##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-Q

(Mark one)

|    |  |                                                                                        
|--- |  | ---------------------------------------------------------------------------------------
|(X) |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended   September 30, 2001

OR

|      |  |                                                                                         
|----- |  | ----------------------------------------------------------------------------------------
|(   ) |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from  to

Commission file number 001-07155

R.H. DONNELLEY CORPORATION
(Exact name of registrant as specified in its charter)

|                                                                                |  |                                                
|------------------------------------------------------------------------------- |  | -----------------------------------------------
|Delaware
(State of Incorporation)                                               |  | 13-2740040
(I.R.S. Employer Identification No.)
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |  |                                                
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|One Manhattanville Road, Purchase N.Y.
(Address of principal executive offices) |  | 10577
(Zip Code)                               

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.          Yes X   No

Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of the latest practicable date:

|                                     |  |                                       |            | 
|------------------------------------ |  | ------------------------------------- | ---------- | 
|Title of Class                       |  | Shares Outstanding at October 9, 2001
|                                     |  |                                      
|Common Stock, par value $1 per share |  |                                       | 29,555,904 | 

Commission file number 333-59287

R.H. DONNELLEY INC. *
(Exact name of registrant as specified in its charter)

|                                                                                |  |                                                
|------------------------------------------------------------------------------- |  | -----------------------------------------------
|Delaware
(State of Incorporation)                                               |  | 36-2467635
(I.R.S. Employer Identification No.)
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |  |                                                
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|One Manhattanville Road, Purchase N.Y.
(Address of principal executive offices) |  | 10577
(Zip Code)                               

Registrants telephone number, including area code   (914) 933-6400

*     R.H. Donnelley Inc. is a wholly owned subsidiary of R.H. Donnelley
Corporation. R.H. Donnelley Inc. became subject to the filing requirements of
Section 15(d) on October 1, 1998 in connection with the public offer and sale
of its 9 1/8% Senior Subordinated Notes. As of October 9, 2001, 100 shares of
R.H. Donnelley Inc. common stock, no par value, were outstanding.





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TABLE OF CONTENTS



|           |                                                                                               |  |  |  |  |  |  | 
|---------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|           | Consolidated Statements of Operations                                                        
|           | Consolidated Balance Sheets                                                                  
|           | Consolidated Statements of Cash Flows                                                        
|           | Notes to Consolidated Financial Statements                                                   
|           | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|           | PART II. OTHER INFORMATION                                                                   
|           | Item 1. Legal Proceedings                                                                    
|           | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES



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##### Table of Contents



R.H. DONNELLEY CORPORATION

INDEX TO FORM 10-Q

|                                                                                              |                                                                                                       |  |      |   | 
|--------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------- |  | ---- | - | 
|                                                                                              |                                                                                                       |  | PAGE
|                                                                                              |                                                                                                       |  |     
|PART I. FINANCIAL INFORMATION                                                                 |                                                                                                       |  |      |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                       |  |      |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Item 1. Financial Statements                                                                  |                                                                                                       |  |      |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                       |  |      |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Consolidated Statements of Operations for the three and nine months ended
September 30, 2001 and 2000 |  |      | 3 | 
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                       |  |      |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Consolidated Balance Sheets at September 30, 2001 and December 31, 2000                               |  |      | 4 | 
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                       |  |      |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Consolidated Statements of Cash Flows for the nine months ended
September 30, 2001 and 2000           |  |      | 5 | 
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                       |  |      |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Notes to Consolidated Financial Statements                                                            |  |      | 6 | 
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                       |  |      |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations |                                                                                                       |  | 12   |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                       |  |      |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Item 3. Quantitative and Qualitative Disclosure About Market Risk                             |                                                                                                       |  | 21   |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                       |  |      |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|PART II. OTHER INFORMATION                                                                    |                                                                                                       |  |      |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                       |  |      |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Item 1. Legal Proceedings                                                                     |                                                                                                       |  | 22   |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                       |  |      |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Item 6. Exhibits and Reports on Form 8-K                                                      |                                                                                                       |  | 22   |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                       |  |      |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|SIGNATURES                                                                                    |                                                                                                       |  | 27   |  

2



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##### Table of Contents






R.H. Donnelley Corporation and Subsidiaries
Consolidated Statements of Operations (Unaudited)

|                                              |                                     |                                            |        |                    |        |                   |        |        |        |   |         |        |         |   |         |        |         | 
|--------------------------------------------- | ----------------------------------- | ------------------------------------------ | ------ | ------------------ | ------ | ----------------- | ------ | ------ | ------ | - | ------- | ------ | ------- | - | ------- | ------ | ------- | 
|                                              |                                     |                                            |        | Three months ended |        | Nine months ended
|                                              |                                     |                                            |        | September 30,      |        | September 30,    
|                                              |                                     |                                            |        |                    |        |                  
|(amounts in thousands, except per share data) |                                     | 2001                                       |        | 2000               |        | 2001              |        | 2000  
|                                              |                                     |                                            |        |                    |        |                   |        |       
|Net revenue                                   |                                     | $                                          | 22,165 |                    |        | $                 | 22,778 |        |        | $ | 61,039  |        |         | $ | 124,327 |       
|                                             
|                                             
|                                             
|                                             
|Expenses                                      |                                     |                                            |        |                    |        |                   |        |        |        |   |         |        |         |   |         |       
|                                             
|                                             
|                                             
|                                             
|                                              | Operating expenses                  |                                            |        | 11,556             |        |                   |        | 13,618 |        |   |         | 35,394 |         |   |         | 82,967 |        
|                                             
|                                             
|                                             
|                                             
|                                              | General and administrative expenses |                                            |        | 4,107              |        |                   |        | 4,760  |        |   |         | 13,267 |         |   |         | 19,145 |        
|                                             
|                                             
|                                             
|                                             
|                                              | Provision for doubtful accounts     |                                            |        | 893                |        |                   |        | 1,056  |        |   |         | 2,492  |         |   |         | 3,700  |        
|                                             
|                                             
|                                             
|                                             
|                                              | Depreciation and amortization       |                                            |        | 2,597              |        |                   |        | 3,281  |        |   |         | 8,237  |         |   |         | 12,054 |        
|                                              |                                     |                                            |        |                    |        |                   |        |        |        |   |         |        |         |   |         |       
|                                              |                                     | Total expenses                             |        |                    | 19,153 |                   |        |        | 22,715 |   |         |        | 59,390  |   |         |        | 117,866 | 
|                                             
|                                             
|                                             
|                                             
|Income from partnership and joint venture     |                                     |                                            | 44,304 |                    |        |                   | 45,578 |        |        |   | 112,539 |        |         |   | 116,962 |       
|                                              |                                     |                                            |        |                    |        |                   |        |        |        |   |         |        |         |   |         |       
|                                              |                                     | Operating income                           |        |                    | 47,316 |                   |        |        | 45,641 |   |         |        | 114,188 |   |         |        | 123,423 | 
|                                             
|                                             
|                                             
|                                             
|Interest income                               |                                     |                                            | 126    |                    |        |                   | 2,164  |        |        |   | 1,672   |        |         |   | 2,605   |       
|                                             
|                                             
|                                             
|                                             
|Interest expense                              |                                     |                                            | (6,342 | )                  |        |                   | (8,591 | )      |        |   | (20,642 | )      |         |   | (27,411 | )     
|                                             
|                                             
|                                             
|                                             
|Gain on disposition of businesses             |                                     |                                            |       |                    |        |                   |       |        |        |   |        |        |         |   | 89,435  |       
|                                              |                                     |                                            |        |                    |        |                   |        |        |        |   |         |        |         |   |         |       
|                                              |                                     | Income before taxes and extraordinary loss |        |                    | 41,100 |                   |        |        | 39,214 |   |         |        | 95,218  |   |         |        | 188,052 | 
|                                             
|                                             
|                                             
|                                             
|Provision for income taxes                    |                                     |                                            | 15,412 |                    |        |                   | 15,097 |        |        |   | 35,706  |        |         |   | 72,400  |       
|                                              |                                     |                                            |        |                    |        |                   |        |        |        |   |         |        |         |   |         |       
|                                              |                                     | Income before extraordinary loss           |        |                    | 25,688 |                   |        |        | 24,117 |   |         |        | 59,512  |   |         |        | 115,652 | 
|                                             
|                                             
|                                             
|                                             
|Extraordinary loss (net of tax)               |                                     |                                            |       |                    |        |                   | 704    |        |        |   | 348     |        |         |   | 704     |       
|                                              |                                     |                                            |        |                    |        |                   |        |        |        |   |         |        |         |   |         |       
|                                              |                                     | Net income                                 |        | $                  | 25,688 |                   |        | $      | 23,413 |   |         | $      | 59,164  |   |         | $      | 114,948 | 
|                                              |                                     |                                            |        |                    |        |                   |        |        |        |   |         |        |         |   |         |       
|Earnings per share before extraordinary loss  |                                     |                                            |        |                    |        |                   |        |        |        |   |         |        |         |   |         |       
|                                             
|                                             
|                                             
|                                             
|                                              |                                     | Basic                                      |        | $                  | 0.86   |                   |        | $      | 0.76   |   |         | $      | 1.95    |   |         | $      | 3.60    | 
|                                             
|                                             
|                                             
|                                             
|                                              |                                     | Diluted                                    |        | $                  | 0.83   |                   |        | $      | 0.74   |   |         | $      | 1.91    |   |         | $      | 3.53    | 
|                                             
|                                             
|                                             
|                                             
|Earnings per share after extraordinary loss   |                                     |                                            |        |                    |        |                   |        |        |        |   |         |        |         |   |         |       
|                                             
|                                             
|                                             
|                                             
|                                              |                                     | Basic                                      |        | $                  | 0.86   |                   |        | $      | 0.74   |   |         | $      | 1.94    |   |         | $      | 3.58    | 
|                                             
|                                             
|                                             
|                                             
|                                              |                                     | Diluted                                    |        | $                  | 0.83   |                   |        | $      | 0.72   |   |         | $      | 1.89    |   |         | $      | 3.51    | 
|                                             
|                                             
|                                             
|                                             
|Shares used in computing earnings per share   |                                     |                                            |        |                    |        |                   |        |        |        |   |         |        |         |   |         |       
|                                             
|                                             
|                                             
|                                             
|                                              |                                     | Basic                                      |        |                    | 29,979 |                   |        |        | 31,743 |   |         |        | 30,454  |   |         |        | 32,134  | 
|                                             
|                                             
|                                             
|                                             
|                                              |                                     | Diluted                                    |        |                    | 30,817 |                   |        |        | 32,547 |   |         |        | 31,230  |   |         |        | 32,749  | 

The accompanying notes are an integral part of the consolidated financial
statements.

3



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##### Table of Contents






R.H. Donnelley Corporation and Subsidiaries
Consolidated Balance Sheets (Unaudited)

|                                                                                                                    |                                             |                                       |          |         |               |   |              |          |   |  | 
|------------------------------------------------------------------------------------------------------------------- | ------------------------------------------- | ------------------------------------- | -------- | ------- | ------------- | - | ------------ | -------- | - |  | 
|                                                                                                                    |                                             |                                       |          |         | September 30, |   | December 31,
|(amounts in thousands, except share and per share data)                                                             |                                             | 2001                                  |          | 2000   
|                                                                                                                    |                                             |                                       |          |        
|                                                                                                                    |                                             |                                       | Assets   |         |               |   |              |          |   |  | 
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Current Assets                                                                                                      |                                             |                                       |          |         |               |   |              |         
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Cash and cash equivalents                                                                                           |                                             | $                                     | 17,970   |         |               | $ | 55,437       |         
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Accounts receivable                                                                                                 |                                             |                                       | 35,320   |         |               |   | 37,646       |         
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Less: sales allowance and allowance for doubtful accounts                                                           |                                             |                                       | (4,798   | )       |               |   | (7,355       | )       
|                                                                                                                    |                                             |                                       |          |         |               |   |              |         
|                                                                                                                    | Net accounts receivable                     |                                       |          | 30,522  |               |   |              | 30,291   |  
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Other current assets                                                                                                |                                             |                                       | 1,511    |         |               |   | 4,821        |         
|                                                                                                                    |                                             |                                       |          |         |               |   |              |         
|                                                                                                                    | Total current assets                        |                                       |          | 50,003  |               |   |              | 90,549   |  
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Fixed assets and computer software, net                                                                             |                                             |                                       | 15,742   |         |               |   | 21,633       |         
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Partnership and joint venture investments                                                                           |                                             |                                       | 218,677  |         |               |   | 213,834      |         
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Investment in ChinaBig.com                                                                                          |                                             |                                       | 13,432   |         |               |   | 13,432       |         
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Prepaid pension                                                                                                     |                                             |                                       | 20,563   |         |               |   | 19,457       |         
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Other non-current assets                                                                                            |                                             |                                       | 6,098    |         |               |   | 6,379        |         
|                                                                                                                    |                                             |                                       |          |         |               |   |              |         
|                                                                                                                    | Total Assets                                |                                       | $        | 324,515 |               |   | $            | 365,284  |  
|                                                                                                                    |                                             |                                       |          |         |               |   |              |         
|                                                                                                                    |                                             | Liabilities and Shareholders Deficit |          |         |               |   |              |          |   | 
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Current Liabilities                                                                                                 |                                             |                                       |          |         |               |   |              |         
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Accounts payable and accrued liabilities                                                                            |                                             | $                                     | 28,113   |         |               | $ | 36,148       |         
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Accrued interest payable                                                                                            |                                             |                                       | 6,577    |         |               |   | 6,490        |         
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Current portion of long-term debt                                                                                   |                                             |                                       | 4,143    |         |               |   | 4,224        |         
|                                                                                                                    |                                             |                                       |          |         |               |   |              |         
|                                                                                                                    | Total current liabilities                   |                                       |          | 38,833  |               |   |              | 46,862   |  
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Long-term debt                                                                                                      |                                             |                                       | 297,607  |         |               |   | 347,526      |         
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Deferred income taxes                                                                                               |                                             |                                       | 58,782   |         |               |   | 60,913       |         
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Postretirement and postemployment benefits                                                                          |                                             |                                       | 10,454   |         |               |   | 8,598        |         
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Other liabilities                                                                                                   |                                             |                                       | 18,678   |         |               |   | 9,895        |         
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Commitments and contingencies                                                                                       |                                             |                                       |          |         |               |   |              |         
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Shareholders Deficit                                                                                               |                                             |                                       |          |         |               |   |              |         
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Preferred stock, par value $1 per share, authorized 
10,000,000 shares, outstanding  none                         |                                             |                                       |         |         |               |   |             |         
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Common stock, par value $1 per share, authorized  400,000,000
shares; issued  51,621,894 shares for 2001 and 2000 |                                             |                                       | 51,622   |         |               |   | 51,622       |         
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Additional paid-in capital                                                                                          |                                             |                                       | 30,252   |         |               |   | 18,373       |         
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Unamortized restricted stock                                                                                        |                                             |                                       | (387     | )       |               |   | (232         | )       
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Equity options outstanding                                                                                          |                                             |                                       | 386      |         |               |   | 242          |         
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Retained deficit                                                                                                    |                                             |                                       | (19,521  | )       |               |   | (78,685      | )       
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Accumulated other comprehensive loss                                                                                |                                             |                                       | (4,528   | )       |               |   |             |         
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Treasury stock, at cost, 22,050,990 shares for 2001 and
20,682,293 shares for 2000                                  |                                             |                                       | (157,663 | )       |               |   | (99,830      | )       
|                                                                                                                    |                                             |                                       |          |         |               |   |              |         
|                                                                                                                    | Total shareholders deficit                 |                                       |          | (99,839 | )             |   |              | (108,510 | )
|                                                                                                                    |                                             |                                       |          |         |               |   |              |         
|                                                                                                                    | Total Liabilities and Shareholders Deficit |                                       | $        | 324,515 |               |   | $            | 365,284  |  
|                                                                                                                    |                                             |                                       |          |         |               |   |              |         

The accompanying notes are an integral part of the consolidated financial
statements.

