10-Q

UNITED STATES

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 March 31, 2012

OR

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

For the transition period from __________ to __________

Commission file number 001-07155

DEX ONE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	13-2740040
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
1001 Winstead Drive, Cary, N.C.	27513
(Address of principal executive offices)	(Zip Code)

(919) 297-1600

  (Registrant’s telephone number, including area code)

N/A

(Former name, former address and former

fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 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 o

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer x    Non-accelerated filer o Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes x No o

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

Title of class	Shares Outstanding at April 16, 2012
Common Stock, par value $.001 per share	50,306,677

DEX ONE CORPORATION

INDEX TO FORM 10-Q

PART I. FINANCIAL INFORMATION	PAGE
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets at March 31, 2012 and December 31, 2011	3
Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2012 and 2011	4
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2012 and 2011	5
Notes to Condensed Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3. Quantitative and Qualitative Disclosures About Market Risk	32
Item 4. Controls and Procedures	34
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	34
Item 1A. Risk Factors	35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 6. Exhibits	36
SIGNATURES	37

EX-10.1

EX-10.2

EX-10.3

EX-10.4

EX-31.1

EX-31.2

EX-32.1

EX-101.INS - XBRL INSTANCE DOCUMENT

EX-101.SCH - XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT

EX-101.CAL - XBRL TAXONOMY EXTENSION CALCULATION LINKBASE DOCUMENT

EX-101.DEF - XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT

EX-101.LAB - XBRL TAXONOMY EXTENSION LABEL LINKBASE DOCUMENT

EX-101.PRE - XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT

2

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Dex One Corporation and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except share data)	March 31, 2012			December 31, 2011
Assets
Current Assets
Cash and cash equivalents	$	115,201		$	257,939
Accounts receivable:
Billed	129,371			161,980
Unbilled	460,814			497,422
Allowance for doubtful accounts	(41,086		)	(53,696		)
Net accounts receivable	549,099			605,706
Deferred directory costs	120,039			130,744
Short-term deferred income taxes, net	68,929			67,793
Prepaid expenses and other current assets	43,479			51,384
Total current assets	896,747			1,113,566
Fixed assets and computer software, net	140,305			151,545
Other non‑current assets	14,930			13,001
Intangible assets, net	2,094,731			2,182,092
Total Assets	$	3,146,713		$	3,460,204
Liabilities and Shareholders' Equity (Deficit)
Current Liabilities
Accounts payable and accrued liabilities	$	89,932		$	126,158
Accrued interest	26,078			29,245
Deferred directory revenues	588,321			644,101
Current portion of long-term debt	223,317			326,300
Total current liabilities	927,648			1,125,804
Long-term debt	2,020,722			2,184,057
Deferred income taxes, net	73,937			75,492
Other non-current liabilities	75,530			84,718
Total Liabilities	3,097,837			3,470,071
Commitments and contingencies
Shareholders' Equity (Deficit)
Common stock, par value $.001 per share, authorized – 300,000,000 shares; issued and outstanding – 50,281,677 shares at March 31, 2012 and 50,233,617 shares at December 31, 2011	50			50
Additional paid-in capital	1,461,121			1,460,057
Accumulated deficit	(1,384,984		)	(1,442,556		)
Accumulated other comprehensive loss	(27,311		)	(27,418		)
Total shareholders' equity (deficit)	48,876			(9,867		)
Total Liabilities and Shareholders' Equity (Deficit)	$	3,146,713		$	3,460,204

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

3

Dex One Corporation and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

	Three Months Ended
	March 31,
(in thousands, except per share data)	2012			2011
Net revenues	$	344,428		$	391,235
Expenses:
Production and distribution expenses (exclusive of depreciation and amortization shown separately below)	70,802			75,059
Selling and support expenses	94,923			104,059
General and administrative expenses	30,226			38,097
Depreciation and amortization	103,751			54,082
Total expenses	299,702			271,297
Operating income	44,726			119,938
Gain on debt repurchases, net	68,763			—
Gain on sale of assets, net	—			13,437
Interest expense, net	(57,084		)	(57,720		)
Income before income taxes	56,405			75,655
(Provision) benefit for income taxes	1,167			(20,245		)
Net income	57,572			55,410
Other comprehensive income:
Benefit plans adjustment, net of tax	107			—
Comprehensive income	$	57,679		$	55,410
Earnings per share:
Basic	$	1.15		$	1.11
Diluted	$	1.15		$	1.11
Shares used in computing earnings per share:
Basic	50,254			50,040
Diluted	50,263			50,040

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

4

Dex One Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Three Months Ended
	March 31,
(in thousands)	2012			2011
Cash Flows Provided By Operating Activities	$	78,109		$	109,533
Cash Flows from Investing Activities
Additions to fixed assets and computer software	(5,005		)	(4,860		)
Proceeds from sale of assets	20			15,391
Net cash (used in) provided by investing activities	(4,985		)	10,531
Cash Flows from Financing Activities
Credit facilities repayments	(213,743		)	(94,846		)
Debt issuance costs and other financing items, net	(1,979		)	315
Decrease in checks not yet presented for payment	(140		)	(16,743		)
Net cash used in financing activities	(215,862		)	(111,274		)
(Decrease) increase in cash and cash equivalents	(142,738		)	8,790
Cash and cash equivalents, beginning of period	257,939			127,852
Cash and cash equivalents, end of period	$	115,201		$	136,642
Supplemental Information:
Cash interest, net	$	42,198		$	63,716
Cash income taxes, net	$	3,018		$	(626	)
Non-cash Financing Activities:
Reduction of debt from debt repurchases	$	(72,613	)	$	—

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

5

Dex One Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(tabular amounts in thousands, except share and per share data and where otherwise indicated)

1. Business and Basis of Presentation

The interim condensed consolidated financial statements of Dex One Corporation and its direct and indirect wholly-owned subsidiaries (“Dex One,” the “Company,” “we,” “us” and “our”) have been prepared in accordance with the Securities and Exchange Commission’s (“SEC”) instructions to this Quarterly Report on Form 10-Q and should be read in conjunction with the financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2011. The interim condensed consolidated financial statements include the accounts of Dex One and its direct and indirect wholly-owned subsidiaries. As of March 31, 2012, R.H. Donnelley Corporation ("RHD"), R.H. Donnelley Inc. (“RHDI” or "RHDI Inc."), Dex Media, Inc. (“Dex Media”), Dex One Digital, Inc. ("Dex One Digital"), formerly known as Business.com, Inc. (“Business.com”), and Dex One Service, Inc. (“Dex One Service”) were our only direct wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated. 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 material adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of financial position, results of operations and cash flows at the dates and for the periods presented have been included.

Business Overview

We are a marketing solutions company that helps local businesses and consumers connect with each other. Our proprietary and affiliate provided marketing solutions combine multiple media platforms, which help drive large volumes of consumer leads to our customers, and assist our customers in managing their presence among those consumers. Our marketing consultants strive to be trusted advisors and offer local businesses personalized marketing consulting services and exposure across leading media platforms used by consumers searching for local businesses. These platforms include online and mobile local search solutions, major search engines, and print directories.

