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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
  þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2010
 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
 DEX ONE 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)
 Registrants telephone number, including area code (919) 297-1600
 Securities registered pursuant to Section 12(b) of the Act:
 Title of class
    
    Name of exchange on which registeredCommon Stock, par value $.001 per share
    
    New York Stock Exchange
 Securities registered pursuant to Section 12(g) of the Act: None
  o þ
  o þ
  þ o
  o o
 þ
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
  o þ
   þ o
 DOCUMENTS INCORPORATED BY REFERENCE




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TABLE OF CONTENTS
 PART IItem 1. Business
    
    
    3Item 1A. Risk Factors
    
    
    12Item 1B. Unresolved Staff Comments
    
    
    20Item 2. Properties
    
    
    21Item 3. Legal Proceedings
    
    
    22Item 4. (Removed and Reserved)
    
    
    22PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
    
    
    23Item 6. Selected Financial Data
    
    
    25Item 7. Managements Discussion and Analysis of Financial Condition and Results
of Operations
    
    
    27Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    76Item 8. Financial Statements and Supplementary Data
    
    
    F-1Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures
    
    
    78Item 9A. Controls and Procedures
    
    
    78Item 9B. Other Information
    
    
    78PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    79Item 11. Executive Compensation
    
    
    79Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
    
    
    79Item 13. Certain Relationships and Related Transactions and Director Independence
    
    
    79Item 14. Principal Accountant Fees and Services
    
    
    79PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    80Signatures
    
    
    86EX-10.17EX-10.18EX-10.19EX-10.34EX-10.35EX-10.36EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1
  2




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PART I
 
 ITEM 1. BUSINESS.
 General
 ®
   Corporate Overview
  ® ®
 3




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
    
    A deep domain expertise in the realm of local businesses;
    
    A vast database of local business information within our markets and the ability to
collect and continuously update its content; and
    
    Strong, direct and long-standing relationships with local businesses maintained by
our locally based marketing consultants who work closely with clients to first discover
their business goals and marketing needs, assess their unique situations, and then
recommend a customized, cost-effective set of marketing solutions to help generate
leads.
 Segment Reporting
  Financial and Other Business Information
  Business Overview
    Marketing Solutions
  
    
    Assessment of marketing programs and advertisements;
    
    Message and image creation;
    
    Recommendations for advertising placement;
    
    Industry-specific research and information;
    
    Market-specific research and information;
    
    In-depth understanding of how consumers search for businesses and what influences them
to buy from one business versus another;
 4




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
    
    Dex published yellow pages;
    
    Dex published white pages;
    
    DexKnows.com;
    
    Search engine optimization strategies;
    
    Keyword implementation;
    
    Social strategies; and
    
    Tracking and reporting.
 Print Products and Services
    Online Products and Services
 DexKnows.com
     5




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
    
    Yahoo! Local Featured Listingssponsored listings with guaranteed placement on the
first or second results pages for broader exposure in a specific geography or category.
    
    Yahoo! Local Enhanced Listingssponsored listings that offer the ability to add a
detailed description of their business, photos, a tagline and coupons to create greater
online visibility for businesses and enhance their appearance within organic results.
  
    
    Basic Listings We have the rights to distribute an unlimited number of clients to
the YPC Internet yellow pages website.
 
    
    Premium Listings We have the rights to sell enhanced YPC advertising products, for
example, guaranteed placement and/or inclusion on the YPC Internet yellow pages website,
to our Illinois and Northwest Indiana clients.
 DexNet
   
    
    Client Profileconstructs a simple but content rich presence on the web for the client
and is designed to maximize the opportunity to appear on major search engines.
    
    Distributionprovides the clients information and business information to multiple
local search platforms including YellowPages.com, Google Maps and Local.com.
    
    Paid Searchdevelops, deploys and manages effective search marketing campaigns across
major search platforms, such as Google and Yahoo!, on behalf of the client.
    
    Reportingprovides transparent, real-time results, such as phone calls, e-mails,
listing views, website visits, driving directions, and the total number of times the
profile is sent to mobile. Reporting is accessible 24 hours a day, 7 days a week and
combines results received from DexKnows.com and leading local search sites.
 Business Cycle Overview
   6




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Sales
    Premise local marketing consultants
 Telephone local marketing consultants
 Locally centralized sales
  National Sales
  Printing and Distribution
  7




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Online Production and Distribution
   Credit, Collections and Bad Debt Expense
    Competition
   8




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® ®
  Raw Materials
  Intellectual Property
 ® ® ® TM ®, ® ®
 9




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Employees
  10




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Executive Officers of the Registrant
  Name
    
    Age
    
    Position(s)Alfred T. Mockett
    
    62
    
    Chief Executive Officer and PresidentGeorge F. Bednarz
    
    57
    
    Executive Vice President, Sales and Marketing(acting)Steven M. Blondy
    
    51
    
    Executive Vice President and Chief FinancialOfficerAtish Banerjea
    
    45
    
    Senior Vice President and Chief Technology OfficerSean W. Greene
    
    40
    
    Senior Vice President, Interactive (acting)Tyler D. Gronbach
    
    42
    
    Senior Vice President, CommunicationsMark W. Hianik
    
    50
    
    Senior Vice President, General Counsel andCorporate SecretaryDonna Towles
    
    58
    
    Senior Vice President, OperationsGretchen Zech
    
    41
    
    Senior Vice President, Human ResourcesSylvester J. Johnson
    
    50
    
    Vice President, Controller and Chief AccountingOfficer
  Alfred T. Mockett
 George F. Bednarz
 Steven M. Blondy
 Atish Banerjea
 Sean W. Greene
 Tyler D. Gronbach
 11




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Mark W. Hianik
 Donna Towles
 Gretchen Zech
 Sylvester J. Johnson
  
 ITEM 1A.
    
    RISK FACTORS
 Forward-Looking Information
  12




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Risks Related to Our Financial Condition and Capital Structure
 1) Our substantial debt poses various risks
   
    
    we may not be able to obtain additional financing or refinance our existing indebtedness
on satisfactory terms or at all;
    
    our indebtedness limits our financial flexibility in planning for, or reacting to,
changes in our business and the industry in which we operate;
    
    rising interest rates could increase the costs of servicing our debt because a majority
of our debt is at variable interest rates;
    
    interest and principal payments on our indebtedness reduces the cash flow available to
us to fund working capital requirements, capital expenditures, acquisitions or other
strategic initiatives, investments and other general corporate requirements because a
substantial portion of our cash flow is needed to service our debt obligations; and
    
    speculation as to our financial condition and the effect of our debt level and debt
service obligations could disrupt our relationships with clients, suppliers, employees,
creditors and other third parties.
  2) The restrictive covenants under our debt agreements limit our operational flexibility
  
    
    incur additional indebtedness or liens;
 
    
    make capital expenditures and investments (including acquisitions);
 
    
    sell assets;
 
    
    pay dividends or otherwise make distributions;
 
    
    make payments of certain indebtedness;
 
    
    engage in sale and leaseback transactions, swap transactions and transactions with
affiliates; and
 
    
    modify the Dex One Senior Subordinated Notes.
  13




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3) Our variable rate indebtedness subjects us to interest rate risk
  Risks Related to Our Business
 1) The ongoing weak economic conditions could adversely affect our business
  2) Some of our competitors are larger than we are and have greater financial and other resources
  3) Competition from emerging online technologies could adversely affect our business
 ® ®
 14




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4) The changing market position of telephone utilities could adversely affect our business
  5) The termination or modification of one or more material Internet search engine, local search or
portal agreements could adversely affect our business
  6) The continuing decline in the use of print yellow pages could adversely affect our business
   
    
    impair our ability to maintain or increase our advertising prices;
 
    
    cause businesses that purchase advertising in our yellow pages directories to reduce or
discontinue those purchases; and
 
    
    discourage businesses that do not presently purchase advertising in our yellow pages
directories from doing so in the future.
  15




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7) New technologies could adversely affect our business
  8) We could recognize impairment charges for our intangible assets or goodwill
   9) Our business could be adversely affected by interruptions to our computer and IT systems
  10) The bankruptcy of any of our telecommunication partners could adversely affect us
  16




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11) Early termination of our contracts with our telecommunication partners could have an adverse
effect on our business
  12) Future regulatory changes in directory publishing obligations in the Qwest and AT&T markets
could have an adverse effect on our business
  13) Internet-related regulation may adversely affect our business
  14) Environmental regulations could adversely affect our business
  15) Other governmental regulation could adversely affect our business
  17




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16) Our reliance on, and extension of credit to, local businesses could adversely affect our
business
  17) Our dependence on third-party providers of printing, distribution, delivery and IT services
could adversely affect our business, financial condition or results of operations
     18




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18) The sale of advertising to national accounts is coordinated by third parties that we do not
control, the performance and financial stability of which could adversely affect our business
   19) Work stoppages or increased unionization among our work force could adversely affect our
business, financial condition or results of operations
  20) Turnover among our sales force or key management could adversely affect our business
   19




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21) The loss of important intellectual property rights could adversely affect our business,
financial condition or results of operations
 ® ® ® TM ® ® ®
 22) Legal proceedings could adversely affect our business, financial condition or results of
operation
  23) Fluctuations in the price and availability of paper could adversely affect our business,
financial condition or results of operation
   
 ITEM 1B.
    
    UNRESOLVED STAFF COMMENTS
  20




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ITEM 2.
    
    PROPERTIES
  Approximate SquareProperty Location
    
    Footage
    
    Purpose
    
    Lease ExpirationLone Tree, CO (1)
    
    143,000
    
    Sales and Administration
    
    2012Cary, NC
    
    105,000
    
    Corporate Headquarters
    
    2015Englewood, CO (1)
    
    66,000
    
    Sales and Operations
    
    2011Morrisville, NC (1)(2)
    
    56,000
    
    Operations and Information Technology
    
    2015Maple Grove, MN (1)
    
    42,000
    
    Sales and Operations
    
    2014Bellevue, WA (1)
    
    38,000
    
    Sales and Operations
    
    2012Overland Park, KS (1)(2)
    
    35,000
    
    Sales and Operations
    
    2012Chicago, IL (2)
    
    34,000
    
    Sales and Operations
    
    2013Santa Monica, CA (3)
    
    29,000
    
    Digital Sales and Operations
    
    2011Beaverton, OR (1)
    
    27,000
    
    Sales and Operations
    
    2013Phoenix, AZ (1)
    
    26,000
    
    Sales and Operations
    
    2013Bristol, TN (2)
    
    25,000
    
    Sales and Operations
    
    OwnedMurray, UT (1)
    
    25,000
    
    Sales and Operations
    
    2011Tinley Park, IL (2)
    
    21,000
    
    Sales and Operations
    
    2014Dunmore, PA (2)
    
    20,000
    
    Graphics Operations
    
    2011Lombard, IL (2)
    
    20,000
    
    Sales and Operations
    
    2012
 
 (1)
    
    Represents facilities utilized by Dex Media, Inc., our direct wholly-owned subsidiary, and its direct and
indirect subsidiaries, to conduct their operations. Employees currently residing at the Englewood, CO location will relocate
to the Lone Tree, CO location upon lease expiration in 2011. We intend to negotiate a new lease at the Murray, UT location
during 2011.(2)
    
    Represents facilities utilized by R.H. Donnelley Inc., our direct wholly-owned subsidiary, and its direct
subsidiaries, to conduct their operations. We will not renew our lease at the Dunmore, PA location once it expires in 2011.(3)
    
    Represents facilities previously utilized by Business.com, Inc., the assets of which were sold in February
2011, and other employees involved in our interactive business. We intend to negotiate a new lease at the Santa Monica, CA
location during 2011.   21




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ITEM 3.
    
    LEGAL PROCEEDINGS
   
 ITEM 4.
    
    (REMOVED AND RESERVED)
 22




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PART II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
 Market for Registrants Common Equity and Related Stockholder Matters
  2010High
    
    
    Low1st QuarterRHD: January 1, 2010  January 29, 2010
    
    $
    0.01
    
    
    $
    0.01Dex One: February 1, 2010  March 31, 2010
    
    $
    35.00
    
    
    $
    25.712nd Quarter
    
    $
    30.89
    
    
    $
    17.603rd Quarter
    
    $
    19.72
    
    
    $
    8.354th Quarter
    
    $
    12.42
    
    
    $
    4.46
 2009High
    
    
    Low1st Quarter
    
    $
    0.37
    
    
    $
    0.072nd Quarter
    
    $
    0.31
    
    
    $
    0.043rd Quarter
    
    $
    0.09
    
    
    $
    0.044th Quarter
    
    $
    0.05
    
    
    $
    0.01
     23




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Equity Compensation Plan Information
    Equity Compensation Plan Information
 (c)Number ofSecurities(a)
    
    
    
    
    
    
    Remaining AvailableNumber of
    
    
    
    
    
    
    for Future IssuanceSecurities to Be
    
    
    (b)
    
    
    Under EquityIssued Upon
    
    
    Weighted-average
    
    
    Compensation PlansExercise of
    
    
    Exercise Price of
    
    
    (excludingOutstanding
    
    
    Outstanding
    
    
    securitiesOptions, Warrants
    
    
    Options, Warrants
    
    
    reflected in columnPlan category
    
    and Rights
    
    
    and Rights
    
    
    (a))Equity compensation plans not
approved by security holders:EIP
    
    
    865,681
    
    
    $
    28.68
    
    
    
    3,889,876CEO Stock-Based Awards (1)
    
    
    800,000
    
    
    
    19.94
    
    
    
    Total
    
    
    1,665,681
    
    
    $
    24.48
    
    
    
    3,889,876
 
 (1)
    
    In accordance with Mr. Mocketts employment agreement, on September
13, 2010, he was awarded 200,000 shares of the Companys common stock in the form of a
restricted stock award with a grant price of $9.62 per share, which was the closing price of the
Companys common stock on September 13, 2010, that will vest ratably over three years. On
September 13, 2010, he was also granted a fair market value option to purchase 200,000 shares of
the Companys common stock at an exercise price of $9.75 per share, which was the closing price
of the Companys common stock on September 3, 2010, that will vest ratably over four years, and
fully vested premium priced options to purchase 600,000 shares of the Companys common stock, a
third of which shares have an exercise price of $15 per share, a third of which shares have an
exercise price of $23 per share, and a third of which shares have an exercise price of $32 per
share (collectively, the CEO Stock-Based Awards). 24




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ITEM 6. SELECTED FINANCIAL DATA
  Successor Company
    
    
    Predecessor CompanyEleven Months
    
    
    One Month Ended(in thousands, except share and per
    
    Ended December 31,
    
    
    January 31,
    
    
    Years Ended December 31,share data)
    
    2010(1)
    
    
    2010 (1)
    
    
    2009
    
    
    2008
    
    
    2007(6)
    
    
    2006(7)Statements of Operations Data:Net revenue
    
    $
    830,887
    
    
    $
    160,372
    
    
    $
    2,202,447
    
    
    $
    2,616,811
    
    
    $
    2,680,299
    
    
    $
    1,899,297Impairment charges (2)
    
    
    (1,159,266
    )
    
    
    
    
    
    
    (7,337,775
    )
    
    
    (3,870,409
    )
    
    
    (20,000
    )
    
    
    Operating income (loss)
    
    
    (1,294,256
    )
    
    
    64,074
    
    
    
    (6,797,503
    )
    
    
    (3,005,717
    )
    
    
    904,966
    
    
    
    442,826Gain (loss) on debt transactions, net
(3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    265,166
    
    
    
    (26,321
    )
    
    
    Reorganization items, net (4)
    
    
    
    
    
    
    7,793,132
    
    
    
    (94,768
    )
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    
    (923,592
    )
    
    
    6,920,009
    
    
    
    (6,453,293
    )
    
    
    (2,298,327
    )
    
    
    46,859
    
    
    
    (237,704
    )Preferred dividend
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,974Gain on repurchase of preferred
stock(5)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (31,195
    )Income (loss) available to common
shareholders
    
    $
    (923,592
    )
    
    $
    6,920,009
    
    
    $
    (6,453,293
    )
    
    $
    (2,298,327
    )
    
    $
    46,859
    
    
    $
    (208,483
    )Earnings (Loss) Per Share:Basic
    
    $
    (18.46
    )
    
    $
    100.3
    
    
    $
    (93.67
    )
    
    $
    (33.41
    )
    
    $
    0.66
    
    
    $
    (3.14
    )Diluted
    
    $
    (18.46
    )
    
    $
    100.2
    
    
    $
    (93.67
    )
    
    $
    (33.41
    )
    
    $
    0.65
    
    
    $
    (3.14
    )Shares Used in Computing Earnings
(Loss) Per Share:Basic
    
    
    50,020
    
    
    
    69,013
    
    
    
    68,896
    
    
    
    68,793
    
    
    
    70,932
    
    
    
    66,448Diluted
    
    
    50,020
    
    
    
    69,052
    
    
    
    68,896
    
    
    
    68,793
    
    
    
    71,963
    
    
    
    66,448Balance Sheet Data:Total assets (8)
    
    $
    4,488,848
    
    
    $
    5,913,482
    
    
    $
    4,498,794
    
    
    $
    11,880,709
    
    
    $
    16,089,093
    
    
    $
    16,147,468Long-term debt, including current
maturities (8)
    
    
    2,737,221
    
    
    
    3,264,578
    
    
    
    3,554,776
    
    
    
    9,622,256
    
    
    
    10,175,649
    
    
    
    10,403,152Liabilities subject to compromise
(8)
    
    
    
    
    
    
    
    
    
    
    6,352,813
    
    
    
    
    
    
    
    
    
    
    
    Shareholders equity (deficit)
(8)
    
    
    525,916
    
    
    
    1,450,784
    
    
    
    (6,919,048
    )
    
    
    (493,375
    )
    
    
    1,822,736
    
    
    
    1,820,756
 
 (1)
    
    As a result of our emergence from Chapter 11 on the Effective Date, financial
information for Dex One is presented as of and for the eleven months ended December 31, 2010.
Financial information for the Predecessor Company is presented as of and for the one month ended
January 31, 2010. See Item 8, Financial Statements and Supplementary Data  Note 3, Fresh
Start Accounting for information on how the Company determined a fresh start reporting date of
February 1, 2010 and for a presentation of the impact of emergence from reorganization and fresh
start accounting on our financial position, results of operations and cash flows.(2)
    
    We recognized a non-goodwill intangible asset impairment charge associated with
trade names and trademarks, technology, local customer relationships and other from our former
Business.com reporting unit of $21.6 million and a goodwill impairment charge of $1,137.6
million, for a total impairment charge of $1,159.3 million during the eleven months ended
December 31, 2010. 25




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The Predecessor Company recognized a non-goodwill intangible asset impairment charge of $7,337.8
million during the year ended December 31, 2009 associated with directory services agreements,
advertiser relationships, third party contracts and network platforms acquired in prior
acquisitions.The Predecessor Company recognized a goodwill impairment charge of $3,123.8 million and
non-goodwill intangible asset and other long-lived asset impairment charges totaling $746.6
million associated with local
and national customer relationships and tradenames and technology acquired in prior
acquisitions, for a total impairment charge of $3,870.4 million during the year ended December
31, 2008.During the year ended December 31, 2007, the Predecessor Company recorded a non-goodwill
intangible asset impairment charge of $20.0 million associated with the tradenames acquired in a
prior acquisition.See Item 8, Financial Statements and Supplementary Data  Note 2, Summary of Significant
Accounting Policies  Identifiable Intangible Assets and Goodwill for additional information
on these impairment charges.(3)
    
    As a result of financing activities conducted during 2008, the Predecessor
Company reduced its outstanding debt by $410.0 million and recorded a gain of $265.2 million
during the year ended December 31, 2008. See Item 8, Financial Statements and Supplementary
Data  Note 2, Summary of Significant Accounting Policies  Gain on Debt Transactions, Net
for further discussion.During the year ended December 31, 2007, the Predecessor Company recorded a loss on debt
transactions of $26.3 million resulting from tender and redemption premium payments of $71.7
million and the write-off of unamortized deferred financing costs of $16.8 million associated
with refinancing transactions conducted during the fourth quarter of 2007, offset by the
accelerated amortization of the fair value adjustment directly attributable to the redemption of
Dex Media East LLCs outstanding 9.875% senior notes and 12.125% senior subordinated notes on
November 26, 2007 of $62.2 million, which was accounted for as an extinguishment of debt.(4)
    
    Reorganization items directly associated with the process of reorganizing the
business under Chapter 11 have been recorded on a separate line item on the consolidated
statement of operations. The Predecessor Company recorded $7.8 billion of net reorganization
items during the one month ended January 31, 2010 comprised of a $4.5 billion gain on
reorganization / settlement of liabilities subject to compromise and fresh start accounting
adjustments of $3.3 billion. For the year ended December 31, 2009, the Predecessor Company
recorded $94.8 million of net reorganization items. See Item 8, Financial Statements and
Supplementary Data  Note 4, Reorganization Items, Net and Liabilities Subject to Compromise
for further discussion.(5)
    
    In conjunction with the Predecessor Companys repurchase of its preferred stock
during 2006, the Predecessor Company reversed the previously recorded beneficial conversion
feature related to these shares and recorded a decrease to loss available to common shareholders
on the consolidated statement of operations of $31.2 million for the year ended December 31,
2006.(6)
    
    Financial data for the year ended December 31, 2007 includes the results of
Business.com commencing August 23, 2007.(7)
    
    Financial data for the year ended December 31, 2006 includes the results of Dex
Media commencing February 1, 2006. Net revenue, operating income, net loss and loss available to
common shareholders reflect purchase accounting adjustments that precluded the recognition of
revenue and certain expenses associated with directories published by Dex Media prior to and in
the month of the Dex Media merger.(8)
    
    The significant decline in total assets and shareholders deficit as of December
31, 2009 and 2008 is a direct result of the impairment charges noted above. The significant
decline in long-term debt, including current maturities, at December 31, 2009 is a direct result
of the Notes in Default, which were reclassed to liabilities subject to compromise on the
consolidated balance sheet at December 31, 2009. See Item 8, Financial Statements and
Supplementary Data  Note 3, Fresh Start Accounting and Note 4, Reorganization Items, Net
and Liabilities Subject to Compromise for additional information as well as items included in
liabilities subject to compromise on the consolidated balance sheet at December 31, 2009. 26




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##### Table of Contents



ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    The Predecessor Companys filing of voluntary positions in Chapter 11;
    
    The confirmed Joint Plan of Reorganization (the Plan) and our emergence from the
Chapter 11 proceedings;
    
    Restructuring conducted in connection with our emergence from the Chapter 11
proceedings;
    
    Consummation of the Plan;
    
    Impact on long-term debt upon emergence from the Chapter 11 proceedings; and
    
    Accounting matters resulting from the Chapter 11 proceedings.
 Recent Trends and Developments Related to Our Business
 Results of Operations
    27




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##### Table of Contents



Our Plan
 ® ®
     Liquidity and Going Concern Analysis
   28




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##### Table of Contents



Fresh Start Accounting
  Impairment Charges
  New Chief Executive Officer and President and Departure of Former Chairman and Chief Executive
Officer
  Labor Unions
  Climate Change
  Healthcare Reform Legislation
  Segment Reporting
  29




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##### Table of Contents



New Accounting Pronouncements
 Disclosures about the Credit Quality of Financing Receivables and the Allowance
for Credit Losses
 Improving Disclosures about Fair Value Measurements
 Revenue Recognition (Topic 605):
Multiple-Deliverable Revenue Arrangements, a consensus of the FASB Emerging Issues Task Force Revenue Recognition  Multiple Element Arrangements
  30




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##### Table of Contents



Critical Accounting Estimates
  Intangible Assets and Goodwill Valuation and Amortization
 st .
   
    
    Historical financial information, including revenue, profit margins, customer attrition
data and price premiums enjoyed relative to competing independent publishers;
    
    Long-term financial projections, including, but not limited to, revenue trends and
profit margin trends;
    
    Intangible asset and other long-lived asset carrying values and any changes in current
and future use;
    
    Trading values of our debt and equity securities;
    
    Industry and economic trends; and
    
    Other Company-specific and Predecessor Company-specific information.
  31




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##### Table of Contents



Balance at February 1, 2010.
    
    $
    2,097,124Goodwill impairment charge during the three months ended June
30, 2010
    
    
    (752,340
    )Goodwill impairment charge during the three months ended
September 30, 2010
    
    
    (385,283
    )Reduction in goodwill during the three months ended December
31, 2010
    
    
    (158,427
    )Balance at December 31, 2010
    
    $
    801,074
   Allocation of Goodwill atReporting Unit
    
    December 31, 2010RHDI
    
    $
    250,518DME Inc.
    
    
    236,159DMW Inc.
    
    
    314,397Total
    
    $
    801,074
  Reporting Unit
    
    $
    
    
    %RHDI
    
    $
    134,848
    
    
    
    10.8
    %DME Inc.
    
    
    18,479
    
    
    
    1.9DMW Inc.
    
