##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 (Mark one)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number: 333-112694
 DEX MEDIA WEST LLC
 (Exact name of registrant as specified in its charter)
 Delaware
    
    25-1903487(State or other jurisdiction of incorporation or organization)
    
    (IRS Employer Identification No.)1001 Winstead Drive, Cary, N.C.
    
    27513(Address of principal executive offices)
    
    (Zip Code)
 (919) 297-1600
 (Registrants telephone number, including area code)
  (Former Name, Former Address and Former
  o þ
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer   þ
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ
  THE REGISTRANT IS AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF R.H. DONNELLEY CORPORATION. THE REGISTRANT
MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF FORM 10-Q AND IS THEREFORE
FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.




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##### 



DEX MEDIA WEST LLC
  
 INDEX TO FORM 10-Q
 PAGEPART I: FINANCIAL INFORMATIONItem 1. Financial Statements (Unaudited)Condensed Consolidated Balance Sheets at March 31, 2009 and December 31, 2008
    
    3Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three
months ended March 31, 2009 and 2008
    
    4Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2009 and 2008
    
    5Notes to Condensed Consolidated Financial Statements
    
    6Item 2. Managements Narrative Analysis of Results of Operations*
    
    17Item 3. Quantitative and Qualitative Disclosures About Market Risk**
    
    26Item 4. Controls and Procedures
    
    26PART II: OTHER INFORMATIONItem 1. Legal Proceedings
    
    27Item 1A. Risk Factors
    
    27Item 2. Unregistered Sales of Equity Securities and Use of Proceeds***
    
    27Item 3. Defaults Upon Senior Securities***
    
    27Item 4. Submission of Matters to a Vote of Security Holders***
    
    27Item 5. Other Information
    
    27Item 6. Exhibits
    
    28SIGNATURES
    
    29EX-31.1EX-31.2EX-32.1
  
 *
    
    Pursuant to General Instruction H(2)(a) of Form 10-Q: (i) the information called for by Item
2 of Part I, Managements Discussion and Analysis of Financial Condition and Results of
Operations has been omitted and (ii) the registrant is providing a Managements Narrative
Analysis of Results of Operations.**
    
    Omitted pursuant to General Instruction H(2)(c) of Form 10-Q.***
    
    Omitted pursuant to General Instruction H(2)(b) of Form 10-Q. 2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
  Dex Media West LLC
 
 Condensed Consolidated Balance Sheets (Unaudited)
 (in thousands)
    
    March 31, 2009
    
    December 31, 2008AssetsCurrent AssetsCash and cash equivalents
    
    $
    88,585
    
    
    $
    71,306Accounts receivableBilled
    
    
    97,875
    
    
    
    108,289Unbilled
    
    
    255,063
    
    
    
    287,794Allowance for doubtful billed accounts and sales claims
    
    
    (20,404
    )
    
    
    (21,352
    )Net accounts receivable
    
    
    332,534
    
    
    
    374,731Intercompany loanreceivable
    
    
    75,000
    
    
    
    Deferred directory costs
    
    
    56,792
    
    
    
    64,179Short-term deferred income taxes, net
    
    
    11,446
    
    
    
    11,168Prepaid expenses and other current assets
    
    
    16,126
    
    
    
    23,670Total current assets
    
    
    580,483
    
    
    
    545,054Fixed assets and computer software, net
    
    
    43,141
    
    
    
    44,708Other non-current assets
    
    
    44,760
    
    
    
    46,258Intangible assets, net
    
    
    4,288,922
    
    
    
    4,344,066Total assets
    
    $
    4,957,306
    
    
    $
    4,980,086Liabilities and Owners EquityCurrent LiabilitiesAccounts payable and accrued liabilities
    
    $
    18,812
    
    
    $
    27,741Affiliates payable, net
    
    
    263,569
    
    
    
    253,423Accrued interest
    
    
    20,214
    
    
    
    50,195Deferred directory revenue
    
    
    362,265
    
    
    
    414,144Current portion of long-term debt
    
    
    22,500
    
    
    
    16,875Total current liabilities
    
    
    687,360
    
    
    
    762,378Long-term debt
    
    
    2,362,249
    
    
    
    2,281,560Deferred income taxes, net
    
    
    694,883
    
    
    
    699,695Other non-current liabilities
    
    
    20,154
    
    
    
    19,023Total liabilities
    
    
    3,764,646
    
    
    
    3,762,656Commitments and contingenciesOwners EquityOwners interest
    
    
    2,208,753
    
    
    
    2,241,276Accumulated deficit
    
    
    (1,013,564
    )
    
