    
    
    $
    66
    
    
    $
    4,076
    
    
    $
    
    
    
    $
    5,183Additions to reserve charged to earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,279
    
    
    
    2,075
    
    
    
    4,354Payments
    
    
    (25
    )
    
    
    (50
    )
    
    
    (17
    )
    
    
    (4,017
    )
    
    
    (337
    )
    
    
    (4,446
    )Reclass to reorganization items,
net
    
    
    (532
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (532
    )Reclass to liabilities subject to
compromise
    
    
    
    
    
    
    (434
    )
    
    
    
    
    
    
    (1,984
    )
    
    
    (1,738
    )
    
    
    (4,156
    )Balance at June 30, 2009
    
    $
    
    
    
    $
    
    
    
    $
    49
    
    
    $
    354
    
    
    $
    
    
    
    $
    403
 17




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##### Table of Contents



2003
    
    2006
    
    2007
    
    2008
    
    2009Six months ended
    
    Restructuring
    
    Restructuring
    
    Restructuring
    
    Restructuring
    
    RestructuringJune 30, 2009
    
    Actions
    
    Actions
    
    Actions
    
    Actions
    
    Actions
    
    TotalBalance at December 31, 2008
    
    $
    603
    
    
    $
    567
    
    
    $
    376
    
    
    $
    10,203
    
    
    $
    
    
    
    $
    11,749Additions to reserve charged to earnings
    
    
    
    
    
    
    
    
    
    
    32
    
    
    
    8,998
    
    
    
    2,075
    
    
    
    11,105Payments
    
    
    (71
    )
    
    
    (133
    )
    
    
    (359
    )
    
    
    (16,863
    )
    
    
    (337
    )
    
    
    (17,763
    )Reclass to reorganization items,
net
    
    
    (532
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (532
    )Reclass to liabilities subject to
compromise
    
    
    
    
    
    
    (434
    )
    
    
    
    
    
    
    (1,984
    )
    
    
    (1,738
    )
    
    
    (4,156
    )Balance at June 30, 2009
    
    $
    
    
    
    $
    
    
    
    $
    49
    
    
    $
    354
    
    
    $
    
    
    
    $
    403
      18




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##### Table of Contents



5. Long-Term Debt
  Notes in Default
    
    
    Credit FacilitiesJune 30, 2009
    
    
    December 31, 2008RHD6.875% Senior Notes due 2013
    
    $
    206,791
    
    
    $
    
    
    
    $
    206,7916.875% Series A-1 Senior Discount Notes due 2013
    
    
    320,903
    
    
    
    
    
    
    
    301,8626.875% Series A-2 Senior Discount Notes due 2013
    
    
    483,365
    
    
    
    
    
    
    
    455,2048.875% Series A-3 Senior Notes due 2016
    
    
    1,012,839
    
    
    
    
    
    
    
    1,012,8398.875% Series A-4 Senior Notes due 2017
    
    
    1,229,760
    
    
    
    
    
    
    
    1,229,760R.H. Donnelley Inc.Credit Facility
    
    
    
    
    
    
    1,430,660
    
    
    
    1,341,09811.75% Senior Notes due 2015
    
    
    412,871
    
    
    
    
    
    
    
    412,871Dex Media, Inc.8% Senior Notes due 2013
    
    
    500,000
    
    
    
    
    
    
    
    510,4089% Senior Discount Notes due 2013
    
    
    749,857
    
    
    
    
    
    
    
    771,488Dex Media EastCredit Facility
    
    
    
    
    
    
    1,082,835
    
    
    
    1,081,500Dex Media WestCredit Facility
    
    
    
    
    
    
    1,101,939
    
    
    
    1,080,0008.5% Senior Notes due 2010
    
    
    385,000
    
    
    
    
    
    
    
    393,8835.875% Senior Notes due 2011
    
    
    8,720
    
    
    
    
    
    
    
    8,7619.875% Senior Subordinated Notes due 2013
    
    
    761,650
    
    
    
    
    
    
    
    815,791Total RHD consolidated
    
    
    6,071,756
    
    
    
    3,615,434
    
    
    
    9,622,256Less current portion
    
    
    
    
    
    
    592,023
    
    
    
    113,566Long-term debt subject to compromise
    
    $
    6,071,756
    
    
    
    
    
    
    
    Long-term debt not subject to compromise
    
    
    
    
    
    $
    3,023,411
    
    
    $
    9,508,690
 Credit Facilities
   19




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##### Table of Contents



RHDI
  Dex Media East
  Dex Media West
  6. Derivative Financial Instruments
 Disclosures about Derivative Instruments and Hedging
Activities an amendment of FASB Statement No. 133
 , Accounting for Certain Derivative Instruments and Certain Hedging Activities, an Amendment
of FAS 133 Amendment of Statement 133 on Derivative Instruments and Hedging
Activities.
 20




---



##### Table of Contents



Effective Dates
    
    Notional Amount
    
    
    Pay Rates
    
    
    Maturity Dates(amounts in millions)September 7, 2004
    
    $
    100
    (1)
    
    
    3.750
    %
    
    September 7, 2009September 15, 2004
    
    
    50
    (1)
    
    
    3.910
    %
    
    September 15, 2009September 17, 2004
    
    
    50
    (1)
    
    
    3.740
    %
    
    September 17, 2009February 28, 2008
    
    
    100
    (1)
    
    
    3.212
    %
    
    February 28, 2011March 31, 2008
    
    
    100
    (1)
    
    
    3.50
    %
    
    March 29, 2013Total
    
    $
    400
 
 (1)
    