    
    13,202
    
    
    
    1.2
    32




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##### Table of Contents



Weighted AverageIntangible Asset
    
    Useful Lives
    
    
    Amortization MethodologyDirectory services agreements
    
    26 years
    
    Income forecast method (1)Local customer relationships
    
    14 years
    
    Income forecast method (1)National customer relationships
    
    25 years
    
    Income forecast method (1)Trade names and trademarks
    
    14 years
    
    Straight-line methodTechnology, advertising commitments and other
    
    8 years
    
    Income forecast method (1)
 
 (1)
    
    These identifiable intangible assets are amortized under the income forecast
method, which assumes the value derived from these intangible assets is greater in the earlier
years and steadily declines over time.   33




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##### Table of Contents



Fresh Start Accounting
 Reorganizations
   Liabilities Subject to Compromise
    34




---



##### Table of Contents



Income Taxes
 Income Taxes
      Allowance for Doubtful Accounts and Sales Claims
  35




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##### Table of Contents



Pension Benefits
   Long-Term Rate ofDiscount Rate
    
    
    Return on Plan AssetsDex One Retirement Plan
    
    
    5.70
    %
    
    
    8.00
    %Dex Media Pension Plan
    
    
    5.70
    %
    
    
    8.00
    %
  Long-Term Rate ofDiscount Rate
    
    
    Return on Plan AssetsDex One Retirement Plan
    
    
    5.70
    %
    
    
    8.00
    %Dex Media Pension Plan
    
    
    5.70
    %
    
    
    8.00
    %
  Discount RateJanuary 1, 2009-
    
    
    June 1, 2009-May 31, 2009
    
    
    December 31, 2009Dex One Retirement Plan
    
    
    5.87
    %
    
    
    5.87
    %Dex Media Pension Plan
    
    
    5.87
    %
    
    
    6.87
    %
 Long-Term Rate of
    
    
    Rate of Increase inReturn on Plan Assets
    
    
    Future CompensationDex One Retirement Plan
    
    
    8.00
    %
    
    
    Dex Media Pension Plan
    
    
    8.00
    %
    
    
    3.66
    %
   36




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##### Table of Contents



Stock-Based Compensation
   Successor Company
    
    
    Predecessor CompanyEleven Months Ended
    
    
    Year EndedDecember 31, 2010
    
    
    December 31, 2008Expected volatility
    
    
    37.3
    %
    
    
    58.8
    %Risk-free interest rate
    
    
    2.6
    %
    
    
    2.8
    %Expected life
    
    7.1 Years
    
    5 YearsDerived service period (grants using Monte Carlo model)
    
    3.6 Years
    
    
    Forfeiture rate
    
    
    8.9
    %
    
    
    8.0
    %Dividend yield
    
    
    0
    %
    
    
    0
    %
  37




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##### Table of Contents



Use of a Simplified
Method in Developing Expected Term of Share Options
   Fair Value of Financial Instruments
  Fair Value Measurements and Disclosures
 Level 1  Unadjusted quoted market prices in active markets for identical assets and
liabilities.Level 2  Observable inputs other than Level 1 inputs such as quoted prices for similar
assets or liabilities, quoted prices in markets with insufficient volume or infrequent
transactions, or model-derived valuations in which all significant inputs are observable or
can be derived principally from or corroborated by observable market data for substantially
the full term of the assets or liabilities.Level 3  Prices or valuations that require inputs that are both significant to the
measurement and unobservable.
 38




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##### Table of Contents



Fair Value MeasurementsUsing Significant Other Observable Inputs (Level 2)Successor Company
    
    
    Predecessor CompanyDerivatives:
    
    December 31, 2010
    
    
    December 31, 2009Interest Rate Swap 
Liabilities
    
    $
    (6,365
    )
    
    $
    (6,695
    )Interest Rate Cap  Assets
    
    $
    308
    
    
    $
    
      39




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##### Table of Contents



Fair Value Measurements at December 31, 2010Quoted Prices in
    
    
    UsingActive Markets for
    
    
    Significant OtherIdentical Assets
    
    
    Observable InputsTotal
    
    
    (Level 1)
    
    
    (Level 2)Cash
    
    $
    460
    
    
    $
    460
    
    
    $
    U.S. Government securities (a)
    
    
    23,210
    
    
    
    
    
    
    
    23,210Common/collective trusts (b)
    
    
    67,375
    
    
    
    
    
    
    
    67,375Corporate debt (c)
    
    
    19,736
    
    
    
    
    
    
    
    19,736Corporate stock (d)
    
    
    19,720
    
    
    
    19,720
    
    
    
    Registered investment companies (e)
    
    
    29,860
    
    
    
    29,860
    
    
    
    Real estate investment trust (f)
    
    
    338
    
    
    
    338
    
    
    
    Credit default swaps and futures (g)
    
    
    1,149
    
    
    
    
    
    
    
    1,149Collective Fund  Group Trust (h)
    
    
    25,479
    
    
    
    
    
    
    
    25,479Total
    
    $
    187,327
    
    
    $
    50,378
    
    
    $
    136,949
 Fair Value Measurements at December 31, 2009Quoted Prices in
    
    
    UsingActive Markets for
    
    
    Significant OtherIdentical Assets
    
    
    Observable InputsTotal
    
    
    (Level 1)
    
    
    (Level 2)Cash
    
    $
    1,860
    
    
    $
    1,860
    
    
    $
    U.S. Government securities (a)
    
    
    14,755
    
    
    
    
    
    
    
    14,755Common/collective trusts (b)
    
    
    80,062
    
    
    
    
    
    
    
    80,062Corporate debt (c)
    
    
    20,879
    
    
    
    
    
    
    
    20,879Corporate stock (d)
    
    
    22,051
    
    
    
    22,051
    
    
    
    Registered investment companies (e)
    
    
    34,036
    
    
    
    34,036
    
    
    
    Real estate investment trust (f)
    
    
    198
    
    
    
    198
    
    
    
    Credit default swaps and futures (g)
    
    
    394
    
    
    
    
    
    
    
    394Total
    
    $
    174,235
    
    
    $
    58,145
    
    
    $
    116,090
 
 (a)
    
    This category includes investments in U.S. Government bonds, government mortgage-backed
securities, index-linked government bonds, guaranteed commercial paper, short-term treasury
bills and notes. Fair value for these assets is determined using a bid evaluation process
of observable, market based inputs effective as of the last business day of the plan year.(b)
    
    This category includes investments in two common/collective funds of which 89% is
invested in stocks comprising the Russell 1000 equity index and the remaining 11% is
comprised of short-term investments at December 31, 2010. Fair value for these assets is
determined based on the contract value, which is based on the provisions of the underlying
guaranteed investment contracts.(c)
    
    This category includes investments in corporate bonds, commercial mortgage-backed and
asset-backed securities, collateralized mortgage obligations and commercial paper. Fair
value for these assets is determined using a bid evaluation process of observable, market
based inputs effective as of the last business day of the plan year. 40




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##### Table of Contents



(d)
    
    This category includes investments in small cap stocks of U. S. issuers across diverse
industries. Fair value for these assets is determined using quoted market prices on a
recognized securities exchange at the last reported trading price on the last business day
of the plan year.(e)
    
    This category is comprised of two mutual funds, one fund that invests in
value-oriented international stocks across diverse industries and one that invests in
intermediate term fixed income instruments such as treasuries and high grade corporate
bonds. Fair value for these assets is determined using quoted market prices on a recognized
securities exchange at the last reported trading price on the last business day of the plan
year.(f)
    
    This category is comprised of a healthcare real estate investment trust. Fair value for
these assets is determined based on traded market prices.(g)
    
    This category includes investments in a combination of 5, 10 and 30 year U.S. Treasury
notes and bond futures and credit default swaps. Fair value for these assets is determined
based on either settlement prices, prices on a recognized securities exchange or a mid/bid
evaluation process using observable, market based inputs.(h)
    
    This category includes investments in passively managed funds composed of
international stocks across diverse industries. Fair value for these assets is calculated
based upon a compilation of observable market information.   RESULTS OF OPERATIONS
 Factors Affecting Comparability
 Fresh Start Accounting Adjustments
   Business Combinations
 41




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Impairment Charges
  Reclassifications
  Year Ended December 31, 2009As Previously(amounts in millions)
    
    Reported
    
    
    Reclass
    
    
    As ReclassifiedProduction and
distribution expenses
    
    $
    350.7
    
    
    $
    24.6
    
    
    $
    375.3Selling and support
expenses
    
    
    663.6
    
    
    
    (53.3
    )
    
    
    610.3General and
administrative
expenses
    
    
    69.0
    
    
    
    28.7
    
    
    
    97.7
 42




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##### Table of Contents



Year Ended December 31, 2008As Previously(amounts in millions)
    
    Reported
    
    
    Reclass
    
    
    As ReclassifiedProduction and
distribution expenses
    
    $
    418.3
    
    
    $
    3.6
    
    
    $
    421.9Selling and support
expenses
    
    
    729.7
    
    
    
    (42.2
    )
    
    
    687.5General and
administrative
expenses
    
    
    120.9
    
    
    
    38.6
    
    
    
    159.5
 GAAP Reported Results
 Successor Company  Eleven Months Ended December 31, 2010
 Net Revenues
  Successor Company(amounts in millions)
    
    Eleven Months Ended
December 31, 2010Gross advertising revenues
    
    $
    824.4Sales claims and allowances
    
    
    (9.9
    )Net advertising revenues
    
    
    814.5Other revenues
    
    
    16.4Total
    
    $
    830.9
    43




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##### Table of Contents



Expenses
  Successor CompanyEleven Months Ended(amounts in millions)
    
    December 31, 2010Production and distribution expenses
    
    $
    223.0Selling and support expenses
    
    
    378.8General and administrative expenses
    
    
    146.4Depreciation and amortization
    
    
    217.7Impairment charges
    
    
    1,159.3Total
    
    $
    2,125.2
  Production and Distribution Expenses
  44




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##### Table of Contents



Selling and Support Expenses
  General and Administrative Expenses
  Depreciation and Amortization
  Impairment Charges
  45




---



##### Table of Contents



Operating Loss
  Interest Expense, Net
   Income Taxes
    46




---



##### Table of Contents



Net Loss and Loss Per Share
   Successor CompanyEleven Months Ended(amounts in thousands except per share amounts)
    
    December 31, 2010Basic EPSNet loss
    
    $
    (923,592
    )Weighted average common shares outstanding
    
    
    50,020Basic EPS
    
    $
    (18.46
    )Diluted EPSNet loss
    
    $
    (923,592
    )Weighted average common shares outstanding
    
    
    50,020Dilutive effect of stock awards (1)
    
    
    Weighted average diluted shares outstanding
    
    
    50,020Diluted EPS
    
    $
    (18.46
    )
 
 (1)
    
    Due to the net loss reported for the eleven months ended December 31, 2010, the effect of all
stock-based awards was anti-dilutive and therefore is not included in the calculation of
diluted EPS. For the eleven months ended December 31, 2010, 1.3 million shares of the
Companys stock-based awards had exercise prices that exceeded the average market price of the
Companys common stock for the period. 47




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##### Table of Contents



Predecessor Company  One Month Ended January 31, 2010
 Net Revenues
  Predecessor CompanyOne Month Ended(amounts in millions)
    
    January 31, 2010|Gross advertising revenues
    
    $
    161.4Sales claims and allowances
    
    
    (3.5
    )Net advertising revenues
    
    
    157.9Other revenues
    
    
    2.5Total.
    
    $
    160.4
    Expenses
  Predecessor CompanyOne Month Ended(amounts in millions)
    
    January 31, 2010|Production and distribution expenses
    
    $
    27.2Selling and support expenses
    
    
    40.7General and administrative expenses
    
    
    8.2Depreciation and amortization
    
    
    20.2Total
    
    $
    96.3
 Production and Distribution Expenses
  48




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##### Table of Contents



Selling and Support Expenses
  General and Administrative Expenses
  Depreciation and Amortization
   Operating Income
  Interest Expense, Net
   49




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##### Table of Contents



Reorganization Items, Net
  Predecessor CompanyOne Month Ended(amounts in thousands)
    
    January 31, 2010Liabilities subject to compromise
    
    $
    6,352,813Issuance of new Dex One common stock (par value)
    
    
    (50
    )Dex One additional paid-in capital
    
    
    (1,450,734
    )Dex One Senior Subordinated Notes
    
    
    (300,000
    )Reclassified into other balance sheet liability accounts
    
    
    (39,471
    )Professional fees and other
    
    
    (38,403
    )Gain on reorganization / settlement of liabilities subject to compromise
    
    
    4,524,155Fresh start accounting adjustments:Goodwill
    
    
    2,097,124Write off of deferred revenue and deferred directory costs
    
    
    655,555Fair value adjustment to intangible assets
    
    
    415,132Fair value adjustment to the amended and restated credit facilities
    
    
    120,245Fair value adjustment to fixed assets and computer software
    
    
    49,814Write-off of deferred financing costs
    
    
    (48,443
    )Other fresh start accounting adjustments
    
    
    (20,450
    )Total fresh start accounting adjustments
    
    
    3,268,977Total reorganization items, net
    
    $
    7,793,132
  Income Taxes
   50




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##### Table of Contents



Net Income and Earnings Per Share
   Predecessor CompanyOne Month Ended(amounts in thousands except per share amounts)
    
    January 31, 2010Basic EPSNet income
    
    $
    6,920,009Weighted average common shares outstanding
    
    
    69,013Basic EPS
    
    $
    100.3Diluted EPSNet income
    
    $
    6,920,009Weighted average common shares outstanding
    
    
    69,013Dilutive effect of stock awards
    
    
    39Weighted average diluted shares outstanding
    
    
    69,052Diluted EPS
    
    $
    100.2
  51




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##### Table of Contents



Non-GAAP Financial Information  Combined Adjusted Results
  Successor Company  Combined Adjusted Results for the Year Ended December 31, 2010 and  Predecessor Company  GAAP and Adjusted Results for the Year Ended December 31, 2009
 Net Revenues
  PredecessorCompanySuccessor
    
    
    OneCompany
    
    
    MonthEleven Months
    
    
    Ended
    
    
    
    
    
    
    Combined Adjusted
    
    
    Predecessor CompanyEnded
    
    
    January
    
    
    Fresh Start
    
    
    Year Ended
    
    
    Year Ended
    
    
    
    
    
    
    %(amounts in millions)
    
    December 31, 2010
    
    
    31, 2010
    
    
    Adjustments
    
    
    December 31, 2010
    
    
    December 31, 2009
    
    
    $ Change
    
    
    ChangeGross advertising
revenues
    
    $
    824.4
    
    
    $
    161.4
    
    
    $
    799.3
    (1)
    
    $
    1,785.1
    
    
    $
    2,219.9
    
    
    $
    (434.8
    )
    
    
    (19.6
    )%Sales claims and
allowances
    
    
    (9.9
    )
    
    
    (3.5
    )
    
    
    (14.0
    )(1)
    
    
    (27.4
    )
    
    
    (43.8
    )
    
    
    16.4
    
    
    
    37.4Net advertising
revenues
    
    
    814.5
    
    
    
    157.9
    
    
    
    785.3
    
    
    
    1,757.7
    
    
    
    2,176.1
    
    
    
    (418.4
    )
    
    
    (19.2
    )Other revenues
    
    
    16.4
    
    
    
    2.5
    
    
    
    5.6
    (1)
    
    
    24.5
    
    
    
    26.3
    
    
    
    (1.8
    )
    
    
    (6.8
    )Total
    
    $
    830.9
    
    
    $
    160.4
    
    
    $
    790.9
    
    
    $
    1,782.2
    
    
    $
    2,202.4
    
    
    $
    (420.2
    )
    
    
    (19.1
    )%
 
 (1)
    
    Represents gross advertising revenues, sales claims and allowances and other
revenues for advertising sales fulfilled prior to the Fresh Start Reporting Date, which would have
been recognized during the eleven months ended December 31, 2010 absent our adoption of fresh start
accounting required under GAAP.   52




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##### Table of Contents



Expenses
  Successor
    
    
    PredecessorCompany
    
    
    Company
    
    
    
    
    
    
    CombinedEleven
    
    
    One Month
    
    
    Fresh Start and

    
    
    AdjustedMonths Ended
    
    
    Ended January
    
    
    Other
    
    
    Year Ended(amounts in millions)
    
    December 31, 2010
    
    
    31, 2010
    
    
    Adjustments
    
    
    December 31, 2010Production and distribution
expenses
    
    $
    223.0
    
    
    $
    27.2
    
    
    $
    81.3
    (1)
    
    $
    331.5Selling and support expenses
    
    
    378.8
    
    
    
    40.7
    
    
    
    79.0
    (1)
    
    
    498.5General and administrative
expenses
    
    
    146.4
    
    
    
    8.2
    
    
    
    
    
    
    
    154.6Depreciation and
amortization
    
    
    217.7
    
    
    
    20.2
    
    
    
    
    (2)
    
    
    237.9Impairment charges
    
    
    1,159.3
    
    
    
    
    
    
    
    (1,159.3
    )(3)
    
    
    Total
    
    $
    2,125.2
    
    
    $
    96.3
    
    
    $
    (999.0
    )
    
    $
    1,222.5
 PredecessorCompanyYear Ended






    AdjustedDecember
    
    
    
    
    
    
    Year Ended
    
    
    $
    
    
    %(amounts in millions)
    
    31, 2009
    
    
    Adjustments
    
    
    December 31, 2009
    
    
    Change
    
    
    ChangeProduction and distribution
expenses
    
    $
    375.3
    
    
    $
    
    
    
    $
    375.3
    
    
    $
    (43.8
    )
    
    
    (11.7
    )%Selling and support expenses
    
    
    610.3
    
    
    
    
    
    
    
    610.3
    
    
    
    (111.8
    )
    
    
    (18.3
    )General and administrative expenses
    
    
    97.7
    
    
    
    
    
    
    
    97.7
    
    
    
    56.9
    
    
    
    58.2Depreciation and
amortization
    
    
    578.8
    
    
    
    
    
    
    
    578.8
    
    
    
    (340.9
    )
    
    
    (58.9
    )Impairment charges
    
    
    7,337.8
    
    
    
    (7,337.8
    )(3)
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    8,999.9
    
    
    $
    (7,337.8
    )
    
    $
    1,662.1
    
    
    $
    (439.6
    )
    
    
    (26.4
    )%
 
 (1)
    
    Represents (a) certain deferred expenses for advertising sales fulfilled
prior to the Fresh Start Reporting Date, which would have been recognized during the eleven months
ended December 31, 2010 absent our adoption of fresh start accounting required under GAAP and (b)
the exclusion of cost-uplift recorded under fresh start accounting.(2)
    
    Depreciation and amortization expense has not been adjusted for the increase in
fair value of our intangible assets and fixed assets and computer software as a result of our
adoption of fresh start accounting, the reduced carrying values of intangible assets resulting from
impairment charges recorded by the Predecessor Company during the fourth quarter of 2009 and the
associated reduction in remaining useful lives effective January 1, 2010.(3)
    
    The goodwill and non-goodwill intangible asset impairment charges during the eleven
months ended December 31, 2010 have been excluded for the combined adjusted year ended December 31,
2010. The non-goodwill intangible asset impairment charges during the year ended December 31, 2009
have been excluded for the adjusted year ended December 31, 2009. 53




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##### Table of Contents



Production and Distribution Expenses
  CombinedAdjusted Year Ended(amounts in millions)
    
    December 31, 2010Lower print, paper and distribution expenses
    
    $
    (30.6
    )Lower internet production and distribution expenses
    
    
    (10.6
    )All other, net
    
    
    (2.6
    )Total decrease in
combined adjusted
production and
distribution expenses for
the year ended December
31, 2010
    
    $
    (43.8
    )
   Selling and Support Expenses
  CombinedAdjusted Year Ended(amounts in millions)
    
    December 31, 2010Lower bad debt expense
    
    $
    (81.2
    )Lower commissions and salesperson expenses
    
    
    (22.3
    )Lower occupancy expenses
    
    
    (5.0
    )Lower directory publishing expenses
    
    
    (4.9
    )All other, net
    
    
    1.6Total decrease in
combined adjusted
selling and support
expenses for the year
ended December 31,
2010
    
    $
    (111.8
    )
    54




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##### Table of Contents



General and Administrative Expenses
  CombinedAdjusted Year Ended(amounts in millions)
    
    December 31, 2010Change in net curtailment gains
    
    $
    48.2One-time expenses associated with departure of Chief Executive Officer
    
    
    9.5Higher restructuring expenses
    
    
    4.0Lower general corporate expenses
    
    
    (4.6
    )All other, net
    
    
    (0.2
    )Total increase in combined adjusted
G&A expenses for the year ended
December 31, 2010
    
    $
    56.9
     Depreciation and Amortization
  55




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Operating Income (Loss)
  Successor
    
    
 Predecessor CompanyCompany
    
    
    OneMonth
    
    
    
    
    
    
    Combined AdjustedEleven Months Ended
    
    
    Ended January
    
    
    
    
    
    
    Year EndedDecember 31,
    
    
    31,
    
    
    Fresh Start and Other
    
    
    December 31,(amounts in millions)
    
    2010
    
    
    2010
    
    
    Adjustments
    
    
    2010| | | |Total
    
    $
    (1,294.3
    )
    
    $
    64.1
    
    
    $
    1,789.9
    (1)
    
    $
    559.7
 PredecessorCompany
    
    
    
    
    
    
    AdjustedYear Ended






Year EndedDecember
    
    
    
    
    
    
    December
    
    
    $
    
    
    %(amounts in millions)
    
    31, 2009
    
    
    Adjustments
    
    
    31, 2009
    
    
    Change
    
    
    ChangeTotal
    
    $
    (6,797.5
    )
    
    $
    7,337.8
    (2)
    
    $
    540.3
    
    
    $
    19.4
    
    
    
    3.6
    %
 
 (1)
    
    Represents the net effect of (a) eliminating gross advertising revenues,
sales claims and allowances, other revenues and certain deferred expenses for advertising sales
fulfilled prior to the Fresh Start Reporting Date, which would have been recognized during the
eleven months ended December 31, 2010 absent our adoption of fresh start accounting required under
GAAP, (b) the exclusion of cost-uplift recorded under fresh start accounting (c) excludes the
goodwill and non-goodwill intangible asset impairment charges during the eleven months ended
December 31, 2010.(2)
    
    Excludes the non-goodwill intangible asset impairment charges during the year ended
December 31, 2009.  Non-GAAP Statistical Measures
  56




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Year Ended December 31, 2009 compared to Year Ended December 31, 2008
 Net Revenues
  For the Years Ended December 31,(amounts in millions)
    
    2009
    
    
    2008
    
    
    $ Change
    
    
    % ChangeGross advertising revenues
    
    $
    2,219.9
    
    
    $
    2,628.5
    
    
    $
    (408.6
    )
    
    
    (15.5
    )%Sales claims and allowances
    
    
    (43.8
    )
    
    
    (45.3
    )
    
    
    1.5
    
    
    
    3.3Net advertising revenues
    
    
    2,176.1
    
    
    
    2,583.2
    
    
    
    (407.1
    )
    
    
    (15.8
    )Other revenues
    
    
    26.3
    
    
    
    33.6
    
    
    
    (7.3
    )
    
    
    (21.7
    )Total
    
    $
    2,202.4
    
    
    $
    2,616.8
    
    
    $
    (414.4
    )
    
    
    (15.8
    )%
   Non-GAAP Statistical Measures
  57




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Expenses
  For the Years Ended December 31,(amounts in millions)
    
    2009
    
    
    2008
    
    
    $ Change
    
    
    % ChangeProduction and distribution expenses
    
    $
    375.3
    
    
    $
    421.9
    
    
    $
    (46.6
    )
    
    
    (11.1
    )%Selling and support expenses
    
    
    610.3
    
    
    
    687.5
    
    
    
    (77.2
    )
    
    
    (11.2
    )General and administrative expenses
    
    
    97.7
    
    
    
    159.5
    
    
    
    (61.8
    )
    
    
    (38.8
    )Depreciation and amortization
    
    
    578.8
    
    
    
    483.3
    
    
    
    95.5
    
    
    
    19.8Impairment charges
    
    
    7,337.8
    
    
    
    3,870.4
    
    
    
    3,467.4
    
    
    
    89.6Total
    
    $
    8,999.9
    
    
    $
    5,622.6
    
    
    $
    3,377.3
    
    
    
    60.1
    %
 Production and Distribution Expenses
  (amounts in millions)
    
    $ ChangeDecreased print, paper and distribution costs
    
    $
    (28.4
    )Decreased internet production and distribution costs
    
    
    (9.9
    )All other, net
    
    
    (8.3
    )Total decrease in production and
distribution expenses for the
year ended December 31, 2009
    
    $
    (46.6
    )
   Selling and Support Expenses
  (amounts in millions)
    