Our proprietary marketing solutions include our Dex published yellow pages directories, which we co-brand with other recognizable brands in the industry such as CenturyLink and AT&T, our Internet yellow pages site, DexKnows.com and our mobile applications, Dex Mobile and CityCentral. Our growing list of marketing solutions also includes local business and market analysis, message and image creation, target market identification, advertising and digital profile creation, web sites, mobile web sites, reputation management, online video development and promotion, keyword optimization strategies and programs, distribution strategies, social strategies and tracking and reporting. Our digital lead generation solutions are powered by our search engine marketing product, Dex Net, which extends our customers’ reach to our leading Internet and mobile partners to attract consumers searching for local businesses, products and services within our markets.

Significant Financing Developments

On March 20, 2012, the Company announced the commencement of a cash tender offer to purchase the maximum aggregate principal amount of our outstanding $300 million 12%/14% Senior Subordinated Notes due 2017 (“Dex One Senior Subordinated Notes”) for $26.0 million. The Offer to Purchase included a purchase price range accepted for purchase of $270 to $300 per $1,000 principal amount of the Dex One Senior Subordinated Notes plus an amount in cash in lieu of the accrued and unpaid interest calculated at a rate of 12% per annum on the aggregate principal amount of the Dex One Senior Subordinated Notes from March 31, 2012 to, but not including, the payment date. The cash tender offer expired on April 19, 2012. See Note 11, “Subsequent Events” for additional information on the cash tender offer to purchase the Dex One Senior Subordinated Notes.

On March 9, 2012, RHDI, Dex Media East, Inc. ("DME Inc.") and Dex Media West, Inc. ("DMW Inc.") each entered into the First Amendment (the "Amendments") to the amended and restated RHDI credit facility (“RHDI Amended and Restated Credit Facility”), the amended and restated DME Inc. credit facility (“Dex Media East Amended and Restated Credit Facility”) and the amended and restated DMW Inc. credit facility (“Dex Media West Amended and Restated Credit Facility”) (collectively, the "Credit Facilities"), respectively, with certain financial institutions. The Amendments permit RHDI, DME Inc. and DMW Inc. to make open market repurchases and retire loans under their respective Credit Facilities at a discount to par through December 31, 2013, provided that such discount is acceptable to those lenders who choose to participate. Repurchases may be made with existing cash on hand, subject to certain restrictions and terms noted in the Amendments. RHDI, DME Inc. and DMW Inc. are under no obligation to make such repurchases at any time throughout the term noted in the Amendments.

6

On March 14, 2012, under the terms and conditions of the Amendments, RHDI commenced an offer to utilize up to $40 million to repurchase loans under the RHDI Amended and Restated Credit Facility at a price of 41.5% to 45.5% of par, DME Inc. commenced an offer to utilize up to $12.5 million to repurchase loans under the Dex Media East Amended and Restated Credit Facility at a price of 50.5% to 54.5% of par and DMW Inc. commenced an offer to utilize up to $23.5 million to repurchase loans under the Dex Media West Amended and Restated Credit Facility at a price of 60.0% to 64.0% of par. The offers expired on March 21, 2012. On March 23, 2012, RHDI, DME Inc. and DMW Inc. collectively utilized cash on hand of $69.5 million to repurchase loans under the Credit Facilities of $142.1 million ("Debt Repurchases"). The Debt Repurchases have been accounted for as an extinguishment of debt resulting in a non-cash, pre-tax gain of $68.8 million during the three months ended March 31, 2012, consisting of the difference between the par value and purchase price of the Credit Facilities, offset by accelerated amortization of fair value adjustments to our Credit Facilities that were recognized in conjunction with our adoption of fresh start accounting and fees associated with the Debt Repurchases. The following table provides detail of the repurchases made on each of our Credit Facilities and the calculation of the net gain on Debt Repurchases for the three months ended March 31, 2012:

	Three Months Ended March 31, 2012
RHDI Amended and Restated Credit Facility (repurchased at 43.5% of par)	$	91,954
Dex Media East Amended and Restated Credit Facility (repurchased at 53.0% of par)	23,585
Dex Media West Amended and Restated Credit Facility (repurchased at 64.0% of par)	26,593
Total Credit Facilities repurchased	142,132
Total purchase price	(69,519		)
Accelerated amortization of fair value adjustments to Credit Facilities	(2,002		)
Fees associated with the Debt Repurchases	(1,848		)
Net gain on Debt Repurchases	$	68,763

The net gain on Debt Repurchases is included in "Gain on debt repurchases, net" on the unaudited condensed consolidated statement of comprehensive income.

2. Summary of Significant Accounting Policies

Identifiable Intangible Assets

The Company reviews the carrying value of definite-lived intangible assets and other long-lived assets whenever events or circumstances indicate that their carrying amount may not be recoverable. The Company reviewed the following information, estimates and assumptions during the three months ended March 31, 2012 to determine if the carrying amounts of our definite-lived intangible assets and other long-lived assets were recoverable:

• Historical financial information, including revenue, profit margins, customer attrition data and price premiums enjoyed relative to competing independent publishers;

• Long-term financial projections, including, but not limited to, revenue trends and profit margin trends;

• Intangible asset and other long-lived asset carrying values and any changes in current and future use;

• Trading values of our debt and equity securities; and

• Other Company-specific information.

Based on our evaluation during the three months ended March 31, 2012, we concluded that the carrying amounts of our definite-lived intangible assets and other long-lived assets were recoverable.

7

Amortization expense related to the Company’s intangible assets was $87.4 million and $38.2 million for the three months ended March 31, 2012 and 2011, respectively. Our intangible assets and their respective book values at March 31, 2012 are shown in the following table:

	Directory Services Agreements			Local Customer Relationships			National Customer Relationships			Trade Names and Trademarks			Technology, Advertising Commitments & Other			Total
Gross intangible assets carrying value	$	1,330,000		$	560,000		$	175,000		$	380,000		$	85,500		$	2,530,500
Accumulated amortization	(215,716		)	(116,421		)	(27,647		)	(53,641		)	(22,344		)	(435,769		)
Net intangible assets	$	1,114,284		$	443,579		$	147,353		$	326,359		$	63,156		$	2,094,731

The Company evaluates the remaining useful lives of definite-lived intangible assets and other long-lived assets whenever events or circumstances indicate that a revision to the remaining period of amortization is warranted. If the estimated remaining useful lives change, the remaining carrying amount of the intangible assets and other long-lived assets would be amortized prospectively over that revised remaining useful life. The Company evaluated the remaining useful lives of definite-lived intangible assets and other long-lived assets during the three months ended March 31, 2012 by considering, among other things, the effects of obsolescence, demand, competition, which takes into consideration the price premium benefit we have over competing independent publishers in our markets as a result of directory services agreements acquired in prior acquisitions, and other economic factors, including the stability of the industry in which we operate, known technological advances, legislative actions that result in an uncertain or changing regulatory environment, and expected changes in distribution channels. Based on our evaluation of these factors during the three months ended March 31, 2012, the Company determined that the estimated useful lives of our directory services agreements, local and national customer relationships and tradenames and trademarks no longer reflect the period they are expected to contribute to future cash flows. Therefore, the Company reduced the estimated useful lives of these intangible assets as shown in the following table:

Intangible Asset	Previous Weighted Average Useful Lives	Revised Weighted Average Useful Lives	Amortization Methodology
Directory services agreements	25 years	10 years	Income forecast method (1)
Local customer relationships	13 years	9 years	Income forecast method (1)
National customer relationships	24 years	9 years	Income forecast method (1)
Tradenames and trademarks	13 years	9 years	Straight-line method

⁽¹⁾ These intangible assets are being amortized under the income forecast method, which assumes the value derived from these intangible assets is greater in the earlier years and steadily declines over time.