    Consists of one swap. June 30, 2009.
 (Gain) Loss Recognized(Gain) Loss Recognized in
    
    in AccumulatedInterest Expense
    
    Other ComprehensiveFrom the Change in Fair Value of
    
    Loss From Effective InterestInterest Rate Swaps
    
    Rate SwapsFair Value
    
    Three Months
    
    Six Months
    
    Three Months
    
    Six MonthsMeasurements
    
    Ended
    
    Ended
    
    Ended
    
    Endedat June 30, 2009
    
    June 30, 2009
    
    June 30, 2009
    
    June 30, 2009
    
    June 30, 2009Accounts Payable and Accrued
Liabilities
    
    $
    (5,760
    )
    
    $
    15,714
    
    
    $
    10,419
    
    
    $
    11,368
    
    
    $
    12,050Other Non-Current Liabilities
    
    
    (1,858
    )
    
    
    (11,162
    )
    
    
    (12,529
    )
    
    
    (7,156
    )
    
    
    (8,166
    )Total Liabilities
    
    $
    (7,618
    )
    
    $
    4,552
    
    
    $
    (2,110
    )
    
    $
    4,212
    
    
    $
    3,884
     21




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##### Table of Contents



7. Income Taxes
      22




---



##### Table of Contents



Three Months Ended
    
    Six Months EndedJune 30
    
    June 302009
    
    2008
    
    2009
    
    2008Statutory U.S. Federal tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State and local taxes, net of U.S. Federal tax benefit
    
    
    (10.5
    )
    
    
    4.0
    
    
    
    (6.8
    )
    
    
    3.2Non-deductible goodwill impairment charges
    
    
    
    
    
    
    (6.4
    )
    
    
    
    
    
    
    (5.0
    )Other non-deductible expenses
    
    
    (7.5
    )
    
    
    (0.1
    )
    
    
    (5.4
    )
    
    
    Section 382 limitation
    
    
    
    
    
    
    
    
    
    
    (303.7
    )
    
    
    Change in state tax regulations
    
    
    
    
    
    
    
    
    
    
    (1.9
    )
    
    
    Change in valuation allowance
    
    
    (1.8
    )
    
    
    (0.2
    )
    
    
    (1.3
    )
    
    
    (0.1
    )Other
    
    
    (0.6
    )
    
    
    
    
    
    
    (1.6
    )
    
    
    Effective tax rate
    
    
    14.6
    %
    
    
    32.3
    %
    
    
    (285.7
    )%
    
    
    33.1
    %
 8. Benefit Plans
  
    
    Effective as of December 31, 2009, the Company will freeze the Dex Media, Inc. Pension
Plan covering IBEW employees. In connection with the freeze, all pension plan benefit
accruals for IBEW plan participants will cease as of December 31, 2009, however, all plan
balances remain intact and interest credits on participant account balances, as well as
service credits for vesting and retirement eligibility, continue in accordance with the
terms of the plan. In addition, supplemental transition credits have been provided to
certain plan participants nearing retirement who would otherwise lose a portion of their
anticipated pension benefit at age 65 as a result of freezing the current plan. Similar
supplemental transition credits have been provided to certain plan participants who were
grandfathered under a final average pay formula when the defined benefit plan was
previously converted from a traditional pension plan to a cash balance plan.
 
    
    The elimination of all non-subsidized access to retiree health care and life insurance
benefits effective January 1, 2010.
 
    
    The elimination of subsidized retiree health care benefits for any Medicare-eligible
retirees effective January 1, 2010.
 
    
    The phase out of subsidized retiree health care benefits over a three-year period
beginning January 1, 2010. With respect to the phase out of subsidized retiree health care
benefits, if an eligible retiree becomes Medicare-eligible at any point in time during the
phase out process noted above, such retiree will no longer be eligible for retiree health
care coverage.
  Employers Accounting for Settlements and Curtailments of Defined Benefit Plans and for
Termination Benefits
 23




---



##### Table of Contents



Employers Disclosures About Pensions and Other Postretirement
Benefits (Revised 2003),
 Pension BenefitsThree Months
    
    Six MonthsEnded June 30,
    
    Ended June 30,2009
    
    2008
    
    2009
    
    2008Service cost
    
    $
    1,378
    
    
    $
    3,224
    
    
    $
    2,819
    
    
    $
    6,736Interest cost
    
    
    3,844
    
    
    
    4,593
    
    
    
    7,452
    
    
    
    9,179Expected return on plan assets
    
    
    (4,546
    )
    
    
    (5,097
    )
    
    
    (9,125
    )
    
    
    (10,155
    )Amortization of prior service cost
    
    
    
    
    
    
    49
    
    
    
    
    
    
    
    98Amortization of net (gain)/ loss
    
    
    (57
    )
    
    
    196
    
    
    
    (27
    )
    
    
    392Settlement
loss
    
    
    3,546
    
    
    
    
    
    
    
    3,546
    
    
    
    Net periodic benefit cost
    
    $
    4,165
    
    
    $
    2,965
    
    
    $
    4,665
    
    
    $
    6,250
 Postretirement BenefitsThree Months
    
    Six MonthsEnded June 30,
    
    Ended June 30,2009
    
    2008
    
    2009
    
    2008Service cost
    
    $
    146
    
    
    $
    446
    
    
    $
    414
    
    
    $
    943Interest cost
    
    
    644
    
    
    
    1,575
    
    
    
    1,403
    
    
    
    2,968Amortization of prior service cost
    
    
    (2
    )
    
    
    167
    
    
    
    (4
    )
    
    
    334Amortization of net (gain)/ loss
    
    
    (261
    )
    
    
    9
    
    
    
    (261
    )
    
    
    18Curtailment
gain
    
    
    (13,460
    )
    
    
    
    
    
    
    (13,460
    )
    
    
    Net periodic benefit cost
    
    $
    (12,933
    )
    
    $
    2,197
    
    
    $
    (11,908
    )
    
    $
    4,263
    24




---



##### Table of Contents



9. Business Segments
  10. Legal Proceedings
      11. R.H. Donnelley Corporation (Parent Company) Financial Statements
   25




---



##### Table of Contents



R.H. Donnelley Corporation
Condensed Parent Company Balance Sheets
 June 30,
    
    December 31,2009
    
    2008AssetsCash and cash equivalents
    
    $
    1,733
    
    
    $
    948Intercompany, net
    
    
    94,369
    
    
    
    350,490Short-term deferred income taxes, net.
    