    $ ChangeDecreased commissions and salesperson costs
    
    $
    (53.4
    )Decreased directory publishing costs
    
    
    (11.7
    )Decreased incentive compensation expense
    
    
    (6.6
    )Decreased billing, credit and collection expenses
    
    
    (5.5
    )Decreased occupancy costs
    
    
    (4.0
    )Increased bad debt expense
    
    
    8.2All other, net
    
    
    (4.2
    )Total decrease in selling and
support expenses for the year
ended December 31, 2009
    
    $
    (77.2
    )
  58




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General and Administrative Expenses
  (amounts in millions)
    
    $ ChangeDecrease in restructuring expenses
    
    $
    (21.5
    )Increase in curtailment gains, net
    
    
    (14.0
    )Decrease in general corporate expenses
    
    
    (11.3
    )Decreased information technology (IT) expenses
    
    
    (8.6
    )Decreased incentive compensation expense
    
    
    (5.1
    )All other, net
    
    
    (1.3
    )Total decrease in G&A expenses for the year ended December 31, 2009
    
    $
    (61.8
    )
   59




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Depreciation and Amortization
   Impairment Charges
  
    
    Historical financial information, including revenue, profit margins, customer attrition
data and price premiums enjoyed relative to competing independent publishers;
    
    Long-term financial projections, including, but not limited to, revenue trends and
profit margin trends; and
    
    Intangible asset carrying values.
   60




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Operating Loss
  For the Years Ended December 31,(amounts in millions)
    
    2009
    
    
    2008
    
    
    $ Change
    
    
    % ChangeTotal
    
    $
    (6,797.5
    )
    
    $
    (3,005.7
    )
    
    $
    (3,791.8
    )
    
    
    N/M
 
 (N/M: Not Meaningful)
  Interest Expense, Net
   61




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Gain on Debt Transactions, Net
       62




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Reorganization Items, Net
  Year Ended(amounts in thousands)
    
    December 31, 2009Professional fees
    
    $
    77,375Write-off of unamortized deferred financing costs
    
    
    64,475Write-off of unamortized net premiums / discounts on
long-term debt
    
    
    34,886Write-off of
debt related unamortized fair value adjustments
    
    
    (78,511
    )Lease rejections, abandoned property and other
    
    
    (3,457
    )Total reorganization items
    
    $
    94,768
     Benefit for Income Taxes
   63




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64




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Net Loss and Loss Per Share
   For the Years EndedDecember 31,(amounts in thousands except per share amounts)
    
    2009
    
    
    2008Basic EPSNet loss
    
    $
    (6,453,293
    )
    
    $
    (2,298,327
    )Weighted average common shares outstanding
    
    
    68,896
    
    
    
    68,793Basic loss per share
    
    $
    (93.67
    )
    
    $
    (33.41
    )Diluted EPSNet loss
    
    $
    (6,453,293
    )
    
    $
    (2,298,327
    )Weighted average common shares outstanding
    
    
    68,896
    
    
    
    68,793Dilutive effect of stock awards (1)
    
    
    
    
    
    
    Weighted average diluted shares outstanding
    
    
    68,896
    
    
    
    68,793Diluted loss per share
    
    $
    (93.67
    )
    
    $
    (33.41
    )
 
 
 65




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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
  Successor CompanyFair Market Value
    
    
    Carrying ValueDecember 31, 2010
    
    
    December 31, 2010RHDI Amended and Restated Credit Facility
    
    $
    800,175
    
    
    $
    1,014,485Dex Media East Amended and Restated Credit Facility
    
    
    597,185
    
    
    
    739,090Dex Media West Amended and Restated Credit Facility
    
    
    618,214
    
    
    
    683,646Dex One 12%/14% Senior Subordinated Notes due 2017
    
    
    204,750
    
    
    
    300,000Total Dex One consolidated
    
    
    2,220,324
    
    
    
    2,737,221Less current portion
    
    
    208,340
    
    
    
    249,301Long-term debt
    
    $
    2,011,984
    
    
    $
    2,487,920
 Credit Facilities
 RHDI Amended and Restated Credit Facility
  
    
    The highest (subject to a floor of 4.00%) of (i) the Prime Rate (as
defined in the RHDI Amended and Restated Credit Facility), (ii) the Federal Funds
Effective Rate (as defined in the RHDI Amended and Restated Credit Facility) plus
0.50%, and (iii) one month LIBOR plus 1.00% in each case, plus an interest rate
margin for base rate loans. The interest rate margin for base rate loans is
initially 5.25% per annum, and such interest rate margin adjusts pursuant to a
pricing grid that provides for a margin equal to 5.25% per annum if RHDIs
consolidated leverage ratio is greater than or equal to 4.25 to 1.00, and equal to
5.00% per annum if RHDIs consolidated leverage ratio is less than 4.25 to 1.00; or
    
    The higher of (i) LIBOR rate and (ii) 3.00%, in each case, plus an
interest rate margin for Eurodollar loans. The interest rate margin for Eurodollar
loans is initially 6.25% per annum, and such interest rate margin adjusts pursuant
to a pricing grid that provides for a margin equal to 6.25% per annum if RHDIs
consolidated leverage ratio is greater than or equal to 4.25 to 1.00, and equal to
6.00% per annum if RHDIs consolidated leverage ratio is less than 4.25 to 1.00.
RHDI may elect interest periods of 1, 2, 3 or 6 months for LIBOR borrowings.
  Dex Media East Amended and Restated Credit Facility
  
    
    The highest of (i) the Prime Rate (as defined in the Dex Media East
Amended and Restated Credit Facility), (ii) the Federal Funds Effective Rate (as
defined in the Dex Media East Amended and Restated Credit Facility) plus 0.50%, and
(iii) one month LIBOR plus 1.00% in each case, plus an interest rate margin for
base rate loans. The interest rate margin for base rate loans is initially 1.50%
per annum, and such interest rate margin adjusts pursuant to a pricing grid that
provides for a margin equal to 1.50% per annum if DME Inc.s consolidated
 66




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##### Table of Contents



leverage ratio is greater than or equal to 2.75 to 1.00, equal to 1.25% per annum if DME
Inc.s consolidated leverage ratio is greater than or equal to 2.50 to 1.00 but
less than 2.75 to 1.00 and equal to 1.00% per annum if DME Inc.s consolidated
leverage ratio is less than 2.50 to 1.00; or
    
    The LIBOR rate plus an interest rate margin for Eurodollar loans. The
interest rate margin for Eurodollar loans is initially 2.50% per annum, and such
interest rate margin adjusts pursuant to a pricing grid that provides for a margin equal to 2.50% per annum if DME Inc.s
consolidated leverage ratio is greater than or equal to 2.75 to 1.00, equal to 2.25%
per annum if DME Inc.s consolidated leverage ratio is greater than or equal to 2.50
to 1.00 but less than 2.75 to 1.00 and equal to 2.00% per annum if DME Inc.s
consolidated leverage ratio is less than 2.50 to 1.00. DME Inc. may elect interest
periods of 1, 2, 3 or 6 months for LIBOR borrowings.
  Dex Media West Amended and Restated Credit Facility
  
    
    The highest (subject to a floor of 4.00%) of (i) the Prime Rate (as
defined in the Dex Media West Amended and Restated Credit Facility), (ii) the
Federal Funds Effective Rate (as defined in the Dex Media West Amended and Restated
Credit Facility) plus 0.50%, and (iii) one month LIBOR plus 1.00% in each case,
plus an interest rate margin for base rate loans. The interest rate margin for
base rate loans is initially 3.50% per annum, and such interest rate margin adjusts
pursuant to a pricing grid that provides for a margin equal to 3.50% per annum if
DMW Inc.s consolidated leverage ratio is greater than or equal to 2.75 to 1.00,
equal to 3.25% per annum if DMW Inc.s consolidated leverage ratio is greater than
or equal to 2.50 to 1.00 but less than 2.75 to 1.00 and equal to 3.00% per annum if
DMW Inc.s consolidated leverage ratio is less than 2.50 to 1.00; or
    
    The higher of (i) LIBOR rate and (ii) 3.00%, in each case, plus an
interest rate margin for Eurodollar loans. The interest rate margin for Eurodollar
loans is initially 4.50% per annum, and such interest rate margin adjusts pursuant
to a pricing grid that provides for a margin equal to 4.50% per annum if DMW Inc.s
consolidated leverage ratio is greater than or equal to 2.75 to 1.00, equal to
4.25% per annum if DMW Inc.s consolidated leverage ratio is greater than or equal
to 2.50 to 1.00 but less than 2.75 to 1.00 and equal to 4.00% per annum if DMW
Inc.s consolidated leverage ratio is less than 2.50 to 1.00. DMW Inc. may elect
interest periods of 1, 2, 3 or 6 months for LIBOR borrowings.
    67




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Notes
 Dex One Senior Subordinated Notes
 st th
  68




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Redemption Year
    
    Price2011
    
    
    106.000
    %2012
    
    
    102.000
    %2013
    
    
    101.000
    %2014 and thereafter
    
    
    100.000
    %
  Impact of Fresh Start Accounting
  Outstanding Debt atUnamortized Fair
    
    
    December 31, 2010Carrying Value at
    
    
    Value Adjustments
    
    
    Excluding the Impact ofDecember 31,
    
    
    at December 31,
    
    
    Unamortized Fair Value2010
    
    
    2010
    
    
    AdjustmentsRHDI Amended and Restated Credit Facility
    
    $
    1,014,485
    
    
    $
    14,463
    
    
    $
    1,028,948Dex Media East Amended and Restated
Credit Facility
    
    
    739,090
    
    
    
    64,735
    
    
    
    803,825Dex Media West Amended and Restated
Credit Facility
    
    
    683,646
    
    
    
    11,769
    
    
    
    695,415Dex One 12%/14% Senior Subordinated
Notes due 2017
    
    
    300,000
    
    
    
    
    
    
    
    300,000Total
    
    $
    2,737,221
    
    
    $
    90,967
    
    
    $
    2,828,188
  Issuance of New Common Stock
  69




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Registration Rights Agreement
  Liquidity and Cash Flows
       70




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Successor Company
   
    
    $(923.6) million in net loss, which includes the goodwill and non-goodwill intangible
asset impairment charges, offset by the impact of the tax benefit recognized during the
eleven months ended December 31, 2010.
    
    $541.7 million of net non-cash items consisting of the goodwill and non-goodwill
intangible asset impairment charges of $1,159.3 million, offset by $(617.6) million in
deferred income taxes, which includes the tax impact of the goodwill and non-goodwill
intangible asset impairment charges.
    
    $158.4 million non-cash reduction of goodwill related to the finalization of
cancellation of indebtedness income and tax attribute reduction calculations associated
with fresh start accounting.
    
    $288.7 million of other net non-cash items primarily consisting of $217.7 million of
depreciation and amortization, $24.1 million in other non-cash items, primarily
associated with the amortization of the debt fair value adjustments resulting from our
adoption of fresh start accounting, $17.8 million of restructuring expenses, $16.4
million in bad debt provision, an increase in interest expense of $8.2 million
associated with the change in fair value of our interest rate swaps and caps and $4.5
million of stock-based compensation expense.
    
    $763.8 million net source of cash from an increase in deferred directory revenues of
$701.6 million, primarily due to the elimination of most of the Predecessor Companys
deferred directory revenues in fresh start accounting and recording deferred directory
revenues of the Company for directories that published subsequent to the Fresh Start
Reporting Date, and a decrease in accounts receivable of $62.2 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
clients.
    
    $142.3 million net use of cash from an increase in other assets, consisting of a
$156.5 million increase in other current and non-current assets, primarily due to the
elimination of all of the Predecessor Companys deferred commissions, print, paper and
delivery costs in fresh start accounting and recording deferred commissions, print,
paper and delivery costs of the Company for directories that published subsequent to the
Fresh Start Reporting Date, as well as changes in the fair value of the Companys
interest rate caps, offset by a $14.2 million decrease in prepaid directory costs
resulting from publication seasonality.
    
    $5.0 million net use of cash from a decrease in accounts payable and accrued
liabilities, resulting from a $33.1 million decrease in other accrued liabilities
primarily associated with the change in fair value of our interest rate swaps and a $2.8
million decrease in trade accounts payable, offset by an increase in accrued interest
payable of $30.9 million.
    
    $169.3 million decrease in other non-current liabilities primarily resulting from deferred income taxes and the change in fair value of our interest rate
swaps.
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
    
    $556.6 million in principal payments on our amended and restated credit
facilities.
    
    $1.2 million in debt issuance costs and other financing items, net.
    
    $9.5 million in the increased balance of checks not yet presented for
payment.
 Predecessor Company
   
    
    $6,920.0 million in net income, which includes the gain on reorganization and fresh
start accounting adjustments of $7,793.1 million.
    
    $(7,830.1) million of non-cash reorganization items, net.
    
    $945.0 million of net non-cash items primarily consisting of $916.9 million in
deferred income taxes, $20.2 million of depreciation and amortization, $7.8 million in
bad debt provision, an increase in interest expense of $2.3 million associated with the
change in fair value of the Predecessor Companys interest rate swaps, $0.6 million of
stock-based compensation expense and $(2.8) million in other non-cash items, primarily
related to the Predecessor Companys pension adjustments.
    
    $17.0 million net use of cash from a decrease in deferred directory revenues of $36.8
million, primarily due to lower advertising sales, offset by a net decrease in accounts
receivable of $19.8 million, which is comprised of a decrease in accounts receivable of
$27.6 million, offset by the provision for bad debts of $7.8 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
clients.
    
    $10.7 million net source of cash from a decrease in other assets, consisting of a
$7.0 million decrease in prepaid directory costs resulting from publication seasonality
and a $3.7 million decrease in other current and non-current assets, primarily relating
to deferred commissions, print, paper and delivery costs.
    
    $9.6 million net source of cash from an increase in accounts payable and accrued
liabilities, primarily resulting from an increase of $22.0 million in trade accounts
payable and an increase in accrued interest payable of $0.3 million, partially offset by
a $12.7 million decrease in other accrued liabilities. These changes comprise items that
were reclassified from liabilities subject to compromise on the consolidated balance
sheet at January 31, 2010. 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 was delayed.
    
    $33.4 million increase in other non-current liabilities primarily
resulting from deferred taxes, the change in fair value of the Predecessor Companys
interest rate swaps as well as the change in pension and postretirement long-term
liabilities.
 72




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
    
    $511.3 million in principal payments on term loans under the Predecessor Companys
credit facilities in accordance with the Plan and in conjunction with our emergence from
Chapter 11.
    
    $22.1 million in costs associated with the issuance of the Dex One Senior
Subordinated Notes and other financing related costs.
    
    $3.1 million in the decreased balance of checks not yet presented for payment.
  
    
    $(6,453.3) million in net loss, which includes the impact of the intangible asset
impairment charges.
    
    $6,423.9 million of net non-cash items consisting of the intangible asset impairment
charges of $7,337.8 million, offset by $(913.9) million in deferred income taxes, which
includes the tax impact of the intangible asset impairment charges.
    
    $791.2 million of other net non-cash items primarily consisting of $578.8 million of
depreciation and amortization, $146.5 million in bad debt provision, $25.1 million in
other non-cash items, primarily related to the amortization of deferred financing costs,
$17.6 million associated with net reorganization items, $11.4 million of stock-based
compensation expense, an increase in interest expense of $10.5 million associated with
the change in fair value of our interest rate swaps and $1.3 million of restructuring
expenses.
    
    $171.6 million net use of cash from a decrease in deferred directory revenues of
$226.3 million, primarily due to lower advertising sales, offset by a net decrease in
accounts receivable of $54.7 million, which is comprised of a decrease in accounts
receivable of $201.2 million, offset by the provision for bad debts of $146.5 million.
During 2009, the Company has experienced deterioration in its 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
clients.
    
    $39.2 million net source of cash from a decrease in other assets, consisting of a
$41.2 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, offset by a $2.0 million increase in
prepaid directory costs resulting from publication seasonality.
    
    $8.9 million net source of cash from an increase in accounts payable and accrued
liabilities, primarily resulting from an increase in accrued interest payable of $65.1
million and a $13.7 million increase in other accrued liabilities, offset by a $69.9
million decrease in trade accounts payable. These changes comprise items included in
liabilities subject to compromise on the consolidated balance sheet at December 31,
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.
    
    $122.5 million decrease in other non-current liabilities primarily resulting from deferred taxes, the change in pension and postretirement
long-term liabilities and the change in fair value of our interest rate swaps.
 73




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
    
    $290.1 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.
 Off-Balance Sheet Arrangements
  Contractual Obligations
  Payments Due by PeriodLess than
    
    
    1-3
    
    
    3-5
    
    
    More than 5(amounts in millions)
    
    Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    YearsPrincipal Payments on Long-Term
Debt (1)
    
    $
    2,828.2
    
    
    $
    283.0
    
    
    $
    464.1
    
    
    $
    1,781.1
    
    
    $
    300.0Interest on Long-Term
Debt(2)
    
    
    805.2
    
    
    
    200.3
    
    
    
    372.4
    
    
    
    184.7
    
    
    
    47.8Operating Leases (3)
    
    
    56.2
    
    
    
    20.0
    
    
    
    24.1
    
    
    
    12.0
    
    
    
    0.1Unconditional Purchase
Obligations (4)
    
    
    72.1
    
    
    
    34.6
    
    
    
    36.1
    
    
    
    1.4
    
    
    
    Other Long-Term
Liabilities (5)
    
    
    191.6
    
    
    
    27.1
    
    
    
    36.6
    
    
    
    36.1
    
    
    
    91.8Total Contractual
Obligations
    
    $
    3,953.3
    
    
    $
    565.0
    
    
    $
    933.3
    
    
    $
    2,015.3
    
    
    $
    439.7
 
 (1)
    
    Included in long-term debt are principal amounts owed under the amended and
restated credit facilities and the Dex One Senior Subordinated Notes, including the current portion
of long-term debt and an estimate of additional debt repayments resulting from cash flow sweep
requirements under our amended and restated credit facilities, as of December 31, 2010.(2)
    
    Interest on debt represents cash interest payment obligations assuming all
indebtedness as of December 31, 2010 will be paid in accordance with its contractual maturity and
assumes interest rates on variable interest debt as of December 31, 2010 will remain unchanged in
future periods. Please refer to Liquidity and Capital Resources for interest rates on the amended
and restated credit facilities and the Dex One Senior Subordinated Notes.(3)
    
    We enter into operating leases in the normal course of business. Substantially all
lease agreements have fixed payment terms. Some lease agreements provide us with renewal or early
termination options. Our future operating lease obligations would change if we exercised these
renewal or early termination options and if we entered into additional operating lease agreements.
The amounts in the table assume we do not exercise any such renewal or early termination options. 74




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##### Table of Contents



(4)
    
    In connection with our software system modernization and on-going support services,
we are obligated to pay an IT outsource service provider approximately $45.0 million over the years
2011 through 2012. Effective January 1, 2010, an Internet Yellow Pages reseller agreement was amended and restated whereby we are
obligated to pay to AT&T $21.8 million over the years 2011 through 2012. We have entered into a
Directory Advertisement agreement with a CMR to cover advertising placed with the Company by the
CMR on behalf of Qwest. Under this agreement, we are obligated to pay the CMR approximately $5.2
million for commissions over the years 2011 through 2014.(5)
    
    We have defined benefit plans covering substantially all employees. Our funding
policy is to contribute an amount at least equal to the minimum legal funding requirement. Based
on past performance and the uncertainty of the dollar amounts to be paid, if any, we have excluded
such amounts from the above table. See Item 8, Financial Statements and Supplementary Data 
Note 10, Benefit Plans for information related to our benefit plans. Those expected future
benefit payments, including administrative expenses, net of employee contributions, are included in
the table above. We expect to make contributions of approximately $16.0 million and $1.1 million
to our pension plans and postretirement plan, respectively, in 2011. 75




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##### Table of Contents



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
 Interest Rate Risk and Risk Management
   Interest Rate Swaps  Dex Media East
 Effective Dates
    
    Notional Amount
    
    
    Pay Rates
    
    
    Maturity Dates(amounts in millions)February 26, 2010
    
    $
    300
    (2)
    
    
    1.20% - 1.796
    %
    
    February 29, 2012  February 28, 2013March 5, 2010
    
    
    100
    (1)
    
    
    1.688
    %
    
    January 31, 2013March 10, 2010
    
    
    100
    (1)
    
    
    1.75
    %
    
    January 31, 2013Total
    
    $
    500
    Interest Rate Caps  RHDI
 Effective Dates
    
    Notional Amount
    
    
    Cap Rates
    
    
    Maturity Dates(amounts in millions)February 26, 2010
    
    $
    200
    (3)
    
    
    3.0% - 3.5
    %
    
    February 29, 2012  February 28, 2013March 8, 2010
    
    
    100
    (4)
    
    
    3.5
    %
    
    January 31, 2013March 10, 2010
    
    
    100
    (4)
    
    
    3.0
    %
    
    April 30, 2012Total
    
    $
    400
 
 (1)
    
    Consists of one swap(2)
    
    Consists of three swaps(3)
    
    Consists of two caps(4)
    
    Consists of one cap 76




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##### Table of Contents



-
 Market Risk Sensitive Instruments
  
  77




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##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 INDEX TO FINANCIAL STATEMENTS
 DEX ONE CORPORATION
 PageReports of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets as of December 31, 2010 (Successor Company) and
December 31, 2009 (Predecessor Company)
    
    
    F-4Consolidated Statements of Operations and Comprehensive Income (Loss) for
the eleven months ended December 31, 2010 (Successor Company), the one month
ended January 31, 2010 and each of the years in the two year period ended
December 31, 2009 (Predecessor Company)
    
    
    F-5Consolidated Statements of Cash Flows for the eleven months ended December 31, 2010
(Successor Company), the one month ended January 31, 2010 and each of the years in the
two year period ended December 31, 2009 (Predecessor Company)
    
    
    F-6Consolidated Statements of Changes in Shareholders Equity (Deficit) for the eleven months
ended December 31, 2010 (Successor Company), the one month ended January 31, 2010
and each of the years in the two year period ended December 31, 2009 (Predecessor Company)
    
    
    F-7Notes to Consolidated Financial Statements
    
    
    F-8
 F-1




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
    Internal Control  Integrated
Framework
  
 F-2




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
 Internal Control  Integrated Framework
    Internal
Control  Integrated Framework
   
 F-3




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##### Table of Contents



DEX ONE CORPORATION


CONSOLIDATED BALANCE SHEETS
 Successor
    
    
    PredecessorCompany
    
    
    Company(in thousands, except share data)
    
    December 31, 2010
    
    
    December 31, 2009AssetsCurrent AssetsCash and cash equivalents
    
    $
    127,852
    
    
    $
    665,940Accounts receivable:Billed
    
    
    186,477
    
    
    
    244,048Unbilled
    
    
    567,839
    
    
    
    636,350Allowance for doubtful accounts
    
    
    (75,891
    )
    
    
    (54,612
    )Net accounts receivable
    
    
    678,425
    
    
    
    825,786Deferred directory costs
    
    
    147,025
    
    
    
    138,061Short-term deferred income taxes, net
    
    
    84,149
    
    
    
    Prepaid expenses and other current assets
    
    
    82,656
    
    
    
    90,928Total current assets
    
    
    1,120,107
    
    
    
    1,720,715Fixed assets and computer software, net
    
    
    188,749
    
    
    
    157,272Deferred income taxes, net
    
    
    
    
    
    
    399,885Other non-current assets
    
    
    9,762
    
    
    
    62,699Intangible assets, net
    
    
    2,369,156
    
    
    
    2,158,223Goodwill, net
    
    
    801,074
    
    
    
    Total Assets
    
    $
    4,488,848
    
    
    $
    4,498,794Liabilities and Shareholders Equity (Deficit)Current Liabilities Not Subject to CompromiseAccounts payable and accrued liabilities
    
    $
    154,540
    
    
    $
    168,488Short-term deferred income taxes, net
    
    
    
    
    
    
    108,184Accrued interest
    
    
    30,905
    
    
    
    4,643Deferred directory revenues
    
    
    722,566
    
    
    
    848,775Current portion of long-term debt
    
    
    249,301
    
    
    
    993,528Total current liabilities not subject to compromise
    
    
    1,157,312
    
    
    
    2,123,618Long-term debt
    
    
    2,487,920
    
    
    
    2,561,248Deferred income taxes, net
    
    
    205,812
    
    
    
    Other non-current liabilities
    
    
    111,888
    
    
    
    380,163Total liabilities not subject to compromise
    
    
    3,962,932
    
    
    
    5,065,029Liabilities subject to compromise
    
    
    
    
    
    
    6,352,813Commitments and contingenciesShareholders Equity (Deficit)Successor Company common stock, par value $.001 per share, authorized  300,000,000 shares; issued and outstanding50,031,441shares at December 31, 2010
    
    
    50
    
    
    
    Predecessor Company common stock, par value $1 per share, authorized - 400,000,000 shares; issued88,169,275 shares and outstanding68,955,674 shares at December 31, 2009
    
    
    
    
    