4



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##### Table of Contents






R.H. Donnelley Corporation and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)

|                                                                           |                                                                      |                                                     |         |                   |          |   |         |         |          |  
|-------------------------------------------------------------------------- | -------------------------------------------------------------------- | --------------------------------------------------- | ------- | ----------------- | -------- | - | ------- | ------- | -------- | -
|                                                                           |                                                                      |                                                     |         | Nine months ended
|                                                                           |                                                                      |                                                     |         | September 30,    
|                                                                           |                                                                      |                                                     |         |                  
|(amounts in thousands)                                                     |                                                                      | 2001                                                |         | 2000             
|                                                                           |                                                                      |                                                     |         |                  
|Cash Flows from Operating Activities                                       |                                                                      |                                                     |         |                   |          |   |         |        
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Net income                                                                 |                                                                      | $                                                   | 59,164  |                   |          | $ | 114,948 |        
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Reconciliation of net income to net cash provided by operating activities: |                                                                      |                                                     |         |                   |          |   |         |        
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Depreciation and amortization                                        |                                                     |         | 8,237             |          |   |         | 12,054  |         
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Provision for doubtful accounts                                      |                                                     |         | 2,492             |          |   |         | 3,700   |         
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Deferred income taxes                                                |                                                     |         | (2,132            | )        |   |         | (1,545  | )       
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Other noncash charges                                                |                                                     |         | 869               |          |   |         | 1,628   |         
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Extraordinary loss (net of tax)                                      |                                                     |         | 348               |          |   |         | 704     |         
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Gain on disposition of businesses (net of tax)                       |                                                     |         |                  |          |   |         | (55,002 | )       
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Cash received in excess of income from partnership and joint venture |                                                     |         | 2,206             |          |   |         | 11,782  |         
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | (Increase) decrease in accounts receivable                           |                                                     |         | (2,724            | )        |   |         | 19,977  |         
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Decrease in other assets                                             |                                                     |         | 1,361             |          |   |         | 6,542   |         
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Decrease in accounts payable and accrued liabilities                 |                                                     |         | (3,197            | )        |   |         | (18,441 | )       
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Increase in other liabilities                                        |                                                     |         | 1,813             |          |   |         | 1,337   |         
|                                                                           |                                                                      |                                                     |         |                   |          |   |         |        
|                                                                           |                                                                      | Net cash provided by operating activities           |         |                   | 68,437   |   |         |         | 97,684   |  
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Cash Flows from Investing Activities                                       |                                                                      |                                                     |         |                   |          |   |         |        
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Additions to fixed assets and computer software                            |                                                                      |                                                     | (3,262  | )                 |          |   | (6,314  | )      
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Investment in ChinaBig.com                                                 |                                                                      |                                                     | (1,550  | )                 |          |   | (3,938  | )      
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Proceeds from disposition of businesses                                    |                                                                      |                                                     |        |                   |          |   | 122,009 |        
|                                                                           |                                                                      |                                                     |         |                   |          |   |         |        
|                                                                           |                                                                      | Net cash (used in) provided by investing activities |         |                   | (4,812   | ) |         |         | 111,757  |  
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Cash Flows from Financing Activities                                       |                                                                      |                                                     |         |                   |          |   |         |        
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Repayment of debt                                                          |                                                                      |                                                     | (50,000 | )                 |          |   | (93,000 | )      
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Purchase of treasury stock                                                 |                                                                      |                                                     | (58,174 | )                 |          |   | (32,953 | )      
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Proceeds from exercise of stock options                                    |                                                                      |                                                     | 7,082   |                   |          |   | 5,251   |        
|                                                                           |                                                                      |                                                     |         |                   |          |   |         |        
|                                                                           |                                                                      | Net cash used in financing activities               |         |                   | (101,092 | ) |         |         | (120,702 | )
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|(Decrease) increase in cash and cash equivalents                           |                                                                      |                                                     | (37,467 | )                 |          |   | 88,739  |        
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Cash and cash equivalents, beginning of year                               |                                                                      |                                                     | 55,437  |                   |          |   | 2,390   |        
|                                                                           |                                                                      |                                                     |         |                   |          |   |         |        
|Cash and cash equivalents, end of period                                   |                                                                      | $                                                   | 17,970  |                   |          | $ | 91,129  |        
|                                                                           |                                                                      |                                                     |         |                   |          |   |         |        
|Supplemental cash flow information                                         |                                                                      |                                                     |         |                   |          |   |         |        
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Interest paid                                                              |                                                                      | $                                                   | 18,031  |                   |          | $ | 20,639  |        
|                                                                           |                                                                      |                                                     |         |                   |          |   |         |        
|Income taxes paid                                                          |                                                                      | $                                                   | 26,800  |                   |          | $ | 47,249  |        
|                                                                           |                                                                      |                                                     |         |                   |          |   |         |        

The accompanying notes are an integral part of the consolidated financial
statements.

5



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##### Table of Contents






R.H. Donnelley Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)(amounts in thousands)

1.     Background and Basis of Presentation
Prior to July 1, 1998, R.H. Donnelley Corporation (the Company) operated as
part of The Dun & Bradstreet Corporation (in the context of specifically
describing the Distribution (as defined below), referred to as Old D&B,
otherwise D&B). The Board of Directors of Old D&B approved a plan to
separate into two publicly traded companies  the Company and The New Dun &
Bradstreet Corporation (New D&B). The distribution (Distribution) was the
method by which Old D&B distributed to its shareholders shares of New D&B
common stock. On July 1, 1998, as part of the Distribution, Old D&B
distributed to its shareholders shares of New D&B stock and Old D&B changed its
name to R.H. Donnelley Corporation.

The interim financial statements have been prepared in accordance with the
instructions to Form 10-Q and should be read in conjunction with the financial
statements and related notes included in the Companys Form 10-K for the year
ended December 31, 2000. The results of interim periods are not necessarily
indicative of results for the full year or any subsequent period. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation of financial position,
results of operations and cash flows at the dates and for the periods presented
have been included. Certain 2000 amounts have been reclassified to conform to
the 2001 presentation.

2.     Disposition of Businesses and Related Cost Cutting Actions
During the second quarter of 2000, the Company sold its Cincinnati proprietary
directory business to Yellow Book USA, Inc., terminated early its directory
services agreements with an affiliate of Bell Atlantic Corporation (Bell
Atlantic), and implemented related cost-cutting measures, including headcount
reductions, at its Raleigh, NC facility and corporate headquarters. In
connection with the above actions, the Company received cash proceeds of
$122,009 and recognized a pretax gain of $89,435 ($55,002 after taxes).

3.     Partnership and Joint Venture Investments
The Company has a 50/50 perpetual partnership (DonTech) with an operating
unit of SBC Communications Inc. (SBC). DonTech acts as the exclusive sales
agent for yellow pages directories published in Illinois and northwest Indiana
by Ameritech Corporation (Ameritech), a wholly owned subsidiary of SBC. The
Company has a 50% interest in the profits of DonTech and also receives revenue
participation income from SBC, which is tied to advertising sales. Income from
DonTech was as follows:

|                             |  |                    |        |                   |  |      |        |      |  |   |        |  |  |   |        | 
|---------------------------- |  | ------------------ | ------ | ----------------- |  | ---- | ------ | ---- |  | - | ------ |  |  | - | ------ | 
|                             |  | Three months ended |        | Nine months ended
|                             |  | September 30,      |        | September 30,    
|                             |  |                    |        |                  
|                             |  | 2001               |        | 2000              |  | 2001 |        | 2000
|                             |  |                    |        |                   |  |      |        |     
|50% share of DonTech profits |  | $                  | 7,762  |                   |  | $    | 7,737  |      |  | $ | 16,681 |  |  | $ | 17,158 | 
|                            
|                            
|                            
|                            
|Revenue participation income |  |                    | 31,252 |                   |  |      | 31,320 |      |  |   | 81,417 |  |  |   | 79,334 | 
|                             |  |                    |        |                   |  |      |        |      |  |   |        |  |  |   |        | 
|Total income from DonTech    |  | $                  | 39,014 |                   |  | $    | 39,057 |      |  | $ | 98,098 |  |  | $ | 96,492 | 
|                             |  |                    |        |                   |  |      |        |      |  |   |        |  |  |   |        | 

The table below shows summarized financial information of DonTech. Revenue
participation income is not shown in the table.

|                 |  |                    |         |                   |  |      |         |      |  |   |         |  |  |   |         | 
|---------------- |  | ------------------ | ------- | ----------------- |  | ---- | ------- | ---- |  | - | ------- |  |  | - | ------- | 
|                 |  | Three months ended |         | Nine months ended
|                 |  | September 30,      |         | September 30,    
|                 |  |                    |         |                  
|                 |  | 2001               |         | 2000              |  | 2001 |         | 2000
|                 |  |                    |         |                   |  |      |         |     
|Net revenue      |  | $                  | 32,644  |                   |  | $    | 32,660  |      |  | $ | 85,422  |  |  | $ | 83,054  | 
|                
|                
|                
|                
|Operating income |  |                    | 15,441  |                   |  |      | 15,455  |      |  |   | 33,096  |  |  |   | 33,653  | 
|                
|                
|                
|                
|Net income       |  |                    | 15,524  |                   |  |      | 15,474  |      |  |   | 33,362  |  |  |   | 34,317  | 
|                
|                
|                
|                
|Total assets     |  |                    | 138,667 |                   |  |      | 136,962 |      |  |   | 138,667 |  |  |   | 136,962 | 

The Company also has a joint venture, CenDon LLC (CenDon), with Centel
Directory Company (Centel), a

6



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##### Table of Contents



subsidiary of Sprint Corporation (Sprint). Income from CenDon consists of a
priority distribution on the Companys membership interest in CenDon, which is
tied to advertising sales. Through June 30, 2000, the Company had a 50/50
partnership with Centel, the CenDon Partnership, formed to publish directories
in Nevada, Florida, Virginia and North Carolina. For the first six months of
2000, income from CenDon consisted of the Companys 50% share of the profits of
the CenDon Partnership. Effective for directories that published after June
30, 2000, the Company and Centel entered into a series of agreements that
effectively restructured the CenDon Partnership as a limited liability company
 CenDon LLC. Under the modified arrangement, Centel assumed responsibility
for the marketing, printing and delivery of directories and related support
services such as customer support and collections and the Company continued to
be the exclusive sales agent in Nevada, Florida, Virginia and North Carolina
and to provide certain pre-press publishing services. For directories that
published after June 30, 2000, revenue and related costs are recognized at the
time of sale, rather than at the time of directory publication as had
previously been the case for the CenDon Partnership. Accordingly, for the nine
months ended September 30, 2000, the Company recognized a one-time income
benefit of $5,422 in connection with the change in revenue and expense
recognition. Income from CenDon was $5,290 and $6,521 for the quarter ended
September 30, 2001 and 2000, respectively, and $14,441 and $21,548 (which
includes the one time benefit of $5,422) for the nine months ended September
30, 2001 and 2000, respectively.

The Company also has an 18% interest in ChinaBig.com Limited (ChinaBig).
Effective June 15, 2000, the Company became a passive investor in ChinaBig and
accounted for this investment under the cost method. Prior to June 15, 2000,
the Company accounted for this investment under the equity method and
recognized its share of the losses of ChinaBig. Accordingly, the nine months
ended September 30, 2000 included a loss of $1,078 related to this
investment. As a cost method investor, the Company does not recognize its
share of ChinaBigs losses subsequent to June 15, 2000.

4.     Comprehensive Income
The provisions of FAS 133, Accounting for Derivative Instruments and Hedging
Activities, (FAS 133) became effective for the Company on January 1, 2001.
FAS 133 requires the Company to recognize the fair value of its derivative
instruments on the balance sheet. The Companys derivative instruments are
limited to interest rate swaps entered into to mitigate its exposure to
fluctuating interest rates on its variable rate debt. The interest rate swaps
have been designated as cash flow hedges, and in accordance with FAS 133, the
difference between the fair value, which represents what the Company would have
to pay to terminate the swaps, and the book value of the swaps (fair value
loss), is recorded in other comprehensive income.

At September 30, 2001, the fair value loss was $4,528. For the three months
ended September 30, 2001, the fair value loss increased $2,237 from June 30,
2001. This fair value loss was recognized as other liabilities on the balance
sheet with a corresponding charge to accumulated other comprehensive loss, a
component of shareholders deficit.