    
    9,370
    
    
    
    Intercompany note receivable
    
    
    7,000
    
    
    
    Prepaid and other current assets
    
    
    4,962
    
    
    
    6,964Total current assets
    
    
    117,434
    
    
    
    358,402Investment in subsidiaries
    
    
    2,022,973
    
    
    
    2,098,154Fixed assets and computer
software, net
    
    
    6,206
    
    
    
    7,844Other non-current assets
    
    
    
    
    
    
    65,651Intercompany note receivable
    
    
    300,000
    
    
    
    300,000Total assets
    
    $
    2,446,613
    
    
    $
    2,830,051Liabilities and Shareholders DeficitAccounts payable and accrued liabilities
    
    $
    2,541
    
    
    $
    7,978Accrued interest
    
    
    
    
    
    
    97,025Total current liabilities not subject to
compromise
    
    
    2,541
    
    
    
    105,003Long-term debt
    
    
    
    
    
    
    3,206,456Deferred income taxes, net
    
    
    3,966
    
    
    
    2,928Other non-current liabilities
    
    
    1,575
    
    
    
    9,039Total liabilities not subject to
compromise
    
    
    8,082
    
    
    
    3,323,426Liabilities subject to compromise
    
    
    3,388,536
    
    
    
    Shareholders deficit
    
    
    (950,005
    )
    
    
    (493,375
    )Total liabilities and shareholders deficit
    
    $
    2,446,613
    
    
    $
    2,830,051
 26




---



##### Table of Contents



R.H. Donnelley Corporation
Condensed Parent Company Statements of Operations
 For the Three Months Ended June 30,2009
    
    2008Expenses
    
    $
    4,947
    
    
    $
    5,979Partnership and equity income
(loss)
    
    
    57,365
    
    
    
    (588,534
    )Operating income (loss)
    
    
    52,418
    
    
    
    (594,513
    )Interest expense, net
    
    
    (41,487
    )
    
    
    (78,831
    )Gain on debt transactions, net
    
    
    
    
    
    
    159,160Income (loss) before
reorganization items, net and
income taxes
    
    
    10,931
    
    
    
    (514,184
    )Reorganization items, net
    
    
    (99,323
    )
    
    
    Loss before income taxes
    
    
    (88,392
    )
    
    
    (514,184
    )Benefit for income taxes
    
    
    12,910
    
    
    
    175,280Net loss
    
    $
    (75,482
    )
    
    $
    (338,904
    )
 For the Six Months Ended June 30,2009
    
    2008Expenses
    
    $
    10,253
    
    
    $
    12,850Partnership and equity income (loss)
    
    
    92,028
    
    
    
    (2,933,569
    )Operating income (loss)
    
    
    81,775
    
    
    
    (2,946,419
    )Interest expense, net
    
    
    (106,036
    )
    
    
    (160,404
    )Gain on debt transactions, net
    
    
    
    
    
    
    159,160Loss before reorganization items,
net and income taxes
    
    
    (24,261
    )
    
    
    (2,947,663
    )Reorganization items, net
    
    
    (99,323
    )
    
    
    Loss before income taxes
    
    
    (123,584
    )
    
    
    (2,947,663
    )(Provision) benefit for income taxes
    
    
    (353,108
    )
    
    
    985,649Net loss
    
    $
    (476,692
    )
    
    $
    (1,962,014
    )
 R.H. Donnelley Corporation
Condensed Parent Company Statements of Cash Flows
 For the Six Months EndedJune 30,2009
    
    2008Cash flow from operating activities
    
    $
    (120,776
    )
    
    $
    (155,901
    )Cash flow from investing activities:Additions to fixed assets and
computer software
    
    
    (134
    )
    
    
    (1,062
    )Equity investment disposition
    
    
    
    
    
    
    4,318Net cash (used in) provided by
investing activities
    
    
    (134
    )
    
    
    3,256Cash flow from financing activities:(Decrease) increase in checks not
yet presented for payment
    
    
    (905
    )
    
    
    5Proceeds from employee stock option
exercises
    
    
    
    
    
    
    94Note repayments
    
    
    
    
    
    
    (158
    )Repurchase of common stock
    
    
    
    
    
    
    (6,112
    )Intercompany loans
    
    
    (7,000
    )
    
    
    Dividends from subsidiaries
    
    
    129,600
    
    
    
    142,900Net cash provided by financing
activities
    
    
    121,695
    
    
    
    136,729Change in cash
    
    
    785
    
    
    
    (15,916
    )Cash at beginning of year
    
    
    948
    
    
    
    18,900Cash at end of period
    
    $
    1,733
    
    
    $
    2,984
 12. Subsequent Events
  27




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward-Looking Information
  Corporate Overview
  
    
    We provide simple, cost effective marketing solutions to our advertisers that generate a
large volume of ready-to-buy consumers for their local businesses.
 