    
    (1,021,317
    )Accumulated other comprehensive loss
    
    
    (2,529
    )
    
    
    (2,529
    )Total owners equity
    
    
    1,192,660
    
    
    
    1,217,430Total liabilities and owners equity
    
    $
    4,957,306
    
    
    $
    4,980,086
  3




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Dex Media West LLC
 
 Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)
 Three months endedMarch 31,(in thousands)
    
    2009
    
    2008Net revenues
    
    $
    211,277
    
    
    $
    236,155Expenses:Production, publication and distribution
expenses (exclusive of depreciation and
amortization shown separately below)
    
    
    29,522
    
    
    
    34,063Selling and support expenses
    
    
    55,183
    
    
    
    56,711General and administrative expenses
    
    
    9,954
    
    
    
    8,241Depreciation and amortization
    
    
    58,599
    
    
    
    49,169Impairment charges
    
    
    
    
    
    
    1,062,967Total expenses
    
    
    153,258
    
    
    
    1,211,151Operating income (loss)
    
    
    58,019
    
    
    
    (974,996
    )Interest expense, net
    
    
    (44,783
    )
    
    
    (41,276
    )Income (loss) before income taxes
    
    
    13,236
    
    
    
    (1,016,272
    )(Provision) benefit for income taxes
    
    
    (5,483
    )
    
    
    379,129Net income (loss)
    
    $
    7,753
    
    
    $
    (637,143
    )Comprehensive Income (Loss)Net income (loss)
    
    $
    7,753
    
    
    $
    (637,143
    )Unrealized loss on interest rate swaps, net of tax
    
    
    
    
    
    
    (5,815
    )Comprehensive income (loss)
    
    $
    7,753
    
    
    $
    (642,958
    )
  4




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Dex Media West LLC
 
 Condensed Consolidated Statements of Cash Flows (Unaudited)
 Three months ended March 31,(in thousands)
    
    2009
    
    2008Cash Flows from Operating ActivitiesNet income (loss)
    
    $
    7,753
    
    
    $
    (637,143
    )Reconciliation of net income (loss) to net cash provided by operating activities:Impairment charges
    
    
    
    
    
    
    1,062,967Depreciation and amortization
    
    
    58,599
    
    
    
    49,169Deferred income tax benefit
    
    
    (5,090
    )
    
    
    (379,723
    )Provision for bad debts
    
    
    16,269
    
    
    
    11,639Stock-based compensation expense
    
    
    1,391
    
    
    
    3,163Amortization of debt fair value adjustment
    
    
    (3,687
    )
    
    
    (3,415
    )Amortization of deferred financing costs
    
    
    1,865
    
    
    
    393Interest rate swap ineffectiveness
    
    
    (3,021
    )
    
    
    Changes in assets and liabilities:Decrease in accounts receivable
    
    
    25,930
    
    
    
    17,577Decrease in other assets
    
    
    14,562
    
    
    
    13,761Decrease in accounts payable and accrued liabilities and accrued interest
    
    
    (38,347
    )
    
    
    (35,328
    )Decrease in deferred directory revenues
    
    
    (51,879
    )
    
    
    (39,898
    )Increase (decrease) in affiliates payable
    
    
    8,759
    
    
    
    (19,799
    )Increase (decrease) in other non-current liabilities
    
    
    1,147
    
    
    
    (2,927
    )Net cash provided by operating activities
    
    
    34,251
    
    
    
    40,436Cash Flows from Investing ActivitiesIntercompany loan
    
    
    (75,000
    )
    
    
    Additions to fixed assets and computer software
    
    
    (1,890
    )
    
    
    (3,914
    )Net cash used in investing activities
    
    
    (76,890
    )
    
    
    (3,914
    )Cash Flows from Financing ActivitiesCredit facility repayments
    
    
    
    
    
    
    (27,530
    )Revolver borrowings
    
    
    90,000
    
    
    
    79,800Revolver repayments
    
    
    
    
    
    
    (92,700
    )Increase in checks not yet presented for payment
    
    
    2,441
    
    
    
    1,448Distributions to owner
    
    
    (32,523
    )
    
    
    Excess tax benefits from exercise of stock options
    
    
    
    
    
    
    1,076Net cash provided by (used in) financing activities
    
    
    59,918
    
    
    
    (37,906
    )Increase (decrease) in cash and cash equivalents
    
    
    17,279
    
    
    
    (1,384
    )Cash and cash equivalents, beginning of period
    
    
    71,306
    
    
    