The weighted average useful lives of technology, advertising commitments and other remain at seven years. The combined weighted average useful life of our intangible assets at March 31, 2012 is nine years. As a result of reducing the estimated useful lives of the intangible assets noted above, the Company expects an increase in amortization expense of $161.6 million and total amortization expense of $349.4 million for 2012. Amortization expense for all intangible assets for the five succeeding years is estimated to be approximately $301.6 million, $257.5 million, $217.1 million, $210.4 million and $206.2 million, respectively.

If industry and local business conditions in our markets deteriorate in excess of current estimates, potentially resulting in further declines in advertising sales and operating results, and / or if the trading value of our debt and equity securities continue to decline significantly, we will be required to assess the recoverability and useful lives of our intangible assets and other long-lived assets. These factors, including changes to assumptions used in our impairment analysis as a result of these factors, could result in future impairment charges, a reduction of remaining useful lives associated with our intangible assets and other long-lived assets and acceleration of amortization expense.

8

Interest Expense

In conjunction with our adoption of fresh start accounting and reporting on February 1, 2010 ("Fresh Start Reporting Date"), an adjustment was established to record our outstanding debt at fair value on the Fresh Start Reporting Date. This fair value adjustment will be amortized as an increase to interest expense over the remaining term of the respective debt agreements using the effective interest method and does not impact future scheduled interest or principal payments. Amortization of the fair value adjustment included as an increase to interest expense was $7.5 million and $7.3 million for the three months ended March 31, 2012 and 2011, respectively.

During the first quarter of 2010, we entered into interest rate swap and interest rate cap agreements that are not designated as cash flow hedges. The Company’s interest expense includes income of $0.2 million and $0.7 million for the three months ended March 31, 2012 and 2011, respectively, resulting from the change in fair value of these interest rate swaps and interest rate caps.

Advertising Expense

We recognize advertising expenses as incurred. These expenses include media, public relations, promotional, branding and sponsorship costs and on-line advertising. Total advertising expense for the Company was $4.1 million and $3.1 million for the three months ended March 31, 2012 and 2011, respectively.

Concentration of Credit Risk

Trade Receivables

Approximately 85% of our advertising revenue is derived from the sale of our marketing solutions to local businesses. These customers typically enter into 12-month advertising sales contracts and make monthly payments over the term of the contract. Commencing in late 2011, the Company began to offer customers the ability to purchase digital marketing solutions for shorter time frames than our standard one year contract. Some customers prepay the full amount or a portion of the contract value. Most new customers and customers desiring to expand their advertising programs are subject to a credit review. If the customers qualify, we may extend credit to them in the form of a trade receivable for their advertising purchase. Local businesses tend to have fewer financial resources and higher failure rates than large businesses. In addition, full collection of delinquent accounts can take an extended period of time and involve significant costs. We do not require collateral from our customers, although we do charge late fees to customers that do not pay by specified due dates.

The remaining approximately 15% of our advertising revenue is derived from the sale of our marketing solutions to national or large regional chains. The majority of the revenue derived through national accounts is serviced through certified marketing representatives ("CMRs") from which we accept orders. CMRs are independent third parties that act as agents for national customers. The CMRs are responsible for billing the national customers for their advertising. We receive payment for the value of advertising placed in our directories, net of the CMR’s commission, directly from the CMR.

Derivative Financial Instruments

At March 31, 2012, we had interest rate swap and interest rate cap agreements with major financial institutions with a notional amount of $300.0 million and $300.0 million, respectively. We are exposed to credit risk in the event that one or more of the counterparties to the agreements does not, or cannot, meet their obligation. The notional amount for interest rate swaps is used to measure interest to be paid or received and does not represent the amount of exposure to credit loss. Any loss would be limited to the amount that would have been received over the remaining life of the interest rate swap agreement. Under the terms of the interest rate cap agreements, the Company will receive payments based on the spread in rates if the three-month LIBOR rate increases above the negotiated cap rates. Any loss would be limited to the amount that would have been received based on the spread in rates over the remaining life of the interest rate cap agreement. The counterparties to the interest rate swap and interest rate cap agreements are major financial institutions with credit ratings of AA- or higher, or the equivalent dependent upon the credit rating agency.

9

Earnings Per Share

The calculation of basic and diluted earnings per share (“EPS”) is presented below.

	Three Months Ended March 31,
	2012		2011
Basic EPS
Net income	$	57,572	$	55,410
Weighted average common shares outstanding	50,254		50,040
Basic EPS	$	1.15	$	1.11
Diluted EPS
Net income	$	57,572	$	55,410
Weighted average common shares outstanding	50,254		50,040
Dilutive effect of stock awards	9		—
Weighted average diluted shares outstanding	50,263		50,040
Diluted EPS	$	1.15	$	1.11

Diluted EPS is calculated by dividing net income by the weighted average common shares outstanding plus dilutive potential common stock. Potential common stock includes stock options and restricted stock, the dilutive effect of which is calculated using the treasury stock method. For the three months ended March 31, 2012 and 2011, 2.7 million shares and 1.8 million shares, respectively, of the Company’s stock-based awards had exercise prices that exceeded the average market price of the Company’s common stock for the respective period.

Fair Value of Financial Instruments

At March 31, 2012 and December 31, 2011, the fair value of cash and cash equivalents, accounts receivable, net and accounts payable and accrued liabilities approximated their carrying value based on the net short-term nature of these instruments. Estimates of fair value may be affected by assumptions made and, accordingly, are not necessarily indicative of the amounts the Company could realize in a current market exchange.

As required by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The Company had interest rate swaps with a notional amount of $300.0 million and $500.0 million at March 31, 2012 and December 31, 2011, respectively, and interest rate caps with a notional amount of $300.0 million and $400.0 million at March 31, 2012 and December 31, 2011, respectively, that are measured at fair value on a recurring basis. The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at March 31, 2012 and December 31, 2011, respectively, and the level within the fair value hierarchy in which the fair value measurements were included.

	Fair Value Measurements Using Significant Other Observable Inputs (Level 2)
Derivatives:	March 31, 2012			December 31, 2011
Interest Rate Swap – Liabilities	$	(2,441	)	$	(2,694	)
Interest Rate Cap – Assets	$	—		$	5

There were no transfers of assets or liabilities into or out of Levels 1, 2 or 3 of the fair value hierarchy during the three months ended March 31, 2012 or year ended December 31, 2011. The Company has established a policy of recognizing transfers between levels of the fair value hierarchy as of the end of a reporting period.