    
    We provide local search solutions to consumers that are easy to use and deliver highly
relevant search results through a variety of print and online media platforms.
 ®
 28




---



##### Table of Contents




    
    Brand:Our Dex brand provides differentiation and an ability to leverage the
capabilities of our print products into other media, such as online and mobile;
 
    
    Advertisers:Strong, long-term relationships with our advertisers;
 
    
    Products:Our multiple media local search solutions target consumers who are closer to
making purchase decisions;
 
    
    Channel:We manage a large, established local sales organization; and
 
    
    Content:Our proprietary database contains up-to-date information for national and
local businesses in 28 states and an infrastructure to service these national and local
advertisers.
 Chapter 11 Bankruptcy Proceedings and Plan of Reorganization
 Filing of Voluntary Petitions in Chapter 11
 et al.
   Commencement of Chapter 11 Cases
   29




---



##### Table of Contents



Proposed Plan of Reorganization
   30




---



##### Table of Contents



Recent Trends Related to Our Business
     31




---



##### Table of Contents



Going Concern
  Accounting Matters
  32




---



##### Table of Contents



Other Significant Financing Developments
  Description
    
    AmountRHDITerm Loan D-1
    
    $
    13,797Term Loan D-2
    
    
    54,912Revolver
    
    
    8,938Dex Media WestTerm Loan A
    
    
    6,971Term Loan B
    
    
    50,941Revolver
    
    
    4,826Dex Media EastTerm Loan A
    
    
    34,176Term Loan B
    
    
    20,454Revolver
    
    
    4,985Total repayment
    
    $
    200,000
  Description
    
    AmountRHDI11.75% Senior Notes due 2015
    
    $
    24,256Dex Media, Inc.8% Senior Notes due 2013
    
    
    20,0009% Senior Discount Notes due 2013
    
    
    33,744Dex Media West5.875% Senior Notes due 2011
    
    
    256Total interest payments
    
    $
    78,256
   33




---



##### Table of Contents



Employee Retirement Savings and Pension Plans
  
    
    Effective as of December 31, 2009, the Company will freeze the Dex Media, Inc. Pension
Plan covering IBEW employees. In connection with the freeze, all pension plan benefit
accruals for IBEW plan participants will cease as of December 31, 2009, however, all plan
balances remain intact and interest credits on participant account balances, as well as
service credits for vesting and retirement eligibility, continue in accordance with the
terms of the plan. In addition, supplemental transition credits have been provided to
certain plan participants nearing retirement who would otherwise lose a portion of their
anticipated pension benefit at age 65 as a result of freezing the current plan. Similar
supplemental transition credits have been provided to certain plan participants who were
grandfathered under a final average pay formula when the defined benefit plan was
previously converted from a traditional pension plan to a cash balance plan.
 
    
    The elimination of all non-subsidized access to retiree health care and life insurance
benefits effective January 1, 2010.
 
    
    The elimination of subsidized retiree health care benefits for any Medicare-eligible
retirees effective January 1, 2010.
 
    
    The phase out of subsidized retiree health care benefits over a three-year period
beginning January 1, 2010. With respect to the phase out of subsidized retiree health care
benefits, if an eligible retiree becomes Medicare-eligible at any point in time during the
phase out process noted above, such retiree will no longer be eligible for retiree health
care coverage.
  Segment Reporting
  34




---



##### Table of Contents



New Accounting Pronouncements
 Subsequent
Events
  35




---



##### Table of Contents



RESULTS OF OPERATIONS
Three and six months ended June 30, 2009 and 2008
 Net Revenues
  Three months ended June 30,(amounts in millions)
    
    2009
    
    2008
    
    $ Change
    
    % ChangeGross advertising
revenues
    
    $
    569.9
    
    
    $
    665.6
    
    
    $
    (95.7
    )
    
    
    (14.4
    )%Sales claims and
allowances
    
    
    (11.7
    )
    
    
    (11.3
    )
    
    
    (0.4
    )
    
    
    (3.5
    )Net advertising
revenues
    
    
    558.2
    
    
    
    654.3
    
    
    
    (96.1
    )
    
    
    (14.7
    )Other revenues
    
    
    7.4
    
    
    
    9.4
    
    
    
    (2.0
    )
    
    
    (21.3
    )Total
    
    $
    565.6
    
    
    $
    663.7
    
    
    $
    (98.1
    )
    
    
    (14.8
    )%
 Six months ended June 30,(amounts in millions)
    
    2009
    
    2008
    
    $ Change
    
    % ChangeGross advertising revenues
    
    $
    1,178.1
    
    
    $
    1,342.5
    
    
    $
    (164.4
    )
    
    
    (12.2
    )%Sales claims and allowances
    
    
    (25.9
    )
    
    
    (23.2
    )
    
    
    (2.7
    )
    
    
    (11.6
    )Net advertising revenues
    
    
    1,152.2
    
    
    
    1,319.3
    
    
    
    (167.1
    )
    
    
    (12.7
    )Other revenues
    
    
    15.4
    
    
    
    19.1
    
    
    
    (3.7
    )
    
    
    (19.4
    )Total
    
    $
    1,167.6
    
    
    $
    1,338.4
    
    
    $
    (170.8
    )
    
    
    (12.8
    )%
     36




---



##### Table of Contents



Expenses
  Three months ended June 30,(amounts in millions)
    
    2009
    
    2008
    
    $ Change
    
    % ChangeProduction and
distribution
expenses
    
    $
    88.5
    
    
    $
    103.5
    
    
    $
    (15.0
    )
    
    
    (14.5
    )%Selling and support
expenses
    
    
    172.2
    
    
    
    175.6
    
    
    
    (3.4
    )
    