    
    88,169Additional paid-in capital
    
    
    1,455,223
    
    
    
    2,442,549Accumulated deficit
    
    
    (923,592
    )
    
    
    (9,137,160
    )Predecessor Company treasury stock, at cost, 19,213,601 shares at December 31, 2009
    
    
    
    
    
    
    (256,114
    )Accumulated other comprehensive loss
    
    
    (5,765
    )
    
    
    (56,492
    )Total shareholders equity (deficit)
    
    
    525,916
    
    
    
    (6,919,048
    )Total Liabilities and Shareholders Equity (Deficit)
    
    $
    4,488,848
    
    
    $
    4,498,794
  F-4




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##### Table of Contents



DEX ONE CORPORATION


CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
 Successor Company
    
    
    Predecessor CompanyEleven Months
    
    
    One Month
    
    
    Year Ended
    
    
    Year EndedEnded
    
    
    Ended
    
    
    December 31,
    
    
    December 31,(in thousands, except per share data)
    
    December 31, 2010
    
    
    January 31, 2010
    
    
    2009
    
    
    2008Net revenues
    
    $
    830,887
    
    
    $
    160,372
    
    
    $
    2,202,447
    
    
    $
    2,616,811Expenses:Production and distribution expenses (exclusive of depreciation and amortization shown separately below)
    
    
    222,968
    
    
    
    27,255
    
    
    
    375,331
    
    
    
    421,857Selling and support expenses
    
    
    378,837
    
    
    
    40,680
    
    
    
    610,291
    
    
    
    687,516General and administrative expenses
    
    
    146,393
    
    
    
    8,202
    
    
    
    97,713
    
    
    
    159,478Depreciation and amortization
    
    
    217,679
    
    
    
    20,161
    
    
    
    578,840
    
    
    
    483,268Impairment charges
    
    
    1,159,266
    
    
    
    
    
    
    
    7,337,775
    
    
    
    3,870,409Total expenses
    
    
    2,125,143
    
    
    
    96,298
    
    
    
    8,999,950
    
    
    
    5,622,528Operating income (loss)
    
    
    (1,294,256
    )
    
    
    64,074
    
    
    
    (6,797,503
    )
    
    
    (3,005,717
    )Interest expense, net
    
    
    (249,451
    )
    
    
    (19,656
    )
    
    
    (489,542
    )
    
    
    (835,472
    )Gain on debt transactions, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    265,166Income (loss) before reorganization items, net and income taxes
    
    
    (1,543,707
    )
    
    
    44,418
    
    
    
    (7,287,045
    )
    
    
    (3,576,023
    )Reorganization items, net
    
    
    
    
    
    
    7,793,132
    
    
    
    (94,768
    )
    
    
    Income (loss) before income taxes
    
    
    (1,543,707
    )
    
    
    7,837,550
    
    
    
    (7,381,813
    )
    
    
    (3,576,023
    )(Provision) benefit for income taxes
    
    
    620,115
    
    
    
    (917,541
    )
    
    
    928,520
    
    
    
    1,277,696Net income (loss)
    
    $
    (923,592
    )
    
    $
    6,920,009
    
    
    $
    (6,453,293
    )
    
    $
    (2,298,327
    )Earnings (loss) per share:Basic
    
    $
    (18.46
    )
    
    $
    100.3
    
    
    $
    (93.67
    )
    
    $
    (33.41
    )Diluted
    
    $
    (18.46
    )
    
    $
    100.2
    
    
    $
    (93.67
    )
    
    $
    (33.41
    )Shares used in computing earnings (loss) per share:Basic
    
    
    50,020
    
    
    
    69,013
    
    
    
    68,896
    
    
    
    68,793Diluted
    
    
    50,020
    
    
    
    69,052
    
    
    
    68,896
    
    
    
    68,793Comprehensive Income (Loss)Net income (loss)
    
    $
    (923,592
    )
    
    $
    6,920,009
    
    
    $
    (6,453,293
    )
    
    $
    (2,298,327
    )Amortization of gain (loss) on interest rate swaps,
net of tax provision (benefit) of $, $ and $(4,385) for the one month ended January 31, 2010 and years ended December 31, 2009 and 2008, respectively
    
    
    
    
    
    
    1,083
    
    
    
    5,606
    
    
    
    (5,724
    )Benefit plans adjustment, net of tax provision (benefit) of $(3,504), $, $ and $(24,902) for the eleven months ended December 31, 2010, one month
ended January 31, 2010 and years ended December 31, 2009 and 2008, respectively
    
    
    (5,765
    )
    
    
    (4,535
    )
    
    
    10,713
    
    
    
    (41,347
    )Comprehensive income (loss)
    
    $
    (929,357
    )
    
    $
    6,916,557
    
    
    $
    (6,436,974
    )
    
    $
    (2,345,398
    )
  F-5




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##### Table of Contents



DEX ONECORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
 Successor Company
    
    
    Predecessor CompanyEleven Months
    
    
    One Month
    
    
    Year Ended
    
    
    Year EndedEnded
    
    
    Ended
    
    
    December 31,
    
    
    December 31,(in thousands)
    
    December 31, 2010
    
    
    January 31, 2010
    
    
    2009
    
    
    2008Cash Flows from Operating ActivitiesNet income (loss)
    
    $
    (923,592
    )
    
    $
    6,920,009
    
    
    $
    (6,453,293
    )
    
    $
    (2,298,327
    )Reconciliation of net income (loss) to net cash provided by operating activities:Impairment charges
    
    
    1,159,266
    
    
    
    
    
    
    
    7,337,775
    
    
    
    3,870,409Gain on debt transactions, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (265,166
    )Depreciation and amortization
    
    
    217,679
    
    
    
    20,161
    
    
    
    578,840
    
    
    
    483,268Deferred income tax provision (benefit)
    
    
    (617,606
    )
    
    
    916,921
    
    
    
    (913,872
    )
    
    
    (1,311,891
    )Reduction in goodwill
    
    
    158,427
    
    
    
    
    
    
    
    
    
    
    
    Restructuring expenses
    
    
    17,858
    
    
    
    
    
    
    
    1,271
    
    
    
    10,202Provision for bad debts
    
    
    16,364
    
    
    
    7,822
    
    
    
    146,553
    
    
    
    138,353Stock-based compensation expense
    
    
    4,489
    
    
    
    613
    
    
    
    11,393
    
    
    
    29,509Change in fair value of interest rate swaps and interest rate caps
    
    
    8,195
    
    
    
    2,298
    
    
    
    10,480
    
    
    
    24,683Other non-cash items, net
    
    
    24,118
    
    
    
    (2,762
    )
    
    
    25,071
    
    
    
    4,972Non-cash reorganization items, net
    
    
    
    
    
    
    (7,830,144
    )
    
    
    17,576
    
    
    
    Changes in assets and liabilities:Decrease (increase) in accounts receivable
    
    
    62,171
    
    
    
    19,847
    
    
    
    54,688
    
    
    
    (101,911
    )(Increase) decrease in other assets
    
    
    (142,325
    )
    
    
    10,690
    
    
    
    39,150
    
    
    
    45,020(Decrease) increase in accounts payable and accrued liabilities
    
    
    (4,999
    )
    
    
    9,611
    
    
    
    8,968
    
    
    
    (34,159
    )Increase (decrease) in deferred directory revenue
    
    
    701,602
    
    
    
    (36,773
    )
    
    
    (226,307
    )
    
    
    (95,764
    )(Decrease) increase in other non-current liabilities
    
    
    (169,288
    )
    
    
    33,448
    
    
    
    (122,471
    )
    
    
    49,496Net cash provided by operating activities
    
    
    512,359
    
    
    
    71,741
    
    
    
    515,822
    
    
    
    548,694Cash Flows from Investing ActivitiesAdditions to fixed assets and computer software
    
    
    (36,527
    )
    
    
    (1,766
    )
    
    
    (33,385
    )
    
    
    (70,642
    )Proceeds from sale of assets
    
    
    926
    
    
    
    
    
    
    
    
    
    
    
    Equity investment disposition
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,318Net cash used in investing activities
    
    
    (35,601
    )
    
    
    (1,766
    )
    
    
    (33,385
    )
    
    
    (66,324
    )Cash Flows from Financing ActivitiesAdditional borrowings under the credit facilities, net of costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,017,202Credit facilities repayments
    
    
    (556,637
    )
    
    
    (511,272
    )
    
    
    (290,071
    )
    
    
    (1,281,701
    )Note repurchases and related costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (92,130
    )Revolver borrowings
    
    
    
    
    
    
    
    
    
    
    361,000
    
    
    
    398,100Revolver repayments
    
    
    
    
    
    
    
    
    
    
    (18,749
    )
    
    
    (422,150
    )Debt issuance costs and other financing items, net
    
    
    (1,233
    )
    
    
    (22,096
    )
    
    
    
    
    
    
    (10,647
    )Repurchase of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,112
    )Proceeds from employee stock option exercises
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    95Increase (decrease) in checks not yet presented for payment
    
    
    9,509
    
    
    
    (3,092
    )
    
    
    124
    
    
    
    (84
    )Net cash (used in) provided by financing activities
    
    
    (548,361
    )
    
    
    (536,460
    )
    
    
    52,304
    
    
    
    (397,247
    )(Decrease) increase in cash and cash equivalents
    
    
    (71,603
    )
    
    
    (466,485
    )
    
    
    534,741
    
    
    
    85,123Cash and cash equivalents, beginning of period
    
    
    199,455
    
    
    
    665,940
    
    
    
    131,199
    
    
    
    46,076Cash and cash equivalents, end of period
    
    $
    127,852
    
    
    $
    199,455
    
    
    $
    665,940
    
    
    $
    131,199Supplemental InformationCash paid:Interest, net
    
    $
    182,176
    
    
    $
    15,460
    
    
    $
    388,112
    
    
    $
    746,529Income taxes, net
    
    $
    311
    
    
    $
    
    
    
    $
    7,873
    
    
    $
    1,587Non-cash financing activities:Reduction of debt from Debt Exchanges
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (172,804
    )
  F-6




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##### Table of Contents



DEX ONE CORPORATION


CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (DEFICIT)
 Accumulated
    
    
    TotalOther
    
    
    ShareholdersAdditional
    
    
    Accumulated
    
    
    Treasury
    
    
    Comprehensive
    
    
    Equity(in thousands)
    
    Common Stock
    
    
    Paid-in Capital
    
    
    Deficit
    
    
    Stock
    
    
    Loss
    
    
    (Deficit)Balance, December 31, 2007 (Predecessor Company)
    
    $
    88,169
    
    
    $
    2,402,181
    
    
    $
    (385,540
    )
    
    $
    (256,334
    )
    
    $
    (25,740
    )
    
    $
    1,822,736Net loss
    
    
    
    
    
    
    
    
    
    
    (2,298,327
    )
    
    
    
    
    
    
    
    
    
    
    (2,298,327
    )Employee stock option exercises
    
    
    
    
    
    
    38
    
    
    
    
    
    
    
    57
    
    
    
    
    
    
    
    95Other adjustments related to compensatory stock awards
    
    
    
    
    
    
    (317
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (317
    )Amortization of loss on interest rate swaps, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,724
    )
    
    
    (5,724
    )Benefit plans adjustment, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (41,347
    )
    
    
    (41,347
    )Compensatory stock awards
    
    
    
    
    
    
    29,509
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,509Balance, December 31, 2008 (Predecessor Company)
    
    
    88,169
    
    
    
    2,431,411
    
    
    
    (2,683,867
    )
    
    
    (256,277
    )
    
    
    (72,811
    )
    
    
    (493,375
    )Net loss
    
    
    
    
    
    
    
    
    
    
    (6,453,293
    )
    
    
    
    
    
    
    
    
    
    
    (6,453,293
    )Other adjustments related to compensatory stock awards
    
    
    
    
    
    
    (255
    )
    
    
    
    
    
    
    163
    
    
    
    
    
    
    
    (92
    )Amortization of gain on interest rate swaps, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,606
    
    
    
    5,606Benefit plans adjustment, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,713
    
    
    
    10,713Compensatory stock awards
    
    
    
    
    
    
    11,393
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,393Balance, December 31, 2009 (Predecessor Company)
    
    
    88,169
    
    
    
    2,442,549
    
    
    
    (9,137,160
    )
    
    
    (256,114
    )
    
    
    (56,492
    )
    
    
    (6,919,048
    )Net income
    
    
    
    
    
    
    
    
    
    
    6,920,009
    
    
    
    
    
    
    
    
    
    
    
    6,920,009Compensatory stock awards
    
    
    
    
    
    
    613
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    613Other adjustments related to compensatory stock awards
    
    
    
    
    
    
    (103
    )
    
    
    
    
    
    
    103
    
    
    
    
    
    
    
    Amortization of gain on interest rate swaps, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,083
    
    
    
    1,083Benefit plans adjustment, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,535
    )
    
    
    (4,535
    )Cancellation of Predecessor Company
common stock .
    
    
    (88,169
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (88,169
    )Elimination of Predecessor Company
additional paid-in capital, accumulated
deficit, treasury stock and accumulated
other comprehensive loss
    
    
    
    
    
    
    (2,443,059
    )
    
    
    2,217,151
    
    
    
    256,011
    
    
    
    59,944
    
    
    
    90,047Balance, January 31, 2010 (Predecessor Company)
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Issuance of Successor Company common stock
    
    $
    50
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    50Establishment of Successor Company
additional paid-in capital
    
    
    
    
    
    
    1,450,734
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,450,734Balance, February 1, 2010 (Successor Company)
    
    
    50
    
    
    
    1,450,734
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,450,784Net loss
    
    
    
    
    
    
    
    
    
    
    (923,592
    )
    
    
    
    
    
    
    
    
    
    
    (923,592
    )Compensatory stock awards
    
    
    
    
    
    
    4,489
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,489Benefit plans adjustment, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,765
    )
    
    
    (5,765
    )Balance, December 31, 2010 (Successor Company)
    
    $
    50
    
    
    $
    1,455,223
    
    
    $
    (923,592
    )
    
    $
    
    
    
    $
    (5,765
    )
    
    $
    525,916
  F-7




---



##### Table of Contents



DEX ONE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (tabular amounts in thousands, except per share data and percentages and where otherwise indicated)
 1. Business and Basis of Presentation
   Corporate Overview
  ® ®
 New Chief Executive Officer and President
  F-8




---



##### Table of Contents



Departure of Former Chairman and Chief Executive Officer
   Reclassifications
  Year Ended December 31, 2009AsPreviously
    
    
    
    
    
    
    AsReported
    
    
    Reclass
    
    
    ReclassifiedProduction and
distribution
expenses
    
    $
    350,729
    
    
    $
    24,602
    
    
    $
    375,331Selling and support
expenses
    
    
    663,638
    
    
    
    (53,347
    )
    
    
    610,291General and
administrative
expenses
    
    
    68,968
    
    
    
    28,745
    
    
    
    97,713
 Year Ended December 31, 2008AsPreviously
    
    
    
    
    
    
    AsReported
    
    
    Reclass
    
    
    ReclassifiedProduction and
distribution
expenses
    
    $
    418,258
    
    
    $
    3,599
    
    
    $
    421,857Selling and support
expenses
    
    
    729,663
    
    
    
    (42,147
    )
    
    
    687,516General and
administrative
expenses
    
    
    120,930
    
    
    
    38,548
    
    
    
    159,478
  F-9




---



##### Table of Contents



Filing of Voluntary Petitions in Chapter 11
  Confirmed Plan of Reorganization and Emergence from the Chapter 11 Proceedings
  In re R.H.
Donnelley Corporation
 Restructuring
  
    
    DonTech Holdings, LLC and R.H. Donnelley Publishing & Advertising of Illinois
Holdings, LLC were merged into their sole member, RHDI;
    
    The DonTech II Partnership and R.H. Donnelley Publishing & Advertising of
Illinois Partnership technically terminated their respective partnership agreements
due to the loss of a second partner;
    
    Dex Media East Finance Co. was merged into Dex Media East LLC;
    
    Dex Media West Finance Co. was merged into Dex Media West LLC;
    
    Work.com, Inc. was merged into Business.com, Inc.;
    
    GetDigitalSmart.com, Inc. was merged into RHDI;
    
    Dex Media East LLC was merged into Dex Media East, Inc. (DME Inc.);
    
    Dex Media West LLC was merged into Dex Media West, Inc. (DMW Inc.); and
    
    R.H. Donnelley Publishing & Advertising, Inc. was merged into RHDI.
  Consummation of the Plan
 Issuance of New Common Stock
  F-10




---



##### Table of Contents



Distributions Pursuant to the Plan
  
    
    On the Effective Date, in accordance with the Plan, the Company issued the
following number of shares of Dex One common stock: (i) approximately 10.5 million
shares, representing 21.0% of total outstanding common stock, to all holders of
notes issued by RHD; (ii) approximately 11.65 million shares, representing 23.3% of
total outstanding common stock, to all holders of notes issued by Dex Media, Inc.;
(iii) approximately 12.9 million shares, representing 25.8% of total outstanding
common stock, to all holders of notes issued by RHDI; (iv) approximately 6.5
million shares, representing 13.0% of total outstanding common stock, to all
holders of senior notes issued by Dex Media West; and (v) approximately 8.45
million shares, representing 16.9% of total outstanding common stock, to all
holders of senior subordinated notes issued by Dex Media West.
    
    On the Effective Date, in accordance with the terms of the Plan, holders of the
Dex Media West 8.5% Senior Notes due 2010 and 5.875% Senior Notes due 2011 also
received their pro rata share of Dex Ones $300.0 million aggregate principal
amount of 12%/14% Senior Subordinated Notes due 2017 (Dex One Senior Subordinated
Notes).
  Discharge, Releases, and Injunctions Pursuant to the Plan and the Confirmation Order
  Registration Rights Agreement
  Impact on Long-Term Debt Upon Emergence from the Chapter 11 Proceedings
  F-11




---



##### Table of Contents



Accounting Matters Resulting from the Chapter 11 Proceedings
    Reorganizations
  Going Concern
  F-12




---



##### Table of Contents



2. Summary of Significant Accounting Policies
  Revenue Recognition
   Revenue
Recognition  Multiple-Element Arrangements.
 Deferred Directory Costs
  Cash and Cash Equivalents
  F-13




---



##### Table of Contents



Accounts Receivable
    Identifiable Intangible Assets and Goodwill
 Successor Company
 st Intangibles  Goodwill and Other . Property, Plant and Equipment
 F-14




---



##### Table of Contents




    
    Historical financial information, including revenue, profit margins, customer attrition
data and price premiums enjoyed relative to competing independent publishers;
    
    Long-term financial projections, including, but not limited to, revenue trends and
profit margin trends;
    
    Intangible asset and other long-lived asset carrying values and any changes in current
and future use;
    
    Trading values of our debt and equity securities;
    
    Industry and economic trends; and
    
    Other Company-specific and Predecessor Company-specific information.
    F-15




---



##### Table of Contents



Three Months Ended
    
    
    Eleven Months EndedReporting Unit
    
    September 30, 2010
    
    
    June 30, 2010
    
    
    December 31, 2010RHDI
    
    $
    134,072
    
    
    $
    243,674
    
    
    $
    377,746DME Inc.
    
    
    103,169
    
    
    
    241,512
    
    
    
    344,681DMW Inc.
    
    
    141,868
    
    
    
    225,955
    
    
    
    367,823Business.com
    
    
    6,174
    
    
    
    41,199
    
    
    
    47,373Total
    
    $
    385,283
    
    
    $
    752,340
    
    
    $
    1,137,623
 F-16




---



##### Table of Contents



PercentageBy WhichReportingUnit FairReporting
    
    
    ValueYears of Cash
    
    
    Unit
    
    
    ExceedsReporting Unit
    
    
    
    
    
    
    
    
    
    
    
    
    
    Terminal
    
    
    Flow Before
    
    
    Fair Value
    
    
    itsat October 31,
    
    Goodwill
    
    
    Percentage of
    
    
    Discount
    
    
    Growth
    
    
    Terminal
    
    
    at October
    
    
    Carrying2010
    
    Balance
    
    
    Total
    
    
    Rate
    
    
    Rate (1)
    
    
    Value
    
    
    31, 2010
    
    
    ValueRHDI
    
    $
    246,089
    
    
    
    25.7
    %
    
    
    9.3
    %
    
    
    0.0
    %
    
    5.0 years
    
    $
    1,385,000
    
    
    
    10.8
    %DME Inc.
    
    
    327,402
    
    
    
    34.1
    
    
    
    9.3
    %
    
    
    0.0
    %
    
    5.0 years
    
    
    1,010,000
    
    
    
    1.9
    %DMW Inc.
    
    
    386,010
    
    
    
    40.2
    
    
    
    9.3
    %
    
    
    0.0
    %
    
    5.0 years
    
    
    1,150,000
    
    
    
    1.2
    %Total
    
    $
    959,501
    
    
    
    100.0
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    3,545,000
    
    
    
    
 PercentageBy WhichReportingReporting
    
    
    Unit FairUnit
    
    
    ValueYears of Cash
    
    
    Fair Value
    
    
    ExceedsReporting Unit
    
    
    
    
    
    
    
    
    
    
    
    
    
    Terminal
    
    
    Flow Before
    
    
    at
    
    
    itsat September
    
    Goodwill
    
    
    Percentage of
    
    
    Discount
    
    
    Growth
    
    
    Terminal
    
    
    September
    
    
    Carrying30, 2010
    
    Balance
    
    
    Total
    
    
    Rate
    
    
    Rate (1)
    
    
    Value
    
    
    30, 2010
    
    
    ValueRHDI
    
    $
    246,089
    
    
    
    25.7
    %
    
    
    10.3
    %
    
    
    0.0
    %
    
    4.25 years
    
    $
    1,310,000
    
    
    
    0.0
    %DME Inc.
    
    
    327,402
    
    
    
    34.1
    
    
    
    10.3
    %
    
    
    0.0
    %
    
    4.25 years
    
    
    1,045,000
    
    
    
    0.0
    %DMW Inc.
    
    
    386,010
    
    
    
    40.2
    
    
    
    10.3
    %
    
    
    0.0
    %
    
    4.25 years
    
    
    1,145,000
    
    
    
    0.0
    %Business.com
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    6,100
    
    
    
    0.0
    %Total
    
    $
    959,501
    
    
    
    100.0
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    3,506,100
    
    
    
    
  PercentageBy WhichReportingUnit FairReporting
    
    
    ValueYears of Cash
    
    
    Unit
    
    
    ExceedsReporting Unit
    
    
    
    
    
    
    
    
    
    
    
    
    
    Terminal
    
    
    Flow Before
    
    
    Fair Value
    
    
    itsAt June
    
    Goodwill
    
    
    Percentage of
    
    
    Discount
    
    
    Growth
    
    
    Terminal
    
    
    at June 30,
    
    
    Carrying30, 2010
    
    Balance
    
    
    Total
    
    
    Rate
    
    
    Rate (1)
    
    
    Value
    
    
    2010
    
    
    ValueRHDI
    
    $
    380,161
    
    
    
    28.3
    %
    
    
    10.5
    %
    
    
    0.0
    %
    
    3.5 years
    
    $
    1,540,000
    
    
    
    0.0
    %DME Inc.
    
    
    430,571
    
    
    
    32.0
    
    
    
    10.5
    %
    
    
    0.0
    %
    
    3.5 years
    
    
    1,180,000
    
    
    
    0.0
    %DMW Inc.
    
    
    527,878
    
    
    
    39.2
    
    
    
    10.5
    %
    
    
    0.0
    %
    
    3.5 years
    
    
    1,335,000
    
    
    
    0.0
    %Business.com
    
    
    6,174
    
    
    
    0.5
    
    
    
    16.0
    %
    
    
    1.0
    %
    
    9.5 years
    
    
    15,600
    
    
    
    0.0
    %Total
    
    $
    1,344,784
    
    
    
    100.0
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    4,070,600
    
    
    
    
 
 (1)
    
    Terminal growth rate is determined by reconciling the market value of our debt and
equity securities as of October 31, 2010, September 30, 2010 and June 30, 2010, respectively, to
the Companys long-term financial projections. F-17




---



##### Table of Contents



Balance at February 1, 2010.
    
    $
    2,097,124Goodwill impairment charge during the three months ended June
30, 2010
    
    
    (752,340
    )Goodwill
impairment charge during the three months ended September 30, 2010
    
    

    (385,283
    )Reduction in goodwill during the three months ended December
31, 2010
    
    
    (158,427
    )Balance at December 31, 2010
    
    $
    801,074
    Allocation of Goodwill atReporting Unit
    
    December 31, 2010RHDI
    
    $
    250,518DME Inc.
    
    
    236,159DMW Inc.
    