10

The Company’s long-term debt obligations are not measured at fair value on a recurring basis, however we present the fair value of the Dex One Senior Subordinated Notes and our Credit Facilities in Note 4, “Long-Term Debt.” The Company has utilized quoted market prices, where available, to compute the fair market value of these long-term debt obligations at March 31, 2012. The Dex One Senior Subordinated Notes are categorized within Level 1 of the fair value hierarchy and our Credit Facilities are categorized within Level 2 of the fair value hierarchy.

Valuation Techniques – Interest Rate Swaps and Interest Rate Caps

Fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Company uses prices and inputs that are current as of the measurement date.

Fair value for our derivative instruments was derived using pricing models based on a market approach. Pricing models take into account relevant observable market inputs that market participants would use in pricing the asset or liability. The pricing models used to determine fair value for each of our derivative instruments incorporate specific contract terms for valuation inputs, including effective dates, maturity dates, interest rate swap pay rates, interest rate cap rates and notional amounts, as disclosed and presented in Note 5, “Derivative Financial Instruments,” interest rate yield curves, and the creditworthiness of the counterparty and the Company. Counterparty credit risk and the Company’s credit risk could have a material impact on the fair value of our derivative instruments, our results of operations or financial condition in a particular reporting period. At March 31, 2012, the impact of applying counterparty credit risk in determining the fair value of our derivative instruments was an increase to our derivative instruments liability of less than $0.1 million. At March 31, 2012, the impact of applying the Company’s credit risk in determining the fair value of our derivative instruments was a decrease to our derivative instruments liability of $0.8 million.

Many pricing models do not entail material subjectivity because the methodologies employed do not necessitate significant judgment, and the pricing inputs are observed from actively quoted markets, as is the case for our derivative instruments. The pricing models used by the Company are widely accepted by the financial services industry. As such and as noted above, our derivative instruments are categorized within Level 2 of the fair value hierarchy.

Fair Value Control Processes– Interest Rate Swaps and Interest Rate Caps

The Company employs control processes to validate the fair value of its derivative instruments derived from the pricing models. These control processes are designed to assure that the values used for financial reporting are based on observable inputs wherever possible. In the event that observable inputs are not available, the control processes are designed to assure that the valuation approach utilized is appropriate and consistently applied and that the assumptions are reasonable.

Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and certain expenses and the disclosure of contingent assets and liabilities. Actual results could differ materially from those estimates and assumptions. Estimates and assumptions are used in the determination of recoverability of long-lived assets, sales allowances, allowances for doubtful accounts, depreciation and amortization, employee benefit plans expense, restructuring expense and accruals, deferred income taxes, certain assumptions pertaining to our stock-based awards, and certain estimates and assumptions used in our impairment evaluation and useful lives assessment of definite-lived intangible assets and other long-lived assets, among others.

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New Accounting Pronouncements

In June 2011, the FASB issued Accounting Standards Update ("ASU") No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income (“ASU 2011-05”). ASU 2011-05 allows an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in shareholders' equity. ASU 2011-05 does not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. In December 2011, the FASB issued ASU No. 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 ("ASU 2011-12"). ASU 2011-12 defers the effective date of provisions included in ASU 2011-05 that require entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement where net income is presented and the statement where other comprehensive income is presented for both interim and annual financial statements. ASU 2011-12 further states that entities must continue to report reclassification adjustments out of accumulated comprehensive income consistent with the presentation requirements in effect before ASU 2011-05. Effective January 1, 2012, the Company adopted the applicable provisions included in ASU 2011-05 and elected to present a single continuous statement of comprehensive income. The Company continues to monitor the FASB's deliberations regarding ASU 2011-12.

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04’). ASU 2011-04 was issued to provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between GAAP and International Financial Reporting Standards. ASU 2011-04 clarifies the FASB’s intent about the application of existing fair value measurement and disclosure requirements, changes certain fair value measurement principles and enhances fair value disclosure requirements. Effective January 1, 2012, the Company adopted the disclosure provisions included in ASU 2011-04. The adoption of ASU 2011-04 had no impact on our financial position or results of operations.

We have reviewed other accounting pronouncements that were issued as of March 31, 2012, which the Company has not yet adopted, and do not believe that these pronouncements will have a material impact on our financial position or operating results.

3.Restructuring Charges

During the fourth quarter of 2010, the Company initiated a restructuring plan that included headcount reductions, consolidation of responsibilities and vacating leased facilities, which continued into 2011 (“Restructuring Actions”). The Company did not recognize a restructuring charge to earnings related to the Restructuring Actions during the three months ended March 31, 2012. Cash payments of $6.4 million were made in conjunction with the Restructuring Actions during the three months ended March 31, 2012. The Company recognized a restructuring charge to earnings of $6.0 million and made cash payments of $8.5 million related to the Restructuring Actions during the three months ended March 31, 2011. The following table shows the activity in our restructuring reserve associated with the Restructuring Actions during the three months ended March 31, 2012:

Three Months Ended March 31, 2012
Balance at January 1, 2012	$	7,967
Payments	(6,434		)
Balance at March 31, 2012	$	1,533

Restructuring charges that are charged to earnings are included in production and distribution expenses, selling and support expenses or general and administrative expenses on the unaudited condensed consolidated statements of comprehensive income, as applicable.

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4. Long-Term Debt

The following table presents the fair market value of our long-term debt at March 31, 2012 based on quoted market prices on that date, as well as the carrying value of our long-term debt at March 31, 2012, which includes (1) $53.7 million of unamortized fair value adjustments required by GAAP in connection with the Company’s adoption of fresh start accounting on the Fresh Start Reporting Date, (2) the issuance of an additional $10.5 million of Dex One Senior Subordinated Notes as a result of the Company's election to make paid-in-kind (“PIK”) interest payments for the semi-annual interest period ending March 31, 2012 and (3) the impact of the Debt Repurchases. See Note 1, “Business and Basis of Presentation - Significant Financing Developments” for additional information on the Debt Repurchases.

	March 31, 2012
	Fair Market Value		Carrying Value
RHDI Amended and Restated Credit Facility	$	357,862	$	816,571
Dex Media East Amended and Restated Credit Facility	298,662		561,394
Dex Media West Amended and Restated Credit Facility	353,717		555,574
Dex One Senior Subordinated Notes	90,821		310,500
Total Dex One consolidated	1,101,062		2,244,039
Less current portion	119,372		223,317
Long-term debt	$	981,690	$	2,020,722

Credit Facilities

RHDI Amended and Restated Credit Facility

In conjunction with the Debt Repurchases, RHDI repurchased $92.0 million of loans under the RHDI Amended and Restated Credit Facility at a rate of 43.5% of par. As of March 31, 2012, the outstanding carrying value under the RHDI Amended and Restated Credit Facility totaled $816.6 million. The RHDI Amended and Restated Credit Facility requires quarterly principal and interest payments and matures on October 24, 2014. The weighted average interest rate of outstanding debt under the RHDI Amended and Restated Credit Facility was 9.0% at March 31, 2012.

