##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 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
 
 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 April 15, 2009Common Stock, par value $1 per share
    
    68,845,477




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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 March 31, 2009 and December 31, 2008
    
    
    3Condensed Consolidated Statements of Operations and
Comprehensive Loss for the three months ended March 31, 2009 and 2008
    
    
    4Condensed Consolidated Statements of Cash Flows for the three
 months ended March 31, 2009 and 2008
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    23Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    41Item 4.
    
    Controls and Procedures
    
    
    42PART II. OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    44Item 6.
    
    Exhibits
    
    
    45SIGNATURES
    
    
    46EX-3.2EX-10.1EX-10.2EX-10.3EX-31.1EX-31.2EX-32.1
  2




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##### Table of Contents



Part I. FINANCIAL INFORMATION
 
  
 R.H. Donnelley Corporation and Subsidiaries  Condensed Consolidated Balance Sheets (Unaudited)
 March 31,
    
    December 31,(in thousands, except share data)
    
    2009
    
    2008AssetsCurrent AssetsCash and cash equivalents
    
    $
    533,301
    
    
    $
    131,199Accounts receivableBilled
    
    
    279,024
    
    
    
    303,338Unbilled
    
    
    770,501
    
    
    
    777,684Allowance for doubtful accounts and sales claims
    
    
    (50,886
    )
    
    
    (53,995
    )Net accounts receivable
    
    
    998,639
    
    
    
    1,027,027Deferred directory costs
    
    
    163,192
    
    
    
    164,248Short-term deferred income taxes, net
    
    
    99,047
    
    
    
    97,973Prepaid expenses and other current assets
    
    
    67,699
    
    
    
    95,084Total current assets
    
    
    1,861,878
    
    
    
    1,515,531Fixed assets and computer software, net
    
    
    178,408
    
    
    
    188,695Other non-current assets
    
    
    154,393
    
    
    
    167,222Intangible assets, net
    
    
    9,880,887
    
    
    
    10,009,261Total Assets
    
    $
    12,075,566
    
    
    $
    11,880,709Liabilities and Shareholders DeficitCurrent LiabilitiesAccounts payable and accrued liabilities
    
    $
    180,650
    
    
    $
    216,093Accrued interest
    
    
    175,649
    
    
    
    181,102Deferred directory revenues
    
    
    1,034,025
    
    
    
    1,076,271Current portion of long-term debt
    
    
    408,568
    
    
    
    113,566Total current liabilities
    
    
    1,798,892
    
    
    
    1,587,032Long-term debt
    
    
    9,550,048
    
    
    
    9,508,690Deferred income taxes, net
    
    
    1,366,072
    
    
    
    998,071Other non-current liabilities
    
    
    250,888
    
    
    
    280,291Total liabilities
    
    
    12,965,900
    
    
    
    12,374,084Commitments and contingenciesShareholders DeficitCommon stock, par value $1 per share, authorized  400,000,000 shares;
issued  88,169,275
shares at March 31, 2009 and December 31, 2008; outstanding 
68,845,060 shares and 68,807,446 shares at March 31, 2009 and December
31, 2008, respectively
    
    
    88,169
    
    
    
    88,169Additional paid-in capital
    
    
    2,435,265
    
    
    
    2,431,411Accumulated deficit
    
    
    (3,085,077
    )
    
    
    (2,683,867
    )Treasury stock, at cost, 19,324,215 shares at March 31, 2009 and 19,361,829
shares at December 31, 2008
    
    
    (256,225
    )
    
    
    (256,277
    )Accumulated other comprehensive loss
    
    
    (72,466
    )
    
    
    (72,811
    )Total shareholders deficit
    
    
    (890,334
    )
    
    
    (493,375
    )Total Liabilities and Shareholders Deficit
    
    $
    12,075,566
    
    
    $
    11,880,709
  3




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##### Table of Contents



R.H. Donnelley Corporation and Subsidiaries  Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
 Three months endedMarch 31,(in thousands, except per share data)
    
    2009
    
    2008Net revenues
    
    $
    601,986
    
    
    $
    674,654Expenses:Production, publication and distribution expenses
(exclusive of depreciation and amortization shown
separately below)
    
    
    96,152
    
    
    
    109,177Selling and support expenses
    
    
    164,883
    
    
    
    186,316General and administrative expenses
    
    
    34,462
    
    
    
    34,889Depreciation and amortization
    
    
    142,845
    
    
    
    118,263Impairment charges
    
    
    
    
    
    
    2,463,615Total expenses
    
    
    438,342
    
    
    
    2,912,260Operating income (loss)
    
    
    163,644
    
    
    
    (2,237,606
    )Interest expense, net
    
    
    (198,835
    )
    
    
    (195,874
    )Loss before income taxes
    
    
    (35,191
    )
    