    
    314,397Total
    
    $
    801,074
   Technology,Directory
    
    
    Local
    
    
    National
    
    
    Trade
    
    
    AdvertisingServices
    
    
    Customer
    
    
    Customer
    
    
    Names and
    
    
    CommitmentsAgreements
    
    
    Relationships
    
    
    Relationships
    
    
    Trademarks
    
    
    & Other
    
    
    TotalNet intangible
assets carrying
value
    
    $
    1,330,000
    
    
    $
    560,000
    
    
    $
    175,000
    
    
    $
    381,000
    
    
    $
    85,500
    
    
    $
    2,531,500Accumulated
amortization
    
    
    (80,010
    )
    
    
    (49,388
    )
    
    
    (6,538
    )
    
    
    (19,848
    )
    
    
    (6,560
    )
    
    
    (162,344
    )Net intangible
assets at December
31, 2010
    
    $
    1,249,990
    
    
    $
    510,612
    
    
    $
    168,462
    
    
    $
    361,152
    
    
    $
    78,940
    
    
    $
    2,369,156
 F-18




---



##### Table of Contents



Weighted AverageIntangible Asset
    
    Useful Lives
    
    Amortization MethodologyDirectory services agreements
    
    26 years
    
    Income forecast method (1)Local customer relationships
    
    14 years
    
    Income forecast method (1)National customer relationships
    
    25 years
    
    Income forecast method (1)Trade names and trademarks
    
    14 years
    
    Straight-line methodTechnology, advertising commitments and other
    
    8 years
    
    Income forecast method (1)
 
 (1)
    
    These identifiable intangible assets are being amortized under the income forecast
method, which assumes the value derived from these intangible assets is greater in the earlier
years and steadily declines over time.   Predecessor Company
   F-19




---



##### Table of Contents



Directory Services
    
    
    Local Customer
    
    
    National CMR
    
    
    
    
    
    
    
    
    
    
    Advertising
    
    
    Technology, NetworkAgreements
    
    
    Relationships
    
    
    Relationships
    
    
    Third-Party Contract
    
    
    Trade Names
    
    
    Commitment
    
    
    Platforms & Other
    
    
    TotalCarrying value:Qwest
    
    $
    989,738
    
    
    $
    229,807
    
    
    $
    50,044
    
    
    $
    
    
    
    $
    490,000
    
    
    $
    25,000
    
    
    $
    
    
    
    $
    1,784,589AT&T
    
    
    151,964
    
    
    
    90,000
    
    
    
    10,003
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    251,967CenturyLink
    
    
    289,734
    
    
    
    40,433
    
    
    
    9,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    339,667Business.com
    
    
    
    
    
    
    1,184
    
    
    
    
    
    
    
    4,699
    
    
    
    18,500
    
    
    
    
    
    
    
    17,467
    
    
    
    41,850Total
    
    
    1,431,436
    
    
    
    361,424
    
    
    
    69,547
    
    
    
    4,699
    
    
    
    508,500
    
    
    
    25,000
    
    
    
    17,467
    
    
    
    2,418,073Accumulated
amortization
    
    
    
    
    
    
    (99,666
    )
    
    
    (11,267
    )
    
    
    
    
    
    
    (130,418
    )
    
    
    (8,167
    )
    
    
    (10,332
    )
    
    
    (259,850
    )Net intangible
assets
    
    $
    1,431,436
    
    
    $
    261,758
    
    
    $
    58,280
    
    
    $
    4,699
    
    
    $
    378,082
    
    
    $
    16,833
    
    
    $
    7,135
    
    
    $
    2,158,223
    F-20




---



##### Table of Contents



Additional Information
   F-21




---



##### Table of Contents



Fixed Assets and Computer Software
  Successor
    
    
    PredecessorCompany
    
    
    CompanyDecember 31,
    
    
    December 31,2010
    
    
    2009Computer software
    
    $
    154,485
    
    
    $
    208,058Computer equipment
    
    
    777
    
    
    
    51,370Machinery and equipment
    
    
    27,537
    
    
    
    9,725Furniture and fixtures
    
    
    13,824
    
    
    
    18,297Leasehold improvements
    
    
    23,420
    
    
    
    37,497Buildings
    
    
    1,760
    
    
    
    1,956Construction in Process  Computer software and equipment
    
    
    16,511
    
    
    
    7,461Total cost
    
    
    238,314
    
    
    
    334,364Less accumulated depreciation and amortization
    
    
    (49,565
    )
    
    
    (177,092
    )Net fixed assets and computer software
    
    $
    188,749
    
    
    $
    157,272
  Successor Company
    
    
    Predecessor CompanyEleven Months Ended
    
    
    One Month EndedDecember 31,
    
    
    January 31,
    
    
    Years Ended December 31,2010
    
    
    2010
    
    
    2009
    
    
    2008Depreciation of fixed assets
    
    $
    15,486
    
    
    $
    1,416
    
    
    $
    16,789
    
    
    $
    17,841Amortization of computer software
    
    
    35,191
    
    
    
    3,188
    
    
    
    47,481
    
    
    
    49,503Total depreciation and
amortization on fixed assets
and computer software
    
    $
    50,677
    
    
    $
    4,604
    
    
    $
    64,270
    
    
    $
    67,344
  F-22




---



##### Table of Contents



Interest Expense and Deferred Financing Costs
 Successor Company
    Predecessor Company
     F-23




---



##### Table of Contents



Gain on Debt Transactions, Net
 Predecessor Company
       F-24




---



##### Table of Contents



Advertising Expense
  Concentration of Credit Risk
      Labor Unions
  F-25




---



##### Table of Contents



Derivative Financial Instruments and Hedging Activities
        F-26




---



##### Table of Contents



Pension and Postretirement Benefits
   Income Taxes
 Income Taxes
   F-27




---



##### Table of Contents



Earnings (Loss) Per Share
  Successor Company
    
    
    Predecessor CompanyEleven Months Ended
    
    
    One Month Ended
    
    
    Years Ended December 31,December 31,
    
    
    January 31,2010
    
    
    2010
    
    
    2009
    
    
    2008Basic EPSNet income (loss)
    
    $
    (923,592
    )
    
    $
    6,920,009
    
    
    $
    (6,453,293
    )
    
    $
    (2,298,327
    )Weighted average common shares
outstanding
    
    
    50,020
    
    
    
    69,013
    
    
    
    68,896
    
    
    
    68,793Basic EPS
    
    $
    (18.46
    )
    
    $
    100.3
    
    
    $
    (93.67
    )
    
    $
    (33.41
    )Diluted EPSNet income (loss)
    
    $
    (923,592
    )
    
    $
    6,920,009
    
    
    $
    (6,453,293
    )
    
    $
    (2,298,327
    )Weighted average common shares
outstanding
    
    
    50,020
    
    
    
    69,013
    
    
    
    68,896
    
    
    
    68,793Dilutive effect of stock awards
    
    
    
    
    
    
    39
    
    
    
    
    
    
    
    Weighted average diluted shares
outstanding
    
    
    50,020
    
    
    
    69,052
    
    
    
    68,896
    
    
    
    68,793Diluted EPS
    
    $
    (18.46
    )
    
    $
    100.2
    
    
    $
    (93.67
    )
    
    $
    (33.41
    )
   Stock-Based Awards
   F-28




---



##### Table of Contents



2009 Long-Term Incentive Plan for Executive Officers
   F-29




---



##### Table of Contents



Fair Value of Financial Instruments
  Fair Value Measurements and Disclosures
     Fair Value MeasurementsUsing Significant Other Observable Inputs (Level 2)Successor Company
    
    
    Predecessor CompanyDerivatives:
    
    December 31, 2010
    
    
    December 31, 2009Interest
Rate Swap  Liabilities
    
    $
    (6,365
    )
    
    $
    (6,695
    )Interest Rate Cap  Assets
    
    $
    308
    
    
    $
    
  F-30




---



##### Table of Contents



Compensation  Retirement Benefits
 Estimates
  F-31




---



##### Table of Contents



New Accounting Pronouncements
 Disclosures about the
Credit Quality of Financing Receivables and the Allowance for Credit Losses
 Improving Disclosures about Fair Value Measurements
 Revenue Recognition (Topic 605):
Multiple-Deliverable Revenue Arrangements, a consensus of the FASB Emerging Issues Task Force Revenue Recognition  Multiple Element Arrangements
  3. Fresh Start Accounting
  F-32




---



##### Table of Contents



Materiality Considering the Effects of
Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements
  Enterprise Value / Reorganization Value Determination
  Business Combinations
  F-33




---



##### Table of Contents



Methodology, Analysis and Assumptions
    Discounted Cash Flow Methodology
     F-34




---



##### Table of Contents



Publicly Traded Company Analysis
  Precedent Transaction Analysis
  Analysis of Post-Emergence Tax Attributes
  Final Enterprise Value, Accounting Policies and Reorganized Consolidated Balance Sheet
    F-35




---



##### Table of Contents



Reorganized Condensed Consolidated Balance Sheet
As of January 31, 2010
 January 31, 2010Predecessor
    
    
    Reorganization
    
    
    Fresh Start
    
    
    SuccessorCompany
    
    
    Adjustments(1)
    
    
    Adjustments(2)
    
    
    Company(10)AssetsCurrent AssetsCash and cash equivalents
    
    $
    725,955
    
    
    $
    (526,500
    )(3)
    
    $
    
    
    
    $
    199,455Net accounts receivable
    
    
    798,113
    
    
    
    
    
    
    
    (41,156
    )(2)
    
    
    756,957Deferred directory costs
    
    
    135,479
    
    
    
    
    
    
    
    (135,479
    )(2)
    
    
    Prepaid expenses and other current assets
    
    
    86,925
    
    
    
    (1,401
    )(4)(7)
    
    
    9,657
    (2)
    
    
    95,181Total current assets
    
    
    1,746,472
    
    
    
    (527,901
    )
    
    
    (166,978
    )
    
    
    1,051,593Fixed assets and computer software, net
    
    
    154,439
    
    
    
    
    
    
    
    49,814
    (2)
    
    
    204,253Other non-current assets
    
    
    60,664
    
    
    
    
    
    
    
    (57,952
    )(9)
    
    
    2,712Deferred income taxes, net
    
    
    423,485
    
    
    
    (333,275
    )(7)
    
    
    (90,210
    )(2)
    
    
    Intangible assets, net
    
    
    2,142,668
    
    
    
    
    
    
    
    415,132
    (2)
    
    
    2,557,800Goodwill
    
    
    
    
    
    
    
    
    
    
    2,097,124
    (2)
    
    
    2,097,124Total Assets
    
    $
    4,527,728
    
    
    $
    (861,176
    )
    
    $
    2,246,930
    
    
    $
    5,913,482Liabilities and Shareholders (Deficit) EquityCurrent LiabilitiesAccounts payable and accrued liabilities
    
    $
    150,974
    
    
    $
    13,910
    (4)(7)
    
    $
    (3,172
    )(2)
    
    $
    161,712Short-term deferred income taxes, net
    
    
    134,080
    
    
    
    (66,651
    )(7)
    
    
    153,573
    (2)
    
    
    221,002Accrued interest
    
    
    20,417
    
    
    
    (20,417
    )(3)(4)
    
    
    
    
    
    
    Deferred directory revenues
    
    
    811,999
    
    
    
    
    
    
    
    (791,034
    )(2)
    
    
    20,965Current portion of long-term debt
    
    
    993,526
    
    
    
    (827,579
    )(3)(4)
    
    
    (31,575
    )(4)(8)
    
    
    134,372Total current liabilities
    
    
    2,110,996
    
    
    
    (900,737
    )
    
    
    (672,208
    )
    
    
    538,051Long-term debt
    
    
    2,561,248
    
    
    
    657,628
    (3)(4)
    
    
    (88,670
    )(4)(8)
    
    
    3,130,206Deferred income taxes, net
    
    
    
    
    
    
    245,025
    (7)
    
    
    66,322
    (2)
    
    
    311,347Other non-current liabilities
    
    
    380,091
    
    
    
    120,391
    (4)(7)
    
    
    (17,388
    )(2)
    
    
    483,094Liabilities subject to compromise
    
    
    6,352,813
    
    
    
    (6,352,813
    )(5)
    
    
    
    
    
    
    Total liabilities
    
    
    11,405,148
    
    
    
    (6,230,506
    )
    
    
    (711,944
    )
    
    
    4,462,698Shareholders (Deficit) EquityCommon stock  Predecessor
    
    
    88,169
    
    
    
    (88,169
    )(6)
    
    
    
    
    
    
    Additional paid-in capital  Predecessor
    
    
    2,443,059
    
    
    
    (2,443,059
    )(6)
    
    
    
    
    
    
    (Accumulated deficit) retained earnings
    
    
    (9,092,693
    )
    
    
    6,133,819
    (6)
    
    
    2,958,874
    (2)
    
    
    Treasury Stock  Predecessor
    
    
    (256,011
    )
    
    
    256,011
    (6)
    
    
    
    
    
    
    Accumulated other comprehensive loss
    
    
    (59,944
    )
    
    
    59,944
    (6)
    
    
    
    
    
    
    Common stock  Successor
    
    
    
    
    
    
    50
    (5)
    
    
    
    
    
    
    50Additional paid-in capital  Successor
    
    
    
    
    
    
    1,450,734
    (5)
    
    
    
    
    
    
    1,450,734Total shareholders (deficit) equity.
    
    
    (6,877,420
    )
    
    
    5,369,330
    
    
    
    2,958,874
    
    
    
    1,450,784Total Liabilities and Shareholders
(Deficit) Equity
    
    $
    4,527,728
    
    
    $
    (861,176
    )
    
    $
    2,246,930
    
    
    $
    5,913,482
 
 (1)
    
    Represents amounts to be recorded on the Fresh Start Reporting Date for the
implementation of the Plan, including the settlement of liabilities subject to compromise and
related payments, distributions of cash and new shares of Dex One common stock to pre-petition
creditors, the cancellation of RHD common stock and the elimination of the Predecessor Companys
additional paid-in capital, a portion of accumulated deficit, treasury stock and accumulated other
comprehensive loss. The reorganization adjustments also include the establishment of Dex One
additional paid-in capital of $1.5 billion based on the fair value of equity of $1.5 billion less
the par value of Dex One common stock of less than $0.1 million. Common shares outstanding of the
Predecessor Company immediately prior to their cancellation on the Effective Date were 69,058,991. F-36




---



##### Table of Contents



(2)
    
    Represents the adjustments for fresh start accounting primarily related to recording
goodwill, recording our intangible assets, accounts receivable, fixed assets and computer software
and other assets and liabilities at fair value and related deferred income taxes in accordance with
ASC 805. Additionally, such fresh start accounting adjustments reflect the elimination of
substantially all of our deferred directory revenue of $791.0 million and all of the related
deferred directory costs of $135.5 million, based on the minimal obligations we have subsequent to
the Fresh Start Reporting Date for advertising sales fulfilled prior to the Fresh Start
Reporting Date. The remaining deferred directory revenues of $21.0 million have been recorded at
fair value in fresh start accounting and pertain to billings ahead of publications and revenues
associated with our internet products and services for which we have future obligations subsequent
to the Fresh Start Reporting Date. Prepaid expenses and other current assets include $14.4 million
of cost-uplift, which is defined and discussed below. The fresh start accounting adjustments also
include the elimination of (1) the remaining portion of the Predecessor Companys accumulated
deficit, (2) prepaid director and officer insurance included in prepaid expenses and other current
assets and (3) deferred rent included in accounts payable and accrued liabilities as well as other
non-current liabilities.  Enterprise value attributed to Dex One
    
    $
    4,515,907Plus: cash and cash equivalents
    
    
    199,455Plus: liabilities (excluding amended and restated credit
facilities and Dex One Senior Subordinated Notes)
    
    
    1,198,120Total reorganization value to be allocated to assets
    
    
    5,913,482Less: fair value assigned to tangible and intangible
assets
    
    
    (3,816,358
    )Value of Dex One assets in excess of fair value (goodwill)
    
    $
    2,097,124Total reorganization value to be allocated to assets
    
    $
    5,913,482Less: amended and restated credit facilities and Dex One
Senior Subordinated Notes
    
    
    (3,264,578
    )Less: other liabilities
    
    
    (1,198,120
    )New Dex One common stock (less than $0.1 million) and
additional paid-in capital ($1,450.7 million)
    
    $
    1,450,784
 
 The following table represents the impact of fresh start accounting adjustments on retained
earnings: Fresh start accounting adjustments:Goodwill
    
    $
    2,097,124Write off of deferred revenue and deferred directory costs
    
    
    655,555Fair value adjustment to intangible assets
    
    
    415,132Fair value adjustment to the amended and restated credit
facilities
    
    
    120,245Fair value adjustment to fixed assets and computer
software
    
    
    49,814Write-off of deferred financing costs
    
    
    (48,443
    )Other fresh start accounting adjustments
    
    
    (20,450
    )Impact of fresh start accounting on statement of operations
    
    
    3,268,977Adjustment to income tax provision
    
    
    (310,103
    )Total impact on retained earnings for fresh start accounting
adjustments
    
    $
    2,958,874
 F-37




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##### Table of Contents



The determination of the fair value of our intangible assets resulted in a $415.1 million net
increase in intangible assets on the reorganized condensed consolidated balance sheet at January
31, 2010. The following table presents the increase (decrease) in fair value of intangible assets
by category: Directory services agreements
    
    $
    (92,061
    )Local customer relationships
    
    
    303,326National customer relationships
    
    
    116,976Trade names and trademarks
    
    
    16,074Technology, advertising commitments and other
    
    
    70,817Total increase in fair value of intangible assets
    
    $
    415,132
 
 (3)
    
    In accordance with the Plan, cash disbursements of $526.5 million were made on
the Effective Date related to the repayment of principal and accrued
interest on outstanding debt.(4)
    
    Reflects the amendment and restatement of our credit facilities as well as the
issuance of the $300.0 million Dex One Senior Subordinated Notes completed on the Effective Date.
The following tables present a reconciliation of outstanding debt, including the current portion,
at January 31, 2010 to reorganized outstanding debt, including the current portion, at January 31,
2010. January 31, 2010Current portion of long-term debt
    
    $
    993,526Reclass of current portion of long-term debt
    
    
    (827,579
    )Adjustment to record the current portion of
long-term debt at fair value
    
    
    (31,575
    )Reorganized current portion of long-term debt
    
    $
    134,372
 January 31, 2010Long-term debt
    
    $
    2,561,248Reorganization adjustments:Repayment of long-term debt
    
    
    (511,272
    )Reclass of current portion of long-term debt
    
    
    827,579Dex One Senior Subordinated Notes
    
    
    300,000Interest rate swaps and accrued interest
    
    
    41,321Total reorganization adjustments
    
    
    657,628Adjustment to record long-term debt at fair value
    
    
    (88,670
    )Reorganized long-term debt
    
    $
    3,130,206
 
 (5)
    
    Liabilities subject to compromise generally refer to pre-petition obligations,
secured or unsecured, that may be impaired by a plan of reorganization. FASB ASC 852 requires such
liabilities, including those that became known after filing the Chapter 11 petitions, be reported
at the amounts expected to be allowed, even if they may be settled for lesser amounts. These
liabilities represented the estimated amount expected to be resolved on known or potential claims
through the Chapter 11 process. Liabilities subject to compromise also includes items that may be
assumed under the plan of reorganization, and may be subsequently reclassified to liabilities not
subject to compromise. The Company has classified all of its Notes in Default as liabilities
subject to compromise at January 31, 2010. Liabilities subject to compromise also include certain
pre-petition liabilities including accrued interest, accounts payable and accrued liabilities, tax
related liabilities and lease related liabilities. The table below identifies the principal
categories of liabilities subject to compromise at January 31, 2010: January 31, 2010Notes in Default
    
    $
    6,071,756Accrued interest
    
    
    241,585Tax related liabilities
    
    
    28,845Accounts payable and accrued liabilities
    
    
    10,627Total liabilities subject to compromise
    
    $
    6,352,813
 F-38




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##### Table of Contents



Liabilities subject to compromise at January 31, 2010 were either settled by the issuance of new
Dex One common stock, the issuance of the Dex One Senior Subordinated Notes, cash disbursements or
reclassified out of liabilities subject to compromise into appropriate balance sheet accounts. As a
result of the extinguishment of liabilities subject to compromise, the Predecessor Company recorded
a gain on reorganization of $4.5 billion for the one month ended January 31, 2010, the components
of which are presented in the following table. One Month EndedJanuary 31, 2010Liabilities subject to compromise
    
    $
    6,352,813Less:Issuance of new Dex One common stock (par value)
    
    
    (50
    )Dex One additional paid-in capital
    
    
    (1,450,734
    )Dex One Senior Subordinated Notes
    
    
    (300,000
    )Reclassified into other balance sheet liability accounts
    
    
    (39,471
    )Professional fees and other
    
    
    (38,403
    )Gain on reorganization / settlement of liabilities subject
to compromise
    
    $
    4,524,155
 
 The Predecessor Company has incurred professional fees associated with filing the Chapter 11
petitions of $30.6 million during the one month ended January 31, 2010, of which $22.7 million have
been paid in cash during the one month ended January 31, 2010. Professional fees include
financial, legal and valuation services directly associated with the reorganization process.
Professional fees for post-emergence activities related to Plan implementation and other transition
costs attributable to the reorganization are expected to continue into 2010.During the one month ended January 31, 2010, the Predecessor Company did not receive any operating
cash receipts resulting from the filing of the Chapter 11 petitions. 
 (6)
    
    Represents the impact of reorganization adjustments on accumulated deficit: Gain on reorganization / settlement of liabilities subject
to compromise
    
    $
    4,524,155Elimination of Predecessor Company common stock
    
    
    88,169Elimination of Predecessor Company additional
paid-in capital
    
    
    2,443,059Elimination of Predecessor Company treasury stock
    
    
    (256,011
    )Elimination of Predecessor Company accumulated
other comprehensive loss
    
    
    (59,944
    )Adjustment to income tax provision
    
    
    (607,487
    )Other charges
    
    
    1,878Total impact on accumulated deficit for reorganization
adjustments
    
    $
    6,133,819
 
 In connection with the Companys adoption of fresh start accounting, the following table presents
the amounts included in accumulated other comprehensive loss at January 31, 2010 that were
eliminated as part of fresh start accounting adjustments: Interest rate swaps, net
    
    $
    15,278Employee benefit plans, net
    
    
    44,666Total
    
    $
    59,944
 
 (7)
    
    Represents reorganization adjustments associated with the Predecessor Companys
deferred income taxes, interest rate swap liabilities and related interest receivables that have
been converted into a new tranche of term loans under the amended and restated credit facilities
and the reclass of certain liabilities from liabilities subject to compromise. F-39




---



##### Table of Contents



(8)
    
    Represents the adjustment to record our long-term debt, including the current
portion, at fair value as of the Fresh Start Reporting Date. See Note 2, Summary of Significant
Accounting Policies  Interest Expense and Deferred Financing Costs and Note 6,
Long-Term Debt, Credit Facilities and Notes for additional information. The following tables
present the fair value adjustments to our long-term debt, including the current portion, by
issuance: Current portion of long-term debt:RHDI Amended and Restated Credit Facility
    
    $
    4,149Dex Media East Amended and Restated Credit Facility
    
    
    22,424Dex Media West Amended and Restated Credit Facility
    
    
    5,002Total fair value adjustments
    
    $
    31,575Long-term debt:RHDI Amended and Restated Credit Facility
    
    $
    14,224Dex Media East Amended and Restated Credit Facility
    
    
    63,633Dex Media West Amended and Restated Credit Facility
    
    
    10,813Total fair value adjustments
    
    $
    88,670
 
 (9)
    
    Represents elimination of deferred financing costs associated with the Predecessor
Companys existing credit facilities and the write-off of other non-current assets as a result of
fresh start accounting.(10)
    
    The following table summarizes the allocation of fair values of the Predecessor
Companys assets and liabilities as shown in the reorganized condensed consolidated balance sheet
at January 31, 2010: January 31, 2010Cash and cash equivalents
    
    $
    199,455Net accounts receivable
    
    
    756,957Prepaid expenses and other current assets
    
    
    95,181Fixed assets and computer software, net
    
    
    204,253Other non-current assets
    
    
    2,712Goodwill
    
    
    2,097,124Intangible assets, net
    
    
    2,557,800Total assets
    
    
    5,913,482Less: accounts payable and accrued liabilities
    
    
    161,712Less: short-term deferred income taxes, net
    
    
    221,002Less: deferred directory revenues
    
    
    20,965Less: current portion of long-term debt
    
    
    134,372Less: long-term debt
    
    
    3,130,206Less: deferred income taxes, net
    
    
    311,347Less: other non-current liabilities
    
    
    483,094Net assets acquired
    
    $
    1,450,784
  Cash
  Accounts Receivable
  F-40




---



##### Table of Contents



Deferred Directory Costs
  Deferred income taxes, net
 Income Taxes,
  Successor Company
    
    
    Predecessor CompanyFebruary 1, 2010
    
    
    December 31, 2009Gross deferred tax assets
    
    $
    139,326
    
    
    $
    1,988,997Valuation allowance
    
    
    (7,876
    )
    
    
    (1,531,905
    )Gross deferred tax liabilities
    
    
    (663,799
    )
    