    7,992Cash and cash equivalents, end of period
    
    $
    88,585
    
    
    $
    6,608Supplemental Information:Cash paid:Interest, net
    
    $
    78,831
    
    
    $
    72,501
  5




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Dex Media West LLC
 
 Notes to Condensed Consolidated Financial Statements (Unaudited)
 (tabular amounts in thousands)
 1. Business and Basis of Presentation
  ® ®
  Going Concern
   6




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Significant Financing Developments
  2. Summary of Significant Accounting Policies
 Identifiable Intangible Assets and Goodwill
 Business Combinations Goodwill and Other Intangible Assets
 7




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Accounting for the Impairment or Disposal of
Long-Lived Assets
      8




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Interest Expense and Deferred Financing Costs
  Accounting for
Derivative Instruments and Hedging Activities
  Advertising Expense
  Concentration of Credit Risk
    9




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Stock-Based Awards
 Share-Based
Payment
 Fair Value of Financial Instruments
 Disclosures About Fair Value of Financial Instruments,
 Fair Value Measurements
     Fair Value Measurements atMarch 31, 2009Using Significant OtherDescription
    
    Observable Inputs (Level 2)Derivatives  Liabilities
    
    $
    (2,710
    )
    10




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##### Table of Contents



Effective Date of FASB Statement No. 157
 Estimates
  New Accounting Pronouncements
  3. Restructuring Charges
  2008
    
    2009Three months ended
    
    Restructuring
    
    RestructuringMarch 31, 2009
    
    Actions
    
    Actions
    
    TotalBalance at December 31, 2008
    
    $
    3,279
    
    
    $
    
    
    
    $
    3,279Additions to reserve charged to earnings
    
    
    1,108
    
    
    
    815
    
    
    
    1,923Payments
    
    
    (3,823
    )
    
    
    (815
    )
    
    
    (4,638
    )Balance at March 31, 2009
    
    $
    564
    
    
    $
    
    
    
    $
    564
  11




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4. Long-Term Debt
  Fair Market Value
    
    Carrying ValueMarch 31, 2009
    
    March 31, 2009
    
    December 31, 2008Credit Facility
    
    $
    562,600
    
    
    $
    1,170,000
    
    
    $
    1,080,0008.5% Senior Notes due 2010
    
    
    200,234
    
    
    
    392,616
    
    
    
    393,8835.875% Senior Notes due 2011
    
    
    4,467
    
    
    
    8,758
    
    
    
    8,7619.875% Senior Subordinated Notes due 2013
    
    
    162,675
    
    
    
    813,375
    
    
    
    815,791Total debt
    
    
    929,976
    
    
    
    2,384,749
    
    
    
    2,298,435Less current portion
    
    
    9,640
    
    
    
    22,500
    
    
    
    16,875Long-term debt
    
    $
    920,336
    
    
    $
    2,362,249
    
    
    $
    2,281,560
    12




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Other
  5. Derivative Financial Instruments
 Disclosures about Derivative Instruments and Hedging
Activities an amendment of FASB Statement No. 133
 , Accounting for Certain Derivative Instruments and
Certain Hedging Activities, an Amendment of FAS 133 Amendment of Statement 133 on
Derivative Instruments and Hedging Activities.
 Effective Dates
    
    Notional Amount
    
    
    Pay Rates
    
    
    Maturity Dates(amounts in millions)May 25, 2006
    
    $
    100
    (1)  (3)
    
    
    5.326%
    
    
    May 26, 2009May 26, 2006
    
    
    200
    (2)  (3)
    
    
    5.2725% - 5.275%
    
    
    May 26, 2009June 12, 2006
    
    
    150
    (2)  (3)
    
    
    5.27% - 5.279%
    
    
    June 12, 2009Total
    
    $
    450
 
 (1)
    
    Consists of one swap(2)
    
    Consists of two swaps(3)
    
    Undesignated  Gain Recognized inFair Value
    
    Interest ExpenseMeasurements
    
    From IneffectiveInterest Rate Swaps
    
    at March 31, 2009
    Interest Rate SwapsUndesignated  LiabilitiesAccounts Payable and
Accrued Liabilities
    
    $
    (2,710
    )
    
    $
    (3,021
    )Total Undesignated  Liabilities
    
    $
    (2,710
    )
    
    $
    (3,021
    )
 13




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6. Income Taxes
  14




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7. Benefit Plans
 Employers Disclosures About
Pension and Other Postretirement Benefits (Revised 2003)
 Pension Benefits
    