    
    (2,433,480
    )(Provision) benefit for income taxes
    
    
    (366,019
    )
    
    
    810,369Net loss
    
    $
    (401,210
    )
    
    $
    (1,623,111
    )Loss per share:Basic and Diluted
    
    $
    (5.83
    )
    
    $
    (23.60
    )Shares used in computing loss per share:Basic and Diluted
    
    
    68,798
    
    
    
    68,778Comprehensive LossNet loss
    
    $
    (401,210
    )
    
    $
    (1,623,111
    )Unrealized gain (loss) on interest rate swaps, net of tax
    
    
    328
    
    
    
    (27,610
    )Benefit plans adjustment, net of tax
    
    
    17
    
    
    
    254Comprehensive loss
    
    $
    (400,865
    )
    
    $
    (1,650,467
    )
  4




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##### Table of Contents



R.H. Donnelley Corporation and Subsidiaries  Condensed Consolidated Statements of Cash Flows (Unaudited)
 Three months endedMarch 31,(in thousands)
    
    2009
    
    2008Cash Flows from Operating ActivitiesNet loss
    
    $
    (401,210
    )
    
    $
    (1,623,111
    )Reconciliation of net loss to net cash provided by operating activities:Impairment charges
    
    
    
    
    
    
    2,463,615Depreciation and amortization
    
    
    142,845
    
    
    
    118,263Deferred income tax provision (benefit)
    
    
    366,702
    
    
    
    (812,114
    )Provision for bad debts
    
    
    37,629
    
    
    
    29,782Stock based compensation expense
    
    
    3,998
    
    
    
    10,816Interest rate swap ineffectiveness
    
    
    (6,662
    )
    
    
    Other non-cash items, net
    
    
    6,017
    
    
    
    (8,414
    )Changes in assets and liabilities:Increase in accounts receivable
    
    
    (9,241
    )
    
    
    (65,666
    )Decrease in other assets
    
    
    32,603
    
    
    
    21,622Decrease in accounts payable and accrued liabilities
    
    
    (44,254
    )
    
    
    (52,918
    )(Decrease) increase in deferred directory revenues
    
    
    (42,246
    )
    
    
    26,424Decrease in other non-current liabilities
    
    
    (30,046
    )
    
    
    (8,363
    )Net cash provided by operating activities
    
    
    56,135
    
    
    
    99,936Cash Flows from Investing ActivitiesAdditions to fixed assets and computer software
    
    
    (3,937
    )
    
    
    (10,118
    )Equity investment disposition
    
    
    
    
    
    
    4,318Net cash used in investing activities
    
    
    (3,937
    )
    
    
    (5,800
    )Cash Flows from Financing ActivitiesCredit facilities repayments
    
    
    (21,985
    )
    
    
    (91,418
    )Revolver borrowings
    
    
    361,000
    
    
    
    215,300Revolver repayments
    
    
    
    
    
    
    (232,350
    )Repurchase of common stock
    
    
    
    
    
    
    (6,112
    )Increase in checks not yet presented for payment
    
    
    10,889
    
    
    
    4,180Proceeds from employee stock option exercises
    
    
    
    
    
    
    89Net cash provided by (used in) financing activities
    
    
    349,904
    
    
    
    (110,311
    )Increase (decrease) in cash and cash equivalents
    
    
    402,102
    
    
    
    (16,175
    )Cash and cash equivalents, beginning of year
    
    
    131,199
    
    
    
    46,076Cash and cash equivalents, end of period
    
    $
    533,301
    
    
    $
    29,901Supplemental Information:Cash paid:Interest, net
    
    $
    203,304
    
    
    $
    214,322Income taxes, net
    
    $
    (10
    )
    
    $
    551
  5




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##### Table of Contents



R.H. Donnelley Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)  (tabular amounts in thousands, except share and per share data)
 1. Business and Basis of Presentation
  ® ®
 Going Concern
    6




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7




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Significant Financing Developments
  2. Summary of Significant Accounting Policies
 Identifiable Intangible Assets and Goodwill
 Business Combinations Goodwill and Other Intangible Assets
   Accounting for the Impairment or Disposal of Long-Lived Assets
  8




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Interest Expense and Deferred Financing Costs
  Accounting for Derivative Instruments and Hedging Activities
  Advertising Expense
  9




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Concentration of Credit Risk
    Earnings (Loss) Per Share
 Earnings Per
Share .
  Three Months EndedMarch 31,2009
    
    2008Basic EPSNet loss
    
    $
    (401,210
    )
    
    $
    (1,623,111
    )Weighted average common shares outstanding
    
    
    68,798
    
    
    
    68,778Basic loss per share
    
    $
    (5.83
    )
    
    $
    (23.60
    )Diluted EPSNet loss
    
    $
    (401,210
    )
    