    
    (165,391
    )Net deferred tax asset (liability)
    
    $
    (532,349
    )
    
    $
    291,701
  Prepaid expenses & other current assets
   Fixed Assets
  F-41




---



##### Table of Contents



Other non-current assets
  Intangible Assets
  Directory Services Agreements 
 Local and National Customer Relationships
 Trade Names and Trademarks
 Technology, Advertising Commitments and Other 
  F-42




---



##### Table of Contents



4. Reorganization Items, Net and Liabilities Subject to Compromise
 Reorganization Items, Net
  Predecessor CompanyOne Month EndedJanuary 31, 2010Liabilities subject to compromise
    
    $
    6,352,813Issuance of new Dex One common stock (par value)
    
    
    (50
    )Dex One additional paid-in capital
    
    
    (1,450,734
    )Dex One Senior Subordinated Notes
    
    
    (300,000
    )Reclassified into other balance sheet liability accounts
    
    
    (39,471
    )Professional fees and other
    
    
    (38,403
    )Gain on reorganization / settlement of liabilities subject to compromise
    
    
    4,524,155Fresh start accounting adjustments:Goodwill
    
    
    2,097,124Write off of deferred revenue and deferred directory costs
    
    
    655,555Fair value adjustment to intangible assets
    
    
    415,132Fair value adjustment to the amended and restated credit facilities
    
    
    120,245Fair value adjustment to fixed assets and computer software
    
    
    49,814Write-off of deferred financing costs
    
    
    (48,443
    )Other fresh start accounting adjustments
    
    
    (20,450
    )Total fresh start accounting adjustments
    
    
    3,268,977Total reorganization items, net
    
    $
    7,793,132
   Predecessor CompanyYear EndedDecember 31, 2009Professional fees
    
    $
    77,375Write-off of unamortized deferred financing costs
    
    
    64,475Write-off of unamortized net premiums / discounts on
long-term debt
    
    
    34,886Write-off of
debt related unamortized fair value adjustments
    
    
    (78,511
    )Lease rejections, abandoned property and other
    
    
    (3,457
    )Total reorganization items
    
    $
    94,768
  F-43




---



##### Table of Contents



Liabilities Subject to Compromise
  Predecessor CompanyDecember 31, 2009Notes in default
    
    $
    6,071,756Accrued interest
    
    
    241,585Tax related liabilities
    
    
    28,845Accounts payable and accrued liabilities
    
    
    10,627Total liabilities subject to compromise
    
    $
    6,352,813
 5. Restructuring Charges
 Successor Company Actions
  2010 ActionsBalance at February 1, 2010
    
    $
    Additions to reserve charged to earnings
    
    
    18,586Payments
    
    
    (728
    )Balance at December 31, 2010
    
    $
    17,858
  F-44




---



##### Table of Contents



Predecessor Company Actions
    6. Long-Term Debt, Credit Facilities and Notes
 Successor Company
  Successor CompanyFair Market Value
    
    
    Carrying ValueDecember 31, 2010
    
    
    December 31, 2010RHDI Amended and Restated Credit Facility
    
    $
    800,175
    
    
    $
    1,014,485Dex Media East Amended and Restated Credit Facility
    
    
    597,185
    
    
    
    739,090Dex Media West Amended and Restated Credit Facility
    
    
    618,214
    
    
    
    683,646Dex One 12%/14% Senior Subordinated Notes due 2017
    
    
    204,750
    
    
    
    300,000Total Dex One consolidated
    
    
    2,220,324
    
    
    
    2,737,221Less current portion
    
    
    208,340
    
    
    
    249,301Long-term debt
    
    $
    2,011,984
    
    
    $
    2,487,920
 Credit Facilities
 RHDI Amended and Restated Credit Facility
  F-45




---



##### Table of Contents




    
    The highest (subject to a floor of 4.00%) of (i) the Prime Rate (as
defined in the RHDI Amended and Restated Credit Facility), (ii) the Federal Funds
Effective Rate (as defined in the RHDI Amended and Restated Credit Facility) plus
0.50%, and (iii) one month LIBOR plus 1.00% in each case, plus an interest rate
margin for base rate loans. The interest rate margin for base rate loans is
initially 5.25% per annum, and such interest rate margin adjusts pursuant to a
pricing grid that provides for a margin equal to 5.25% per annum if RHDIs
consolidated leverage ratio is greater than or equal to 4.25 to 1.00, and equal to
5.00% per annum if RHDIs consolidated leverage ratio is less than 4.25 to 1.00; or
    
    The higher of (i) LIBOR rate and (ii) 3.00%, in each case, plus an
interest rate margin for Eurodollar loans. The interest rate margin for Eurodollar
loans is initially 6.25% per annum, and such interest rate margin adjusts pursuant
to a pricing grid that provides for a margin equal to 6.25% per annum if RHDIs
consolidated leverage ratio is greater than or equal to 4.25 to 1.00, and equal to
6.00% per annum if RHDIs consolidated leverage ratio is less than 4.25 to 1.00.
RHDI may elect interest periods of 1, 2, 3 or 6 months for LIBOR borrowings.
  Dex Media East Amended and Restated Credit Facility
  
    
    The highest of (i) the Prime Rate (as defined in the Dex Media East
Amended and Restated Credit Facility), (ii) the Federal Funds Effective Rate (as
defined in the Dex Media East Amended and Restated Credit Facility) plus 0.50%, and
(iii) one month LIBOR plus 1.00% in each case, plus an interest rate margin for
base rate loans. The interest rate margin for base rate loans is initially 1.50%
per annum, and such interest rate margin adjusts pursuant to a pricing grid that
provides for a margin equal to 1.50% per annum if DME Inc.s consolidated leverage
ratio is greater than or equal to 2.75 to 1.00, equal to 1.25% per annum if DME
Inc.s consolidated leverage ratio is greater than or equal to 2.50 to 1.00 but
less than 2.75 to 1.00 and equal to 1.00% per annum if DME Inc.s consolidated
leverage ratio is less than 2.50 to 1.00; or
    
    The LIBOR rate plus an interest rate margin for Eurodollar loans. The
interest rate margin for Eurodollar loans is initially 2.50% per annum, and such
interest rate margin adjusts pursuant to a pricing grid that provides for a margin
equal to 2.50% per annum if DME Inc.s consolidated leverage ratio is greater than
or equal to 2.75 to 1.00, equal to 2.25% per annum if DME Inc.s consolidated
leverage ratio is greater than or equal to 2.50 to 1.00 but less than 2.75 to 1.00
and equal to 2.00% per annum if DME Inc.s consolidated leverage ratio is less than
2.50 to 1.00. DME Inc. may elect interest periods of 1, 2, 3 or 6 months for LIBOR
borrowings.
  Dex Media West Amended and Restated Credit Facility
  
    
    The highest (subject to a floor of 4.00%) of (i) the Prime Rate (as
defined in the Dex Media West Amended and Restated Credit Facility), (ii) the
Federal Funds Effective Rate (as defined in the Dex Media West Amended and Restated
Credit Facility) plus 0.50%, and (iii) one month LIBOR plus 1.00% in each case,
plus an interest rate margin for base rate loans. The interest rate margin for
base rate loans is initially 3.50% per annum, and such interest rate margin adjusts
pursuant to a pricing grid that provides for a margin equal to 3.50% per annum if
DMW Inc.s consolidated leverage ratio is greater than or equal to 2.75 to 1.00,
equal to 3.25% per annum if DMW Inc.s consolidated leverage ratio is greater than
or equal to 2.50 to 1.00 but less than 2.75 to 1.00 and equal to 3.00% per annum if
DMW Inc.s consolidated leverage ratio is less than 2.50 to 1.00; or
 F-46




---



##### Table of Contents




    
    The higher of (i) LIBOR rate and (ii) 3.00%, in each case, plus an
interest rate margin for Eurodollar loans. The interest rate margin for Eurodollar
loans is initially 4.50% per annum, and such interest rate margin adjusts pursuant
to a pricing grid that provides for a margin equal to 4.50% per annum if DMW Inc.s
consolidated leverage ratio is greater than or equal to 2.75 to 1.00, equal to
4.25% per annum if DMW Inc.s consolidated leverage ratio is greater than or equal
to 2.50 to 1.00 but less than 2.75 to 1.00 and equal to 4.00% per annum if DMW
Inc.s consolidated leverage ratio is less than 2.50 to 1.00. DMW Inc. may elect
interest periods of 1, 2, 3 or 6 months for LIBOR borrowings.
       Notes
 Dex One Senior Subordinated Notes
 st th
 F-47




---



##### Table of Contents



Redemption Year
    
    Price2011
    
    
    106.000
    %2012
    
    
    102.000
    %2013
    
    
    101.000
    %2014 and thereafter
    
    
    100.000
    %
  2011
    
    $
    283,0222012
    
    
    187,9632013
    
    
    276,1192014
    
    
    1,781,0842015
    
    
    Thereafter
    
    
    300,000Total
    
    $
    2,828,188
 Impact of Fresh Start Accounting
  F-48




---



##### Table of Contents



Outstanding Debt atDecember 31, 2010Unamortized Fair
    
    
    Excluding theValue Adjustments
    
    
    Impact ofCarrying Value at
    
    
    at December 31,
    
    
    Unamortized FairDecember 31, 2010
    
    
    2010
    
    
    Value AdjustmentsRHDI Amended and Restated Credit Facility
    
    $
    1,014,485
    
    
    $
    14,463
    
    
    $
    1,028,948Dex Media East Amended and Restated
Credit Facility
    
    
    739,090
    
    
    
    64,735
    
    
    
    803,825Dex Media West Amended and Restated
Credit Facility
    
    
    683,646
    
    
    
    11,769
    
    
    
    695,415Dex One 12%/14% Senior Subordinated
Notes due 2017
    
    
    300,000
    
    
    
    
    
    
    
    300,000Total
    
    $
    2,737,221
    
    
    $
    90,967
    
    
    $
    2,828,188
 Predecessor Company
  Predecessor CompanyNotes in Default
    
    
    Credit FacilitiesDecember 31, 2009RHD6.875% Senior Notes due 2013
    
    $
    206,791
    
    
    $
    6.875% Series A-1 Senior Discount Notes due 2013
    
    
    320,903
    
    
    
    6.875% Series A-2 Senior Discount Notes due 2013
    
    
    483,365
    
    
    
    8.875% Series A-3 Senior Notes due 2016
    
    
    1,012,839
    
    
    
    8.875% Series A-4 Senior Notes due 2017
    
    
    1,229,760
    
    
    
    R.H. Donnelley Inc.Credit Facility
    
    
    
    
    
    
    1,424,04811.75% Senior Notes due 2015
    
    
    412,871
    
    
    
    Dex Media, Inc.8% Senior Notes due 2013
    
    
    500,000
    
    
    
    9% Senior Discount Notes due 2013
    
    
    749,857
    
    
    
    Dex Media EastCredit Facility
    
    
    
    
    
    
    1,039,436Dex Media WestCredit Facility
    
    
    
    
    
    
    1,091,2928.5% Senior Notes due 2010
    
    
    385,000
    
    
    
    5.875% Senior Notes due 2011
    
    
    8,720
    
    
    
    9.875% Senior Subordinated Notes due 2013
    
    
    761,650
    
    
    
    Total Predecessor Company consolidated
    
    
    6,071,756
    
    
    
    3,554,776Less current portion not subject to compromise
    
    
    
    
    
    
    993,528Long-term debt subject to compromise
    
    $
    6,071,756
    
    
    
    Long-term debt not subject to compromise
    
    
    
    
    
    $
    2,561,248
 F-49




---



##### Table of Contents



7. Derivative Financial Instruments
 Successor Company
  Interest Rate Swaps  Dex Media East
 Effective Dates
    
    Notional Amount
    
    
    Pay Rates
    
    
    Maturity Dates(amounts in millions)February 26, 2010
    
    $
    300
    (2)
    
    
    1.20% - 1.796 %
    
    
    February 29, 2012 February 28, 2013March 5, 2010
    
    
    100
    (1)
    
    
    1.688 %
    
    
    January 31, 2013March 10, 2010
    
    
    100
    (1)
    
    
    1.75%
    
    
    January 31, 2013Total
    
    $
    500
   Interest Rate Caps  RHDI
 Effective Dates
    
    Notional Amount
    
    
    Cap Rates
    
    
    Maturity Dates(amounts in millions)February 26, 2010
    
    $
    200
    (3)
    
    
    3.0% - 3.5 %
    
    
    February 29, 2012 February 28, 2013March 8, 2010
    
    
    100
    (4)
    
    
    3.5 %
    
    
    January 31, 2013March 10, 2010
    
    
    100
    (4)
    
    
    3.0 %
    
    
    April 30, 2012Total
    
    $
    400
 
 (1)
    
    Consists of one swap(2)
    
    Consists of three swaps(3)
    
    Consists of two caps(4)
    
    Consists of one cap F-50




---



##### Table of Contents



Loss Recognized inInterest ExpenseFrom the Change in Fair Value ofFair Value
    
    
    Interest Rate SwapsMeasurements
    
    
    Eleven Months Endedat December 31, 2010
    
    
    December 31, 2010Interest Rate Swaps:Accounts
payable and accrued liabilities
    
    $
    (4,376
    )
    
    $
    4,376Other non-current liabilities
    
    
    (1,989
    )
    
    
    1,989Total
    
    $
    (6,365
    )
    
    $
    6,365
 Loss Recognized inInterest ExpenseFrom the Change in Fair Value ofFair Value
    
    
    Interest Rate CapsMeasurements
    
    
    Eleven Months Endedat December 31, 2010
    
    
    December 31, 2010Interest Rate Caps:Prepaid expenses and
other current assets
    
    $
    5
    
    
    $
    64Other non-current assets
    
    
    303
    
    
    
    1,766Total
    
    $
    308
    
    
    $
    1,830
  Predecessor Company
  F-51




---



##### Table of Contents



(Gain) LossRecognizedin Accumulated(Gain) Loss Recognized in
    
    
    Other ComprehensiveInterest Expense
    
    
    Loss From EffectiveFrom the Change in Fair Value of
    
    
    InterestFair Value
    
    
    Interest Rate Swaps
    
    
    Rate SwapsMeasurements at
    
    
    One Month Ended
    
    
    Year Ended
    
    
    Year EndedDecember 31, 2009
    
    
    January 31, 2010
    
    
    December 31, 2009
    
    
    December 31, 2009Interest Rate Swaps:Accounts
payable and accrued liabilities
    
    $
    (5,043
    )
    
    $
    3,898
    
    
    $
    16,798
    
    
    $
    4,480Other non-current liabilities
    
    
    (1,652
    )
    
    
    (1,600
    )
    
    
    (12,260
    )
    
    
    (8,166
    )Total
    
    $
    (6,695
    )
    
    $
    2,298
    
    
    $
    4,538
    
    
    $
    (3,686
    )
   RHDI Amended and Restated Credit Facility
    
    $
    11,346Dex Media East Amended and Restated Credit Facility
    
    
    26,301Dex Media West Amended and Restated Credit Facility
    
    
    121Total
    
    $
    37,768
   F-52




---



##### Table of Contents



8. Income Taxes
  Components of (Provision) Benefit for Income Taxes
 Successor Company
    
    
    Predecessor CompanyEleven Months Ended
    
    
    One Month EndedDecember 31,
    
    
    January 31,
    
    
    Years Ended December 31,2010
    
    
    2010
    
    
    2009
    
    
    2008Current (provision) benefitFederal
    
    $
    (1,263
    )
    
    $
    (600
    )
    
    $
    2,875
    
    
    $
    (23,900
    )State and local
    
    
    3,772
    
    
    
    (20
    )
    
    
    11,773
    
    
    
    (10,295
    )Total current (provision) benefit
    
    
    2,509
    
    
    
    (620
    )
    
    
    14,648
    
    
    
    (34,195
    )Deferred (provision) benefitFederal
    
    
    568,938
    
    
    
    (792,162
    )
    
    
    780,678
    
    
    
    1,152,636State and local
    
    
    48,668
    
    
    
    (124,759
    )
    
    
    133,194
    
    
    
    159,255Total deferred (provision) benefit
    
    
    617,606
    
    
    
    (916,921
    )
    
    
    913,872
    
    
    
    1,311,891(Provision) benefit for income taxes
    
    $
    620,115
    
    
    $
    (917,541
    )
    
    $
    928,520
    
    
    $
    1,277,696
 Reconciliation of Statutory Federal Tax Rate to Effective Tax Rate
 Successor Company
    
    
    Predecessor CompanyEleven Months Ended
    
    
    One Month EndedDecember 31,
    
    
    January 31,
    
    
    Years Ended December 31,2010
    
    
    2010
    
    
    2009
    
    
    2008Income (loss) before income taxes
    
    $
    (1,543,707
    )
    
    $
    7,837,550
    
    
    $
    (7,381,813
    )
    
    $
    (3,576,023
    )Statutory federal tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State and local taxes, net of federal tax
benefit
    
    
    3.6
    
    
    
    2.6
    
    
    
    3.3
    
    
    
    2.9Non-taxable fresh start adjustments
    
    
    
    
    
    
    (28.0
    )
    
    
    
    
    
    
    Non-deductible impairment expenses
    
    
    (19.5
    )
    
    
    
    
    
    
    
    
    
    
    (3.6
    )Other nondeductible expenses
    
    
    
    
    
    
    
    
    
    
    (0.2
    )
    
    
    Section 382 limitation
    
    
    22.9
    
    
    
    1.1
    
    
    
    (4.5
    )
    
    
    Section 108 tax attribution reduction
    
    
    
    
    
    
    21.4
    
    
    
    
    
    
    
    Change in valuation allowance
    
    
    (2.3
    )
    
    
    (19.5
    )
    
    
    (20.7
    )
    
    
    0.1Other, net
    
    
    0.5
    
    
    
    (0.9
    )
    
    
    (0.3
    )
    
    
    1.3Effective tax rate
    
    
    40.2
    %
    
    
    11.7
    %
    
    
    12.6
    %
    
    
    35.7
    %
 F-53




---



##### Table of Contents



Components of Deferred Tax Assets and Liabilities
 Successor Company
    
    
    Predecessor CompanyDecember 31, 2010
    
    
    December 31, 2009Deferred tax assets:Allowance for doubtful accounts
    
    $
    20,234
    
    
    $
    22,303Accounts receivable
    
    
    4,009
    
    
    
    Deferred and other compensation
    
    
    8,205
    
    
    
    33,364Deferred directory revenue and costs
    
    
    
    
    
    
    23,598Deferred financing costs
    
    
    
    
    
    
    45,411Capital investments
    
    
    6,201
    
    
    
    6,220Debt and other interest
    
    
    2,274
    
    
    
    12,098Pension and other retirement benefits
    
    
    27,093
    
    
    
    29,915Restructuring reserves
    
    
    6,895
    
    
    
    Net operating loss and credit
carryforwards
    
    
    212,793
    
    
    
    532,222Goodwill and intangible assets
    
    
    
    
    
    
    1,246,106Other, net
    
    
    15,590
    
    
    
    37,760Total deferred tax assets
    
    
    303,294
    
    
    
    1,988,997Valuation allowance
    
    
    (97,642
    )
    
    
    (1,531,905
    )Net deferred tax assets
    
    $
    205,652
    
    
    $
    457,092Deferred tax liabilities:Fixed assets and capitalized software
    
    $
    56,136
    
    
    $
    28,321Goodwill and intangible assets
    
    
    156,140
    
    
    
    Debt and other interest
    
    
    
    
    
    
    135,610Deferred directory revenue and costs
    
    
    19,596
    
    
    
    Investment in subsidiaries
    
    
    89,481
    
    
    
    7Restructuring reserves
    
    
    
    
    
    
    967Other, net
    
    
    5,962
    
    
    
    486Total deferred tax liabilities
    
    
    327,315
    
    
    
    165,391Net deferred tax asset (liability)
    
    $
    (121,663
    )
    
    $
    291,701
 Reconciliation of Gross Unrecognized Tax Benefits
 Successor Company
    
    
    Predecessor CompanyEleven Months Ended
    
    
    One Month EndedDecember 31,
    
    
    January 31,
    
    

    Years Ended December 31,2010
    
    
    2010
    
    
    2009
    
    
    2008Balance at beginning of period
    
    $
    390,872
    
    
    $
    298,001
    
    
    $
    32,637
    
    
    $
    9,988Gross additions for tax positions
related to the current year
    
    
    693
    
    
    
    95,555
    
    
    
    277,740
    
    
    
    Gross
additions for tax positions related to the prior year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,182Gross reductions for tax positions
related to the current year
    
    
    (370,611
    )
    
    
    (2,684
    )
    
    
    (9,929
    )
    
    
    Settlements
    
    
    
    
    
    
    
    
    
    
    (2,447
    )
    
    
    (533
    )Balance at end of period
    
    $
    20,954
    
    
    $
    390,872
    
    
    $
    298,001
    
    
    $
    32,637
 F-54




---



##### Table of Contents



Successor Company
 Components of Benefit for Income Taxes
  Reconciliation of Statutory Federal Tax Rate to Effective Tax Rate
  Components of Deferred Tax Assets and Liabilities
  Reconciliation of Gross Unrecognized Tax Benefits
       F-55




---



##### Table of Contents



Other
       F-56




---



##### Table of Contents



Predecessor Company  One Month Ended January 31, 2010
 Components of Provision for Income Taxes
  Reconciliation of Statutory Federal Tax Rate to Effective Tax Rate
  Reconciliation of Gross Unrecognized Tax Benefits
   Predecessor Company  Year Ended December 31, 2009
 Components of Benefit for Income Taxes
   Reconciliation of Statutory Federal Tax Rate to Effective Tax Rate
  F-57




---



##### Table of Contents



Components of Deferred Tax Assets and Liabilities
  Reconciliation of Gross Unrecognized Tax Benefits
     Predecessor Company  Year Ended December 31, 2008
 Components of Benefit for Income Taxes
   F-58




---



##### Table of Contents



Reconciliation of Statutory Federal Tax Rate to Effective Tax Rate
  Reconciliation of Gross Unrecognized Tax Benefits
  9. Stock Incentive Plans
     Successor Company
    
    
    Predecessor CompanyEleven Months Ended
    
    
    Year EndedDecember 31, 2010
    
    
    December 31, 2008Expected volatility
    
    
    37.3 %
    
    
    
    58.8 %Risk-free interest rate
    
    
    2.6 %
    
    
    
    2.8 %Expected life
    
    7.1 Years
    
    5 YearsDerived service period (grants using Monte Carlo model)
    
    3.6 Years
    
    
    Forfeiture rate
    
    
    8.9 %
    
    
    
    8.0 %Dividend yield
    
    
    0 %
    
    
    
    0%
 F-59




---



##### Table of Contents



Use of a Simplified
Method in Developing Expected Term of Share Options
  Weighted Average
    
    
    AggregateExercise/Grant
    
    
    IntrinsicShares
    
    
    Price Per Share
    
    
    ValuePredecessor CompanyAwards outstanding, January 1, 2010
    
    
    3,754,714
    
    
    $
    10.55
    
    
    $
    Granted
    
    
    
    
    
    
    
    
    
    
    Exercises
    
    
    
    
    
    
    
    
    
    
    Forfeitures and cancellations (1)
    
    
    (3,754,714
    )
    
    
    10.55
    
    
    
    Awards outstanding, January 31, 2010
    
    
    
    
    
    $
    
    
    
    $
    Successor CompanyAwards outstanding, February 1, 2010
    
    
    
    
    
    $
    
    
    
    $
    Granted
    
    
    2,147,008
    
    
    
    25.42
    
    
    
    Exercises
    
    
    
    
    
    
    
    
    
    
    Forfeitures
    
    
    (481,327
    )
    
    
    28.68
    
    
    
    Awards outstanding, December 31, 2010
    
    
    1,665,681
    
    
    $
    24.48
    
    
    $
    Available for future grants at December 31, 2010
    
    
    3,889,876
 
 (1)
    
    Upon emergence from Chapter 11 and pursuant to the Plan, all outstanding
equity securities of the Predecessor Company including all stock options, SARs and restricted
stock, were cancelled.  F-60




---



##### Table of Contents



Stock Awards Outstanding
    
    
    Stock Awards ExercisableRange of
    
    
    
    
    
    Weighted Average
    
    
    Weighted Average
    
    
    
    
    
    
    Weighted Average
    
    
    Weighted AverageExercise/Grant
    
    
    
    
    
    Remaining Contractual
    
    
    Exercise/Grant
    
    
    
    
    
    
    Remaining Contractual
    
    
    Exercise/GrantPrices
    
    Shares
    
    
    Life (In Years)
    
    
    Price Per Share
    
    
    Shares
    
    
    Life (In Years)
    
    
    Price Per Share$9.75 - $9.75
    
    
    200,000
    
    
    
    9.68
    
    
    $
    9.75
    
    
    
    
    
    
    
    
    
    
    $
    $15.00 - $15.00
    
    
    200,000
    
    
    