Comprehensive income for the quarter and nine months ended September 30, 2001
and 2000 was as follows:

|                     |  |                    |        |                   |  |      |        |      |  |   |        |   |  |   |         | 
|-------------------- |  | ------------------ | ------ | ----------------- |  | ---- | ------ | ---- |  | - | ------ | - |  | - | ------- | 
|                     |  | Three months ended |        | Nine months ended
|                     |  | September 30,      |        | September 30,    
|                     |  |                    |        |                  
|                     |  | 2001               |        | 2000              |  | 2001 |        | 2000
|                     |  |                    |        |                   |  |      |        |     
|Net income           |  | $                  | 25,688 |                   |  | $    | 23,413 |      |  | $ | 59,164 |   |  | $ | 114,948 | 
|                    
|                    
|                    
|                    
|Fair value loss      |  |                    | (2,237 | )                 |  |      |       |      |  |   | (4,528 | ) |  |   |        | 
|                     |  |                    |        |                   |  |      |        |      |  |   |        |   |  |   |         | 
|Comprehensive income |  | $                  | 23,451 |                   |  | $    | 23,413 |      |  | $ | 54,636 |   |  | $ | 114,948 | 
|                     |  |                    |        |                   |  |      |        |      |  |   |        |   |  |   |         | 

7



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##### Table of Contents



5.     Earnings Per Share
The table below provides a reconciliation of basic weighted average shares
outstanding to diluted weighted average shares outstanding for each period
presented.

|                                              |  |                    |        |                   |  |      |        |      |  |  |        |  |  |  |        | 
|--------------------------------------------- |  | ------------------ | ------ | ----------------- |  | ---- | ------ | ---- |  |  | ------ |  |  |  | ------ | 
|                                              |  | Three months ended |        | Nine months ended
|                                              |  | September 30,      |        | September 30,    
|                                              |  |                    |        |                  
|                                              |  | 2001               |        | 2000              |  | 2001 |        | 2000
|                                              |  |                    |        |                   |  |      |        |     
|Weighted average shares outstanding  basic   |  |                    | 29,979 |                   |  |      | 31,743 |      |  |  | 30,454 |  |  |  | 32,134 | 
|                                             
|                                             
|                                             
|                                             
|Potentially dilutive shares                   |  |                    | 838    |                   |  |      | 804    |      |  |  | 776    |  |  |  | 615    | 
|                                              |  |                    |        |                   |  |      |        |      |  |  |        |  |  |  |        | 
|Weighted average shares outstanding  diluted |  |                    | 30,817 |                   |  |      | 32,547 |      |  |  | 31,230 |  |  |  | 32,749 | 
|                                              |  |                    |        |                   |  |      |        |      |  |  |        |  |  |  |        | 

6.     Long-term Debt
Long-term debt consisted of the following:

|                                 |                    |   |               |         |              |   |         |         | 
|-------------------------------- | ------------------ | - | ------------- | ------- | ------------ | - | ------- | ------- | 
|                                 |                    |   | September 30, |         | December 31,
|                                 |                    |   | 2001          |         | 2000        
|                                 |                    |   |               |         |             
|Senior Subordinated 9.125% Notes |                    | $ | 150,000       |         |              | $ | 150,000 |        
|                                
|                                
|                                
|                                
|Senior Secured Term Facilities   |                    |   | 151,750       |         |              |   | 201,750 |        
|                                 |                    |   |               |         |              |   |         |        
|                                 | Total              |   |               | 301,750 |              |   |         | 351,750 | 
|                                
|                                
|                                
|                                
|Less current portion             |                    |   | 4,143         |         |              |   | 4,224   |        
|                                 |                    |   |               |         |              |   |         |        
|                                 | Net long-term debt |   | $             | 297,607 |              |   | $       | 347,526 | 
|                                 |                    |   |               |         |              |   |         |        

In March 2001, the Company prepaid $50,000 of Senior Secured Term Facilities,
and in connection with the prepayment, recorded an extraordinary loss of $348
(net of taxes of $208) for the write-off of related deferred financing costs.

7.     Business Segments
The Companys reportable operating segments are DonTech and Directory
Advertising Services (DAS). The Company evaluates the performance of its
operating segments and allocates resources to them primarily based on operating
income contribution. Interest expense, interest income, income tax expense and
non-operating income and expenses are not allocated to the operating segments.

The DonTech segment includes the Companys 50% interest in the profits of
DonTech and revenue participation income, but does not include an allocation of
certain operating and general and administrative expenses incurred to support
this business. Although DonTech provides advertising sales of yellow pages and
other directory products similar to DAS, the partnership is considered a
separate operating segment since, among other things, the partnership has its
own Board of Directors and the employees of DonTech, including officers and
managers, are not employees of the Company.

Within the DAS segment, the Company sells advertising for yellow pages and
other directory products for affiliated entities of Sprint and performs
pre-press publishing services for yellow pages directories of DonTech, Sprint
and an unaffiliated third party. DAS also includes all information technology
costs and an allocation of certain shared general and administrative expenses
based on estimated business usage.

Get Digital Smart (GDS) included the results of the Companys Internet
business. The Company ceased operations of this business in December 2000 and
accordingly, GDS is not reported as an operating segment in 2001.

General & Corporate (previously referred to as Other) represents expenses not
allocated to the operating segments.

8



---



##### Table of Contents



Selected financial results for the three and nine month periods ended September
30, 2001 and 2000 are as follows:

|                                      |                   |  |             |         |         |  |         |         |           |   |        |   |           |   |              |   |  |  |         |         | 
|------------------------------------- | ----------------- |  | ----------- | ------- | ------- |  | ------- | ------- | --------- | - | ------ | - | --------- | - | ------------ | - |  |  | ------- | ------- | 
|                                      |                   |  | DonTech     |         |         |  |         |         |           |   |        |   | General & |   | Consolidated
|                                      |                   |  | Partnership |         | DAS (1) |  | GDS     |         | Corporate |   | Totals
|                                      |                   |  |             |         |         |  |         |         |           |   |       
|Three months ended September 30,
2001 |                   |  |             |         |         |  |         |         |           |   |        |   |           |   |              |   |  |  |         |        
|                                     
|                                     
|                                     
|                                     
|Advertising sales (2)                 |                   |  |             |         |         |  |         |         |           |   |        |   |           |   |              |   |  |  |         |        
|                                     
|                                     
|                                     
|                                     
|                                      | Calendar cycle    |  | $           | 129,028 |         |  | $       | 54,854  |           |   |        |  |           |   |              |  |  |  | $       | 183,882 | 
|                                     
|                                     
|                                     
|                                     
|                                      | Publication cycle |  |             | 67,435  |         |  |         | 56,034  |           |   |        |  |           |   |              |  |  |  |         | 123,469 | 
|                                     
|                                     
|                                     
|                                     
|Net revenue                           |                   |  |            |         |         |  | 22,165  |         |           |   |       |   |           |   |             |   |  |  | 22,165  |        
|                                     
|                                     
|                                     
|                                     
|Operating income (loss)               |                   |  | 39,014      |         |         |  | 11,790  |         |           |   |       |   |           | $ | (3,488       | ) |  |  | 47,316  |        
|                                     
|                                     
|                                     
|                                     
|Depreciation and amortization         |                   |  |            |         |         |  | 2,465   |         |           |   |       |   |           |   | 132          |   |  |  | 2,597   |        
|                                     
|                                     
|                                     
|                                     
|EBITDA (3)                            |                   |  | 39,014      |         |         |  | 14,258  |         |           |   |       |   |           |   | (3,359       | ) |  |  | 49,913  |        
|                                     
|                                     
|                                     
|                                     
|Total assets                          |                   |  | 201,918     |         |         |  | 42,852  |         |           |   |       |   |           |   | 79,745       |   |  |  | 324,515 |        
|                                     
|                                     
|                                     
|                                     
|Three months ended September 30,
2000 |                   |  |             |         |         |  |         |         |           |   |        |   |           |   |              |   |  |  |         |        
|                                     
|                                     
|                                     
|                                     
|Advertising sales (2)                 |                   |  |             |         |         |  |         |         |           |   |        |   |           |   |              |   |  |  |         |        
|                                     
|                                     
|                                     
|                                     
|                                      | Calendar cycle    |  | $           | 128,895 |         |  | $       | 62,256  |           |   |        |  |           |   |              |  |  |  | $       | 191,151 | 
|                                     
|                                     
|                                     
|                                     
|                                      | Publication cycle |  |             | 64,393  |         |  |         | 55,550  |           |   |        |  |           |   |              |  |  |  |         | 119,943 | 
|                                     
|                                     
|                                     
|                                     
|Net revenue                           |                   |  |            |         |         |  | 22,714  |         |           | $ | 64     |   |           |   |             |   |  |  | 22,778  |        
|                                     
|                                     
|                                     
|                                     
|Operating income (loss)               |                   |  | 39,057      |         |         |  | 11,741  |         |           |   | (2,188 | ) |           | $ | (2,969       | ) |  |  | 45,641  |        
|                                     
|                                     
|                                     
|                                     
|Depreciation and amortization         |                   |  |            |         |         |  | 2,906   |         |           |   | 18     |   |           |   | 357          |   |  |  | 3,281   |        
|                                     
|                                     
|                                     
|                                     
|EBITDA (3)                            |                   |  | 39,057      |         |         |  | 14,647  |         |           |   | (2,170 | ) |           |   | (2,612       | ) |  |  | 48,922  |        
|                                     
|                                     
|                                     
|                                     
|Total assets                          |                   |  | 202,862     |         |         |  | 73,188  |         |           |   | 273    |   |           |   | 139,506      |   |  |  | 415,829 |        
|                                     
|                                     
|                                     
|                                     
|Nine months ended September 30, 2001  |                   |  |             |         |         |  |         |         |           |   |        |   |           |   |              |   |  |  |         |        
|                                     
|                                     
|                                     
|                                     
|Advertising sales (2)                 |                   |  |             |         |         |  |         |         |           |   |        |   |           |   |              |   |  |  |         |        
|                                     
|                                     
|                                     
|                                     
|                                      | Calendar cycle    |  | $           | 337,675 |         |  | $       | 153,097 |           |   |        |  |           |   |              |  |  |  | $       | 490,772 | 
|                                     
|                                     
|                                     
|                                     
|                                      | Publication cycle |  |             | 290,568 |         |  |         | 136,486 |           |   |        |  |           |   |              |  |  |  |         | 427,054 | 
|                                     
|                                     
|                                     
|                                     
|Net revenue                           |                   |  |            |         |         |  | 61,039  |         |           |   |       |   |           |   |             |   |  |  | 61,039  |        
|                                     
|                                     
|                                     
|                                     
|Operating income (loss)               |                   |  | 98,099      |         |         |  | 27,326  |         |           |   |       |   |           | $ | (11,237      | ) |  |  | 114,188 |        
|                                     
|                                     
|                                     
|                                     
|Depreciation and amortization         |                   |  |            |         |         |  | 7,712   |         |           |   |       |   |           |   | 525          |   |  |  | 8,237   |        
|                                     
|                                     
|                                     
|                                     
|EBITDA (3)                            |                   |  | 98,099      |         |         |  | 35,038  |         |           |   |       |   |           |   | (10,712      | ) |  |  | 122,425 |        
|                                     
|                                     
|                                     
|                                     
|Nine months ended September 30, 2000  |                   |  |             |         |         |  |         |         |           |   |        |   |           |   |              |   |  |  |         |        
|                                     
|                                     
|                                     
|                                     
|Advertising sales (2)                 |                   |  |             |         |         |  |         |         |           |   |        |   |           |   |              |   |  |  |         |        
|                                     
|                                     
|                                     
|                                     
|                                      | Calendar cycle    |  | $           | 328,210 |         |  | $       | 430,620 |           |   |        |  |           |   |              |  |  |  | $       | 758,830 | 
|                                     
|                                     
|                                     
|                                     
|                                      | Publication cycle |  |             | 283,443 |         |  |         | 370,392 |           |   |        |  |           |   |              |  |  |  |         | 653,835 | 
|                                     
|                                     
|                                     
|                                     
|Net revenue                           |                   |  |            |         |         |  | 124,239 |         |           | $ | 88     |   |           |   |             |   |  |  | 124,327 |        
|                                     
|                                     
|                                     
|                                     
|Operating income (loss)               |                   |  | 96,492      |         |         |  | 45,128  |         |           |   | (6,578 | ) |           | $ | (11,619      | ) |  |  | 123,423 |        
|                                     
|                                     
|                                     
|                                     
|Depreciation and amortization         |                   |  |            |         |         |  | 10,831  |         |           |   | 42     |   |           |   | 1,181        |   |  |  | 12,054  |        
|                                     
|                                     
|                                     
|                                     
|EBITDA (3)                            |                   |  | 96,492      |         |         |  | 55,959  |         |           |   | (6,536 | ) |           |   | (10,438      | ) |  |  | 135,477 |        



---

|(1) |  | For the nine months ended September 30, 2000, DAS includes the one-time
operating items related to the CenDon restructuring (see Notes 2 and 3)
and the following results of the Bell Atlantic and Cincinnati businesses,
which were disposed of in 2000. Accordingly, no financial results for
these businesses are included for the 2001 periods.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                              |                   |  |        |         | 
|----------------------------- | ----------------- |  | ------ | ------- | 
|Advertising sales (2)         |                   |  |        |        
|                             
|                             
|                             
|                             
|                              | Calendar cycle    |  | $      | 277,768 | 
|                             
|                             
|                             
|                             
|                              | Publication cycle |  |        | 238,131 | 
|                             
|                             
|                             
|                             
|Net revenue                   |                   |  | 63,831 |        
|                             
|                             
|                             
|                             
|Operating income              |                   |  | 22,105 |        
|                             
|                             
|                             
|                             
|Depreciation and amortization |                   |  | 2,703  |        
|                             
|                             
|                             
|                             
|EBITDA (3)                    |                   |  | 24,808 |        
|                             
|                             
|                             
|                             
|Total assets                  |                   |  |       |        



---

|(2) |  | Advertising sales represent the billing value of advertisements sold for
an annual directory by the Company and DonTech. Calendar cycle sales
represent the billing value of advertisements sold for an annual directory
stated on the same basis as revenue is recognized (that is, when a sales
contract is signed where the Company acts as a sales agent and when a
directory was published where the Company acted as the publisher).
Publication cycle sales represent sales for directories that published in
the current period regardless of when the advertising for that directory
was sold. These sales are compared against sales for the same directories
published in the prior year period. If events occur during the current
year that effect the comparability of publication sales to the prior year,
such as changes in directory publication dates or other contractual
changes, then prior year publication sales are adjusted to conform to the
current year presentation and maintain comparability. Accordingly, for
comparative purposes, DAS publication sales for the three and nine months
ended September 30, 2000 have been increased by $1,997 and $3,668,
respectively.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(3) |  | EBITDA represents earnings before interest, taxes and depreciation and
amortization. EBITDA is not a measurement of operating performance
computed in accordance with generally accepted accounting principles and
should not be considered as a substitute for operating income or net
income prepared in conformity with generally accepted accounting
principles. In addition, EBITDA may not be
comparable to similarly titled measures of other companies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

9



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##### Table of Contents



8.     Litigation
In 1999, Sandy Goldberg, Dellwood Publishing, Inc. and Rockland Yellow Pages
initiated a lawsuit against the Company and Bell Atlantic Corporation (now
known as Verizon Communications, Bell Atlantic) in the United States District
Court for the Southern District of New York. The Rockland Yellow Pages is a
proprietary directory that competes against a Bell Atlantic directory in the
same region, for which the Company served as Bell Atlantics advertising sales
agent through June 30, 2000. The complaint alleged that the defendants
disseminated false information concerning the Rockland Yellow Pages, which
resulted in damages to the Rockland Yellow Pages. In May 2001, the Court
dismissed substantially all of plaintiffs claims, including the antitrust
claims; only a false advertising claim under the Lanham Act and a state law
tort claim with respect to only one advertiser survived. In August 2001, the
plaintiff withdrew its Lanham Act claim with prejudice and then the Court
dismissed the state law tort claim without prejudice as to re-filing in state
court. In August 2001, the same plaintiffs filed a complaint naming the same
defendants in New York State Supreme Court, in Rockland County, alleging
virtually the same state law tort claim, seeking unspecified damages. While at
this stage in the proceedings management is unable to predict the outcome of
this matter, it presently believes that the resolution of the action will not
have a material adverse effect on the Companys financial position or results
of operations.