    
    (1.9
    )General and
administrative
expenses
    
    
    18.8
    
    
    
    30.1
    
    
    
    (11.3
    )
    
    
    (37.5
    )Depreciation and
amortization
    
    
    142.3
    
    
    
    119.5
    
    
    
    22.8
    
    
    
    19.1Impairment
charges
    
    
    
    
    
    
    660.2
    
    
    
    (660.2
    )
    
    
    N/MTotal
    
    $
    421.8
    
    
    $
    1,088.9
    
    
    $
    (667.1
    )
    
    
    (61.3
    )%
 Six months ended June 30,(amounts in millions)
    
    2009
    
    2008
    
    $ Change
    
    % ChangeProduction and
distribution
expenses
    
    $
    184.6
    
    
    $
    212.6
    
    
    $
    (28.0
    )
    
    
    (13.2
    )%Selling and support
expenses
    
    
    337.1
    
    
    
    361.9
    
    
    
    (24.8
    )
    
    
    (6.9
    )General and
administrative
expenses
    
    
    53.2
    
    
    
    65.0
    
    
    
    (11.8
    )
    
    
    (18.2
    )Depreciation and
amortization
    
    
    285.2
    
    
    
    237.8
    
    
    
    47.4
    
    
    
    19.9Impairment
charges
    
    
    
    
    
    
    3,123.9
    
    
    
    (3,123.9
    )
    
    
    N/MTotal
    
    $
    860.1
    
    
    $
    4,001.2
    
    
    $
    (3,141.1
    )
    
    
    (78.5
    )%
 
 (N/M: Not Meaningful)
  37




---



##### Table of Contents



Production and Distribution Expenses
  Three months ended
    
    Six months ended(amounts in millions)
    
    June 30, 2009
    
    June 30, 2009$ ChangeDecreased internet production and distribution
costs
    
    $
    (7.2
    )
    
    $
    (9.2
    )Decreased print, paper and distribution costs
    
    
    (6.2
    )
    
    
    (12.4
    )Decreased
information technology (IT expenses)
    
    
    (0.1
    )
    
    
    (2.8
    )All other, net
    
    
    (1.5
    )
    
    
    (3.6
    )Total decrease in production
and distribution expenses for
the three and six months
ended 
June 30,
2009
    
    $
    (15.0
    )
    
    $
    (28.0
    )
    Selling and Support Expenses
  Three months ended
    
    Six months ended(amounts in millions)
    
    June 30, 2009
    
    June 30, 2009$ ChangeDecreased commissions and salesperson costs
    
    $
    (11.1
    )
    
    $
    (27.1
    )Decreased directory publishing costs
    
    
    (1.7
    )
    
    
    (5.4
    )Decreased
billing, credit and collection expenses
    
    
    (1.2
    )
    
    
    (2.8
    )Decreased
incentive compensation expense
    
    
    (0.9
    )
    
    
    (3.5
    )Increased bad debt expense
    
    
    8.6
    
    
    
    16.4All other, net
    
    
    2.9
    
    
    
    (2.4
    )Total decrease in selling and
support expenses for the three
and six months ended June 30,
2009
    
    $
    (3.4
    )
    
    $
    (24.8
    )
 38




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##### Table of Contents



General and Administrative Expenses
  Three months ended
    
    Six months ended(amounts in millions)
    
    June 30, 2009
    
    June 30, 2009$ ChangeCurtailment gains, net
    
    $
    (13.5
    )
    
    $
    (13.5
    )(Decrease) increase in restructuring expenses
    
    
    (2.5
    )
    
    
    6.5Decreased
incentive compensation expense
    
    
    (0.1
    )
    
    
    (3.4
    )All other, net
    
    
    4.8
    
    
    
    (1.4
    )Total decrease in G&A expenses for
the three and six months ended June
30,
2009
    
    $
    (11.3
    )
    
    $
    (11.8
    )
    39




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##### Table of Contents



Depreciation and Amortization
    Impairment Charges
 Goodwill and Other Intangible
Assets Accounting for the Impairment or Disposal of Long-Lived
Assets
  40




---



##### Table of Contents



Operating Income (Loss)
  Three months ended June 30,(amounts in millions)
    
    2009
    
    2008
    
    $ Change
    
    % ChangeTotal
    
    $
    143.9
    
    
    $
    (425.2
    )
    
    $
    569.1
    
    
    
    N/M
 Six months ended June 30,(amounts in millions)
    
    2009
    
    2008
    
    $ Change
    
    % ChangeTotal
    
    $
    307.5
    
    
    $
    (2,662.8
    )
    
    $
    2,970.3
    
    
    
    N/M
  Interest Expense, Net
  Accounting for Derivative Instruments and
Hedging Activities
  41




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##### Table of Contents



Gain on Debt Transactions, Net
  Reorganization Items, Net
 Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code
 Three and Six MonthsEnded June 30, 2009Write-off of unamortized deferred financing costs
    
    $
    64,475Professional fees
    
    
    50,463Write-off of net premiums / discounts on long-term
debt
    
    
    34,886Write-off of fair value adjustments
    
    
    (78,511
    )Lease rejections
    
    
    (532
    )Total reorganization items
    
    $
    70,781
  42




---



##### Table of Contents



Income Taxes
    Net Loss and Loss Per Share
  Earnings Per
Share .
  43




---



##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
 Debt
  Notes in Default
    
    
    Credit FacilitiesJune 30, 2009
    
    
    December 31, 2008RHD6.875% Senior Notes due 2013
    
    $
    206,791
    
    
    $
    
    
    
    $
    206,7916.875% Series A-1 Senior Discount Notes due 2013
    
    
    320,903
    
    
    