    9.68
    
    
    
    15.00
    
    
    
    200,000
    
    
    
    9.68
    
    
    
    15.00$23.00 - $23.00
    
    
    200,000
    
    
    
    9.68
    
    
    
    23.00
    
    
    
    200,000
    
    
    
    9.68
    
    
    
    23.00$28.68 - $28.68
    
    
    865,681
    
    
    
    9.17
    
    
    
    28.68
    
    
    
    
    
    
    
    
    
    
    
    $32.00 - $32.00
    
    
    200,000
    
    
    
    9.68
    
    
    
    32.00
    
    
    
    200,000
    
    
    
    9.68
    
    
    
    32.001,665,681
    
    
    
    9.41
    
    
    $
    24.48
    
    
    
    600,000
    
    
    
    9.68
    
    
    $
    23.33
   Non-vested Stock
    
    
    Weighted Average
    
    
    Non-Vested
    
    
    Weighted AverageOptions
    
    
    Grant Date Exercise
    
    
    Restricted
    
    
    Grant Date Fairand SARs
    
    
    Price Per Award
    
    
    Stock
    
    
    Value Per AwardPredecessor CompanyNon-vested at January 1, 2010
    
    
    2,174,282
    
    
    $
    6.48
    
    
    
    521,215
    
    
    $
    4.52Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Vested
    
    
    (698,305
    )
    
    
    7.79
    
    
    
    (349,481
    )
    
    
    5.40Forfeitures and cancellations
    
    
    (1,475,977
    )
    
    
    5.86
    
    
    
    (171,734
    )
    
    
    2.74Non-vested at January 31, 2010
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    Successor CompanyNon-vested at February 1, 2010
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    Granted
    
    
    2,147,008
    
    
    
    25.42
    
    
    
    231,440
    
    
    
    10.97Vested
    
    
    (600,000
    )
    
    
    23.33
    
    
    
    (31,440
    )
    
    
    19.59Forfeitures
    
    
    (481,327
    )
    
    
    28.68
    
    
    
    
    
    
    
    Non-vested at December 31, 2010
    
    
    1,065,681
    
    
    $
    25.12
    
    
    
    200,000
    
    
    $
    9.62
  F-61




---



##### Table of Contents



Components of Successor Company Stock-Based Compensation Expense
 Compensation  Stock Compensation,
   Components of Predecessor Company Stock-Based Compensation Expense
      F-62




---



##### Table of Contents



F-63




---



##### Table of Contents



10. Benefit Plans
  Dex One Retirement Plan.
  Dex Media Pension Plan.
  Dex One, Dex Media and Business.com Savings Plans.
 F-64




---



##### Table of Contents



Other Benefits Information  Union Employees
 
    
    All access to retiree health care and life insurance benefits has been eliminated for
IBEW represented employees retiring after May 8, 2009 and for CWA represented employees
retiring after October 2, 2009;
    
    Retiree life insurance benefits have been eliminated effective January 1, 2010;
    
    The two-year phase out of subsidized retiree health care benefits commenced January 1,
2010; and
    
    Effective January 1, 2012, retiree health care benefits will be eliminated for all
retirees.
 Other Benefits Information  Non-Union Employees
 
    
    All non-subsidized access to retiree health care and life insurance benefits were
eliminated effective January 1, 2009;
    
    Subsidized retiree health care benefits for any Medicare-eligible retirees were
eliminated effective January 1, 2009; and
    
    The three-year phase out of subsidized retiree health care benefits commenced January 1,
2009 (with non-union retiree health care benefits terminating December 31, 2011, except for
continued non-subsidized access to retiree benefits for retirees enrolled as of December
31, 2008). 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.
    F-65




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##### Table of Contents



Benefit Obligation and Funded Status
  Pension Plans
    
    
    Postretirement PlansSuccessor Company
    
    
    Predecessor Company
    
    
    Successor Company
    
    
    Predecessor CompanyDecember 31, 2010
    
    
    December 31, 2009
    
    
    December 31, 2010
    
    
    December 31, 2009Change in benefit obligationBenefit obligation, February 1, 2010
    
    $
    250,671
    
    
    
    
    
    
    $
    3,475Benefit obligation, January 1, 2009
    
    
    
    
    
    $
    278,290
    
    
    
    
    
    
    $
    55,282Transfer of
Supplemental Executive Retirement Plan liability
    
    
    
    
    
    
    6,228
    
    
    
    
    
    
    
    Service cost
    
    
    
    
    
    
    4,394
    
    
    
    
    
    
    
    647Interest cost
    
    
    12,432
    
    
    
    14,481
    
    
    
    107
    
    
    
    2,608Actuarial loss (gain)
    
    
    19,133
    
    
    
    2,203
    
    
    
    (675
    )
    
    
    (4,253
    )Plan curtailments
    
    
    (3,754
    )
    
    
    (4,162
    )
    
    
    
    
    
    
    (46,704
    )Benefits paid
    
    
    (19,910
    )
    
    
    (9,559
    )
    
    
    (1,867
    )
    
    
    (4,122
    )Plan settlements
    
    
    (1,327
    )
    
    
    (42,271
    )
    
    
    
    
    
    
    Benefit obligation, end of year
    
    $
    257,245
    
    
    $
    249,604
    
    
    $
    1,040
    
    
    $
    3,458Change in plan assetsFair value of plan assets, February 1, 2010
    
    $
    170,859
    
    
    
    
    
    
    $
    Fair value of plan assets, January 1, 2009
    
    
    
    
    
    $
    148,115
    
    
    
    
    
    
    $
    Return on plan assets
    
    
    21,664
    
    
    
    27,362
    
    
    
    
    
    
    
    Employer contributions
    
    
    9,770
    
    
    
    49,984
    
    
    
    1,867
    
    
    
    4,122Benefits paid
    
    
    (14,966
    )
    
    
    (8,955
    )
    
    
    (1,867
    )
    
    
    (4,122
    )Plan settlements
    
    
    
    
    
    
    (42,271
    )
    
    
    
    
    
    
    Fair value of plan assets, end of year
    
    $
    187,327
    
    
    $
    174,235
    
    
    $
    
    
    
    $
    Funded status at end of year
    
    $
    (69,918
    )
    
    $
    (75,369
    )
    
    $
    (1,040
    )
    
    $
    (3,458
    )
  Pension Plans
    
    
    Postretirement PlansSuccessor Company
    
    
    Predecessor Company
    
    
    Successor Company
    
    
    Predecessor CompanyDecember 31, 2010
    
    
    December 31, 2009
    
    
    December 31, 2010
    
    
    December 31, 2009Current liabilities
    
    $
    (357
    )
    
    $
    (275
    )
    
    $
    (1,040
    )
    
    $
    (2,848
    )Non-current liabilities
    
    
    (69,561
    )
    
    
    (75,094
    )
    
    
    
    
    
    
    (610
    )Net amount recognized
    
    $
    (69,918
    )
    
    $
    (75,369
    )
    
    $
    (1,040
    )
    
    $
    (3,458
    )
  F-66




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##### Table of Contents



Successor Company
    
    
    Predecessor CompanyDecember 31, 2010
    
    
    December 31, 2009Projected benefit obligation
    
    $
    3,427
    
    
    $
    4,988Accumulated benefit obligation
    
    $
    3,427
    
    
    $
    4,988
 Components of Net Periodic Benefit (Income) Expense
  Successor Company
    
    
    Predecessor CompanyEleven Months Ended
    
    
    One Month EndedDecember 31,
    
    
    January 31,
    
    

    Years Ended December 31,2010
    
    
    2010
    
    
    2009
    
    
    2008Service cost
    
    $
    
    
    
    $
    
    
    
    $
    4,394
    
    
    $
    12,736Interest cost
    
    
    12,432
    
    
    
    1,124
    
    
    
    14,481
    
    
    
    18,416Expected return on
plan assets
    
    
    (12,201
    )
    
    
    (1,385
    )
    
    
    (17,899
    )
    
    
    (19,719
    )Amortization of
unrecognized prior
service cost
    
    
    
    
    
    
    81
    
    
    
    975
    
    
    
    163Settlement loss
    
    
    17
    
    
    
    
    
    
    
    6,083
    
    
    
    3,504Curtailment (gain) loss
    
    
    (3,754
    )
    
    
    
    
    
    
    
    
    
    
    1,590Amortization of
unrecognized net loss
(gain)
    
    
    
    
    
    
    122
    
    
    
    (190
    )
    
    
    373Net periodic benefit
(income) expense
    
    $
    (3,506
    )
    
    $
    (58
    )
    
    $
    7,844
    
    
    $
    17,063
  Successor Company
    
    
    Predecessor CompanyEleven Months Ended
    
    
    One Month EndedDecember 31,
    
    
    January 31,
    
    

    Years Ended December 31,2010
    
    
    2010
    
    
    2009
    
    
    2008Service cost
    
    $
    
    
    
    $
    
    
    
    $
    647
    
    
    $
    1,621Interest cost
    
    
    107
    
    
    
    10
    
    
    
    2,608
    
    
    
    5,632Amortization of
unrecognized prior
service (credit)
    
    
    
    
    
    
    
    
    
    
    (6
    )
    
    
    (6
    )Curtailment gain
    
    
    
    
    
    
    
    
    
    
    (52,019
    )
    
    
    (39,588
    )Amortization of
unrecognized net
(gain) loss
    
    
    (291
    )
    
    
    (21
    )
    
    
    (608
    )
    
    
    524Net periodic
benefit (income)
    
    $
    (184
    )
    
    $
    (11
    )
    
    $
    (49,378
    )
    
    $
    (31,817
    )
   F-67




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##### Table of Contents



Pension
    
    
    PostretirementPlans
    
    
    PlansSuccessor Company
    
    
    Predecessor Company
    
    
    Successor Company
    
    
    Predecessor CompanyDecember 31, 2010
    
    
    December 31, 2009
    
    
    December 31, 2010
    
    
    December 31, 2009Net actuarial loss (gain)
    
    $
    9,653
    
    
    $
    (11,422
    )
    
    $
    (384
    )
    
    $
    (5,885
    )Prior service (credit)
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (45
    )
 Assumptions
  Successor Company
    
    
    Predecessor CompanyEleven Months Ended
    
    
    One Month EndedDecember 31,
    
    
    January 31,
    
    
    Year Ended December2010
    
    
    2010
    
    
    31, 2009Weighted average discount rates:Dex One Retirement Plan
    
    
    5.30
    %
    
    
    5.70
    %
    
    
    5.72
    %Dex Media Pension Plan
    
    
    5.06
    %
    
    
    5.70
    %
    
    
    5.72
    %
    F-68




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##### Table of Contents



Dex One Retirement Plan
    
    
    Dex Media Pension PlanWeighted average discount rate
    
    
    5.70
    %
    
    
    5.70
    %Expected return on plan assets
    
    
    8.00
    %
    
    
    8.00
    %
  November 1, 2008
    
    
    January 1, 2008One Month Ended
    
    
    
    
    
    
    through
    
    
    throughJanuary 31, 2010
    
    
    2009
    
    
    December 31, 2008
    
    
    October 31, 2008Weighted average discount rate
    
    
    5.70
    %
    
    
    5.87
    %
    
    
    8.01
    %
    
    
    6.48
    %Rate of increase in future compensation
    
    
    
    
    
    
    
    
    
    
    3.66
    %
    
    
    3.66
    %Expected return on plan assets
    
    
    8.00
    %
    
    
    8.00
    %
    
    
    8.50
    %
    
    
    8.50
    %
  June 1, 2009
    
    
    January 1, 2009
    
    
    November 1, 2008
    
    
    July 1,
    
    
    January 1, 2008One Month Ended
    
    
    through December
    
    
    through May 31,
    
    
    through December
    
    
    2008 through
    
    
    through June 30,January 31, 2010
    
    
    31, 2009
    
    
    2009
    
    
    31, 2008
    
    
    October 31, 2008
    
    
    2008Weighted average
discount rate
    
    
    5.70
    %
    
    
    6.87
    %
    
    
    5.87
    %
    
    
    8.01
    %
    
    
    6.82
    %
    
    
    6.48
    %Rate of increase in
future
compensation
    
    
    
    
    
    
    3.66
    %
    
    
    3.66
    %
    
    
    3.66
    %
    
    
    3.66
    %
    
    
    3.66
    %Expected return on
plan assets
    
    
    8.00
    %
    
    
    8.00
    %
    
    
    8.00
    %
    
    
    8.50
    %
    
    
    8.50
    %
    
    
    8.50
    %
  F-69




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##### Table of Contents



Year EndedDecember 31, 2009Healthcare cost trend rate assumed for
next year:Under 65
    
    
    9.4
    %65 and older
    
    
    9.4
    %Rate to which the cost trend rate is
assumed to decline:Under 65
    
    
    5.0
    %65 and older
    
    
    5.0
    %Year ultimate trend rate is reached
    
    
    2015
 Plan Assets
  Fair Value Measurements at December 31, 2010Quoted Prices in
    
    
    UsingActive Markets for
    
    
    Significant OtherIdentical Assets
    
    
    Observable InputsTotal
    
    
    (Level 1)
    
    
    (Level 2)Cash
    
    $
    460
    
    
    $
    460
    
    
    $
    U.S. Government securities (a)
    
    
    23,210
    
    
    
    
    
    
    
    23,210Common/collective trusts (b)
    
    
    67,375
    
    
    
    
    
    
    
    67,375Corporate debt (c)
    
    
    19,736
    
    
    
    
    
    
    
    19,736Corporate stock (d)
    
    
    19,720
    
    
    
    19,720
    
    
    
    Registered investment companies (e)
    
    
    29,860
    
    
    
    29,860
    
    
    
    Real estate investment trust (f)
    
    
    338
    
    
    
    338
    
    
    
    Credit default swaps and futures (g)
    
    
    1,149
    
    
    
    
    
    
    
    1,149Collective Fund  Group Trust (h)
    
    
    25,479
    
    
    
    
    
    
    
    25,479Total
    
    $
    187,327
    
    
    $
    50,378
    
    
    $
    136,949
 Fair Value Measurements at December 31, 2009Quoted Prices in
    
    
    UsingActive Markets for
    
    
    Significant OtherIdentical Assets
    
    
    Observable InputsTotal
    
    
    (Level 1)
    
    
    (Level 2)Cash
    
    $
    1,860
    
    
    $
    1,860
    
    
    $
    U.S. Government securities (a)
    
    
    14,755
    
    
    
    
    
    
    
    14,755Common/collective trusts (b)
    
    
    80,062
    
    
    
    
    
    
    
    80,062Corporate debt (c)
    
    
    20,879
    
    
    
    
    
    
    
    20,879Corporate stock (d)
    
    
    22,051
    
    
    
    22,051
    
    
    
    Registered investment companies (e)
    
    
    34,036
    
    
    
    34,036
    
    
    
    Real estate investment trust (f)
    
    
    198
    
    
    
    198
    
    
    
    Credit default swaps and futures (g)
    
    
    394
    
    
    
    
    
    
    
    394Total
    
    $
    174,235
    
    
    $
    58,145
    
    
    $
    116,090
 
 (a)
    
    This category includes investments in U.S. Government bonds, government mortgage-backed
securities, index-linked government bonds, guaranteed commercial paper, short-term treasury
bills and notes. Fair value for these assets is determined using a bid evaluation process
of observable, market based inputs effective as of the last business day of the plan year. F-70




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##### Table of Contents



(b)
    
    This category includes investments in two common/collective funds of which 89% is
invested in stocks comprising the Russell 1000 equity index and the remaining 11% is
comprised of short-term investments at December 31, 2010. Fair value for these assets is
determined based on the contract value, which is based on the provisions of the underlying
guaranteed investment contracts.(c)
    
    This category includes investments in corporate bonds, commercial mortgage-backed and
asset-backed securities, collateralized mortgage obligations and commercial paper. Fair
value for these assets is determined using a bid evaluation process of observable, market
based inputs effective as of the last business day of the plan year.(d)
    
    This category includes investments in small cap stocks of U. S. issuers across diverse
industries. Fair value for these assets is determined using quoted market prices on a
recognized securities exchange at the last reported trading price on the last business day
of the plan year.(e)
    
    This category is comprised of two mutual funds, one fund that invests in value-oriented
international stocks across diverse industries and one that invests in intermediate term
fixed income instruments such as treasuries and high grade corporate bonds. Fair value for
these assets is determined using quoted market prices on a recognized securities exchange
at the last reported trading price on the last business day of the plan year.(f)
    
    This category is comprised of a healthcare real estate investment trust. Fair value for
these assets is determined based on traded market prices.(g)
    
    This category includes investments in a combination of 5, 10 and 30 year U.S. Treasury
notes and bond futures and credit default swaps. Fair value for these assets is determined
based on either settlement prices, prices on a recognized securities exchange or a mid/bid
evaluation process using observable, market based inputs.(h)
    
    This category includes investments in passively managed funds composed of
international stocks across diverse industries. Fair value for these assets is calculated
based upon a compilation of observable market information.  Master TrustPlan Assets at
    
    
    Asset AllocationDecember 31, 2010
    
    
    TargetEquity securities
    
    
    62
    %
    
    
    65
    %Debt securities
    
    
    38
    %
    
    
    35
    %Total
    
    
    100
    %
    
    
    100
    %
  Master TrustPlan Assets at
    
    
    Asset AllocationDecember 31, 2009
    
    
    TargetEquity securities
    
    
    60
    %
    
    
    65
    %Debt securities
    
    
    40
    %
    
    
    35
    %Total
    
    
    100
    %
    
    
    100
    %
 F-71




---



##### Table of Contents



F-72




---



##### Table of Contents



Estimated Future Benefit Payments
  Pension Plans
    
    
    Postretirement Plans2011
    
    $
    26,048
    
    
    $
    1,0662012
    
    
    18,219
    
    
    
    2013
    
    
    18,382
    
    
    
    2014
    
    
    18,094
    
    
    
    2015
    
    
    17,981
    
    
    
    Years 2016-2020
    
    
    91,812
    
    
    
    
  Subsequent Events
  11. Commitments
  2011
    
    $
    20,0072012
    
    
    15,1942013
    
    
    8,9182014
    
    
    8,5402015
    
    
    3,461Thereafter
    
    
    109Total
    
    $
    56,229
  F-73




---



##### Table of Contents



12. Legal Proceedings
   13. Business Segments
  14. Dex One Corporation (Parent Company) Financial Statements
  F-74




---



##### Table of Contents



Condensed Parent Company Balance Sheets
 Successor
    
    
    PredecessorCompany
    
    
    CompanyDecember 31,
    
    
    December 31,2010
    
    
    2009AssetsCash and cash equivalents
    
    $
    2,134
    
    
    $
    5,007Intercompany, net
    
    
    
    
    
    
    109,102Intercompany loan receivable
    
    
    4,900
    
    
    
    5,000Prepaid and other current assets
    
    
    282
    
    
    
    8,055Total current assets
    
    
    7,316
    
    
    
    127,164Investment in subsidiaries
    
    
    900,409
    
    
    
    Fixed assets and computer software, net
    
    
    
    
    
    
    5,990Deferred income taxes, net
    
    
    
    
    
    
    71,878Intercompany note receivable
    
    
    
    
    
    
    300,000Total assets
    
    $
    907,725
    
    
    $
    505,032Liabilities and Shareholders Equity (Deficit)Accounts payable, accrued liabilities and other
    
    $
    46
    
    
    $
    80,061Accrued interest
    
    
    9,198
    
    
    
    Intercompany, net
    
    
    15,460
    
    
    
    Short-term deferred income taxes, net
    
    
    2,116
    
    
    
    Total current liabilities not subject to compromise
    
    
    26,820
    
    
    
    80,061Long-term debt
    
    
    300,000
    
    
    
    Deferred income taxes, net
    
    
    54,989
    
    
    
    Deficit in subsidiaries
    
    
    
    
    
    
    3,950,031Other non-current liabilities
    
    
    
    
    
    
    8,232Total liabilities not subject to compromise
    
    
    381,809
    
    
    
    4,038,324Liabilities subject to compromise
    
    
    
    
    
    
    3,385,756Shareholders equity (deficit)
    
    
    525,916
    
    
    
    (6,919,048
    )Total liabilities and shareholders equity (deficit)
    
    $
    907,725
    
    
    $
    505,032
 F-75




---



##### Table of Contents



Condensed Parent Company Statements of Operations
 Successor Company
    
    
    Predecessor CompanyEleven Months Ended
    
    
    One Month Ended
    
    
    Year Ended
    
    
    Year EndedDecember 31, 2010
    
    
    January 31, 2010
    
    
    December 31, 2009
    
    
    December 31, 2008Expenses
    
    $
    18,019
    
    
    $
    891
    
    
    $
    21,631
    
    
    $
    18,490Partnership and equity income
(loss)
    
    
    (1,492,376
    )
    
    
    643,971
    
    
    
    (7,155,397
    )
    
    
    (3,521,790
    )Operating income (loss)
    
    
    (1,510,395
    )
    
    
    643,080
    
    
    
    (7,177,028
    )
    
    
    (3,540,280
    )Interest expense, net
    
    
    (33,312
    )
    
    
    
    
    
    
    (106,034
    )
    
    
    (297,119
    )Gain on debt transactions, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    247,297Income (loss) before reorganization
items, net and income taxes
    
    
    (1,543,707
    )
    
    
    643,080
    
    
    
    (7,283,062
    )
    
    
    (3,590,102
    )Reorganization items, net
    
    
    
    
    
    
    7,194,470
    
    
    
    (98,751
    )
    
    
    Income (loss) before income taxes
    
    
    (1,543,707
    )
    
    
    7,837,550
    
    
    
    (7,381,813
    )
    
    
    (3,590,102
    )(Provision) benefit for income
taxes
    
    
    620,115
    
    
    
    (917,541
    )
    
    
    928,520
    
    
    
    1,291,775Net income (loss)
    
    $
    (923,592
    )
    
    $
    6,920,009
    
    
    $
    (6,453,293
    )
    
    $
    (2,298,327
    )
 Condensed Parent Company Statements of Cash Flows
 Successor Company
    
    
    Predecessor CompanyEleven Months Ended
    
    
    One Month Ended
    
    
    Year Ended
    
    
    Year EndedDecember 31, 2010
    
    
    January 31, 2010
    
    
    December 31, 2009
    
    
    December 31, 2008Cash flow used in operating
activities
    
    $
    (23,422
    )
    
    $
    (531
    )
    
    $
    (118,814
    )
    
    $
    (306,471
    )Cash flow from investing activities:Additions to fixed assets and
computer software, net
    
    
    
    
    
    
    (643
    )
    
    
    (1,705
    )
    
    
    (1,391
    )Intercompany loan
    
    
    (4,900
    )
    
    
    
    
    
    
    (5,000
    )
    
    
    Equity investment disposition
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,318Net cash (used in) provided by
investing activities
    
    
    (4,900
    )
    
    
    (643
    )
    
    
    (6,705
    )
    
    
    2,927Cash flow from financing activities:Note repurchases and related
costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (92,130
    )Proceeds from employee stock option exercises
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    95Debt issuance and other
financing costs
    
    
    
    
    
    
    (370
    )
    
    
    
    
    
    
    (433
    )(Decrease) increase in checks not
yet presented for payment
    
    
    (1,025
    )
    
    
    (182
    )
    
    
    (22
    )
    
    
    1,131Repurchase of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,112
    )Excess tax benefits from the exercise of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,059
    )Dividends from subsidiaries
    
    
    28,200
    
    
    
    
    
    
    
    129,600
    
    
    
    384,100Net cash provided by (used in)
financing activities
    
    
    27,175
    
    
    
    (552
    )
    
    
    129,578
    
    
    
    285,592Change in cash
    
    
    (1,147
    )
    
    
    (1,726
    )
    
    
    4,059
    
    
    
    (17,952
    )Cash at beginning of period
    
    
    3,281
    
    
    
    5,007
    
    
    
    948
    
    
    
    18,900Cash at end of period
    
    $
    2,134
    
    
    $
    3,281
    
    
    $
    5,007
    
    
    $
    948
 15. Capital Stock
  F-76




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##### Table of Contents



16. Valuation and Qualifying Accounts
 Net
    
    
    Net ChangesAdditions
    
    
    to OtherBalance at
    
    
    Charged To
    
    
    Balance
    
    
    Write-offs
    
    
    Balance atBeginning
    
    
    Revenue
    
    
    Sheet
    
    
    and Other
    
    
    End ofof Period
    
    
    And Expense
    
    
    Accounts
    
    
    Deductions
    
    
    PeriodAllowance for Doubtful
AccountsSuccessor Company:For the eleven months ended
December 31, 2010
    
    $
    
    
    
    
    16,364
    
    
    
    119,230
    
    
    
    (59,703
    )
    
    $
    75,891Predecessor Company:For the one month ended
January 31, 2010
    
    $
    54,612
    
    
    
    7,822
    
    
    
    (54,591
    )
    
    
    (7,843
    )
    