In 1996, Information Resources, Inc. (IRI) filed a complaint in the United
States District Court for the Southern District of New York, naming as
defendants the Company (as successor of Old D&B), ACNielsen Company and IMS
International Inc., each former subsidiaries of D&B (IRI Action). The
complaint alleges, among other things, various violations of the antitrust laws
and seeks damages in excess of $350,000, which IRI is seeking to have trebled
under the antitrust laws. IRI also seeks punitive damages of an unspecified
amount. Under the definitive agreement entered into in connection with the
Distribution (the Distribution Agreement), New D&B has assumed the defense
and will indemnify the Company against any payments to be made by the Company
in respect of the IRI Action, including any related legal fees and expenses.
As required by the Distribution Agreement, Moodys Corporation, which recently
separated from New D&B, has agreed to be jointly and severally liable with New
D&B for the indemnity obligation to the Company. Management presently believes
that New D&B and Moodys have sufficient financial resources and/or borrowing
capacity to satisfy all such liabilities and to reimburse the Company for all
related costs and expenses. However, no assurances can be provided that all
such liabilities, costs and expenses will be covered.

Certain tax planning strategies entered into by Old D&B are currently subject
to review by tax authorities. Pursuant to a series of agreements, IMS Health
Incorporated (IMS) and Nielsen Media Research, Inc. (NMR) (both of which
are former subsidiaries of D&B) are each jointly and severally liable to pay
50%, and Old D&B is liable for the remaining 50% of any payments for taxes and
accrued interest arising from this matter and certain other potential tax
liabilities after Old D&B pays the first $137,000 of tax liability. As a
result of the form of the Distribution, the Company is the corporate successor
of, and the taxpayer referred to herein as, Old D&B. However, pursuant to the
terms of the Distribution Agreement and the Tax Allocation Agreement, New D&B
assumed the defense and agreed to indemnify the Company against any payments to
be made by the Company in respect of any tax liability that may be assessed and
any related costs and expenses. In 2000, New D&B filed an amended tax return
for 1989 and 1990, which reflected $561,600 of tax and interest due and paid
the IRS approximately $349,300, while IMS paid approximately $212,300. The
Company understands that these payments were paid under dispute in order to
stop additional interest from accruing. As required by the Distribution
Agreement, Moodys Corporation has agreed to be jointly and severally liable
with New D&B for the indemnity obligation to the Company. Management presently
believes that New D&B, Moodys, IMS and NMR have sufficient financial resources
and/or borrowing capacity to satisfy all such liabilities and to reimburse the
Company for all related costs and expenses. However, no assurances can be
provided that all such liabilities, costs and expenses will be covered.

In May 2001, Image One filed a complaint against certain Sprint Corporation
affiliates and the Company in the United States District Court for the Middle
District of Florida. In the complaint, Image One alleges that it creates and
licenses original text, graphics, images and other artwork specifically for
yellow pages advertising and that the defendants engaged in copyright
infringement and false designation of origin. Image One is seeking actual
damages of approximately $95,000 and statutory damages in excess of $330,000.
While at this preliminary stage in the proceedings management is unable to
predict the outcome of this matter, management intends to vigorously defend
this action, and it presently believes that the resolution of the action will
not have a material adverse effect on the Companys financial position or
results of operations.

10



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##### Table of Contents



Other than the matters described above, the Company is involved in legal
proceedings, claims and litigation arising in the ordinary conduct of its
business. Although there can be no assurances, management presently believes
that the outcome of such legal proceedings will not have a material adverse
affect on the Companys financial position, results of operations or cash
flows.

9.     Subsequent Event
On October 31, 2001, the Company will prepay an additional $15,000 of Senior
Secured Term Facilities. In connection with the prepayment, the Company will
recognize an extraordinary loss of $93 (net of taxes of $55) for the write-off
of related deferred financing costs.

11



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##### Table of Contents






Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Certain statements contained in this Form 10-Q regarding R.H. Donnelleys
future operating results or performance or business plans or prospects and
any other statements not constituting historical fact are forward-looking
statements subject to the safe harbor created by the Private Securities
Litigation Reform Act of 1995. Where possible, the words believe,
expect, anticipate, should, planned, estimated, potential,
goal, outlook, and similar expressions, as they relate to R.H. Donnelley
or its management, have been used to identify such forward-looking
statements. Regardless of any identifying phrases, these statements and all
other forward-looking statements reflect only managements current beliefs
and specific assumptions with respect to future business plans, prospects,
decisions and results, and are based on information currently available to
R.H. Donnelley. Accordingly, the statements are subject to significant
risks, uncertainties and contingencies which could cause R.H. Donnelleys
actual operating results, performance or business plans or prospects to
differ from those expressed in, or implied by, these statements. Such risks,
uncertainties and contingencies include, without limitation, the following:
(1) loss of market share through competition; (2) uncertainties caused by the
consolidation of the telecommunications industry; (3) introduction of
competing products or technologies by other companies; (4) complexity and
uncertainty regarding the development and/or deployment of new high
technology products, and uncertainty regarding the acceptance rate of such
products; (5) pricing pressures from competitors and/or customers; (6)
changes in the yellow pages industries and markets; (7) further deterioration
or protraction of the economic slowdown presently being experienced in the
United States, especially with respect to the markets in which we operate;
(8) residual economic effects of, and uncertainties regarding (i) the
terrorist attacks that occurred on September 11, 2001, (ii) the general
possibility or express threat of similar terrorist or other related
disruptive events, and (iii) future occurrence of similar terrorist or other
related disruptive events, especially with respect to the major markets in
which we operate that depend so heavily upon travel and tourism; and (9) the
fact that the repurchase of the Companys common stock is subject to market
conditions and compliance with legal restrictions and the Companys debt
covenants. Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date hereof. The
Company undertakes no obligation to update any forward-looking statements.

The Company

R.H. Donnelley Corporation is a leading marketer of yellow pages advertising
tailored for small and medium-sized businesses. Unless otherwise indicated,
the terms Company, we, us and our refer to R.H. Donnelley Corporation
and its direct and indirect wholly owned subsidiaries. Unless otherwise
specified, all tabular amounts are presented in millions of dollars.

The Company is organized into two reportable operating segments as of January
1, 2001  the DonTech Partnership (DonTech) and Directory Advertising
Services (DAS). DonTech is a 50/50 perpetual partnership with an operating
unit of SBC Communications Inc. (SBC), which acts as the exclusive sales
agent for yellow pages directories published by Ameritech Corporation
(Ameritech), a wholly owned subsidiary of SBC, in Illinois and northwest
Indiana. In addition to our 50% interest in the profits of DonTech, we receive
revenue participation income from our partner, which is tied to advertising
sales. Although DonTech provides advertising sales of yellow pages and other
directory products similar to DAS, the partnership is considered a separate
operating segment since, among other things, the partnership has its own Board
of Directors and the employees of DonTech, including its officers and managers,
are not our employees.

Within our DAS segment, we sell advertising for yellow pages and other
directory products for affiliated entities of Sprint Corporation (Sprint) and
perform pre-press publishing services for yellow pages directories. We are the
exclusive sales agent in Central Florida for an operating unit of Sprint and
the exclusive sales agent in Nevada, Florida, Virginia and North Carolina for
CenDon LLC, a joint venture with Centel Directory Company (Centel), a
subsidiary of Sprint. We receive sales commissions on all advertising sold and
receive a priority distribution on our membership interest in CenDon LLC, which
is tied to advertising sales. We also provide pre-press publishing services
for yellow pages directories of DonTech, Sprint and an unaffiliated third party
under separately negotiated contracts. DAS also includes all information
technology costs. The results for DAS for the nine months ended September 30,
2000 also include the operating results of the disposed Bell Atlantic and
Cincinnati businesses, and our share of the losses in ChinaBig (see   Factors
Affecting Comparability below).

12



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##### Table of Contents



Through June 30, 2000, we served as the exclusive sales agent to the CenDon
Partnership, a 50/50 partnership between the Company and Centel formed to
publish directories in Florida, Nevada, Virginia and North Carolina.
Effective for directories that published after June 30, 2000, the Company and
Centel entered into a series of agreements that effectively restructured the
CenDon Partnership as a limited liability company  CenDon LLC (CenDon).
Under the modified arrangement, Centel assumed responsibility for marketing,
printing and delivery of directories and related support services such as
customer support and collections and we continued to be the exclusive sales
agent in Nevada, Florida, Virginia and North Carolina and to provide certain
pre-press publishing services. For directories that published after June 
30, 2000, revenue and related costs are recognized at the time of sale, rather
than at the time of directory publication as had been the case for the
CenDon Partnership. Accordingly, the recognition of revenue and expenses for
the CenDon operations for the first half of 2001 was accounted for differently
than in the first half of 2000 (see   Factors Affecting Comparability
below).

We have an 18% interest in ChinaBig.com Limited (previously known as Unicom
Media Limited, ChinaBig), which publishes yellow pages directories and offers
Internet directory services in the Peoples Republic of China. In connection
with an equity investment by an unaffiliated third party and in order to
facilitate the raising of additional capital and provide greater flexibility,
on June 15, 2000, ChinaBig and each existing investor (including the Company),
restructured the existing joint venture agreement of ChinaBig to, among other
things, significantly reduce our influence on the daily operations of ChinaBig.
As a result of the restructured agreement, we are a passive investor in
ChinaBig and account for this investment under the cost method. Therefore, our
share of the losses of ChinaBig is no longer recognized in the consolidated
statement of operations (see   Factors Affecting Comparability below).

The quarter and nine-month periods ended September 30, 2000 also include the
operating results of Get Digital Smart (GDS), our Internet business, which
was reported as a separate operating segment during 2000. GDS ceased
operations in December 2000 and, accordingly, there were no financial results
for the 2001 periods (see   Factors Affecting Comparability below).

As a sales agent, we recognize revenue from sales commissions at the time an
advertising contract is executed with a customer. This includes sales
commission revenue realized from Sprint, including commission revenue for
CenDon directories that published after June 30, 2000, and Bell Atlantic
(through June 30, 2000). Where we were the publisher (Cincinnati and CenDon
directories published before June 30, 2000), we recognized revenue when a
directory was published. There was no revenue recognized in 2000 from our
Cincinnati proprietary operation as the business was sold prior to the
scheduled directory publication date. We recognize revenue from our pre-press
publishing services on a straight-line basis throughout the year as the
services are performed.

Income from partnership and joint venture includes our share of the net income
of DonTech, revenue participation income from SBC, priority distribution income
on our membership interest in CenDon (for periods subsequent to June 30, 2000)
and our share of the net income of the CenDon Partnership (through June 30,
2000). Income from partnership and joint venture for 2000 also includes our
share of the losses of ChinaBig through June 15, 2000, the date through which
we accounted for this investment under the equity method of accounting.

2000 Strategic Actions

Disposition of Businesses and Related Cost Cutting Actions
On April 27, 2000, we sold our Cincinnati proprietary directory business to
Yellow Book USA, Inc. for $8 million.

On June 30, 2000, we entered into an agreement (Agreement) with an affiliate
of Bell Atlantic Corporation (Bell Atlantic) for the early termination of the
directory services agreements between the Company and Bell Atlantic dated
September 5, 1985 and May 5, 1998, as amended (the Agency Agreements).
Pursuant to the Agency Agreements, the Company had served as exclusive sales
agent for Bell Atlantic directories covering substantially all of New York
State. The Agency Agreements had been scheduled to expire in 2005 and 2003,
respectively. The transactions contemplated by the Agreement were also
consummated on June 30, 2000.

Under the terms of the Agreement, we received cash proceeds of $114 million.
We also received commissions of approximately $42 million for sales which
occurred prior to the closing, but which were not yet payable under the

13



---



##### Table of Contents



terms
of the Agency Agreements, and commissions of approximately $15 million for
sales in directories that published in the pre-closing period.

In connection with the above actions, we also implemented cost-cutting
measures, including headcount reductions, at our Raleigh, NC facility and
corporate headquarters consistent with our new streamlined operating structure.

The Company recognized a pretax gain from the above transactions of
approximately $89 million ($55 million after taxes), net of approximately $40
million of costs incurred for severance and other related costs associated with
work-force reductions, asset write-offs, including internal software, and other
transaction related costs, partially offset by pension related gains of $7
million.