    
    
    
    
    301,8626.875% Series A-2 Senior Discount Notes due 2013
    
    
    483,365
    
    
    
    
    
    
    
    455,2048.875% Series A-3 Senior Notes due 2016
    
    
    1,012,839
    
    
    
    
    
    
    
    1,012,8398.875% Series A-4 Senior Notes due 2017
    
    
    1,229,760
    
    
    
    
    
    
    
    1,229,760R.H. Donnelley Inc.Credit Facility
    
    
    
    
    
    
    1,430,660
    
    
    
    1,341,09811.75% Senior Notes due 2015
    
    
    412,871
    
    
    
    
    
    
    
    412,871Dex Media, Inc.8% Senior Notes due 2013
    
    
    500,000
    
    
    
    
    
    
    
    510,4089% Senior Discount Notes due 2013
    
    
    749,857
    
    
    
    
    
    
    
    771,488Dex Media EastCredit Facility
    
    
    
    
    
    
    1,082,835
    
    
    
    1,081,500Dex Media WestCredit Facility
    
    
    
    
    
    
    1,101,939
    
    
    
    1,080,0008.5% Senior Notes due 2010
    
    
    385,000
    
    
    
    
    
    
    
    393,8835.875% Senior Notes due 2011
    
    
    8,720
    
    
    
    
    
    
    
    8,7619.875% Senior Subordinated Notes due 2013
    
    
    761,650
    
    
    
    
    
    
    
    815,791Total RHD consolidated
    
    
    6,071,756
    
    
    
    3,615,434
    
    
    
    9,622,256Less current portion
    
    
    
    
    
    
    592,023
    
    
    
    113,566Long-term debt subject to compromise
    
    $
    6,071,756
    
    
    
    
    
    
    
    Long-term debt not subject to compromise
    
    
    
    
    
    $
    3,023,411
    
    
    $
    9,508,690
 Credit Facilities
   44




---



##### Table of Contents



RHDI
  Dex Media East
  Dex Media West
  Impact of Purchase Accounting
 Business Combinations
 Impact of Economic Instability on Prospective Pension Funding
  45




---



##### Table of Contents



Liquidity and Cash Flows
        
    
    $476.7 million in net loss.
 
    
    $764.2 million of net non-cash items primarily consisting of $352.7 million in
deferred income taxes, $285.2 million of depreciation and amortization, $80.6 million in
bad debt provision, of which $75.3 million relates to the change in net accounts
receivable, $20.7 million in other non-cash items, primarily related to the change in
the fair value of our interest rate swap agreements, $20.3 million associated with net
reorganization items and $6.8 million of stock-based compensation expense, offset by a
reduction in interest expense of $2.1 million associated with the change in fair value
of our interest rate swaps.
 46




---



##### Table of Contents




    
    $103.6 million net use of cash from a decrease in deferred directory revenues of
$98.3 million due to lower advertising sales and an increase in accounts receivable of
$5.3 million, representing the increase in accounts receivable net of the provision for
bad debts of $80.6 million, due to deterioration in accounts receivable aging
categories, which has been driven by weaker economic conditions. The change in deferred
revenues and accounts receivable are analyzed together given the fact that when a
directory is published, the annual billable value of that directory is initially
deferred and unbilled accounts receivable are established. Each month thereafter,
typically one twelfth of the billing value is recognized as revenues and billed to
customers.
 
    
    $38.2 million net source of cash from a decrease in other assets, consisting of a
$21.4 million decrease in prepaid directory costs resulting from publication seasonality
as well as a $16.8 million decrease in other current and non-current assets, primarily
relating to deferred commissions, print, paper and delivery costs and changes in the
fair value of the Companys interest rate swap agreements.
 
    
    $47.8 million net source of cash from an increase in accounts payable and accrued
liabilities, primarily resulting from an increase in accrued interest payable of $64.9
million and a $3.2 million increase in trade accounts payable, offset by a $20.3 million
decrease in other accrued liabilities. These changes comprise  items
included in liabilities subject to compromise on the condensed
consolidated balance sheet at June 30, 2009. The source of cash from an increase in accounts
payable and accrued liabilities is a direct result of filing the
Chapter 11 petitions, whereby payment of pre-petition
obligations has been delayed.
 
    
    $93.3 million decrease in other non-current liabilities
primarily resulting from the change in fair value of our interest rate swaps as
well as the change in pension and postretirement long-term liabilities.
  
    
    $9.8 million used to purchase fixed assets, primarily computer equipment, software
and leasehold improvements.
  
    
    $229.4 million in principal payments on term loans under our secured credit
facilities.
 
    
    $361.0 million in borrowings under our revolvers. The Company made the
borrowings under the various revolving credit facilities to preserve its financial
flexibility in light of the continuing uncertainty in the global credit markets.
 
    
    $18.7 million in principal payments on our revolvers.
 
    
    $3.9 million in the decreased balance of checks not yet presented for
payment.
  
    
    $(1,962.0) million in net loss, which includes the impact of the goodwill impairment
charges.
 
    
    $2,149.3 million of net non-cash items consisting of the goodwill impairment charges
of $3,123.9 million, offset by $(974.6) million in deferred income taxes, which includes
the tax impact of the goodwill impairment charge.
 
    
    $159.2 million of the net non-cash gain on the debt transactions.
 47




---



##### Table of Contents




    
    $383.3 million of other net non-cash items primarily consisting of $237.8 million of
depreciation and amortization, $64.2 million in bad debt provision, $38.4 million of net
additional interest expense associated with the change in fair value of our interest
rate swaps, and $26.5 million in other non-cash items, primarily consisting of $36.4
million related to the accretion of our discounted debt and $12.1 million related to the
amortization of deferred financing costs, offset by $13.3 million associated with the
change in fair value of our interest rate swaps and $8.6 million associated with the
amortization of the fair value adjustments required by GAAP as a result of the Dex Media
Merger, which reduced interest expense. Other net non-cash items also include $16.3
million of stock-based compensation expense.
 