    $
    (1,623,111
    )Weighted average common shares outstanding
    
    
    68,798
    
    
    
    68,778Dilutive effect of stock awards (1)
    
    
    
    
    
    
    Weighted average diluted shares outstanding
    
    
    68,798
    
    
    
    68,778Diluted loss per share
    
    $
    (5.83
    )
    
    $
    (23.60
    )
 
 (1)
    
    Due to the reported net loss for the three months ended March 31, 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 March 31, 2009 and 2008, 5.8 million and 6.1 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. 10




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Stock-Based Awards
 Share-Based Payment
 Fair Value of Financial Instruments
 Disclosures About Fair Value of Financial
Instruments
 Fair Value Measurements
     Fair Value Measurements atMarch 31, 2009Using Significant OtherDescription
    
    Observable Inputs (Level 2)Derivatives  Liabilities
    
    $
    (50,387
    )
    11




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Effective Date of FASB Statement No. 157
 Estimates
  New Accounting Pronouncements
  3. Restructuring Charges
  2003
    
    2006
    
    2007
    
    2008
    
    2009Restructuring
    
    Restructuring
    
    Restructuring
    
    Restructuring
    
    RestructuringActions
    
    Actions
    
    Actions
    
    Actions
    
    Actions
    
    TotalBalance at December
31, 2008
    
    $
    603
    
    
    $
    567
    
    
    $
    376
    
    
    $
    10,203
    
    
    $
    
    
    
    $
    11,749Additions to
reserve charged to
earnings
    
    
    
    
    
    
    
    
    
    
    32
    
    
    
    6,713
    
    
    
    2,343
    
    
    
    9,088Payments
    
    
    (46
    )
    
    
    (83
    )
    
    
    (342
    )
    
    
    (12,840
    )
    
    
    (2,343
    )
    
    
    (15,654
    )Balance at March
31, 2009
    
    $
    557
    
    
    $
    484
    
    
    $
    66
    
    
    $
    4,076
    
    
    $
    
    
    
    $
    5,183
 12




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4. Long-Term Debt
  13




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Fair Market Value
    
    Carrying ValueMarch 31, 2009
    
    March 31, 2009
    
    December 31, 2008RHD6.875% Senior Notes due 2013
    
    $
    10,340
    
    
    $
    206,791
    
    
    $
    206,7916.875% Series A-1 Senior Discount Notes due 2013
    
    
    15,151
    
    
    
    303,019
    
    
    
    301,8626.875% Series A-2 Senior Discount Notes due 2013
    
    
    22,821
    
    
    
    456,427
    
    
    
    455,2048.875% Series A-3 Senior Notes due 2016
    
    
    60,770
    
    
    
    1,012,839
    
    
    
    1,012,8398.875% Series A-4 Senior Notes due 2017
    
    
    73,786
    
    
    
    1,229,760
    
    
    
    1,229,760R.H. Donnelley Inc. (RHDI)Credit Facility
    
    
    775,927
    
    
    
    1,511,614
    
    
    
    1,341,09811.75% Senior Notes due 2015
    
    
    57,802
    
    
    
    412,871
    
    
    
    412,871Dex Media, Inc.8% Senior Notes due 2013
    
    
    58,646
    
    
    
    509,966
    
    
    
    510,4089% Senior Discount Notes due 2013
    
    
    86,250
    
    
    
    770,580
    
    
    
    771,488Dex Media EastCredit Facility
    
    
    487,640
    
    
    
    1,160,000
    
    
    
    1,081,500Dex Media WestCredit Facility
    
    
    562,600
    
    
    
    1,170,000
    
    
    
    1,080,0008.5% Senior Notes due 2010
    
    
    200,234
    
    
    
    392,616
    
    
    
    393,8835.875% Senior Notes due 2011
    
    
    4,467
    
    
    
    8,758
    
    
    
    8,7619.875% Senior Subordinated Notes due 2013
    
    
    162,675
    
    
    
    813,375
    
    
    
    815,791Total RHD Consolidated
    
    
    2,579,109
    
    
    
    9,958,616
    
    
    
    9,622,256Less current portion
    
    
    216,466
    
    
    
    408,568
    
    
    
    113,566Long-term debt
    
    $
    2,362,643
    
    
    $
    9,550,048
    
    
    $
    9,508,690
     14




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RHDI
  Dex Media East
  Dex Media West
  Other
  5. Derivative Financial Instruments
 Disclosures about Derivative Instruments and Hedging
Activities an amendment of FASB Statement No. 133
 15




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, Accounting for Certain Derivative Instruments and
Certain Hedging Activities, an Amendment of FAS 133 Amendment of Statement 133 on
Derivative Instruments and Hedging Activities.
 Effective Dates
    