In December 2000, we entered into an agreement pursuant to which Innuity Inc.,
a provider of e-commerce services to small and medium-sized businesses, assumed
all of the rights and obligations under our GDS contracts. One-time costs of
$2.9 million for severance and other related costs were recognized in December
2000.

CenDon Partnership Restructuring and Extension
Effective for directories that published after June 30, 2000, the Company and
Centel entered into a series of agreements which effectively restructured the
existing CenDon Partnership as a limited liability company and extended the
existing sales agency agreement through 2010 (with the continuation of our
pre-press publishing services extending through 2003). In connection with the
restructuring, a one-time operating income benefit of $15.8 million was
recognized during the nine-month period ended September 30, 2000. This
one-time operating income benefit was comprised of net sales commission revenue
of $21.0 million (based on accelerated calendar advertising sales of $95.8
million), income from CenDon of $5.4 million less related expenses of $10.6
million.

ChinaBig Investment
On June 15, 2000, ChinaBig and each existing investor (including the Company)
restructured the existing joint venture agreement of ChinaBig to, among other
things, significantly reduce our influence on the daily operations of ChinaBig.
As a result of the restructured agreement, we are a passive investor in
ChinaBig and account for this investment under the cost method. Prior to June
15, 2000, we accounted for this investment under the equity method. Therefore,
subsequent to June 15, 2000, our share of the losses of ChinaBig is no longer
recognized in the consolidated statement of operations.

Factors Affecting Comparability

The three months ended September 30, 2000 include the results of the GDS
business and the nine months ended September 30, 2000 include the results of
the Bell Atlantic, Cincinnati and GDS businesses and the one-time operating
items from the restructuring of the CenDon relationship. Due to the inclusion
of these amounts in the 2000 periods, we do not believe that a comparison of
2001 results to 2000 reported results would be meaningful. Accordingly,
information below for the 2000 periods is presented on both a reported basis
and an as adjusted basis. The Results of Operations discussion ignores as no
longer relevant or material changes between the 2001 and 2000 periods related
to the disposed operations or the effect of the one-time items. The as
adjusted amounts assume these operations were disposed as of January 1, 2000
and are derived by excluding from the reported 2000 amounts the relevant
amounts for the Bell Atlantic, Cincinnati and GDS operations, and the one-time
operating items from the restructuring of the CenDon relationship. The as
adjusted amounts are presented for comparison purposes only and do not purport
to represent what our actual results would have been had the businesses been
disposed as of January 1, 2000, nor do they project the financial condition or
results of operations for any future period. For a discussion of the results
of the disposed businesses and a more detailed discussion of the one-time
operating items, see Managements Discussion and Analysis of Financial
Condition and Results of Operations in our Quarterly Report on Form 10-Q for
our second quarter of 2000 and in our Form 10-K for the year ended December 31,
2000.

14



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##### Table of Contents



RESULTS OF OPERATIONS
Three and Nine Months Ended September 30, 2001 and 2000

Advertising Sales

Calendar Cycle Sales
Calendar cycle sales represent the billing value of advertisements sold for an
annual directory by the Company and DonTech in a given calendar year. These
sales are recognized on the same basis on which revenue is recognized (that is,
when a sales contract is signed where we are a sales agent or when a directory
was published where we were
the publisher). The selling of advertising for a specific directory is managed
as a sales campaign and typically begins approximately six to eight months
prior to the scheduled directory publication date. As a result, the amount of
calendar sales can fluctuate from the prior year due to various factors,
including changes in the commencement date of a sales campaign and the timing
of sales during the sales campaign.

Reported and as adjusted calendar cycle sales by segment were as follows:

|                                |  |          |       |          |  |                  |       |          |  |          |       |     |  |                   |      |   |  |  |       |   
|------------------------------- |  | -------- | ----- | -------- |  | ---------------- | ----- | -------- |  | -------- | ----- | --- |  | ----------------- | ---- | - |  |  | ----- | --
|                                |  |          |       |          |  |                  |       |          |  |          |       |     |  | 2001 Reported vs.
|                                |  | Reported |       | As       |  | 2000 As adjusted
|                                |  |          |       | adjusted |  |                 
|                                |  | 2001     |       | 2000     |  | 2000             |       | $ Change |  | % Change
|                                |  |          |       |          |  |                  |       |          |  |         
|Quarter ended September 30,     |  |          |       |          |  |                  |       |          |  |          |       |     |  |                   |      |   |  |  |       |   
|                               
|                               
|                               
|                               
|DonTech                         |  | $        | 129.0 |          |  | $                | 128.9 |          |  | $        | 128.9 |     |  | $                 | 0.1  |   |  |  | 0.1   | % 
|                               
|                               
|                               
|                               
|DAS                             |  |          | 54.9  |          |  |                  | 62.3  |          |  |          | 62.3  |     |  |                   | (7.4 | ) |  |  | (11.9 | )%
|                                |  |          |       |          |  |                  |       |          |  |          |       |     |  |                   |      |   |  |  |       |   
|Total                           |  | $        | 183.9 |          |  | $                | 191.2 |          |  | $        | 191.2 |     |  | $                 | (7.3 | ) |  |  | (3.8  | )%
|                                |  |          |       |          |  |                  |       |          |  |          |       |     |  |                   |      |   |  |  |       |   
|Nine months ended September 30, |  |          |       |          |  |                  |       |          |  |          |       |     |  |                   |      |   |  |  |       |   
|                               
|                               
|                               
|                               
|DonTech                         |  | $        | 337.7 |          |  | $                | 328.2 |          |  | $        | 328.2 |     |  | $                 | 9.5  |   |  |  | 2.9   | % 
|                               
|                               
|                               
|                               
|DAS                             |  |          | 153.1 |          |  |                  | 430.6 |          |  |          | 152.8 | (a) |  |                   | 0.3  |   |  |  | 0.2   | % 
|                                |  |          |       |          |  |                  |       |          |  |          |       |     |  |                   |      |   |  |  |       |   
|Total                           |  | $        | 490.8 |          |  | $                | 758.8 |          |  | $        | 481.0 |     |  | $                 | 9.8  |   |  |  | 2.0   | % 
|                                |  |          |       |          |  |                  |       |          |  |          |       |     |  |                   |      |   |  |  |       |   



---

|(a) |  | Excludes Bell Atlantic calendar sales of $182.0 million and one-time
sales benefit of $95.8 million from the restructuring of the CenDon
relationship.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

Calendar cycle sales for the quarter and nine months ended September 30, 2001
were $183.9 million and $490.8 million, respectively, compared to calendar
sales of $191.2 million for the quarter and as adjusted calendar cycle sales of
$481.0 million for the nine months ended September 30, 2000. Sales for the
quarter at both DonTech and DAS were adversely affected by the weakening
economy and a more cautious attitude by small businesses with respect to
advertising spending, particularly following the tragic events of September 11,
2001. Through September 2001, DonTech sales were higher than the prior year
period, driven partially by improvements in the billing and collection
processes implemented by SBC during 2001. DAS sales for the nine months,
however, were flat compared to the prior year due to lower customer renewals
primarily due to the weakening economy and actions taken by Sprint and the
Company to tighten credit policies. Sales for the fourth quarter at both
DonTech and DAS are presently expected to be weak as softening economic
conditions and uncertainty regarding possible terrorist or other disruptive
activities, and their potential impact on travel, tourism and business, has
prompted caution among small business advertisers in some of our markets,
especially Las Vegas, Orlando and Chicago. In addition, DonTech has
experienced a modest increase in competition, especially in its Chicago market,
which has had, to a lesser extent, an impact on sales. We expect these factors
will continue to unfavorably impact sales into 2002.

Publication Cycle Sales
We believe that an additional useful measure of sales performance is
publication cycle sales. Publication cycle sales represent sales for
directories that published in the current period regardless of when the
advertising for that directory was sold. These sales are compared against
sales for the same directories published in the prior year period. If events
occur during the current year that effect the comparability of publication
sales to the prior year, such as changes in directory publication dates or
other contractual changes, then prior year publication sales are adjusted to
conform to the current year presentation and maintain comparability.
Accordingly, for comparative purposes prior year DAS publication sales for the
three and nine months ended September 30, 2000 have been increased by $2.0
million and $3.7 million, respectively. Fourth quarter 2000 DAS publication
sales will be reduced by $2.0 million.

15



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##### Table of Contents



Reported and as adjusted publication cycle sales by segment were as follows:

|                                |  |          |       |          |  |                  |       |          |  |          |       |                   |  |   |      |  |  |  |     |  
|------------------------------- |  | -------- | ----- | -------- |  | ---------------- | ----- | -------- |  | -------- | ----- | ----------------- |  | - | ---- |  |  |  | --- | -
|                                |  |          |       |          |  |                  |       |          |  |          |       | 2001 Reported vs.
|                                |  | Reported |       | As       |  | 2000 As adjusted
|                                |  |          |       | Adjusted |  |                 
|                                |  | 2001     |       | 2000     |  | 2000             |       | $ Change |  | % Change
|                                |  |          |       |          |  |                  |       |          |  |         
|Quarter ended September 30,     |  |          |       |          |  |                  |       |          |  |          |       |                   |  |   |      |  |  |  |     |  
|                               
|                               
|                               
|                               
|DonTech                         |  | $        | 67.4  |          |  | $                | 64.4  |          |  | $        | 64.4  |                   |  | $ | 3.0  |  |  |  | 4.7 | %
|                               
|                               
|                               
|                               
|DAS                             |  |          | 56.1  |          |  |                  | 55.5  |          |  |          | 55.5  |                   |  |   | 0.6  |  |  |  | 1.1 | %
|                                |  |          |       |          |  |                  |       |          |  |          |       |                   |  |   |      |  |  |  |     |  
|Total                           |  | $        | 123.5 |          |  | $                | 119.9 |          |  | $        | 119.9 |                   |  | $ | 3.6  |  |  |  | 3.0 | %
|                                |  |          |       |          |  |                  |       |          |  |          |       |                   |  |   |      |  |  |  |     |  
|Nine months ended September 30, |  |          |       |          |  |                  |       |          |  |          |       |                   |  |   |      |  |  |  |     |  
|                               
|                               
|                               
|                               
|DonTech                         |  | $        | 290.6 |          |  | $                | 283.4 |          |  | $        | 283.4 |                   |  | $ | 7.2  |  |  |  | 2.5 | %
|                               
|                               
|                               
|                               
|DAS                             |  |          | 136.5 |          |  |                  | 370.4 |          |  |          | 132.3 | (a)               |  |   | 4.2  |  |  |  | 3.2 | %
|                                |  |          |       |          |  |                  |       |          |  |          |       |                   |  |   |      |  |  |  |     |  
|Total                           |  | $        | 427.1 |          |  | $                | 653.8 |          |  | $        | 415.7 |                   |  | $ | 11.4 |  |  |  | 2.7 | %
|                                |  |          |       |          |  |                  |       |          |  |          |       |                   |  |   |      |  |  |  |     |  



---

|(a) |  | Excludes Bell Atlantic sales of $238.1 million.
|--- |  | -----------------------------------------------

Publication cycle sales for the quarter and nine months ended September 30,
2001 were $123.5 million and $427.1 million, respectively, compared to
publication sales of $119.9 million for the quarter and as adjusted publication
cycle sales of $415.7 million for the nine months ended September 30, 2000.
Both DonTech and DAS have seen modest sales growth in 2001 compared to 2000;
however, we presently expect sales for our fourth quarter publications to be
lower than the prior year. As a result, we currently expect full year DonTech
sales to be approximately 1% higher than 2000 and full year DAS sales to be
essentially unchanged from 2000.

Net Revenue

Net revenue consists principally of sales commissions earned on the value of
advertising sold (less an estimate for potential sales claims and allowances)
and fees for pre-press publishing services. In 2001, net revenue is derived
entirely from our DAS segment.

Reported and as adjusted net revenue was as follows:

|                                |  |          |      |          |  |                  |       |          |  |          |      |                   |  |   |      |   |  |  |      |   
|------------------------------- |  | -------- | ---- | -------- |  | ---------------- | ----- | -------- |  | -------- | ---- | ----------------- |  | - | ---- | - |  |  | ---- | --
|                                |  |          |      |          |  |                  |       |          |  |          |      | 2001 Reported vs.
|                                |  | Reported |      | As       |  | 2000 As adjusted
|                                |  |          |      | Adjusted |  |                 
|                                |  | 2001     |      | 2000     |  | 2000             |       | $ Change |  | % Change
|                                |  |          |      |          |  |                  |       |          |  |         
|Quarter ended September 30,     |  | $        | 22.2 |          |  | $                | 22.8  |          |  | $        | 22.7 | (a)               |  | $ | (0.5 | ) |  |  | (2.2 | )%
|                                |  |          |      |          |  |                  |       |          |  |          |      |                   |  |   |      |   |  |  |      |   
|Nine months ended September 30, |  | $        | 61.0 |          |  | $                | 124.3 |          |  | $        | 60.4 | (b)               |  | $ | 0.6  |   |  |  | 1.0  | % 
|                                |  |          |      |          |  |                  |       |          |  |          |      |                   |  |   |      |   |  |  |      |   



---

|(a) |  | Excludes GDS revenue of $0.1 million.                                                                                                                    
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(b) |  | Excludes Bell Atlantic revenue of $42.8 million, GDS revenue of $0.1
million and one-time revenue benefit from the CenDon restructuring of
$21.0 million.

Net revenue was $22.2 million and $61.0 million for the quarter and nine months
ended September 30, 2001, respectively, compared to as adjusted net revenue of
$22.7 million and $60.4 million for the quarter and nine months ended September
30, 2000, respectively. The decrease in revenue in the third quarter 2001
compared to the prior year quarter was primarily due to the decrease in DAS
sales described above. Also contributing to the decrease in the quarter was
that the 2000 period included revenue from our YPTV product of $0.9 million.
This product was discontinued in 2001. These decreases were partially offset
by lower sales claims and allowances. Each period, we provide for potential
sales claims and allowances based on historical experience. Due to
improvements in the accuracy and quality of the sales contract processes, as
well as certain contractual changes, an adjustment was made in the quarter to
reduce the amounts previously provided for sales claims and allowances. For
the nine-month period, the increase in revenue in 2001 compared to 2000 was
primarily due to lower sales claims and allowances partially offset by YPTV
revenue of $1.5 million in 2000.