Dex Media East Amended and Restated Credit Facility

In conjunction with the Debt Repurchases, DME Inc. repurchased $23.6 million of loans under the Dex Media East Amended and Restated Credit Facility at a rate of 53.0% of par. As of March 31, 2012, the outstanding carrying value under the Dex Media East Amended and Restated Credit Facility totaled $561.4 million. The Dex Media East Amended and Restated Credit Facility requires quarterly principal and interest payments and matures on October 24, 2014. The weighted average interest rate of outstanding debt under the Dex Media East Amended and Restated Credit Facility was 3.0% at March 31, 2012.

Dex Media West Amended and Restated Credit Facility

In conjunction with the Debt Repurchases, DMW Inc. repurchased $26.6 million of loans under the Dex Media West Amended and Restated Credit Facility at a rate of 64.0% of par. As of March 31, 2012, the outstanding carrying value under the Dex Media West Amended and Restated Credit Facility totaled $555.6 million. The Dex Media West Amended and Restated Credit Facility requires quarterly principal and interest payments and matures on October 24, 2014. The weighted average interest rate of outstanding debt under the Dex Media West Amended and Restated Credit Facility was 7.3% at March 31, 2012.

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Notes

Dex One Senior Subordinated Notes

Interest on the Dex One Senior Subordinated Notes is payable semi-annually on March 31^st and September 30^th of each year, commencing on March 31, 2010 through January 29, 2017. The Dex One Senior Subordinated Notes accrue interest at an annual rate of 12% for cash interest payments and 14% if the Company elects PIK interest payments. The Company may elect, no later than two business days prior to the beginning of any such semi-annual interest period, whether to make each interest payment on the Dex One Senior Subordinated Notes (i) entirely in cash or (ii) 50% in cash and 50% in PIK interest, which is capitalized as additional senior subordinated notes. In the absence of such an election for any subsequent semi-annual interest period, interest on the Dex One Senior Subordinated Notes will be payable in the form of the interest payment for the semi-annual interest period immediately preceding such subsequent semi-annual interest period. For the semi-annual interest period ending March 31, 2012, the Company made interest payments 50% in cash and 50% in PIK interest, as permitted by the indenture governing the Dex One Senior Subordinated Notes, resulting in the issuance of an additional $10.5 million of Dex One Senior Subordinated Notes at March 31, 2012. The Company will continue to make interest payments on the Dex One Senior Subordinated Notes 50% in cash and 50% in PIK interest for the semi-annual interest period ending September 30, 2012.

Impact of Fresh Start Accounting

In conjunction with our adoption of fresh start accounting, an adjustment was established to record our outstanding debt at fair value on the Fresh Start Reporting Date. The Company was required to record our Credit Facilities at a discount as a result of their fair value on the Fresh Start Reporting Date. Therefore, the carrying amount of these debt obligations is lower than the principal amount due at maturity. A total discount of $120.2 million was recorded upon adoption of fresh start accounting associated with our Credit Facilities, of which $53.7 million remains unamortized at March 31, 2012, as shown in the following table.

	Carrying Value at March 31, 2012		Unamortized Fair Value Adjustments at March 31, 2012		Outstanding Debt at March 31, 2012 Excluding the Impact of Unamortized Fair Value Adjustments
RHDI Amended and Restated Credit Facility	$	816,571	$	8,785	$	825,356
Dex Media East Amended and Restated Credit Facility	561,394		37,720		599,114
Dex Media West Amended and Restated Credit Facility	555,574		7,154		562,728
Dex One Senior Subordinated Notes	310,500		—		310,500
Total	$	2,244,039	$	53,659	$	2,297,698

In conjunction with the Debt Repurchases, we accelerated amortization of fair value adjustments to our Credit Facilities of $2.0 million, which partially offset the net gain on Debt Repurchases recognized during the three months ended March 31, 2012. See Note 1, “Business and Basis of Presentation - Significant Financing Developments” for additional information.

5. Derivative Financial Instruments

We do not use derivative financial instruments for trading or speculative purposes and our derivative financial instruments are limited to interest rate swap and interest rate cap agreements. The Company utilizes a combination of fixed rate debt and variable rate debt to finance its operations. The variable rate debt exposes the Company to variability in interest payments due to changes in interest rates. Management believes that it is prudent to mitigate the interest rate risk on a portion of its variable rate borrowings. To satisfy our objectives and requirements, the Company has entered into interest rate swap and interest rate cap agreements, which have not been designated as cash flow hedges, to manage our exposure to interest rate fluctuations on our variable rate debt.

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All derivative financial instruments are recognized as either assets or liabilities on the condensed consolidated balance sheets with measurement at fair value. On a quarterly basis, the fair values of our interest rate swaps and interest rate caps are determined based on observable inputs. These derivative instruments have not been designated as cash flow hedges and as such, the initial fair value and any subsequent gains or losses on the change in the fair value of the interest rate swaps and interest rate caps are reported in earnings as a component of interest expense. Any gains or losses related to the quarterly fair value adjustments are presented as a non-cash operating activity on the condensed consolidated statements of cash flows.

By using derivative financial instruments to hedge exposures to changes in interest rates, the Company exposes itself to credit risk and market risk. Credit risk is the possible failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk for the Company. When the fair value of a derivative contract is negative, the Company owes the counterparty and, therefore, it is not subject to credit risk. The Company minimizes the credit risk in derivative financial instruments by entering into transactions with major financial institutions with credit ratings of AA- or higher, or the equivalent dependent upon the credit rating agency.

Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates. The market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

See Note 2, “Summary of Significant Accounting Policies – Fair Value of Financial Instruments” for additional information regarding our interest rate swaps and interest rate caps.

The Company has entered into the following interest rate swaps that effectively convert $300.0 million, or approximately 16%, of the Company’s variable rate debt to fixed rate debt as of March 31, 2012. Since the RHDI Amended and Restated Credit Facility and the Dex Media West Amended and Restated Credit Facility are subject to a LIBOR floor of 3.00% and the LIBOR rate is below that floor at March 31, 2012, both credit facilities are effectively fixed rate debt until such time LIBOR exceeds the stated floor. At March 31, 2012, approximately 86% of our total debt outstanding consisted of variable rate debt, excluding the effect of our interest rate swaps. Including the effect of our interest rate swaps, total fixed rate debt comprised approximately 27% of our total debt portfolio as of March 31, 2012.

Interest Rate Swaps – Dex Media East

Effective Dates	Notional Amount			Pay Rates	Maturity Dates
(amounts in millions)
February 26, 2010	$	100	(1)	1.796%	February 28, 2013
March 5, 2010	100		(1)	1.688%	January 31, 2013
March 10, 2010	100		(1)	1.75%	January 31, 2013
Total	$	300

⁽¹⁾ Consists of one swap

Under the terms of the interest rate swap agreements, we receive variable interest based on the three-month LIBOR and pay a weighted average fixed rate of 1.7%. The weighted average rate received on our interest rate swaps was 0.5% for the three months ended March 31, 2012. These periodic payments and receipts are recorded as interest expense.

Under the terms of the interest rate cap agreements, the Company will receive payments based on the spread in rates if the three-month LIBOR rate increases above the cap rates noted in the table below. The Company paid $2.1 million for the interest rate cap agreements entered into during the first quarter of 2010. We are not required to make any future payments related to these interest rate cap agreements.