    Notional Amount
    
    
    Pay Rates
    
    
    Maturity Dates(amounts in millions)September 7, 2004
    
    $
    100
    (1)  (6)
    
    
    3.750%
    
    
    September 7, 2009September 15, 2004
    
    
    150
    (2)  (6)
    
    
    3.884% - 3.910%
    
    
    September 15, 2009September 17, 2004
    
    
    50
    (1)  (6)
    
    
    3.740%
    
    
    September 17, 2009May 25, 2006
    
    
    300
    (3)  (6)
    
    
    5.326%
    
    
    May 25, 2009  May 26, 2009May 26, 2006
    
    
    200
    (2)  (6)
    
    
    5.2725% -5.275%
    
    
    May 26, 2009May 31, 2006
    
    
    50
    (1)  (6)
    
    
    5.312%
    
    
    May 31, 2009June 12, 2006
    
    
    150
    (2)  (6)
    
    
    5.27% - 5.279%
    
    
    June 12, 2009November 26, 2007
    
    
    600
    (4) (5)
    
    
    4.1852% - 4.604%
    
    
    November 26, 2010  November 26, 2012February 28, 2008
    
    
    100
    (1) (6)
    
    
    3.212%
    
    
    February 28, 2011March 20, 2008
    
    
    100
    (1) (6)
    
    
    2.5019%
    
    
    March 21, 2011March 31, 2008
    
    
    100
    (1) (5)
    
    
    3.50%
    
    
    March 29, 2013September 23, 2008
    
    
    150
    (1) (6)
    
    
    3.6172%
    
    
    September 23, 2010September 30, 2008
    
    
    150
    (1) (5)
    
    
    3.955%
    
    
    September 30, 2011Total
    
    $
    2,200
 
 (1)
    
    Consists of one swap.(2)
    
    Consists of two swaps.(3)
    
    Consists of three swaps.(4)
    
    Consists of four swaps.(5)
    
    Designated as cash flow hedges.(6)
    
    Undesignated.  16




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(Gain) Loss RecognizedGain Recognized in
    
    in AccumulatedFair Value
    
    Interest Expense
    
    Other ComprehensiveMeasurements
    
    From Ineffective
    
    Loss From EffectiveInterest Rate Swaps
    
    at March 31, 2009
    
    Interest Rate Swaps
    
    Interest Rate SwapsDesignated  LiabilitiesAccounts Payable and
Accrued Liabilities
    
    $
    (14,269
    )
    
    $
    
    
    
    $
    681Other Non-Current
Liabilities
    
    
    (20,784
    )
    
    
    
    
    
    
    (1,009
    )Total Designated  Liabilities
    
    
    (35,053
    )
    
    
    
    
    
    
    (328
    )Undesignated  LiabilitiesAccounts Payable and
Accrued Liabilities
    
    
    (10,779
    )
    
    
    (5,295
    )
    
    
    Other Non-Current
Liabilities
    
    
    (4,555
    )
    
    
    (1,367
    )
    
    
    Total Undesignated  Liabilities
    
    
    (15,334
    )
    
    
    (6,662
    )
    
    
    Total Liabilities
    
    $
    (50,387
    )
    
    $
    (6,662
    )
    
    $
    (328
    )
      17




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6. Income Taxes
    18




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Three Months EndedMarch 312009
    
    2008Statutory U.S. Federal tax rate
    
    
    35.0
    %
    
    
    35.0
    %State and local taxes, net of U.S. Federal tax benefit
    
    
    2.5
    
    
    
    3.1Non-deductible goodwill impairment charge
    
    
    
    
    
    
    (4.7
    )Other non-deductible expenses
    
    
    (0.2
    )
    
    
    Section 382 limitation
    
    
    (1,066.6
    )
    
    
    Change in state tax regulations
    
    
    (6.8
    )
    
    
    Change in valuation allowance
    
    
    (0.3
    )
    
    
    (0.1
    )Other
    
    
    (3.7
    )
    
    
    Effective tax rate
    
    
    (1,040.1
    )%
    
    
    (33.3
    )%
 7. Benefit Plans
 Employers Disclosures About Pensions and Other Postretirement
Benefits (Revised 2003),
 Pension Benefits
    
    Postretirement BenefitsThree Months
    
    Three MonthsEnded March 31,
    
    Ended March 31,2009
    
    2008
    
    2009
    
    2008Service cost
    
    $
    1,441
    
    
    $
    3,512
    
    
    $
    268
    
    
    $
    497Interest cost
    
    
    3,608
    
    
    
    4,586
    
    
    
    759
    
    
    
    1,393Expected return on plan assets
    
    
    (4,579
    )
    
    
    (5,058
    )
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    
    
    
    
    49
    
    
    
    (2
    )
    
    
    167Amortization of net loss
    
    
    30
    
    
    
    196
    
    
    
    
    
    
    