    Postretirement BenefitsThree Months
    
    Three MonthsEnded March 31,
    
    Ended March 31,2009
    
    2008
    
    2009
    
    2008Service cost
    
    $
    1,074
    
    
    $
    1,412
    
    
    $
    194
    
    
    $
    240Interest cost
    
    
    1,352
    
    
    
    1,747
    
    
    
    487
    
    
    
    654Expected return on plan assets
    
    
    (1,443
    )
    
    
    (1,820
    )
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    Net periodic benefit cost
    
    $
    983
    
    
    $
    1,339
    
    
    $
    680
    
    
    $
    894
    8. Business Segments
  9. Legal Proceedings
  15




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10. Related Party Transactions
     11. Subsequent Events
   16




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Managements Narrative Analysis of Results of Operations
  Forward-Looking Information
  Corporate Overview
  
    
    We provide simple, cost effective marketing solutions to our advertisers that generate a
large volume of ready-to-buy consumers for their local businesses.
    
    We provide local search solutions to consumers that are easy to use and deliver highly
relevant search results through a variety of print and online media platforms.
 ®
  17




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##### Table of Contents




    
    Brand:Our Dex brand provides differentiation and an ability to leverage the
capabilities of our print products into other media, such as online and mobile;
    
    Advertisers:Strong, long-term relationships with our advertisers;
    
    Products:Our multiple media local search solutions target consumers who are closer to
making purchase decisions;
    
    Channel:We manage a large, established local sales organization; and
    
    Content:Our proprietary database contains up-to-date information for more than
200,000 national and local businesses in 7 states and an infrastructure to service these
national and local advertisers.
  Recent Trends Related to Our Business
   Accounting for the Impairment or
Disposal of Long-Lived Assets
   18




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Going Concern
        19




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Significant Financing Developments
  Segment Reporting
  New Accounting Pronouncements
  20




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RESULTS OF OPERATIONS
 Three months ended March 31, 2009 and 2008
 Net Revenues
  Three months ended March 31,(amounts in millions)
    
    2009
    
    2008
    
    $ Change
    
    % ChangeGross directory advertising revenues
    
    $
    214.4
    
    
    $
    238.1
    
    
    $
    (23.7
    )
    
    
    (10.0
    )%Sales claims and allowances
    
    
    (5.4
    )
    
    
    (5.3
    )
    
    
    (0.1
    )
    
    
    (1.9
    )Net directory advertising revenues
    
    
    209.0
    
    
    
    232.8
    
    
    
    (23.8
    )
    
    
    (10.2
    )Other revenues
    
    
    2.3
    
    
    
    3.4
    
    
    
    (1.1
    )
    
    
    (32.4
    )Total Net Revenues
    
    $
    211.3
    
    
    $
    236.2
    
    
    $
    (24.9
    )
    
    
    (10.5
    )%
     21




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Expenses
  Three months ended March 31,(amounts in millions)
    
    2009
    
    2008
    
    $ Change
    
    % ChangeProduction, publication and distribution expenses
    
    $
    29.5
    
    
    $
    34.1
    
    
    $
    (4.6
    )
    
    
    (13.5
    )%Selling and support expenses
    
    
    55.2
    
    
    
    56.7
    
    
    
    (1.5
    )
    
    
    (2.6
    )General and administrative expenses
    
    
    10.0
    
    
    
    8.2
    
    
    
    1.8
    
    
    
    22.0Depreciation and amortization expense
    
    
    58.6
    
    
    
    49.2
    
    
    
    9.4
    
    
    
    19.1Impairment charges
    
    
    
    
    
    
    1,063.0
    
    
    
    (1,063.0
    )
    
    
    N/MTotal
    
    $
    153.3
    
    
    $
    1,211.2
    
    
    $
    (1,057.9
    )
    
    
    (87.3
    )%
 
 (N/M: Not Meaningful)
  Production, Publication and Distribution Expenses
  Three months ended(amounts in millions)
    
    March 31, 2009$ ChangeDecreased information technology (IT) expenses.
    
    $
    (1.9
    )Decreased print, paper and distribution costs
    
    
    (1.1
    )All other, net
    
    
    (1.6
    )Total decrease in production, publication and
distribution expenses for the three months ended
March 31, 2009
    
    $
    (4.6
    )
   22




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Selling and Support Expenses
  Three months ended(amounts in millions)
    
    March 31, 2009$ ChangeDecreased commissions and salesperson costs
    
    $
    (4.5
    )Decreased directory publishing costs
    
    
    (1.4
    )Increased bad debt expense
    
    
    4.6All other, net
    
    
    (0.2
    )Total decrease in selling
and support expenses for
the three months ended
March 31, 2009
    
    $
    (1.5
    )
    General and Administrative Expenses
  Three months ended(amounts in millions)
    
    March 31, 2009$ ChangeIncreased restructuring expenses.
    