    
    $92.4 million net use of cash from an increase in accounts receivable of $128.9
million due to an increase in days outstanding of customer balances and deterioration in
accounts receivable aging categories, which has been driven by the extension of the
write-off policy in our Qwest markets to conform to the legacy RHD markets, weaker
economic conditions, the transition to in-house billing and collection services for
certain local customers in our Qwest markets that were previously performed by Qwest on
our behalf, as well as publication cycle seasonality, offset by an increase in deferred
directory revenues of $36.5 million. The change in deferred revenues and accounts
receivable are analyzed together given the fact that when a directory is published, the
annual billable value of that directory is initially deferred and unbilled accounts
receivable are established. Each month thereafter, typically one twelfth of the billing
value is recognized as revenues and billed to customers.
 
    
    $25.1 million net source of cash from a decrease in other assets, consisting of a
$46.9 million decrease in prepaid directory costs resulting from publication
seasonality, offset by a $21.8 million increase in other current and non-current assets,
primarily relating to deferred commissions, print, paper and delivery costs and changes
in the fair value of the Companys interest rate swap agreements.
 
    
    $71.3 million net use of cash from a decrease in accounts payable and accrued
liabilities, primarily reflecting a $32.7 million decrease in trade accounts payable
resulting from timing of invoice processing versus payment thereon, a $31.9 million
decrease in accrued interest payable on outstanding debt and a $6.7 million decrease in
accrued liabilities, which include accrued salaries and related bonuses and accrued
income taxes.
 
    
    $3.5 million increase in other non-current liabilities, including pension and
postretirement long-term liabilities.
  
    
    $30.3 million used to purchase fixed assets, primarily computer equipment, software
and leasehold improvements.
 
    
    $4.3 million in cash proceeds from the disposition of an equity investment in the
fourth quarter of 2007, which were received in January 2008.
  
    
    $1,018.7 million in proceeds, net of costs, from borrowings under our new Dex Media
West credit facility, which was used to refinance the former Dex Media West credit
facility and pay related fees and expenses.
 
    
    $1,191.2 million in principal payments on term loans under our credit facilities and
notes. With regard to our credit facilities, $35.1 million represents scheduled
principal payments and $1,156.0 million represents principal payments made on an
accelerated basis, at our option, from proceeds received with the new Dex Media West
credit facility and from available cash flow generated from operations.
 
    
    $373.1 million in borrowings under our revolvers, used primarily to fund temporary
working capital requirements.
 
    
    $396.2 million in principal payments on our revolvers.
 48




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##### Table of Contents




    
    $8.5 million in fees associated with the issuance of the RHDI Senior Notes, which has
been accounted for as a non-cash financing activity.
 
    
    $6.1 million used to repurchase our common stock. This use of cash pertains to common
stock repurchases made during 2007 that had not settled as of December 31, 2007.
 
    
    $4.2 million in the decreased balance of checks not yet presented for payment.
 
    
    $0.1 million in proceeds from the exercise of employee stock options.
 Contractual Obligations
  Payment Due by PeriodLess than
    
    1-3
    
    3-5
    
    More than 5(amounts in millions)
    
    Total
    
    1 Year
    
    Years
    
    Years
    
    YearsLong-term debt (1)
    
    $
    3,615.4
    
    
    $
    592.0
    
    
    $
    1,244.7
    
    
    $
    569.2
    
    
    $
    1,209.5Interest on long-term
debt(2)
    
    
    691.3
    
    
    
    205.4
    
    
    
    262.2
    
    
    
    184.9
    
    
    
    38.8Total long-term debt and related
interest contractual
obligations
    
    $
    4,306.7
    
    
    $
    797.4
    
    
    $
    1,506.9
    
    
    $
    754.1
    
    
    $
    1,248.3
 
 (1)
    
    Included in long-term debt are principal amounts owed under our credit facilities,
including the current portion.(2)
    
    Interest on long-term debt represents cash interest payment obligations assuming
all indebtedness at June 30, 2009 will be paid in accordance with its contractual maturity and
assumes interest rates on variable interest debt as of June 30, 2009 will remain unchanged in
future periods. The weighted average interest rates under the RHDI, Dex Media East and Dex Media
West Credit Facilities were 6.75%, 2.52% and 6.97%, respectively, at June 30, 2009. Our notes in
default of $6.1 billion at June 30, 2009 have been excluded from this schedule as a result of
filing the Chapter 11 petitions and the Plan.  49




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##### Table of Contents



Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
 Interest Rate Risk and Risk Management
      Accounting for Derivative Instruments and Hedging Activities
   50




---



##### Table of Contents



Market Risk Sensitive Instruments
  Accounting for
Derivative Instruments and Hedging Activities , Accounting for Certain Derivative Instruments and Certain Hedging Activities, an Amendment of FAS
133 Amendment of Statement 133 on Derivative Instruments and Hedging Activities
 51




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##### Table of Contents



Item 4.
    
    Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Controls
 ,
 Remediation Plan for Material Weakness in Internal Control Over Financial Reporting
   
    
    During 2008, the Company began to
implement, and
during 2009 it
intends to fully
implement controls
to formalize its
evaluation of
deferred income tax
balances including
a comprehensive
reconciliation
between deferred
income tax balances
determined on a
basis in conformity
with U.S. generally
accepted accounting
principles for
financial reporting
purposes and those
determined for tax
reporting purposes;
    
    During 2008, the
Company began to
implement, and
during 2009 it
intends to fully
implement an
acceleration of the
timing of certain
tax review
activities,
including
apportionment and
allocation for
income tax
reporting purposes,
during the
financial statement
closing process;
    
    The Company intends
to improve
documentation and
institute more
formalized review
of tax positions
taken, with senior
management and
external experts,
to ensure proper
evaluation and
accounting
treatment of
complex tax issues;
and
    
    The Company intends
to evaluate and
supplement and/or
train internal
resources, as
necessary, and
evaluate external
experts.
  52




---



##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1.   Legal Proceedings
      
 Item 1A.   Risk Factors
  Risks Related to Our Chapter 11 Cases
 1) We have filed voluntary petitions for reorganization under the Bankruptcy Code that may have an
adverse effect on our businesses, financial condition and results of operation.
 et al.
 53




---



##### Table of Contents




    
    our ability to comply with and operate under the terms of any cash management
orders entered by the Bankruptcy Court from time to time, which subject us to restrictions
on transferring cash and other assets;
    
    our ability to maintain adequate cash on hand and to generate cash from operations;
    
    our ability to fund emergence and to fund our operations after emergence from the
bankruptcy process on reasonable terms;
    
    our ability to retain key employees during the pendency of our bankruptcy proceedings;
and
    
    our ability to maintain good customer and supplier relationships in light of
developments in our bankruptcy proceedings and the terms of our emergence.
  2) Failure to obtain confirmation of the Plan may result in liquidation or alternative plan on less
favorable terms.
    3) Failure of occurrence of the effective date may result in liquidation or alternative plan on
less favorable terms.
   54




---



##### Table of Contents



4) We may have insufficient liquidity to successfully operate our businesses.
  5) The extent of the Companys leverage may limit its ability to obtain additional financing for
operations.
   6) Historical financial information may not be comparable.
  7) Our businesses, financial condition and results of operations could be negatively impacted by
the loss of customers and suppliers.
  55




---



##### Table of Contents



8) Our businesses could suffer from the loss of key personnel.
  9) Adverse publicity in connection with the Chapter 11 Cases or otherwise could negatively affect
our businesses.
  10) Pursuit of litigation by the parties in interest could disrupt the confirmation of the Plan and
could have material adverse effects on the Companys businesses and financial condition.
  11) Our inability to take advantage of business opportunities during the Chapter 11 Cases, without
Bankruptcy Court approval.
  56




---



##### Table of Contents



Item 3.   Defaults Upon Senior Securities
     57




---



##### Table of Contents



Item 6.
    
    Exhibits
 Exhibit No.
    
    Document10.1*
    
    R.H. Donnelley Corporation Non-Management Director
Compensation Program effective as of April 1, 2009.10.2*
    
    Amendment to R. H. Donnelley Corporation Supplemental
Executive Retirement Agreement by and between the Company and
David C. Swanson, dated and effective as of April 21, 2009.31.1*
    
    Certification of Quarterly Report on Form 10-Q for the period
ended June 30, 2009 by David C. Swanson, Chairman and Chief
Executive Officer of R.H. Donnelley Corporation under Section
302 of the Sarbanes-Oxley Act31.2*
    
    Certification of Quarterly Report on Form 10-Q for the period
ended June 30, 2009 by Steven M. Blondy, Executive Vice
President and Chief Financial Officer of R.H. Donnelley
Corporation under Section 302 of the Sarbanes-Oxley Act32.1*
    
    Certification of Quarterly Report on Form 10-Q for the period
ended June 30, 2009 under Section 906 of the Sarbanes-Oxley
Act by David C. Swanson, Chairman and Chief Executive Officer,
and Steven M. Blondy, Executive Vice President and Chief
Financial Officer, for R.H. Donnelley Corporation
 
 *
    
    Filed herewith. 58




---



##### Table of Contents



SIGNATURES
  R.H. DONNELLEY CORPORATIONDate: August 4, 2009
    By:
    /s/ Steven M. BlondySteven M. BlondyExecutive Vice President and Chief Financial Officer
(Principal Financial Officer)/s/ Sylvester J. JohnsonSylvester J. JohnsonVice President, Corporate Controller and Chief
Accounting Officer
(Principal Accounting Officer) 59




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##### Table of Contents



Exhibit Index
 Exhibit No.
    
    Document10.1*
    
    R.H. Donnelley Corporation Non-Management Director
Compensation Program effective as of April 1, 2009.10.2*
    
    Amendment to R. H. Donnelley Corporation Supplemental
Executive Retirement Agreement by and between the Company and
David C. Swanson, dated and effective as of April 21, 2009.31.1*
    
    Certification of Quarterly Report on Form 10-Q for the period
ended June 30, 2009 by David C. Swanson, Chairman and Chief
Executive Officer of R.H. Donnelley Corporation under Section
302 of the Sarbanes-Oxley Act31.2*
    
    Certification of Quarterly Report on Form 10-Q for the period
ended June 30, 2009 by Steven M. Blondy, Executive Vice
President and Chief Financial Officer of R.H. Donnelley
Corporation under Section 302 of the Sarbanes-Oxley Act32.1*
    
    Certification of Quarterly Report on Form 10-Q for the period
ended June 30, 2009 under Section 906 of the Sarbanes-Oxley
Act by David C. Swanson, Chairman and Chief Executive Officer,
and Steven M. Blondy, Executive Vice President and Chief
Financial Officer, for R.H. Donnelley Corporation
 
 *
    
    Filed herewith. 60