    9Net periodic benefit cost
    
    $
    500
    
    
    $
    3,285
    
    
    $
    1,025
    
    
    $
    2,066
    19




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8. Business Segments
  9. Legal Proceedings
     10. R.H. Donnelley Corporation (Parent Company) Financial Statements
   20




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R.H. Donnelley Corporation
Condensed Parent Company Balance Sheets
 March 31,
    
    
    December 31,2009
    
    
    2008AssetsCash and cash equivalents
    
    $
    2,336
    
    
    $
    948Intercompany, net
    
    
    11,358
    
    
    
    350,490Affiliate note receivable
    
    
    8,000
    
    
    
    Prepaid and other current assets
    
    
    5,036
    
    
    
    6,964Total current assets
    
    
    26,730
    
    
    
    358,402Investment in subsidiaries
    
    
    2,023,307
    
    
    
    2,098,154Fixed assets and computer
software, net
    
    
    7,646
    
    
    
    7,844Other non-current assets
    
    
    57,576
    
    
    
    65,651Intercompany note receivable
    
    
    300,000
    
    
    
    300,000Total assets
    
    $
    2,415,259
    
    
    $
    2,830,051Liabilities and Shareholders DeficitAccounts payable and accrued liabilities
    
    $
    4,947
    
    
    $
    7,978Accrued interest
    
    
    83,838
    
    
    
    97,025Total current liabilities
    
    
    88,785
    
    
    
    105,003Long-term debt
    
    
    3,208,836
    
    
    
    3,206,456Deferred income taxes, net
    
    
    3,971
    
    
    
    2,928Other non-current liabilities
    
    
    4,001
    
    
    
    9,039Shareholders deficit
    
    
    (890,334
    )
    
    
    (493,375
    )Total liabilities and shareholders deficit
    
    $
    2,415,259
    
    
    $
    2,830,051
 21




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##### Table of Contents



R.H. Donnelley Corporation
Condensed Parent Company Statements of Operations
 For the Three Months EndedMarch 31,2009
    
    2008Expenses
    
    $
    5,305
    
    
    $
    6,872Partnership and equity income (loss)
    
    
    34,663
    
    
    
    (2,345,035
    )Operating income (loss)
    
    
    29,358
    
    
    
    (2,351,907
    )Interest expense, net
    
    
    (64,549
    )
    
    
    (81,573
    )Loss before income taxes
    
    
    (35,191
    )
    
    
    (2,433,480
    )(Provision) benefit for income taxes
    
    
    (366,019
    )
    
    
    810,369Net loss
    
    $
    (401,210
    )
    
    $
    (1,623,111
    )
 R.H. Donnelley Corporation
Condensed Parent Company Statements of Cash Flows
 For the Three MonthsEnded March 31,2009
    
    2008Cash flow from operating activities
    
    $
    (81,269
    )
    
    $
    (65,372
    )Cash flow from investing activities:Additions to fixed assets and computer
software, net
    
    
    (757
    )
    
    
    (182
    )Equity investment disposition
    
    
    
    
    
    
    4,318Net cash (used in) provided by investing
activities
    
    
    (757
    )
    
    
    4,136Cash flow from financing activities:(Decrease) increase in checks not yet
presented for payment
    
    
    (686
    )
    
    
    96Proceeds from employee stock option exercises
    
    
    
    
    
    
    89Repurchase of common stock
    
    
    
    
    
    
    (6,112
    )Intercompany loans
    
    
    (8,000
    )
    
    
    Dividends from subsidiaries
    
    
    92,100
    
    
    
    49,900Net cash provided by financing activities
    
    
    83,414
    
    
    
    43,973Change in cash
    
    
    1,388
    
    
    
    (17,263
    )Cash at beginning of year
    
    
    948
    
    
    
    18,900Cash at end of period
    
    $
    2,336
    
    
    $
    1,637
 11. Subsequent Events
  22




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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.
 ® ®
  23




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##### 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 more than
600,000 national and local businesses in 28 states and an infrastructure to service these
national and local advertisers.
 Recent Trends Related to Our Business
   Accounting for the
Impairment or Disposal of Long-Lived Assets
   24




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Going Concern
     25




---



##### Table of Contents



Significant Financing Developments
  Segment Reporting
  New Accounting Pronouncements
  26




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##### Table of Contents



RESULTS OF OPERATIONS
Three months ended March 31, 2009 and 2008
 Net Revenues
  Three months ended March 31,(amounts in millions)
    
    2009
    
    2008
    
    $ Change
    
    % ChangeGross directory advertising
revenues
    
    $
    608.2
    
    
    $
    676.8
    
    
    $
    (68.6
    )
    
    
    (10.1
    )%Sales claims and allowances
    
    
    (14.2
    )
    
    
    (11.8
    )
    