16



---



##### Table of Contents



Expenses

Reported and as adjusted expenses were as follows:

|                                |  |          |      |          |  |                  |       |          |  |          |      |                   |  |   |      |   |  |  |       |   
|------------------------------- |  | -------- | ---- | -------- |  | ---------------- | ----- | -------- |  | -------- | ---- | ----------------- |  | - | ---- | - |  |  | ----- | --
|                                |  |          |      |          |  |                  |       |          |  |          |      | 2001 Reported vs.
|                                |  | Reported |      | As       |  | 2000 As adjusted
|                                |  |          |      | adjusted |  |                 
|                                |  | 2001     |      | 2000     |  | 2000             |       | $ Change |  | % Change
|                                |  |          |      |          |  |                  |       |          |  |         
|Quarter ended September 30,     |  |          |      |          |  |                  |       |          |  |          |      |                   |  |   |      |   |  |  |       |   
|                               
|                               
|                               
|                               
|Operating expenses              |  | $        | 11.6 |          |  | $                | 13.6  |          |  | $        | 11.4 | (a)               |  | $ | 0.2  |   |  |  | 1.8   | % 
|                               
|                               
|                               
|                               
|G&A expenses                    |  |          | 4.1  |          |  |                  | 4.8   |          |  |          | 4.8  |                   |  |   | (0.7 | ) |  |  | (14.6 | )%
|                               
|                               
|                               
|                               
|Provision for bad debts         |  |          | 0.9  |          |  |                  | 1.0   |          |  |          | 1.0  |                   |  |   | (0.1 | ) |  |  | (10.0 | )%
|                               
|                               
|                               
|                               
|D&A expense                     |  |          | 2.6  |          |  |                  | 3.3   |          |  |          | 3.3  |                   |  |   | (0.7 | ) |  |  | (21.2 | )%
|                                |  |          |      |          |  |                  |       |          |  |          |      |                   |  |   |      |   |  |  |       |   
|Total                           |  | $        | 19.2 |          |  | $                | 22.7  |          |  | $        | 20.5 |                   |  | $ | (1.3 | ) |  |  | (6.3  | )%
|                                |  |          |      |          |  |                  |       |          |  |          |      |                   |  |   |      |   |  |  |       |   
|Nine months ended September 30, |  |          |      |          |  |                  |       |          |  |          |      |                   |  |   |      |   |  |  |       |   
|                               
|                               
|                               
|                               
|Operating expenses              |  | $        | 35.4 |          |  | $                | 83.0  |          |  | $        | 35.9 | (b)               |  | $ | (0.5 | ) |  |  | (1.4  | )%
|                               
|                               
|                               
|                               
|G&A expenses                    |  |          | 13.3 |          |  |                  | 19.1  |          |  |          | 16.4 | (c)               |  |   | (3.1 | ) |  |  | (18.9 | )%
|                               
|                               
|                               
|                               
|Provision for bad debts         |  |          | 2.5  |          |  |                  | 3.7   |          |  |          | 2.5  | (d)               |  |   |     |   |  |  |      |   
|                               
|                               
|                               
|                               
|D&A expense                     |  |          | 8.2  |          |  |                  | 12.1  |          |  |          | 9.4  | (e)               |  |   | (1.2 | ) |  |  | (12.8 | )%
|                                |  |          |      |          |  |                  |       |          |  |          |      |                   |  |   |      |   |  |  |       |   
|Total                           |  | $        | 59.4 |          |  | $                | 117.9 |          |  | $        | 64.2 |                   |  | $ | (4.8 | ) |  |  | (7.5  | )%
|                                |  |          |      |          |  |                  |       |          |  |          |      |                   |  |   |      |   |  |  |       |   



---

|(a) |  | Excludes GDS operating expenses of $2.2 million.                                                                                                                                                                        
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(b) |  | Excludes Bell Atlantic operating expenses of $30.4 million, Cincinnati
operating expenses of $0.7 million, GDS operating expenses of $6.6 million
and one-time operating expenses of $9.4 from the CenDon restructuring.
|   
|   
|   
|   
|(c) |  | Excludes general and administrative expenses for Bell Atlantic of $2.4
million and Cincinnati of $0.3 million.                                                                                                          
|   
|   
|   
|   
|(d) |  | Excludes one-time provision of $1.2 million from the CenDon
restructuring. The provision for Bell Atlantic and Cincinnati for the
nine months ended September 30, 2000 was minimal.                                     
|   
|   
|   
|   
|(e) |  | Excludes depreciation and amortization expense for Bell Atlantic of $2.6
million and Cincinnati of $0.1 million.                                                                                                        

Operating expenses were $11.6 million and $35.4 million for the quarter and
nine months ended September 30, 2001, respectively, compared to as adjusted
operating expenses of $11.4 million and $35.9 million for the quarter and nine
months ended September 30, 2000, respectively. The slight increase in
operating expenses for the quarter was primarily due to the timing of
publishing costs partially offset by lower compensation-related costs
associated with the reduction in DAS sales and the absence of YPTV production
costs in 2001. For the year-to-date period, operating expenses were down
slightly compared to the prior year-to-date period primarily due to lower
compensation-related sales costs and the absence of YPTV production and
ChinaBig investment related costs incurred in 2000.

General and administrative expenses were $4.1 million and $13.3 million for the
quarter and nine months ended September 30, 2001, respectively, compared to
general and administrative expenses of $4.8 million for the quarter and as
adjusted general and administrative expenses of $16.4 million for the nine
months ended September 30, 2000. The decrease in general and administrative
expenses for the quarter and year-to-date periods was due to cost cutting
actions and headcount reductions implemented in the second half of 2000.

Provision for bad debts were $0.9 million and $2.5 million for the quarter and
nine months ended September 30, 2001, respectively, compared to $1.0 million
for the quarter and as adjusted provision for bad debts of $2.5 million for the
nine months ended September 30, 2000. The change in the provision for the
quarter and nine-month periods was consistent with the change in DAS sales for
these periods. Under the sales agency agreements with Sprint, our exposure to
bad debts is capped at a fixed percentage of total sales.

Depreciation and amortization expense was $2.6 million and $8.2 million for the
quarter and nine months ended September 30, 2001, respectively, compared to
depreciation and amortization expense of $3.3 million for the quarter and as
adjusted depreciation and amortization expense of $9.4 million for the nine
months ended September 30, 2000. The decrease in the quarter and year-to-date
periods was due to the write-off of assets associated with the strategic
actions taken in 2000, as well as lower capital spending in 2001.

17



---



##### Table of Contents



Income from Partnership and Joint Venture

Income from our partnership and joint venture relationships was as follows:

|                                |  |          |       |          |  |                  |       |          |  |          |       |                   |  |   |      |   |  |  |       |   
|------------------------------- |  | -------- | ----- | -------- |  | ---------------- | ----- | -------- |  | -------- | ----- | ----------------- |  | - | ---- | - |  |  | ----- | --
|                                |  |          |       |          |  |                  |       |          |  |          |       | 2001 Reported vs.
|                                |  | Reported |       | As       |  | 2000 As adjusted
|                                |  |          |       | adjusted |  |                 
|                                |  | 2001     |       | 2000     |  | 2000             |       | $ Change |  | % Change
|                                |  |          |       |          |  |                  |       |          |  |         
|Quarter ended September 30,     |  |          |       |          |  |                  |       |          |  |          |       |                   |  |   |      |   |  |  |       |   
|                               
|                               
|                               
|                               
|DonTech                         |  | $        | 39.0  |          |  | $                | 39.1  |          |  | $        | 39.1  |                   |  | $ | (0.1 | ) |  |  | (0.3  | )%
|                               
|                               
|                               
|                               
|CenDon                          |  |          | 5.3   |          |  |                  | 6.5   |          |  |          | 6.5   |                   |  |   | (1.2 | ) |  |  | (18.5 | )%
|                                |  |          |       |          |  |                  |       |          |  |          |       |                   |  |   |      |   |  |  |       |   
|Total                           |  | $        | 44.3  |          |  | $                | 45.6  |          |  | $        | 45.6  |                   |  | $ | (1.3 | ) |  |  | (2.9  | )%
|                                |  |          |       |          |  |                  |       |          |  |          |       |                   |  |   |      |   |  |  |       |   
|Nine months ended September 30, |  |          |       |          |  |                  |       |          |  |          |       |                   |  |   |      |   |  |  |       |   
|                               
|                               
|                               
|                               
|DonTech                         |  | $        | 98.1  |          |  | $                | 96.5  |          |  | $        | 96.5  |                   |  | $ | 1.6  |   |  |  | 1.7   | % 
|                               
|                               
|                               
|                               
|CenDon                          |  |          | 14.4  |          |  |                  | 21.5  |          |  |          | 16.1  | (a)               |  |   | (1.7 | ) |  |  | (10.6 | )%
|                               
|                               
|                               
|                               
|ChinaBig                        |  |          |      |          |  |                  | (1.0  | )        |  |          | (1.0  | )                 |  |   | 1.0  |   |  |  | n/m   |   
|                                |  |          |       |          |  |                  |       |          |  |          |       |                   |  |   |      |   |  |  |       |   
|Total                           |  | $        | 112.5 |          |  | $                | 117.0 |          |  | $        | 111.6 |                   |  | $ | 0.9  |   |  |  | 0.8   | % 
|                                |  |          |       |          |  |                  |       |          |  |          |       |                   |  |   |      |   |  |  |       |   



---

|(a) |  | Excludes one-time income benefit of $5.4 million from the CenDon
restructuring.
|--- |  | -------------------------------------------------------------------------------

Income was $44.3 million and $112.5 million for the quarter and nine months
ended September 30, 2001, respectively, compared to income of $45.6 million for
the quarter and as adjusted income of $111.6 million for the nine months ended
September 30, 2000. Income from DonTech for the third quarter compared to last
years third quarter was consistent with calendar cycle sales for the same
period, which is a key driver of income from DonTech. Sales for the fourth
quarter are expected to be lower than last years fourth quarter resulting in
flat to a slight decrease in income from DonTech for the fourth quarter
compared to last years fourth quarter. For the full year, we presently expect
income growth at DonTech of approximately 1% over the prior year amount.

Income from CenDon for the 2001 periods was lower than the amounts for the
corresponding 2000 periods, primarily due to the above-described weakness in
sales and a contractual reduction in the rate used to calculate our priority
distribution.

We did not recognize any losses from ChinaBig in the 2001 periods due to the
previously discussed restructuring of this entity in 2000 and the corresponding
change from equity method accounting to cost method accounting.

Operating Income

Operating income for DonTech includes the income from DonTech, but does not
include an allocation of certain operating and general and administrative
expenses incurred to support this business. Operating income for DAS includes
revenue and direct expenses incurred by each DAS business unit plus an
allocation of certain shared operating and general and administrative expenses
based on estimated business usage. DAS operating income also includes the
income from CenDon (for periods subsequent to June 30, 2000) and the CenDon
Partnership (for periods prior to June 30, 2000). General & Corporate
represents overhead costs that are not allocated to the business segments.

18



---



##### Table of Contents



Reported and as adjusted operating income by segment was as follows:

|                                |  |          |       |          |  |                  |       |          |  |          |       |                   |  |   |      |   |  |  |       |   
|------------------------------- |  | -------- | ----- | -------- |  | ---------------- | ----- | -------- |  | -------- | ----- | ----------------- |  | - | ---- | - |  |  | ----- | --
|                                |  |          |       |          |  |                  |       |          |  |          |       | 2001 Reported vs.
|                                |  | Reported |       | As       |  | 2000 As adjusted
|                                |  |          |       | adjusted |  |                 
|                                |  | 2001     |       | 2000     |  | 2000             |       | $ Change |  | % Change
|                                |  |          |       |          |  |                  |       |          |  |         
|Quarter ended September 30,     |  |          |       |          |  |                  |       |          |  |          |       |                   |  |   |      |   |  |  |       |   
|                               
|                               
|                               
|                               
|DonTech                         |  | $        | 39.0  |          |  | $                | 39.1  |          |  | $        | 39.1  |                   |  | $ | (0.1 | ) |  |  | (0.3  | )%
|                               
|                               
|                               
|                               
|DAS                             |  |          | 11.8  |          |  |                  | 11.7  |          |  |          | 11.7  |                   |  |   | 0.1  |   |  |  | 0.9   | % 
|                               
|                               
|                               
|                               
|GDS                             |  |          |      |          |  |                  | (2.2  | )        |  |          |      | (a)               |  |   |     |   |  |  |      |   
|                               
|                               
|                               
|                               
|General & Corporate             |  |          | (3.5  | )        |  |                  | (3.0  | )        |  |          | (3.0  | )                 |  |   | (0.5 | ) |  |  | (16.7 | )%
|                                |  |          |       |          |  |                  |       |          |  |          |       |                   |  |   |      |   |  |  |       |   
|Total                           |  | $        | 47.3  |          |  | $                | 45.6  |          |  | $        | 47.8  |                   |  | $ | (0.5 | ) |  |  | (1.0  | )%
|                                |  |          |       |          |  |                  |       |          |  |          |       |                   |  |   |      |   |  |  |       |   
|Nine months ended September 30, |  |          |       |          |  |                  |       |          |  |          |       |                   |  |   |      |   |  |  |       |   
|                               
|                               
|                               
|                               
|DonTech                         |  | $        | 98.1  |          |  | $                | 96.5  |          |  | $        | 96.5  |                   |  | $ | 1.6  |   |  |  | 1.7   | % 
|                               
|                               
|                               
|                               
|DAS                             |  |          | 27.3  |          |  |                  | 45.1  |          |  |          | 23.0  | (b)               |  |   | 4.3  |   |  |  | 18.7  | % 
|                               
|                               
|                               
|                               
|GDS                             |  |          |      |          |  |                  | (6.6  | )        |  |          |      | (a)               |  |   |     |   |  |  |      |   
|                               
|                               
|                               
|                               
|General & Corporate             |  |          | (11.2 | )        |  |                  | (11.6 | )        |  |          | (11.6 | )                 |  |   | 0.4  |   |  |  | 3.4   | % 
|                                |  |          |       |          |  |                  |       |          |  |          |       |                   |  |   |      |   |  |  |       |   
|Total                           |  | $        | 114.2 |          |  | $                | 123.4 |          |  | $        | 107.9 |                   |  | $ | 6.3  |   |  |  | 5.8   | % 
|                                |  |          |       |          |  |                  |       |          |  |          |       |                   |  |   |      |   |  |  |       |   



---

|(a) |  | Excludes the operating loss for GDS.                                                                                                                                                               
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(b) |  | Excludes operating income from Bell Atlantic of $7.3 million, operating
loss for Cincinnati of $1.0 million and a one-time operating income
benefit of $15.8 million from the CenDon restructuring.