    $
    1.6All other, net
    
    
    0.2Total increase in G&A
expenses for the three
months ended March 31,
2009
    
    $
    1.8
 23




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Depreciation and Amortization Expense
    Impairment Charges
 Goodwill and Other Intangible Assets
   24




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Operating Income (Loss)
  Three months ended March 31,(amounts in millions)
    
    2009
    
    2008
    
    $ Change
    
    % ChangeTotal
    
    $
    58.0
    
    
    $
    (975.0
    )
    
    $
    1,033.0
    
    
    
    N/M
  Interest Expense, Net
    Income Taxes
  25




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Quantitative and Qualitative Disclosures About Market Risk
  
 Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Controls
 ,
 Remediation Plan for Material Weakness in Internal Control Over Financial Reporting
   
    
    During 2008, the
Company began to
implement, and
during 2009 it
intends to fully
implement controls
to formalize its
evaluation of
deferred income tax
balances including
a comprehensive
reconciliation
between deferred
income tax balances
determined on a
basis in conformity
with U.S. generally
accepted accounting
principles for
financial reporting
purposes and those
determined for tax
reporting purposes;
    
    During 2008, the
Company began to
implement, and
during 2009 it
intends to fully
implement an
acceleration of the
timing of certain
tax review
activities,
including
apportionment and
allocation for
income tax
reporting purposes,
during the
financial statement
closing process;
    
    The Company intends
to improve
documentation and
institute more
formalized review
of tax positions
taken, with senior
management and
external experts,
to ensure proper
evaluation and
accounting
treatment of
complex tax issues;
and
    
    The Company intends
to evaluate and
supplement and/or
train internal
resources, as
necessary, and
evaluate external
experts.
  26




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PART II. OTHER INFORMATION
 
 Legal Proceedings
  
 Item1A. Risk Factors
  
 Unregistered Sales of Equity Securities and Use of Proceeds
  
 Defaults Upon Senior Securities
  
 Submission of Matters to a Vote of Security Holders
  
 Other Information
  27




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Exhibits
 Exhibit No.
    
    Document31.1*
    
    Certification of Quarterly Report on Form 10-Q for the period ended
March 31, 2009 by David C. Swanson, Chairman and Chief Executive
Officer of Dex Media West LLC under Section 302 of the
Sarbanes-Oxley Act.31.2*
    
    Certification of Quarterly Report on Form 10-Q for the period ended
March 31, 2009 by Steven M. Blondy, Executive Vice President and
Chief Financial Officer of Dex Media West LLC under Section 302 of
the Sarbanes-Oxley Act.32.1*
    
    Certification of Quarterly Report on Form 10-Q for the period ended
March 31, 2009 under Section 906 of the Sarbanes-Oxley Act
by David C.
Swanson, Chairman and Chief Executive Officer, and Steven M.
Blondy, Executive Vice President and Chief Financial Officer of Dex
Media West LLC.
 
 *
    
    Filed herewith. 28




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SIGNATURES
  DEX MEDIA WEST LLCDate: May 12,  2009
    By:
    /s/ Steven M. BlondySteven M. BlondyExecutive Vice President and Chief Financial Officer
(Principal Financial Officer)/s/ Robert S. LowreyRobert S. LowreyAssistant Vice President, Assistant Controller and
Interim Chief Accounting Officer
(Interim Principal Accounting Officer) 29




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Exhibit Index
 Exhibit No.
    
    Document31.1*
    
    Certification of Quarterly Report on Form 10-Q for the period ended
March 31, 2009 by David C. Swanson, Chairman and Chief Executive
Officer of Dex Media West LLC under Section 302 of the
Sarbanes-Oxley Act.31.2*
    
    Certification of Quarterly Report on Form 10-Q for the period ended
March 31, 2009 by Steven M. Blondy, Executive Vice President and
Chief Financial Officer of Dex Media West LLC under Section 302 of
the Sarbanes-Oxley Act.32.1*
    
    Certification of Quarterly Report on Form 10-Q for the period ended
March 31, 2009 under Section 906 of the Sarbanes-Oxley Act
by David C.
Swanson, Chairman and Chief Executive Officer, and Steven M.
Blondy, Executive Vice President and Chief Financial Officer of Dex
Media West LLC.
 
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    Filed herewith. 30