    $
    For the year ended
December 31, 2009
    
    $
    48,727
    
    
    
    146,553
    
    
    
    
    
    
    
    (140,668
    )
    
    $
    54,612For the year ended
December 31, 2008
    
    $
    35,959
    
    
    
    138,353
    
    
    
    
    
    
    
    (125,585
    )
    
    $
    48,727Deferred Income Tax Asset
Valuation AllowanceSuccessor Company:For the eleven months ended
December 31, 2010
    
    $
    7,876
    
    
    
    89,766
    
    
    
    
    
    
    
    
    
    
    $
    97,642Predecessor Company:For the one month ended
January 31, 2010
    
    $
    1,531,905
    
    
    
    
    
    
    
    
    
    
    
    (1,524,029
    )
    
    $
    7,876For the year ended
December 31, 2009
    
    $
    9,252
    
    
    
    1,522,653
    
    
    
    
    
    
    
    
    
    
    $
    1,531,905For the year ended
December 31, 2008
    
    $
    13,726
    
    
    
    
    
    
    
    
    
    
    
    (4,474
    )
    
    $
    9,252
 17. Quarterly Information
 PredecessorCompany
    
    

Successor
Company(Audited)
    
    

(Unaudited)One Month
    
    
    Two Months
    
    
    Three Months
    
    
    Three Months
    
    
    Three MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    Ended
    
    
    EndedJanuary 31, 2010
    
    
    March 31, 2010
    
    
    June 30, 2010
    
    
    September 30, 2010
    
    
    December 31, 2010Net revenues
    
    $
    160,372
    
    
    $
    53,145
    
    
    $
    160,891
    
    
    $
    259,231
    
    
    $
    357,620Impairment charges (1)
    
    
    
    
    
    
    
    
    
    
    769,674
    
    
    
    389,592
    
    
    
    Operating income (loss)
    
    
    64,074
    
    
    
    (95,370
    )
    
    
    (853,544
    )
    
    
    (391,348
    )
    
    
    46,006Reorganization items, net
(2)
    
    
    7,793,132
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (Provision) benefit for income
taxes
    
    
    (917,541
    )
    
    
    401,522
    
    
    
    157,044
    
    
    
    68,241
    
    
    
    (6,692
    )Net income (loss)
    
    $
    6,920,009
    
    
    $
    257,218
    
    
    $
    (769,923
    )
    
    $
    (390,643
    )
    
    $
    (20,244
    )Basic earnings (loss) per share
    
    $
    100.3
    
    
    $
    5.14
    
    
    $
    (15.39
    )
    
    $
    (7.81
    )
    
    $
    (0.41
    )Diluted earnings (loss) per share
    
    $
    100.2
    
    
    $
    5.14
    
    
    $
    (15.39
    )
    
    $
    (7.81
    )
    
    $
    (0.41
    )
 F- 77




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##### Table of Contents



Predecessor Company (Unaudited)Three Months EndedMarch 31
    
    
    June 30
    
    
    September 30
    
    
    December 312009Net revenues
    
    $
    601,986
    
    
    $
    565,628
    
    
    $
    533,990
    
    
    $
    500,843Impairment charges (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,337,775
    )Operating income (loss)
    
    
    163,644
    
    
    
    143,858
    
    
    
    116,506
    
    
    
    (7,221,511
    )Reorganization items, net (2)
    
    
    
    
    
    
    (70,781
    )
    
    
    (7,107
    )
    
    
    (16,880
    )(Provision) benefit for income taxes
    
    
    (366,019
    )
    
    
    12,910
    
    
    
    (21,925
    )
    
    
    1,303,554Net income (loss)
    
    $
    (401,210
    )
    
    $
    (75,482
    )
    
    $
    23,930
    
    
    $
    (6,000,531
    )Basic and diluted earnings (loss) per share
    
    $
    (5.83
    )
    
    $
    (1.10
    )
    
    $
    0.35
    
    
    $
    (87.05
    )
 
 (1)
    
    We recognized goodwill impairment charges of $752.3 million and $385.3
million during the second and third quarters of 2010. Non-goodwill intangible asset impairment
charges of $17.3 million and $4.3 million were recognized during the second and third quarters
of 2010 associated with trade names and trademarks, technology, local customer relationships and
other from our former Business.com reporting unit. We recognized a non-goodwill intangible asset
impairment charge of $7.3 billion during the fourth quarter of 2009 associated with directory
services agreements, advertiser relationships, third party contracts and network platforms
acquired in prior acquisitions. See Note 2, Summary of Significant Accounting Policies 
Identifiable Intangible Assets and Goodwill for further discussion.(2)
    
    Reorganization items, net represent charges that are directly associated
with the process of reorganizing the business under Chapter 11. See Note 3, Fresh Start
Accounting and Note 4, Reorganization Items, Net and Liabilities Subject to Compromise for
further discussion. F- 78




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##### Table of Contents



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
  
 ITEM 9A. CONTROLS AND PROCEDURES.
 Evaluation of Disclosure Controls and Procedures
  Managements Annual Report on Internal Control Over Financial Reporting
     Changes in Internal Controls
  
 ITEM 9B. OTHER INFORMATION.
  78




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
  
 ITEM 11. EXECUTIVE COMPENSATION.
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS.
  
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
  
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
  79




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
 (a)(1) and (2)  List of financial statements and financial statement schedules
  Reports of Independent Registered Public Accounting FirmConsolidated Balance Sheets as of December 31, 2010 (Successor Company) and
December 31, 2009 (Predecessor Company)Consolidated Statements of Operations and Comprehensive Income (Loss) for
the eleven months ended December 31, 2010 (Successor Company), the one month
ended January 31, 2010 and each of the years in the two year period ended
December 31, 2009 (Predecessor Company)Consolidated Statements of Cash Flows for the eleven months ended December 31, 2010
(Successor Company), the one month ended January 31, 2010 and each of the years in the
two year period ended December 31, 2009 (Predecessor Company)Consolidated Statements of Changes in Shareholders Equity (Deficit) for the eleven months
ended December 31, 2010 (Successor Company), the one month ended January 31, 2010
and each of the years in the two year period ended December 31, 2009 (Predecessor Company)Notes to Consolidated Financial StatementsFinancial statement schedules for the Company and the Predecessor Company have not been
prepared because the required information has been included in the Companys and the
Predecessor Companys consolidated financial statements included in Item 8 of this Annual
Report.
 80




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##### Table of Contents



(b) Exhibits:
 Exhibit No.
    
    Document2.1
    
    Joint Plan of Reorganization, as confirmed by the Bankruptcy Court
on January 12, 2010. (incorporated by reference to Exhibit 2.1 to
the Companys Current Report on Form 8-K filed with the Securities
and Exchange Commission on January 15, 2010, Commission File No.
001-07155).3.1
    
    Amended and Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the Companys Current
Report on Form 8-K filed with the Securities and Exchange
Commission on February 4, 2010, Commission File No. 001-07155).3.2
    
    Sixth Amended and Restated Bylaws of the Company (incorporated by
reference to Exhibit 3.2 to the Companys Current Report on Form
8-K filed with the Securities and Exchange Commission on February
4, 2010, Commission File No. 001-07155).4.1
    
    Indenture, dated as of January 29, 2010, between the Company and
The Bank of New York Mellon, as Trustee, with respect to the
Companys 12%/14% Senior Subordinated Notes due 2017 (incorporated
by reference to Exhibit 4.1 to the Companys Current Report on
Form 8-K filed with the Securities and Exchange Commission on
February 4, 2010, Commission File No. 001-07155).4.2
    
    Form of 12%/14% Senior Subordinated Notes due 2017 (attached as
Exhibit A to Exhibit 4.1).4.3
    
    Registration Rights Agreement, dated as of January 29, 2010, among
the Company and Franklin Advisers, Inc. and certain of its
affiliates (incorporated by reference to Exhibit 4.3 to the
Companys Current Report on Form 8-K filed with the Securities and
Exchange Commission on February 4, 2010, Commission File No.
001-07155).10.1
    
    Non-Competition Agreement, dated as of January 3, 2003, by and
among the Company, R.H. Donnelley Publishing & Advertising, Inc.
(f/k/a Sprint Publishing & Advertising, Inc.), CenDon, L.L.C.,
R.H. Donnelley Directory Company (f/k/a Centel Directory Company),
Sprint Corporation and the Sprint Local Telecommunications
Division (incorporated by reference to Exhibit 10.4 to the
Companys Current Report on Form 8-K, filed with the Securities
and Exchange Commission on January 17, 2003, Commission File No.
001-07155).10.2
    
    Letter from Sprint Nextel Corporation, dated as of May 16, 2006,
acknowledging certain matters with respect to the Non-Competition
Agreement described above as Exhibit 10.1 (incorporated by
reference to Exhibit 10.12 to the Companys Current Report on Form
8-K, filed with the Securities and Exchange Commission on May 19,
2006, Commission File No. 001-07155).10.3
    
    Directory Services License Agreement, dated as of May 16, 2006, by
and among R.H. Donnelley Publishing & Advertising, Inc., CenDon,
L.L.C., R.H. Donnelley Directory Company, Embarq Corporation,
Embarq Directory Trademark Company, LLC and certain subsidiaries
of Embarq Corporation formerly constituting Sprint Local
Telecommunications Division (incorporated by reference to Exhibit
10.6 to the Companys Current Report on Form 8-K, filed with the
Securities and Exchange Commission on May 19, 2006).10.4
    
    Trademark License Agreement, dated as of May 16, 2006, by and
among R.H. Donnelley Publishing & Advertising, Inc., R.H.
Donnelley Directory Company and Embarq Directory Trademark
Company, LLC (incorporated by reference to Exhibit 10.7 to the
Companys Current Report on Form 8-K, filed with the Securities
and Exchange Commission on May 19, 2006).
 81




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##### Table of Contents



Exhibit No.
    
    Document10.5
    
    Publisher Trademark License Agreement, dated as of May 16, 2006,
by and among R.H. Donnelley Publishing & Advertising, Inc.,
CenDon, L.L.C., R.H. Donnelley Directory Company and Embarq
Corporation (incorporated by reference to Exhibit 10.8 to the
Companys Current Report on Form 8-K, filed with the Securities
and Exchange Commission on May 19, 2006).10.6
    
    Non-Competition Agreement, dated as of May 16, 2006, by and among
the Company, R.H. Donnelley Publishing & Advertising, Inc.,
CenDon, L.L.C., R.H. Donnelley Directory Company, Embarq
Corporation and certain subsidiaries of Embarq Corporation
formerly constituting Sprint Local Telecommunications Division
(incorporated by reference to Exhibit 10.9 to the Companys
Current Report on Form 8-K, filed with the Securities and Exchange
Commission on May 19, 2006).10.7
    
    Subscriber Listings Agreement, dated as of May 16, 2006, by and
among R.H. Donnelley Publishing & Advertising, Inc., CenDon,
L.L.C., R.H. Donnelley Directory Company, Embarq Corporation and
certain subsidiaries of Embarq Corporation formerly constituting
Sprint Local Telecommunications Division (incorporated by
reference to Exhibit 10.10 to the Companys Current Report on Form
8-K, filed with the Securities and Exchange Commission on May 19,
2006).10.8
    
    Standstill Agreement, dated as of May 16, 2006, by and between
R.H. Donnelley Publishing & Advertising, Inc. and Embarq
Corporation (incorporated by reference to Exhibit 10.11 to the
Companys Current Report on Form 8-K, filed with the Securities
and Exchange Commission on May 19, 2006).10.9
    
    Directory Services License Agreement, dated as of September 1,
2004, among the Company, R.H. Donnelley Publishing & Advertising
of Illinois Partnership (f/k/a The APIL Partners Partnership),
DonTech II Partnership, Ameritech Corporation, SBC Directory
Operations, Inc. and SBC Knowledge Ventures, L.P. (incorporated by
reference to Exhibit 10.1 to the Companys Current Report on Form
8-K, filed with the Securities and Exchange Commission on
September 3, 2004, Commission File No. 001-07155).10.10
    
    Non-Competition Agreement, dated as of September 1, 2004, by and
between the Company and SBC Communications Inc. (incorporated by
reference to Exhibit 10.2 to the Companys Current Report on Form
8-K, filed with the Securities and Exchange Commission on
September 3, 2004, Commission File No. 001-07155).10.11
    
    Ameritech Directory Publishing Listing License Agreement, dated as
of September 1, 2004, among R.H. Donnelley Publishing &
Advertising of Illinois Partnership (f/k/a The APIL Partners
Partnership), DonTech II Partnership and Ameritech Services Inc.
(incorporated by reference to Exhibit 10.4 to the Companys
Current Report on Form 8-K, filed with the Securities and Exchange
Commission on September 3, 2004, Commission File No. 001-07155).10.12
    
    Publishing Agreement, dated November 8, 2002, as amended, by and
among Dex Holding LLC., Dex Media East LLC (f/k/a SGN LLC), Dex
Media West LLC (f/k/a/ GPP LLC) and Qwest Corporation
(incorporated by reference to Exhibit 10.19 to Dex Media, Inc.s
Registration Statement on Form S-4, filed with the Securities and
Exchange Commission on April 14, 2004, Commission File No.
333-114472).
 82




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##### Table of Contents



Exhibit No.
    
    Document10.13
    
    Non-Competition and Non-Solicitation Agreement, dated November 8,
2002, by and between Dex Media East LLC (f/k/a SGN LLC), Dex Media
West LLC (f/k/a GPP LLC), Dex Holdings LLC and Qwest Corporation,
Qwest Communications International Inc. and Qwest Dex, Inc.
(incorporated by reference to Exhibit 10.10 to Dex Media, Inc.s
Registration Statement on Form S-4, filed with the Securities and
Exchange Commission on April 14, 2004, Commission File No.
333-114472).10.14
    
    Third Amended and Restated Credit Agreement, dated as of January
29, 2010, by and among the Company, R.H. Donnelley Inc., as
borrower, the lenders parties thereto and Deutsche Bank Trust
Company Americas, as administrative agent and as collateral agent
(incorporated by reference to Exhibit 10.1 to the Companys
Current Report on Form 8-K filed with the Securities and Exchange
Commission on February 4, 2010, Commission File No. 001-07155).10.15
    
    Credit Agreement, dated as of June 6, 2008, as amended and
restated as of January 29, 2010, by and among the Company, Dex
Media, Inc., Dex Media West, Inc., Dex Media West LLC, as
borrower, the lenders parties thereto and JPMorgan Chase Bank,
N.A., as administrative agent and as collateral agent
(incorporated by reference to Exhibit 10.2 to the Companys
Current Report on Form 8-K filed with the Securities and Exchange
Commission on February 4, 2010, Commission File No. 001-07155).10.16
    
    Credit Agreement, dated as of October 24, 2007, as amended and
restated as of January 29, 2010, by and among the Company, Dex
Media, Inc., Dex Media East, Inc., Dex Media East LLC, as
borrower, the lenders parties thereto and JPMorgan Chase Bank,
N.A., as administrative agent and as collateral agent
(incorporated by reference to Exhibit 10.3 to the Companys
Current Report on Form 8-K filed with the Securities and Exchange
Commission on February 4, 2010, Commission File No. 001-07155).10.17^*
    
    Board of Director Compensation Program (as modified and in effect
as of June 24, 2010).10.18^*
    
    Dex One Pension Benefit Equalization Plan, as Amended and Restated
as of January 1, 2011.10.19 ^*
    
    Dex One Corporation Restoration Plan, as Amended and Restated as
of January 1, 2011.10.20^
    
    R.H. Donnelley Corporation 2005 Stock Award and Incentive Plan, as Amended and Restated as of December 31, 2008 (incorporated by
reference to Exhibit 10.3 to the Companys Current Report on Form
8-K, filed with the Securities and Exchange Commission on January
7, 2009, Commission File No. 001-07155).10.21^
    
    Dex One Corporation 2009 Long-Term Incentive Program for Executive
Officers (as adopted and effective as of March 9, 2009
(incorporated by reference to Exhibit 10.3 to the Companys
Quarterly Report on Form 10-Q for the quarter ended March 31, 2009
filed with the Securities and Exchange Commission on May 8, 2009,
Commission File No. 001-07155).10.22^
    
    Dex One Corporation Equity Incentive Plan adopted and effective as
of January 29, 2010 (incorporated by reference to Exhibit 10.4 to
the Companys Current Report on Form 8-K filed with the Securities
and Exchange Commission on February 4, 2010, Commission File No.
001-07155).10.23^
    
    Form of Stock Appreciation Rights Agreement for Executive Officers
who are Senior Vice Presidents and Above for the March 2010 SAR
Awards (incorporated by reference to Exhibit 10.25 to the
Companys Annual Report on Form 10-K for the year ended December
31, 2009 filed with the Securities and Exchange Commission on
March 12, 2010, Commission File No. 001-07155).
 83




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##### Table of Contents



Exhibit No.
    
    Document10.24^
    
    Form of Stock Appreciation Right Agreement for Employees other
than Executive Officers who are Senior Vice Presidents and Above
for the March 2010 SAR Awards (incorporated by reference to
Exhibit 10.26 to the Companys Annual Report on Form 10-K for the
year ended December 31, 2009 filed with the Securities and
Exchange Commission on March 12, 2010, Commission File No.
001-07155).10.25^
    
    Employment Agreement, dated as of September 6, 2010, by and
between the Company and Alfred T. Mockett (incorporated by
reference to Exhibit 10.1 to the Companys Current Report on Form
8-K, filed with the Securities and Exchange Commission on
September 8, 2010, Commission File No. 001-07155).10.26^
    
    Stand-Alone Nonqualified Stock Option Agreement, dated as of
September 6, 2010, by and between the Company and Alfred T.
Mockett (attached as Exhibit A to Exhibit 10.25).10.27^
    
    Form of Stand-Alone Restricted Stock Award Agreement by and
between the Company and Alfred T. Mockett (attached as Exhibit B
to Exhibit 10.25).10.28^
    
    Stand-Alone Premium Nonqualified Stock Option Agreement ($15 Exercise Price),
dated as of September 6, 2010, by and between the Company and Alfred T. Mockett (attached as Exhibit C to Exhibit
10.25).10.29^
    
    Stand-Alone Premium Nonqualified Stock Option Agreement ($23
Exercise Price), dated as of September 6, 2010, by and between the
Company and Alfred T. Mockett (attached as Exhibit D to Exhibit
10.25).10.30^
    
    Stand-Alone Premium Nonqualified Stock Option Agreement ($32
Exercise Price), dated as of September 6, 2010, by and between the
Company and Alfred T. Mockett (attached as Exhibit E to Exhibit
10.25).10.31^
    
    Amended and Restated Employment Agreement, dated as of December
31, 2008, by and between the Company and Steven M. Blondy
(incorporated by reference to Exhibit 10.2 to the Companys
Current Report on Form 8-K, filed with the Securities and Exchange
Commission on January 7, 2009, Commission File No. 001-07155).10.32^
    
    Amendment No. 1 to Employment Agreement, dated as of March 9,
2009, between the Company and Steven M. Blondy (incorporated by
reference to Exhibit 10.2 to the Companys Quarterly Report on
Form 10-Q for the quarter ended March 31, 2009 filed with the
Securities and Exchange Commission on May 5, 2009, Commission File
No. 001-07155).10.33^
    
    Amendment, dated as of January 29, 2010 to Amended and Restated
Employment Agreement, effective as of December 31, 2008, between
the Company and Steven M. Blondy (incorporated by reference to
Exhibit 10.6 to the Companys Current Report on Form 8-K filed
with the Securities and Exchange Commission on February 4, 2010,
Commission File No. 001-07155).10.34^*
    
    Stand-Alone Restricted Stock Award Agreement, dated as of January
18, 2011, between the Company and Atish Banerjea.10.35^*
    
    Stand-Alone Nonqualified Stock Option Agreement, dated as of
January 18, 2011, between the Company and Atish Banerjea.10.36^*
    
    Dex One Corporation Severance Plan  Senior Vice President,
effective as amended October 14, 2010.
 84




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##### Table of Contents



Exhibit No.
    
    Document10.37^
    
    Separation Agreement, dated as of May 20, 2010, by and between the
Company, R.H. Donnelley Inc., Dex Media West, Inc. Dex media East,
Inc. and David C. Swanson (incorporated by reference to Exhibit
10.1 to the Companys Current Report on Form 8-K filed with the
Securities and Exchange Commission on May 21, 2010, Commission
File No. 001-07155).10.38^
    
    Form of Indemnification Agreement for Directors of the Company
(incorporated by reference to Exhibit 10.9 to the Companys
Current Report on Form 8-K filed with the Securities and Exchange
Commission on February 4, 2010, Commission File No. 001-07155).21.1*
    
    Subsidiaries of the Registrant.23.1*
    
    Consent of KPMG LLP, Independent Registered Public Accounting Firm.31.1*
    
    Certification of Annual Report on Form 10-K for the period ended
December 31, 2010 by Alfred T. Mockett, Chief Executive Officer
and President of the Company under Section 302 of the
Sarbanes-Oxley Act.31.2*
    
    Certification of Annual Report on Form 10-K for the period ended
December 31, 2010 by Steven M. Blondy, Executive Vice President
and Chief Financial Officer of the Company under Section 302 of
the Sarbanes-Oxley Act.32.1*
    
    Certification of Annual Report on Form 10-K for the period ended
December 31, 2010 under Section 906 of the Sarbanes-Oxley Act by
Alfred T. Mockett, Chief Executive Officer and President, and
Steven M. Blondy, Executive Vice President and Chief Financial
Officer, for the Company.99.1
    
    Order Confirming Joint Plan of Reorganization, as entered by the
Bankruptcy Court on January 12, 2010 (incorporated by reference to
Exhibit 99.1 to the Companys Current Report on Form 8-K filed
with the Securities and Exchange Commission on January 15, 2010,
Commission File No. 001-07155).
 
 *
    
    Filed herewith.^
    
    Management contract or compensatory plan. 85




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##### Table of Contents



SIGNATURES
 
 Dex One CorporationBy:
    /s/ Alfred T. MockettAlfred T. Mockett, Chief Executive Officer 
 And President  /s/ Alfred T. Mockett
    
    Chief Executive Officer and President
(Principal Executive Officer)
    
    March 4, 2011(Alfred T. Mockett)/s/ Steven M. Blondy
    
    Executive Vice President and
    
    March 4, 2011(Steven M. Blondy)
    
    Chief Financial Officer
(Principal Financial Officer)/s/ Sylvester J. Johnson
    
    Vice President  Corporate
    
    March 4, 2011(Sylvester J. Johnson)
    
    Controller and Chief
Accounting Officer 
(Principal Accounting Officer)/s/ Jonathan B. Bulkeley
    
    Director
    
    March 4, 2011(Jonathan B. Bulkeley)/s/ Eugene I Davis
    
    Director
    
    March 4, 2011(Eugene I. Davis)/s/ W. Kirk Liddell
    
    Director
    
    March 4, 2011(W. Kirk Liddell)/s/ Richard L. Kuersteiner
    
    Director
    
    March 4, 2011(Richard L. Kuersteiner)/s/ Mark A. McEachen
    
    Director
    
    March 4, 2011(Mark A. McEachen)/s/ Alan F. Schultz
    
    Director
    
    March 4, 2011(Alan F. Schultz)
 86




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##### Table of Contents



Exhibit Index
 Exhibit No.
    
    Document10.17^*
    
    Board of Director Compensation Program (as modified and
in effect as of June 24, 2010).10.18^*
    
    Dex One Pension Benefit Equalization Plan, as Amended and Restated
as of January 1, 2011.10.19 ^*
    
    Dex One Corporation Restoration Plan, as Amended and Restated as
of January 1, 2011.10.34^*
    
    Stand-Alone Restricted Stock Award Agreement, dated as of January
18, 2011, between the Company and Atish Banerjea.10.35^*
    
    Stand-Alone Nonqualified Stock Option Agreement, dated as of
January 18, 2011, between the Company and Atish Banerjea.10.36^*
    
    Dex One Corporation Severance Plan  Senior Vice President,
effective as amended October 14, 2010.21.1*
    
    Subsidiaries of the Registrant.23.1*
    
    Consent of KPMG LLP, Independent Registered Public Accounting Firm.31.1*
    
    Certification of Annual Report on Form 10-K for the period ended
December 31, 2010 by Alfred T. Mockett, Chief Executive Officer
and President of the Company under Section 302 of the
Sarbanes-Oxley Act.31.2*
    
    Certification of Annual Report on Form 10-K for the period ended
December 31, 2010 by Steven M. Blondy, Executive Vice President
and Chief Financial Officer of the Company under Section 302 of
the Sarbanes-Oxley Act.32.1*
    
    Certification of Annual Report on Form 10-K for the period ended
December 31, 2010 under Section 906 of the Sarbanes-Oxley Act by
Alfred T. Mockett, Chief Executive Officer and President, and
Steven M. Blondy, Executive Vice President and Chief Financial
Officer, for the Company.
 
 *
    
    Filed herewith.^
    
    Management contract or compensatory plan. 87