    
    (2.4
    )
    
    
    (20.3
    )Net directory advertising
revenues
    
    
    594.0
    
    
    
    665.0
    
    
    
    (71.0
    )
    
    
    (10.7
    )Other revenues
    
    
    8.0
    
    
    
    9.7
    
    
    
    (1.7
    )
    
    
    (17.5
    )Total
    
    $
    602.0
    
    
    $
    674.7
    
    
    $
    (72.7
    )
    
    
    (10.8
    )%
      27




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##### Table of Contents



Expenses
  Three months ended March 31,(amounts in millions)
    
    2009
    
    2008
    
    $ Change
    
    % ChangeProduction, publication and
distribution expenses
    
    $
    96.1
    
    
    $
    109.2
    
    
    $
    (13.1
    )
    
    
    (12.0
    )%Selling and support expenses
    
    
    164.9
    
    
    
    186.3
    
    
    
    (21.4
    )
    
    
    (11.5
    )General and administrative expenses
    
    
    34.5
    
    
    
    34.9
    
    
    
    (0.4
    )
    
    
    (1.1
    )Depreciation and amortization
    
    
    142.8
    
    
    
    118.3
    
    
    
    24.5
    
    
    
    20.7Impairment charges
    
    
    
    
    
    
    2,463.6
    
    
    
    (2,463.6
    )
    
    
    N/MTotal
    
    $
    438.3
    
    
    $
    2,912.3
    
    
    $
    (2,474.0
    )
    
    
    N/M
 
 (N/M: Not Meaningful)
  Production, Publication and Distribution Expenses
  Three months endedMarch 31, 2009(amounts in millions)
    
    $ ChangeDecreased print, paper and distribution costs
    
    $
    (6.2
    )Decreased internet production costs
    
    
    (4.1
    )Decreased information technology (IT) expenses
    
    
    (2.7
    )Increased internet distribution costs
    
    
    1.6All other, net
    
    
    (1.7
    )Total decrease in production, publication
and distribution expenses for the three
months ended March 31, 2009
    
    $
    (13.1
    )
 28




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##### Table of Contents



Selling and Support Expenses
  Three monthsended March 31, 2009(amounts in millions)
    
    $ ChangeDecreased commissions and salesperson costs
    
    $
    (16.0
    )Decreased directory publishing costs
    
    
    (3.7
    )Decreased non-cash stock-based compensation expense under SFAS No. 123 (R)
    
    
    (2.6
    )Decreased marketing expenses
    
    
    (2.3
    )Decreased billing, credit and collection expenses
    
    
    (1.6
    )Increased bad debt expense
    
    
    7.8All other, net
    
    
    (3.0
    )Total decrease in selling and support
expenses for the three months ended
March 31, 2009
    
    $
    (21.4
    )
    29




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##### Table of Contents



General and Administrative Expenses
  Three monthsended March 31, 2009(amounts in millions)
    
    $ ChangeDecreased general corporate expenses
    
    $
    (4.9
    )Decreased non-cash stock-based compensation expense under SFAS No. 123 (R)
    
    
    (3.3
    )Increased restructuring expenses
    
    
    9.0All other, net
    
    
    (1.2
    )Total decrease in G&A expenses for the three months ended March 31, 2009
    
    $
    (0.4
    )
    30




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##### Table of Contents



Depreciation and Amortization
    Impairment Charges
 Goodwill and Other Intangible Assets
     31




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##### Table of Contents



Operating Income (Loss)
  Three months ended March 31,(amounts in millions)
    
    2009
    
    2008
    
    $ Change
    
    % ChangeTotal
    
    $
    163.6
    
    
    $
    (2,237.6
    )
    
    $
    2,401.2
    
    
    
    N/M
  Interest Expense, Net
    Income Taxes
   32




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##### Table of Contents



Net Loss and Loss Per Share
  Earnings Per
Share .
  33




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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
 Debt
  Fair Market Value
    
    Carrying ValueMarch 31, 2009
    
    March 31, 2009
    
    December 31, 2008RHD6.875% Senior Notes due 2013
    
    $
    10,340
    
    
    $
    206,791
    
    
    $
    206,7916.875% Series A-1 Senior Discount Notes due 2013
    
    
    15,151
    
    
    
    303,019
    
    
    
    301,8626.875% Series A-2 Senior Discount Notes due 2013
    
    
    22,821
    
    
    
    456,427
    
    
    
    455,2048.875% Series A-3 Senior Notes due 2016
    
    
    60,770
    
    
    
    1,012,839
    
    
    
    1,012,8398.875% Series A-4 Senior Notes due 2017
    
    
    73,786
    
    
    
    1,229,760
    
    
    
    1,229,760R.H. Donnelley Inc. (RHDI)Credit Facility
    
    
    775,927
    
    
    