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Interest Rate Caps – RHDI

Effective Dates	Notional Amount			Cap Rates	Maturity Dates
(amounts in millions)
February 26, 2010	$	100	(2)	3.5%	February 28, 2013
March 8, 2010	100		(2)	3.5%	January 31, 2013
March 10, 2010	100		(2)	3.0%	April 30, 2012
Total	$	300

⁽²⁾ Consists of one cap

The following tables present the fair value of our interest rate swaps and interest rate caps at March 31, 2012 and December 31, 2011. The fair value of our interest rate swaps is presented in accounts payable and accrued liabilities and other non-current liabilities and the fair value of our interest rate caps is presented in prepaid expenses and other current assets and other non-current assets on the condensed consolidated balance sheet at March 31, 2012 and December 31, 2011. The following tables also present the (gain) loss recognized in interest expense from the change in fair value of our interest rate swaps and interest rate caps for the three months ended March 31, 2012 and 2011, respectively.

	Fair Value Measurements at						(Gain) Loss Recognized in Interest Expense from the Change in Fair Value of Interest Rate Swaps
							Three Months Ended March 31,
Interest Rate Swaps	March 31, 2012			December 31, 2011			2012			2011
Accounts payable and accrued liabilities	$	(2,441	)	$	(2,269	)	$	172		$	(33	)
Other non-current liabilities	—			(425		)	(425		)	(819		)
Total	$	(2,441	)	$	(2,694	)	$	(253	)	$	(852	)
	Fair Value Measurements at						Loss Recognized in Interest Expense from the Change in Fair Value of Interest Rate Caps
							Three Months Ended March 31,
Interest Rate Caps	March 31, 2012			December 31, 2011			2012			2011
Prepaid expenses and other current assets	$	—		$	1		$	1		$	3
Other non-current assets	—			4			4			142
Total	$	—		$	5		$	5		$	145

The Company recognized expense related to our interest rate swaps and interest rate caps, including accrued interest, of $0.9 million and $0.8 million during the three months ended March 31, 2012 and 2011, respectively.

6. Income Taxes

Our quarterly income tax (provision) benefit for income taxes is measured using an estimated annual effective tax rate for the period, adjusted for discrete items that occurred within the periods presented.

For the three months ended March 31, 2012, we recorded an income tax benefit of $1.2 million, which represents an effective tax rate of (2.1)%. The effective tax rate for the three months ended March 31, 2012 differs from the federal statutory rate of 35.0% primarily due to changes in recorded valuation allowances, the impact of state income taxes and changes in deferred tax liabilities related to the stock basis of subsidiaries.

The Debt Repurchases resulted in a tax gain of $69.8 million for the three months ended March 31, 2012. Generally, the discharge of a debt obligation for an amount less than the adjusted issue price creates cancellation of debt income ("CODI"), which must be included in the taxpayer's taxable income. However, in accordance with Internal Revenue Code ("IRC") Section 108, in lieu of recognizing taxable income from CODI, the Company is required to reduce existing tax attributes. As a result, the Company recognized an estimated decrease in deferred tax assets relating to net operating losses and the basis of amortizable and depreciable property of approximately $27.2 million. These decreases were offset by a decrease in recorded valuation allowance during the three months ended March 31, 2012.

The estimated annual effective tax rate for the current year includes an estimate of the change in the valuation allowance expected to be necessary at the end of the year. The Company also recorded a decrease in the valuation allowance during the three months ended March 31, 2012 as a result of the Debt Repurchases (discussed above). In addition, the valuation allowance was decreased during the three months ended March 31, 2012 as a result of the reduction in estimated useful lives of certain intangible assets as discussed in Note 2, "Summary of Significant Accounting Policies - Identifiable Intangible Assets," which was a change in circumstances that resulted in a change in judgment about the Company's ability to realize deferred tax assets in future years. The resulting decrease in income tax expense allocated to the three months ended March 31, 2012 relating to the changes in valuation allowance is $25.6 million, which reduces the effective tax rate for the three months ended March 31, 2012 by approximately 45.5%.

For the three months ended March 31, 2011, we recorded an income tax (provision) of $(20.2) million, which represents an effective tax rate of 26.8%. The effective tax rate for the three months ended March 31, 2011 differs from the federal statutory rate of 35.0% primarily due to changes in deferred tax liabilities related to the stock basis of subsidiaries, the impact of state income taxes and a valuation allowance that has been recorded.

Upon emergence from bankruptcy, where required pursuant to FASB ASC 740-30-25-7, Income Taxes, the Company recorded deferred tax liabilities related to the excess of the financial statement carrying amount over the tax basis of investments in certain subsidiaries. The estimated annual effective tax rate for the current year includes an estimate of the change in these deferred tax liabilities for the year. The resulting reduction in income tax expense allocated to the three months ended March 31, 2011 relating to the change in these deferred tax liabilities is $6.4 million, which reduced the effective tax rate for the three months ended March 31, 2011 by approximately 8.4%.

7. Benefit Plans

The following table provides the components of the Company’s net periodic benefit credit for the three months ended March 31, 2012 and 2011, respectively.

	Pension Benefits
	Three Months Ended March 31,
	2012			2011
Interest cost	$	2,800		$	3,190
Expected return on plan assets	(3,612		)	(3,523		)
Amortization of net loss	259			—
Net periodic benefit credit	$	(553	)	$	(333	)

The Company made contributions to its pension plans of $7.0 million and $11.4 million during the three months ended March 31, 2012 and 2011, respectively. We expect to make total contributions of approximately $16.3 million to our pension plans in 2012.

8.    Business Segments

For the periods covered by this quarterly report, management reviews and analyzes its business of providing marketing solutions as one operating segment.

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9.    Legal Proceedings

We are subject to various lawsuits, claims, and regulatory and administrative proceedings arising out of our business covering matters such as general commercial, governmental regulations, intellectual property, employment, tax and other actions. In the opinion of management, the ultimate resolution of these matters, including the two cases described below, will not have a material adverse effect on our results of operations, cash flows or financial position.

Beginning on October 23, 2009, a series of putative securities class action lawsuits were commenced against certain former Company officers in the United States District Court for the District of Delaware on behalf of all persons who purchased or otherwise acquired our publicly traded securities between July 26, 2007 and the time we filed for bankruptcy on May 28, 2009, alleging that such officers issued false and misleading statements regarding our business and financial condition and seeking damages and equitable relief. On August 19, 2010, an amended consolidated class action complaint was filed as the operative securities class action complaint (the “Securities Class Action Complaint”). The Company is not named as a defendant in the Securities Class Action Complaint. On December 30, 2011, the parties to the Securities Class Action Complaint entered into a memorandum of understanding containing the essential terms of a settlement of all disputes between them. On February 17, 2012, a formal stipulation of settlement was filed with the court. Pursuant to the stipulation of settlement, in exchange for a complete release of all claims, the Company's director's and officer's liability insurers will create a $25 million settlement fund for the benefit of the settlement class. The Company is not making any financial contribution to the settlement fund. The stipulation of settlement is subject to final court approval, which we expect to receive during the second quarter of 2012.