Reported operating income was $47.3 million and $114.2 million for the quarter
and nine months ended September 30, 2001, respectively, compared to as adjusted
operating income of $47.8 million and $107.9 million for the quarter and nine
months ended September 30, 2000, respectively. See  Income from Partnership
and Joint Venture above for an explanation of the change in DonTech operating
income for the quarter and nine-month periods. DAS operating income for the
quarter was flat compared to the prior year quarter as sales weakness in the
Sprint markets was offset by lower information technology costs. The
year-to-date increase in DAS operating income was primarily the result of lower
information technology costs due to increased efficiencies and cost controls
and the absence of costs and equity losses associated with ChinaBig due to the
change to cost basis accounting in June 2000. General & Corporate costs were
higher in the third quarter 2001 compared to the third quarter 2000 due to the
timing of expenses, but were lower for the nine month period due to continued
cost controls.

Interest and Taxes

Net interest expense was $6.2 million and $19.0 million for the quarter and
nine months ended September 30, 2001, respectively, compared to $6.4 million
and $24.8 million for the quarter and nine months ended September 30, 2000,
respectively. The decrease in 2001 is primarily due to the prepayment of debt
in the third quarter of 2000 and the first quarter of 2001 and lower interest
rates in 2001.

The effective tax rate for the quarter and nine months ended September 30, 2001
was 37.5% compared to 38.5% for the quarter and nine months ended September 30,
2000. The decrease in the effective rate is due to various previously
disclosed actions taken during 2000.

Extraordinary Loss

In the third quarter of 2000 and first quarter of 2001, we prepaid a total of
$140,000 of Senior Secured Term Facilities. In connection with these
prepayments, we recorded an extraordinary loss for the write-off of related
deferred financing costs of $704 (net of taxes of $440) in 2000 and $348 (net
of taxes of $208) in 2001. The extraordinary losses reduced diluted earnings
per share by $0.02 for the nine months ended September 30, 2001 and for the
three and nine months ended September 30, 2000.

19



---



##### Table of Contents



Net Income and Earnings Per Share

Net income for the third quarter 2001 was $25.7 million, or $0.83 per diluted
share compared to net income of $23.4 million, or $0.72 per diluted share for
the third quarter 2000. Net income for the nine months ended September 30,
2001 was $59.2 million, or $1.89 per diluted share compared to net income of
$114.9 million, or $3.51 per diluted share for the nine months ended September
30, 2000. However, net income for the nine months ended September 30, 2000
includes the gain from the disposition of the Bell Atlantic and Cincinnati
operations ($55.0 million after-tax) and the one-time benefit from the
restructuring of the CenDon relationship ($9.7 million after-tax). Excluding
these amounts, net income for the nine months ended September 30, 2000 was
$50.2 million, or $1.53 per diluted share.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2001, we had cash on hand of $18.0 million and borrowing
capacity of $100 million under our $100 million Senior Revolving Credit
Facility (the Revolver).

Net cash provided by operations was $68.4 million for the first nine months of
2001 compared to $97.7 million for the comparable 2000 period. The decrease
was driven primarily by lower accounts receivable collections and lower cash
received from our partnership and joint venture partially offset by a decrease
in accounts payable and accrued liability payments. Accounts receivable
collections during 2000 included $57 million for Bell Atlantic directories that
published during the period as well as payment for commissions on advertising
sales made prior to the sale of the Bell Atlantic operation for directories
that had not yet published. Also affecting the cash flow from accounts
receivable is the change in timing of receivable recognition and receipt of
commission payments resulting from the restructuring of the CenDon
relationship. Under the modified CenDon arrangement, commissions are
recognized at the time of sale and payment is received in the month of
directory publication whereas, under the prior arrangement, commissions were
recognized in the month of directory publication and payment was received in
the month following publication. The decrease in cash received from our
partnership and joint venture was mainly due to timing and the decrease in
accrued liability payments was primarily due to higher income tax payments in
2000 due to the sale of the Bell Atlantic and Cincinnati businesses. We
believe that cash from operations and available debt capacity under the
Revolver will be sufficient to fund our operations and meet our anticipated
investment, capital expenditures and debt service requirements for the
foreseeable future.

Net cash used in investing activities during the 2001 was $4.8 million compared
to net cash provided by investing activities of $111.8 million during 2000,
which included proceeds of $122.0 million from the sale of our Bell Atlantic
and Cincinnati operations. Through September 2001, we spent $3.2 million for
fixed assets and computer software. This was $3.1 million lower than the
previous year period due to lower capital expenditure requirements as a result
of the strategic actions taken in 2000. During 2001, we made additional
investments in ChinaBig of $1.6 million, which represented our final required
payment for this investment. We currently have no material commitments for
investment spending or capital expenditures.

Net cash used in financing activities was $101.1 million during 2001 compared
to $120.7 million during 2000. Cash used in financing activities consists of
debt repayment, repurchases of our common stock and proceeds received from the
exercise of employee stock options. Through September 2001 and 2000,
respectively, we repaid debt of $50.0 million and $93.0 million, repurchased
$58.2 million and $33.0 million of our common stock and received $7.1 million
and $5.3 million from the exercise of employee stock options. At September 30,
2001, we had available authorization to repurchase an additional $28.2 million
of common stock under our $100 million open market share repurchase plan
through April 2002, and to repurchase 1.9 million shares under the systematic
share repurchase plan to offset the dilutive impact on earnings of the exercise
of employee stock options.

20



---



##### Table of Contents



QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Interest Rate Risk
We are exposed to interest rate risk on our variable rate debt. There is
inherent rollover risk as borrowings mature and are renewed at current market
rates. At September 30, 2001, we had outstanding variable rate debt of $151.8
million. In order to manage our exposure to fluctuations in interest rates,
and mitigate this rollover risk, we have entered into interest rate swap
agreements, which allow us to raise funds at floating rates and effectively
swap them into fixed rates. At September 30, 2001 there was $125 million
outstanding notional amount of interest rate swaps. Since over 80% of our
variable rate debt was swapped to fixed rates, management believes that our
interest rate risk at September 30, 2001 was minimal. On June 18, 2001, an
interest rate swap agreement with a notional value of $50 million expired, and
due to the reduced level of indebtedness, the interest rate swap agreement was
not replaced. A swap with a notional value of $50 million is scheduled to
expire June 18, 2002; however, we have not determined whether we will replace
the swap at this time. These derivative financial instruments are viewed as
risk management tools and are entered into for hedging purposes only. We do
not use derivative financial instruments for trading or speculative purposes.

The difference between the fair value of the swaps, which represents what we
would have to pay to terminate the swaps, and the book value of the swaps
reflected a loss of $4.5 million at September 30, 2001. In accordance with FAS
133, Accounting for Derivative Instruments and Hedging Activities, which
became effective for the Company on January 1, 2001, this fair value loss was
recognized on the balance sheet in other liabilities with a corresponding
charge to accumulated other comprehensive loss, a component of shareholders
deficit.

Credit Risk
We maintain significant receivable balances with operating units of SBC and
Sprint. The ultimate remittance of these receivables is subject to adjustment,
up to specified maximums under contractual provisions, based on collections by
these companies from the individual advertisers. We do not currently foresee a
credit risk associated with these receivables. We establish a sales allowance
and an allowance for doubtful accounts based on the expected collectibility of
receivables from advertisers principally based upon historical trends and
contractual provisions.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

The requirements of this Item are discussed in Item 2  Managements Discussion
and Analysis of Financial Condition and Results of Operations  Quantitative
and Qualitative Disclosure About Market Risk.

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PART II. OTHER INFORMATION




Item 1. Legal Proceedings

Reference is made to the discussion of legal proceedings under Item 3 of Part I
in the Companys Annual Report on Form 10-K for the year ended December 31,
2000 (10-K). Except as described in Footnote 8 to the Consolidated Financial
Statements set forth in Item 1 of this Form 10-Q, there has been no material
change in the information with respect to legal proceedings from that set forth
in the 10-K.

The Company is also involved in certain legal proceedings incidental to the
normal conduct of its business. Although there can be no assurances,
management believes that the outcome of such legal proceedings will not have a
material adverse effect on the Companys financial position, results of
operations or cash flows.




Item 6. Exhibits and Reports on Form 8-K



| | (a) |  | Exhibits
| | --- |  | --------

|            |  |                                                                                                                                                                                                                                                                                                                                                                                               
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Document                                                                                                                                                                                                                                                                                                                                                                                      
|            |  |                                                                                                                                                                                                                                                                                                                                                                                               
|3.1         |  | Certificate of Incorporation of the Company (incorporated by reference to
Exhibit 3.1 to the Quarterly Report on Form 10-Q for the three months ended
March 31, 1999, Commission File No. 001-07155)                                                                                                                                                                                          
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                               
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|3.2         |  | By-laws of the Company (incorporated by reference to Exhibit 3.2 to the
Quarterly Report on Form 10-Q for the three months ended March 31, 1999,
Commission File No. 001-07155)                                                                                                                                                                                                               
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                               
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|3.3         |  | Certificate of Incorporation of R.H. Donnelley Inc. (incorporated by
reference to Exhibit 3.3 to Amendment No. 1 to the Registration Statement on
Form S-4, filed with the Securities and Exchange Commission on August 7,
1998, Registration No. 333-59287)                                                                                                                                  
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                               
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|3.4         |  | By-laws of R.H. Donnelley Inc. (incorporated by reference to Exhibit 3.4 to
the Registration Statement on Form S-4, filed with the Securities and
Exchange Commission on July 17, 1998, Registration No. 333-59287)                                                                                                                                                                           
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                               
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|4.1         |  | Indenture dated as of June 5, 1998 between R.H. Donnelley Inc., as Issuer,
the Company, as Guarantor, and the Bank of New York, as Trustee, with respect
to the 9 1/8% Senior Subordinated Notes due 2008 (incorporated by reference to
Exhibit 4.1 to the Registration Statement on Form S-4, filed with the
Securities and Exchange Commission on July 17, 1998, Registration No.
333-59287)
|           
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                               
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|4.2         |  | Form of the 9 1/8% Senior Subordinated Notes due 2008 (included in Exhibit 4.1)                                                                                                                                                                                                                                                                                                               
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                               
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|4.3         |  | Company Guarantee (included in Exhibit 4.1)                                                                                                                                                                                                                                                                                                                                                   
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                               
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|4.4         |  | Rights Agreement, dated as of October 27, 1998 between R.H. Donnelley
Corporation and First Chicago Trust Company (incorporated by reference to
Exhibit 4 to the Registration Statement on Form 8-A, filed with the
Securities and Exchange Commission on November 5, 1998, Registration No.
001-07155)                                                                                       
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                               
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|4.5         |  | Amendment No. 1 to Rights Agreement dated as of February 26, 2001 by and
among R.H. Donnelley Corporation, First Chicago Trust Company of New York (as
initial Rights Agent) and The Bank of New York (as successor Rights Agent)
(incorporated by reference to Exhibit 4.5 to the Annual Report on Form 10-K
for the year ended December 31, 2000, Commission File No. 001-07155)            

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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                        
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Document                                                                                                                                                                                                                                                                                                                                                                                                                               
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.1        |  | Form of Distribution Agreement between the Company (f/k/a The
Dun & Bradstreet Corporation) and The New Dun & Bradstreet
Corporation (incorporated by reference to Exhibit 99.2 to the
Form 8-K of the Company (f/k/a The Dun & Bradstreet
Corporation), filed on June 30, 1998, Commission File No.
001-07155)                                                                                                                        
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|10.2        |  | Form of Tax Allocation Agreement between the Company (f/k/a
The Dun & Bradstreet Corporation) and The New Dun & Bradstreet
Corporation (incorporated by reference to Exhibit 99.3 to the
Form 8-K of the Company (f/k/a The Dun & Bradstreet
Corporation), filed on June 30, 1998, Commission File No.
001-07155)                                                                                                                      
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|10.3        |  | Form of Employee Benefits Agreement between the Company (f/k/a
The Dun & Bradstreet Corporation) and The New Dun & Bradstreet
Corporation (incorporated by reference to Exhibit 99.4 to the
Form 8-K of the Company (f/k/a The Dun & Bradstreet
Corporation), filed on June 30, 1998, Commission File No.
001-07155)                                                                                                                   
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|10.4        |  | Form of Intellectual Property Agreement between the Company
(f/k/a The Dun & Bradstreet Corporation) and The New Dun &
Bradstreet Corporation (incorporated by reference to Exhibit
99.5 to the Form 8-K of the Company (f/k/a The Dun &
Bradstreet Corporation), filed on June 30, 1998, Commission
File No. 001-07155)                                                                                                               
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|10.5        |  | Form of Amended and Restated Transition Services Agreement
between the Company (f/k/a The Dun & Bradstreet Corporation),
The New Dun & Bradstreet Corporation, Cognizant Corporation,
IMS Health Incorporated, ACNielsen Corporation and Gartner
Group, Inc. (incorporated by reference to Exhibit 99.9 to the
Form 8-K of the Company (f/k/a The Dun & Bradstreet
Corporation), filed on June 30, 1998, Commission File No.
001-07155)
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|10.6        |  | Credit Agreement among the Company, R.H. Donnelley Inc., The
Chase Manhattan Bank, as Administrative Agent and the Lenders
party thereto (incorporated by reference to Exhibit 10.9 to
the Registration Statement on Form S-4, filed with the
Securities and Exchange Commission on July 17, 1998,
Registration No. 333-59287)                                                                                                         
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|10.7        |  | First Amendment to Credit Agreement, dated as of March 4,
1999, among the Company, R.H. Donnelley Inc., The Chase
Manhattan Bank, as Administrative Agent, and the Lenders party
thereto (incorporated by reference to Exhibit 10.1 to the
Quarterly Report on Form 10-Q for the three months ended March
31, 1999, Commission File No. 001-07155)                                                                                     
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|10.8        |  | DonTech II Partnership Agreement, effective August 19, 1997,
by and between R.H. Donnelley Inc. (f/k/a The Reuben H.
Donnelley Corporation) and Ameritech Publishing of Illinois,
Inc. (incorporated by reference to Exhibit 10.10 to Amendment
No. 1 to the Registration Statement on Form S-4, filed with
the Securities and Exchange Commission on August 7, 1998,
Registration No. 333-59287)                                      
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|10.9        |  | Revenue Participation Agreement, dated as of August 19, 1997,
by and between APIL Partners Partnership and R.H. Donnelley
Inc. (f/k/a The Reuben H. Donnelley Corporation) (incorporated
by reference to Exhibit 10.11 to Amendment No. 1 to the
Registration Statement on Form S-4, filed with the Securities
and Exchange Commission on August 7, 1998, Registration No.
333-59287)                                                  