    1,511,614
    
    
    
    1,341,09811.75% Senior Notes due 2015
    
    
    57,802
    
    
    
    412,871
    
    
    
    412,871Dex Media, Inc.8% Senior Notes due 2013
    
    
    58,646
    
    
    
    509,966
    
    
    
    510,4089% Senior Discount Notes due 2013
    
    
    86,250
    
    
    
    770,580
    
    
    
    771,488Dex Media EastCredit Facility
    
    
    487,640
    
    
    
    1,160,000
    
    
    
    1,081,500Dex Media WestCredit Facility
    
    
    562,600
    
    
    
    1,170,000
    
    
    
    1,080,0008.5% Senior Notes due 2010
    
    
    200,234
    
    
    
    392,616
    
    
    
    393,8835.875% Senior Notes due 2011
    
    
    4,467
    
    
    
    8,758
    
    
    
    8,7619.875% Senior Subordinated Notes due 2013
    
    
    162,675
    
    
    
    813,375
    
    
    
    815,791Total RHD Consolidated
    
    
    2,579,109
    
    
    
    9,958,616
    
    
    
    9,622,256Less current portion
    
    
    216,466
    
    
    
    408,568
    
    
    
    113,566Long-term debt
    
    $
    2,362,643
    
    
    $
    9,550,048
    
    
    $
    9,508,690
  34




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##### Table of Contents



RHDI
  Dex Media East
  35




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##### Table of Contents



Dex Media West
  Impact of Purchase Accounting
 Business Combinations
 Long-TermLong-
    
    
    Debt at MarchUnamortized
    
    
    Term Debt
    
    
    31, 2009Fair Value
    
    
    Carrying
    
    
    ExcludingAdjustment at
    
    
    Value at
    
    
    UnamortizedMarch 31,
    
    
    March 31,
    
    
    Fair Value(amounts in millions)
    
    2009
    
    
    2009
    
    
    AdjustmentDex Media, Inc. 8% Senior Notes
    
    $
    9,966
    
    
    
    509,966
    
    
    $
    500,000Dex Media, Inc. 9% Senior Discount Notes
    
    
    12,168
    
    
    
    770,580
    
    
    
    758,412Dex Media West 8.5% Senior Notes
    
    
    7,616
    
    
    
    392,616
    
    
    
    385,000Dex Media West 5.875% Senior Notes
    
    
    38
    
    
    
    8,758
    
    
    
    8,720Dex Media West 9.875% Senior Subordinated Notes
    
    
    51,725
    
    
    
    813,375
    
    
    
    761,650Total Dex Media Outstanding Debt at January
31, 2006
    
    $
    81,513
    
    
    $
    2,495,295
    
    
    $
    2,413,782
 Subsequent Events
  Impact of Economic Instability on Prospective Pension Funding
  36




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Liquidity and Cash Flows
        37




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##### Table of Contents




    
    $(401.2) million in net loss.
    
    $550.4 million of net non-cash items primarily consisting of $366.7 million in
deferred income taxes, $142.8 million of depreciation and amortization, $37.6 million in
bad debt provision, of which $28.4 million relates to the change in net accounts
receivable, $6.0 million in other non-cash items and $4.0 million of stock-based
compensation expense, offset by a reduction in interest expense of $6.7 million
associated with ineffective interest rate swaps.
    
    $51.4 million net use of cash from a decrease in deferred directory revenues of $42.2
million due to lower advertising sales and an increase in accounts receivable of $9.2
million, representing the increase in accounts receivable net of the provision for bad
debts of $37.6 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.
    
    $32.6 million net source of cash from a decrease in other assets, consisting of a
$24.3 million decrease in prepaid directory costs resulting from publication seasonality
as well as a $8.3 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.
    
    $44.3 million net use of cash from a decrease in accounts payable and accrued
liabilities, primarily reflecting a $13.3 million decrease in trade accounts payable
resulting from timing of invoice processing versus payment thereon, a $5.5 million
decrease in accrued interest payable on outstanding debt and a $25.5 million decrease in
other accrued liabilities.
    
    $30.0 million decrease in other non-current liabilities, including pension and
postretirement long-term liabilities.
  
    
    $3.9 million used to purchase fixed assets, primarily computer equipment, software
and leasehold improvements.
  
    
    $22.0 million in scheduled principal payments on term loans under our 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.
 
    
    $10.9 million in the increased balance of checks not yet presented for payment.
 38




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##### Table of Contents




    
    $(1,623.1) million in net loss, which includes the impact of the non-cash goodwill
impairment charge.
    
    1,651.5 million of net non-cash items consisting of the non-cash goodwill impairment
charge of $2,463.6 million, offset by $(812.1) million in deferred income taxes, which
includes the tax impact of the non-cash goodwill impairment charge.
    