On December 7, 2009, a putative ERISA class action lawsuit was commenced in the United States District Court for the Northern District of Illinois on behalf of certain participants in, or beneficiaries of, the R.H. Donnelley 401(k) Savings Plan at any time between July 26, 2007 and January 29, 2010 and whose plan accounts included investments in R.H. Donnelley common stock. The putative ERISA class action complaint contains allegations against certain current and former directors, officers and employees similar to those set forth in the Securities Class Action Complaint as well as allegations of breaches of fiduciary duties under ERISA and seeks damages and equitable relief. The Company is not named as a defendant in this ERISA class action. The parties to the ERISA class action suit have tentatively agreed to the essential terms of a settlement of all disputes between them. The terms of the proposed settlement provide that, in exchange for a complete release of all claims, the Company's fiduciary liability insurers will create a $2.1 million settlement fund for the benefit of the settlement class. The Company is not making any financial contribution to the settlement fund. The terms of the final settlement agreement between the parties will be subject to final court approval, which we expect to receive during the second half of 2012.

10. Other Information

On February 14, 2011, we completed the sale of substantially all net assets of Business.com, including long-lived assets, domain names, trademarks, brands, intellectual property, related content and technology platform. As a result, we recognized a gain on the sale of these assets of $13.4 million during the three months ended March 31, 2011.

11.    Subsequent Events

On April 19, 2012, under the terms and conditions of the Offer to Purchase, the Company utilized cash on hand of $26.5 million to repurchase $98.2 million aggregate principal amount of Dex One Senior Subordinated Notes, representing 27% of par value. The repurchase of the Dex One Senior Subordinated Notes will be accounted for as an extinguishment of debt and the Company will recognize a non-cash gain as a result of the repurchase during the second quarter of 2012.

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

Forward-Looking Information

Certain statements contained in this Quarterly Report on Form 10-Q regarding Dex One Corporation and its direct and indirect wholly-owned subsidiaries (“Dex One,” the “Company,” “we,” “us” and “our”) future operating results, performance, 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, words such as “believe,” “expect,” “anticipate,” “should,” “will,” “would,” “planned,” “estimated,” “potential,” “goal,” “outlook,” “may,” “predicts,” “could,” or the negative of those words and other comparable expressions, are used to identify such forward-looking statements. All forward-looking statements reflect our current beliefs and assumptions with respect to our future results, business plans and prospects, based on information currently available to us and are subject to significant risks and uncertainties. Accordingly, these statements are subject to significant risks and uncertainties and our actual results, business plans and prospects could differ significantly from those expressed in, or implied by, these statements. We caution readers not to place undue reliance on, and we undertake no obligation to update, other than as imposed by law, any forward-looking statements. Such risks, uncertainties and contingencies include, but are not limited to, statements about Dex One’s future financial and operating results, our plans, objectives, expectations and intentions and other statements that are not historical facts. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: (1) the continuing decline in the use of print directories; (2) increased competition, particularly from existing and emerging digital technologies; (3) ongoing weak economic conditions and continued decline in advertising sales; (4) our ability to collect trade receivables from customers to whom we extend credit; (5) our ability to generate sufficient cash to service our debt; (6) our ability to comply with the financial covenants contained in our debt agreements and the potential impact to operations and liquidity as a result of restrictive covenants in such debt agreements; (7) our ability to refinance or restructure our debt on reasonable terms and conditions as might be necessary from time to time; (8) increasing interest rates; (9) changes in the Company’s and the Company’s subsidiaries credit ratings; (10) changes in accounting standards; (11) regulatory changes and judicial rulings impacting our business; (12) adverse results from litigation, governmental investigations or tax related proceedings or audits; (13) the effect of labor strikes, lock-outs and negotiations; (14) successful realization of the expected benefits of acquisitions, divestitures and joint ventures; (15) our ability to maintain agreements with CenturyLink and AT&T and other major Internet search and local media companies; (16) our reliance on third-party vendors for various services; and (17) other events beyond our control that may result in unexpected adverse operating results.Additional risks and uncertainties are described in detail in Part I - Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2011.

Recent Trends and Developments Related to Our Business

Significant Financing Developments

On March 20, 2012, the Company announced the commencement of a cash tender offer to purchase the maximum aggregate principal amount of our outstanding $300 million 12%/14% Senior Subordinated Notes due 2017 (“Dex One Senior Subordinated Notes”) for $26.0 million. The cash tender offer expired on April 19, 2012. See Item 1, "Financial Statements (Unaudited)" - Note 1, "Business and Basis of Presentation - Significant Financing Developments" for additional information on the cash tender offer to repurchase the Dex One Senior Subordinated Notes. On April 19, 2012, under the terms and conditions of the Offer to Purchase, the Company utilized cash on hand of $26.5 million to repurchase $98.2 million aggregate principal amount of Dex One Senior Subordinated Notes, representing 27% of par value. The repurchase of the Dex One Senior Subordinated Notes will be accounted for as an extinguishment of debt and the Company will recognize a non-cash gain as a result of the repurchase during the second quarter of 2012.

On March 9, 2012, R.H. Donnelley Inc. ("RHDI"), Dex Media East, Inc. ("DME Inc.") and Dex Media West, Inc. ("DMW Inc.") each entered into the First Amendment (the "Amendments") to the amended and restated RHDI credit facility (“RHDI Amended and Restated Credit Facility”), the amended and restated DME Inc. credit facility (“Dex Media East Amended and Restated Credit Facility”) and the amended and restated DMW Inc. credit facility (“Dex Media West Amended and Restated Credit Facility”) (collectively, the "Credit Facilities"), respectively, with certain financial institutions. The Amendments permit RHDI, DME Inc. and DMW Inc. to make open market repurchases and retire loans under their respective Credit Facilities at a discount to par through December 31, 2013, provided that such discount is acceptable to those lenders who choose to participate. See Item 1, "Financial Statements (Unaudited)" - Note 1, "Business and Basis of Presentation - Significant Financing Developments" for additional information on the Amendments and the offers to repurchase loans under the respective Credit Facilities.