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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Document                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|10.10       |  | Master Agreement, executed August 19, 1997, by and among R.H.
Donnelley Inc. (f/k/a The Reuben H. Donnelley Corporation),
the Company (f/k/a The Dun & Bradstreet Corporation), The
Am-Don Partnership a/k/a DonTech, DonTech II, Ameritech
Publishing, Inc., Ameritech Publishing of Illinois, Inc.,
Ameritech Corporation, DonTech I Publishing Company LLC and
the APIL Partners Partnership (incorporated by reference to
Exhibit 10.12 to Amendment No. 1 to the Registration Statement
on Form S-4, filed with the Securities and Exchange Commission
on August 7, 1998, Registration No. 333-59287)
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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|10.11       |  | Exclusive Sales Agency Agreement, effective August 19, 1997,
between APIL Partners Partnership and DonTech II (incorporated
by reference to Exhibit 10.13 to Amendment No. 1 to the
Registration Statement on Form S-4, filed with the Securities
and Exchange Commission on August 7, 1998, Registration No.
333-59287)                                                                                                                                                                                                                                                                                  
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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|10.12       |  | Second Amended and Restated Partnership Agreement, effective
as of August 19, 1997, by and between R.H. Donnelley Inc.
(f/k/a The Reuben H. Donnelley Corporation) and Ameritech
Publishing of Illinois (incorporated by reference to Exhibit
10.14 to Amendment No. 1 to the Registration Statement on Form
S-4, filed with the Securities and Exchange Commission on
August 7, 1998, Registration No. 333-59287)                                                                                                                                                                                        
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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|10.13^      |  | Key Employees Performance Unit Plan, as amended and restated
(incorporated by reference to Exhibit 10.15 to Amendment No. 3
to the Registration Statement on Form S-4, filed with the
Securities and Exchange Commission on September 28, 1998,
Registration No. 333-59287)                                                                                                                                                                                                                                                                                                                              
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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|10.14^      |  | 1991 Key Employees Stock Option Plan, as amended and restated
through April 25, 2000 (incorporated by reference to Exhibit
10.17 to the Companys Quarterly Report on Form 10-Q for the
three months ended September 30, 2000, Commission File No.
001-07155)                                                                                                                                                                                                                                                                                                                                            
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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|10.15^      |  | Amended and Restated 1998 Directors Stock Plan
(incorporated by reference to Exhibit 10.18 to the Companys
Annual Report on Form 10-K for the year ended December 31,
1999, Commission File No. 001-07155)                                                                                                                                                                                                                                                                                                                                                                                              
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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|10.16^      |  | Annual Incentive Plan, as amended and restated (incorporated
by reference to Exhibit 10.18 to Amendment No. 3 to the
Registration Statement on Form S-4, filed with the Securities
and Exchange Commission on September 28, 1998, Registration
No. 333-59287)                                                                                                                                                                                                                                                                                                                                             
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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|10.17^      |  | Supplemental Executive Benefit Plan (incorporated by reference
to Exhibit 10.19 to Amendment No. 3 to the Registration
Statement on Form S-4, filed with the Securities and Exchange
Commission on September 28, 1998, Registration No. 333-59287)                                                                                                                                                                                                                                                                                                                                                        
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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|10.18^      |  | Deferred Compensation Plan (incorporated by reference to
Exhibit 4.01 to the Companys Registration Statement on Form
S-8, filed with the Securities and Exchange Commission on
November 24, 1999, Registration No. 333-91613)                                                                                                                                                                                                                                                                                                                                                                            
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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|10.19^      |  | Employment Agreement dated as of September 28, 1998 between
the Company and Frank R. Noonan (incorporated by reference to
Exhibit 10.1 to the Companys Quarterly Report on Form 10-Q
for the quarter ended September 30, 1998, Commission File No.
001-07155)                                                                                                                                                                                                                                                                                                                                            
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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|10.20^      |  | Employment Agreement dated as of September 28, 1998 between
the Company and Philip C. Danford (incorporated by reference
to Exhibit 10.2 to the Companys Quarterly Report on Form 10-Q
for the quarter ended September 30, 1998, Commission File No.
001-07155)                                                                                                                                                                                                                                                                                                                                          
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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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|10.21^      |  | Amendment No. 1 to Employment Agreement dated as of July 27,
2000 between the Company and Phillip C. Danford (incorporated
by reference to Exhibit 10.21 to the Annual Report on Form
10-K for the year ended December 31, 2000, Commission File No.
001-07155)                                                                                                                                                                                                                                                                                                                                           

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|            |  |                                                                                                                                                                                                                                                                      
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Document                                                                                                                                                                                                                                                             
|            |  |                                                                                                                                                                                                                                                                      
|10.22^      |  | Amendment No. 2 to Employment Agreement dated as of February
27, 2001 between the Company and Phillip C. Danford
(incorporated by reference to Exhibit 10.22 to the Annual
Report on Form 10-K for the year ended December 31, 2000,
Commission File No. 001-07155)  
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|            |  |                                                                                                                                                                                                                                                                      
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|10.23^      |  | Employment Agreement dated as of September 28, 1998 between
the Company and David C. Swanson (incorporated by reference to
Exhibit 10.4 to the Companys Quarterly Report on Form 10-Q
for the quarter ended September 30, 1998, Commission File No.
001-07155)      
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|            |  |                                                                                                                                                                                                                                                                      
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|10.24^      |  | Amendment No. 1 to Employment Agreement dated as of July 27,
2000 between the Company and David C. Swanson (incorporated by
reference to Exhibit 10.24 to the Annual Report on Form 10-K
for the year ended December 31, 2000, Commission File No.
001-07155)        
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|            |  |                                                                                                                                                                                                                                                                      
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|10.25^      |  | Amendment No. 2 to Employment Agreement dated as of February
27, 2001 between the Company and David C. Swanson
(incorporated by reference to Exhibit 10.25 to the Annual
Report on Form 10-K for the year ended December 31, 2000,
Commission File No. 001-07155)    
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|            |  |                                                                                                                                                                                                                                                                      
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|10.26^      |  | Employment Agreement dated as of September 28, 1998 between
the Company and Judith A. Norton (incorporated by reference to
Exhibit 10.25 to the Companys Annual Report on Form 10-K for
the year ended December 31, 1999, Commission File No.
001-07155)            
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|            |  |                                                                                                                                                                                                                                                                      
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|10.27^      |  | Amendment No. 1 to Employment Agreement dated as of July 27,
2000 between the Company and Judith A. Norton (incorporated by
reference to Exhibit 10.27 to the Annual Report on Form 10-K
for the year ended December 31, 2000, Commission File No.
001-07155)        
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|            |  |                                                                                                                                                                                                                                                                      
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|10.28^      |  | Amendment No. 2 to the Employment Agreement dated as of
February 27, 2001 between the Company and Judith A. Norton
(incorporated by reference to Exhibit 10.28 to the Annual
Report on Form 10-K for the year ended December 31, 2000,
Commission File No. 001-07155)
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|            |  |                                                                                                                                                                                                                                                                      
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|10.29^      |  | Separation Agreement and Release dated as of March 15, 2001
between the Company and Judith A. Norton (incorporated by
reference to Exhibit 10.29 to the Annual Report on Form 10-K
for the year ended December 31, 2000, Commission File No.
001-07155)              
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|            |  |                                                                                                                                                                                                                                                                      
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|10.30^      |  | Employment Agreement dated as of March 23, 2000 between Get
Digital Smart.com, Inc. and Thomas A. Daniel (incorporated by
reference to Exhibit 10.30 to the Annual Report on Form 10-K
for the year ended December 31, 2000, Commission File No.
001-07155)          
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|            |  |                                                                                                                                                                                                                                                                      
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|10.31^      |  | Separation Agreement and Release dated as of February 28, 2001
between Get Digital Smart.com and Thomas A. Daniel
(incorporated by reference to Exhibit 10.31 to the Annual
Report on From 10-K for the year ended December 31, 2000,
Commission File No. 001-07155) 
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|            |  |                                                                                                                                                                                                                                                                      
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|10.32^      |  | Employment Agreement dated as of September 28, 1998 between
the Company and Frank M. Colarusso (incorporated by reference
to Exhibit 10.32 to the Annual Report on Form 10-K for the
year ended December 31, 2000, Commission File No. 001-07155)                    
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|            |  |                                                                                                                                                                                                                                                                      
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|10.33^      |  | Amendment No. 1 to Employment Agreement dated as of July 27,
2000 between the Company and Frank M. Colarusso (incorporated
by reference to Exhibit 10.33 to the Annual Report on Form
10-K for the year ended December 31, 2000, Commission File No.
001-07155)      
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|            |  |                                                                                                                                                                                                                                                                      
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|10.34^      |  | Amendment No. 2 to Employment Agreement dated as of February
27, 2001 between the Company and Frank M. Colarusso
(incorporated by reference to Exhibit 10.34 to the Annual
Report on Form 10-K for the year ended December 31, 2000,
Commission File No. 001-07155)  
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|            |  |                                                                                                                                                                                                                                                                      
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|10.35^      |  | Employment Agreement dated as of September 26, 2000 between
the Company and William C. Drexler (incorporated by reference
to Exhibit 10.35 to the Annual Report on Form 10-K for the
year ended December 31, 2000, Commission File No. 001-07155)                    

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|            |  |                                                                                                                                                                                                                                                                    
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Document                                                                                                                                                                                                                                                           
|            |  |                                                                                                                                                                                                                                                                    
|10.36^      |  | Amendment No. 1 to Employment Agreement dated as of February
27, 2001 between the Company and William C. Drexler
(incorporated by reference to Exhibit 10.36 to the Annual
Report on Form 10-K for the year ended December 31, 2000,
Commission File No. 001-07155)
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|            |  |                                                                                                                                                                                                                                                                    
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|10.37^      |  | Employment Agreement dated as of January 1, 2001 between the
Company and Robert J. Bush (incorporated by reference to
Exhibit 10.37 to the Annual Report on Form 10-K for the year
ended December 31, 2000, Commission File No. 001-07155)                         
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|            |  |                                                                                                                                                                                                                                                                    
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|10.38^      |  | Amendment No. 1 to Employment Agreement dated as of February
27, 2001 between the Company and Robert J. Bush (incorporated
by reference to Exhibit 10.38 to the Annual Report on Form
10-K for the year ended December 31, 2000, Commission File No.
001-07155)    
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|            |  |                                                                                                                                                                                                                                                                    
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|10.39^      |  | 2001 Partner Share Plan (incorporated by reference to Exhibit
99.1 to Registration Statement on Form S-8, filed with the
Securities and Exchange Commission on April 30, 2001,
Registration No. 333-59790)                                                         
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|            |  |                                                                                                                                                                                                                                                                    
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|10.40^      |  | 2001 Stock Award and Incentive Plan (incorporated by reference to Exhibit 10.40
to the Quarterly Report on Form 10-Q for the three months ended March 31, 2001,
Commission File No. 001-07155)                                                                     
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|            |  |                                                                                                                                                                                                                                                                    
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|           
|10.41^      |  | Form of Non-qualified Stock Option Agreement (incorporated by
reference to Exhibit 99.02 to the Companys Registration
Statement on Form S-8, filed with the Securities and Exchange
Commission on July 25, 2001, Registration No. 333-65822)                      
|           
|           
|           
|           
|            |  |                                                                                                                                                                                                                                                                    
|           
|           
|           
|           
|10.42^      |  | Form of Annual Incentive Program Award (incorporated by
reference to Exhibit 99.03 to the Companys Registration
Statement on Form S-8, filed with the Securities and Exchange
Commission on July 25, 2001, Registration No. 333-65822)                            
|           
|           
|           
|           
|            |  |                                                                                                                                                                                                                                                                    
|           
|           
|           
|           
|10.43^      |  | Form of Performance Unit Program Award (incorporated by
reference to Exhibit 99.04 to the Companys Registration
Statement on Form S-8, filed with the Securities and Exchange
Commission on July 25, 2001, Registration No. 333-65822)                            



---

| |  | ^ Management contract or compensatory plan
| |  | ------------------------------------------



| | (b) |  | Reports on Form 8-K:
| | --- |  | --------------------
|
| |     |  | None                

26



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                       |  |     |  |                                                                                           
|---------------------- |  | --- |  | ------------------------------------------------------------------------------------------
|                       |  |     |  | R.H. DONNELLEY CORPORATION                                                                
|                      
|                      
|                      
|                      
|                       |  |     |  |                                                                                           
|                      
|                      
|                      
|                      
|Date: October 30, 2001 |  | By: |  | /s/ Philip C. Danford

Philip C. Danford
Senior Vice President and Chief Financial Officer
|                      
|                      
|                      
|                      
|                       |  |     |  |                                                                                           
|                      
|                      
|                      
|                      
|Date: October 30, 2001 |  | By: |  | /s/ William C. Drexler

William C. Drexler
Vice President and Controller                  

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                       |  |     |  |                                                                                           
|---------------------- |  | --- |  | ------------------------------------------------------------------------------------------
|                       |  |     |  | R.H. DONNELLEY INC.                                                                       
|                      
|                      
|                      
|                      
|                       |  |     |  |                                                                                           
|                      
|                      
|                      
|                      
|Date: October 30, 2001 |  | By: |  | /s/ Philip C. Danford

Philip C. Danford
Senior Vice President and Chief Financial Officer
|                      
|                      
|                      
|                      
|                       |  |     |  |                                                                                           
|                      
|                      
|                      
|                      
|Date: October 30, 2001 |  | By: |  | /s/ William C. Drexler

William C. Drexler
Vice President and Controller                  

27