    $150.5 million of other net non-cash items primarily consisting of $118.3 million of
depreciation and amortization, $29.8 million in bad debt provision and $10.8 million of
stock-based compensation expense, partially offset by $(8.4) million in other non-cash
items, primarily related to the amortization of deferred financing costs and
amortization of the fair value adjustments required by GAAP as a result of the Dex Media
Merger, which reduced interest expense.
    
    $39.3 million net use of cash from an increase in accounts receivable of $65.7
million due to an increase in days outstanding of customer balances and deterioration in
accounts receivable aging categories, which has been driven by weaker economic
conditions, as well as publication cycle seasonality, offset by an increase in deferred
directory revenues of $26.4 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.
    
    $21.6 million net source of cash from a decrease in other assets, primarily
consisting of a $34.3 million decrease in prepaid directory costs resulting from
publication seasonality, offset by a $12.7 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.
    
    $52.9 million net use of cash from a decrease in accounts payable and accrued
liabilities, primarily reflecting a $41.9 million decrease in accrued interest payable
on outstanding debt resulting from interest payments of $247.8 million, partially offset
by $205.9 million in accruals during the period, and a $41.0 million decrease in trade
accounts payable resulting from timing of invoice processing versus payment thereon,
offset by a $30.0 million increase in accrued liabilities, which include accrued
salaries and related bonuses and accrued income taxes.
    
    $8.4 million decrease in other non-current liabilities, including pension and
postretirement long-term liabilities.
  
    
    $10.1 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.
 39




---



##### Table of Contents




    
    $91.4 million in principal payments on term loans under our credit facilities. Of
this amount, $31.4 million represents scheduled principal payments and $60.0 million
represents principal payments made on an accelerated basis, at our option, from
available cash flow generated from operations.
    
    $215.3 million in borrowings under our revolvers, used primarily to fund temporary
working capital requirements.
    
    $232.4 million in principal payments on our revolvers.
    
    $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 increased balance of checks not yet presented for payment.
    
    $0.1 million in proceeds from the exercise of employee stock options.
 40




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##### Table of Contents



Quantitative and Qualitative Disclosures About Market Risk
 Interest Rate Risk and Risk Management
      Accounting for Derivative Instruments and Hedging Activities
  41




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##### Table of Contents



Market Risk Sensitive Instruments
 , Accounting for Certain Derivative Instruments and Certain Hedging Activities, an Amendment of FAS
133 Amendment of Statement 133 on Derivative Instruments and Hedging Activities
  
 Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Controls
 ,
 Remediation Plan for Material Weakness in Internal Control Over Financial Reporting
  42




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##### Table of Contents




    
    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.
  43




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
     44




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##### Table of Contents



Exhibits
 Exhibit No.
    
    Document3.2*
    
    Fifth Amended and Restated R. H. Donnelley Corporation Bylaws (as amended and
in effect as of April 14, 2009)10.1*
    
    Amendment No. 1, dated as of March 9, 2009, to Amended and Restated Employment
Agreement, dated as of December 31, 2008, by and between the Company and David
C. Swanson10.2*
    
    Amendment No. 1, dated as of March 9, 2009, to Amended and Restated Employment
Agreement, dated as of December 31, 2008, by and between the Company and
Steven M. Blondy10.3*
    
    R.H. Donnelley Corporation 2009 Long-Term Incentive Plan for Executive Officers31.1*
    
    Certification of Quarterly Report on Form 10-Q for the period ended March 31,
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 March 31,
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 March 31,
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. 45




---



##### Table of Contents



SIGNATURES
  R.H. DONNELLEY CORPORATIONDate: May 8, 2009
    By:
    /s/ Steven M. BlondySteven M. BlondyExecutive Vice President and Chief Financial Officer
(Principal Financial Officer)/s/ Robert S. LowreyRobert S. LowreyAssistant Vice President, Assistant Controller and
Interim Chief Accounting Officer
(Interim Principal Accounting Officer) 46




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##### Table of Contents



Exhibit Index
 Exhibit No.
    
    Document3.2*
    
    Fifth Amended and Restated R. H. Donnelley Corporation Bylaws (as amended and
in effect as of April 14, 2009)10.1*
    
    Amendment No. 1, dated as of March 9, 2009, to Amended and Restated Employment
Agreement, dated as of December 31, 2008, by and between the Company and David
C. Swanson10.2*
    
    Amendment No. 1, dated as of March 9, 2009, to Amended and Restated Employment
Agreement, dated as of December 31, 2008, by and between the Company and
Steven M. Blondy10.3*
    
    R.H. Donnelley Corporation 2009 Long-Term Incentive Plan for Executive Officers31.1*
    
    Certification of Quarterly Report on Form 10-Q for the period ended March 31,
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 March 31,
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 March 31,
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. 47