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On March 23, 2012, RHDI, DME Inc. and DMW Inc. collectively utilized cash on hand of $69.5 million to repurchase loans under the Credit Facilities of $142.1 million ("Debt Repurchases"). The Debt Repurchases have been accounted for as an extinguishment of debt resulting in a non-cash, pre-tax gain of $68.8 million during the three months ended March 31, 2012, consisting of the difference between the par value and purchase price of the Credit Facilities, offset by accelerated amortization of fair value adjustments to our Credit Facilities that were recognized in conjunction with our adoption of fresh start accounting and fees associated with the Debt Repurchases. The following table provides detail of the repurchases made on each of our Credit Facilities and the calculation of the net gain on Debt Repurchases for the three months ended March 31, 2012:

	Three Months Ended March 31, 2012
RHDI Amended and Restated Credit Facility (repurchased at 43.5% of par)	$	91,954
Dex Media East Amended and Restated Credit Facility (repurchased at 53.0% of par)	23,585
Dex Media West Amended and Restated Credit Facility (repurchased at 64.0% of par)	26,593
Total Credit Facilities repurchased	142,132
Total purchase price	(69,519		)
Accelerated amortization of fair value adjustments to Credit Facilities	(2,002		)
Fees associated with the Debt Repurchases	(1,848		)
Net gain on Debt Repurchases	$	68,763

Results of Operations

As discussed in “Results of Operations” below, we continue to experience lower revenues, advertising sales and bookings related to our print products primarily as a result of declines in new and recurring business, including both renewal and incremental sales to existing advertisers, mainly driven by (1) customer attrition, (2) declines in overall advertising spending by our customers, (3) the significant impact of the weak local business conditions on consumer spending in our clients’ markets, (4) an increase in competition and more fragmentation in local business search and (5) the migration of customers to digital marketing solutions. However, despite the challenges associated with our print products, we have seen growth in our digital revenues, advertising sales and bookings driven by new partnerships, a focus on providing targeted solution bundled packages to our customers, new digital products and services and the migration of customers to digital marketing solutions. These advancements have helped partially offset the decline in print revenues, advertising sales and bookings.

The Company currently projects that these challenging conditions associated with our print products will continue for the foreseeable future, and, as such, our print revenues, advertising sales and bookings, as well as overall operating results, cash flow and liquidity, will continue to be adversely impacted. Therefore, the Company’s historical operating results will not be indicative of future operating performance, although our long-term financial forecast currently anticipates no material improvement in local business conditions in our markets until 2013 at the earliest.

As more fully described below in “Results of Operations – Net Revenues,” our method of recognizing print revenue under the deferral and amortization method results in delayed recognition of advertising sales whereby recognized revenues reflect the amortization of advertising sales consummated in prior periods as well as advertising sales consummated in the current period. Accordingly, the Company’s projected decline in print advertising sales will result in a decline in print revenues recognized in future periods. In addition, any improvements in local business conditions that are anticipated in our long-term financial forecast noted above will not have a significant immediate impact on our print revenues.

Our Plan

As more fully described in Part I - Item 1, “Business” of our Annual Report on Form 10-K for the year ended December 31, 2011, we are a marketing solutions company that helps local businesses and consumers connect with each other. Our proprietary and affiliate provided marketing solutions combine multiple media platforms, which help drive large volumes of consumer leads to our customers, and assist our customers in managing their presence among those consumers. Our proprietary marketing solutions include our Dex published yellow pages directories, our Internet yellow pages site, DexKnows.com and our mobile applications, Dex Mobile and CityCentral. Our digital lead generation solutions are powered by our search engine marketing product, DexNet, which extends our customers’ reach to our leading Internet and mobile partners to attract consumers searching for local businesses, products and services within our markets.

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In response to the challenges noted above, we are working to improve the value we deliver to our customers by (1) providing targeted solution bundles that combine offline and online media platforms, which includes our Dex Guaranteed Actions ("DGA") program and (2) expanding the number of platforms and media through which we deliver their message to consumers. Our growing list of marketing solutions includes local business and market analysis, message and image creation, target market identification, advertising and digital profile creation, web sites, mobile web sites, reputation management, online video development and promotion, keyword optimization strategies and programs, distribution strategies, social strategies and tracking and reporting. In addition, our Company is in the process of transitioning to a compete-and-collaborate business model, as we believe that partnerships will enable us to offer a broader and more robust array of products and services to our customers than we would be able to do on a proprietary basis and without the risks, capital investment, and ongoing maintenance associated with development in house.

We also continue to invest in our business and our people through strategic programs, initiatives and technology such as: (1) the Dex One Account Management System, which provides the ability for customers to log in and make real-time changes to their online marketing as well as view real-time performance data and also enables our marketing consultants to construct proposals on their mobile devices wherever they may be, (2) the Dex One Sales Academy, which provides initial training, ongoing knowledge and skills enhancement, and additional support to marketing consultants throughout the business, (3) the Digital Media Learning Program, which provides our marketing consultants the resources needed to obtain a Google sales certification, and (4) sales force technology, with the introduction of Webex virtual sales presentations for our telephone marketing consultants and the purchase of iPads for our premise marketing consultants. We have recently made a strategic change to centralize the telephone marketing consultants from our local markets to three inside sales center locations in Overland Park, Kansas, Denver, Colorado and Omaha, Nebraska. In these locations we will be able to leverage scale of resources to allow greater efficiency and focus equally across the geography we serve as well as out of market opportunities. We will also be able to utilize state of the art telephone technology to increase reach, contact rates and efficiencies. The Overland Park center was completed in 2011 and we anticipate the transition to Denver and Omaha to be completed during the second quarter of 2012. As local business conditions recover in our markets, we believe these strategic investments will help us drive incremental revenue over time.

We continue to actively manage expenses and are considering and acting upon various initiatives and opportunities to streamline operations and reduce our cost structure. One such initiative centers around print product optimization ("PPO") and the evaluation of all print related expenses and processes. The focus of PPO includes initiatives such as transforming our print product's design and content as well as distribution optimization. We believe that PPO will drive significant savings in annual print costs while continuing to provide valuable products and quality service to our customers. We also continue to assess our organizational structure to ensure it properly supports our base of business and is optimized to compete in a rapidly evolving marketplace.

The Company continues to evaluate options for reducing leverage, extending the maturities of our Credit Facilities, reducing refinancing risk and other strategic alternatives in response to the challenging industry environment.  The Company's strategic objective is to build on our existing strengths and assets to maximize value for our shareholders and other constituents. The Company has recently taken significant steps towards reducing its leverage by obtaining the Amendments to our Credit Facilities in March 2012, which resulted in the repurchase of $142.1 million of loans under our Credit Facilities at a purchase price of $69.5 million during the three months ended March 31, 2012. In addition, in April 2012 we repurchased $98.2 million aggregate principal amount of Dex One Senior Subordinated Notes for a purchase price of $26.5 million. We anticipate making additional repurchases of our outstanding debt below par in the future, as permitted. The Company also continues to assess additional alternatives for the strategic objectives noted above including, but not limited to, additional amendments to our Credit Facilities, obtaining additional financing and/or refinancing our existing indebtedness, joint ventures, partnerships, acquisitions and business combinations, both within our industry and in complementary industries.

Liquidity and Going Concern Analysis

As more fully described below in “Liquidity and Capital Resources,” the Company’s primary sources of liquidity are existing cash on hand and cash flows generated from operations and our primary liquidity requirements are to fund operations and service our indebtedness. The Company’s projected decline in print advertising sales will result in a decline in cash flows in future periods. In addition, while improvements in local business conditions are anticipated in our long-term financial forecast as noted above, these improvements will not have a significant immediate impact on our cash flows. However, based on current financial projections, which include the impact of projected growth in our digital operations, the recent repurchases of our outstanding debt below par and continuous expense management, the Company expects to be able to continue to generate cash flows from operations in amounts sufficient to fund operations and meet debt service requirements for at least the next 12-15 months.

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Impairment and Useful Life Analysis

The Company reviews the carrying value of definite-lived intangible assets and other long-lived assets whenever events or circumstances indicate that their carrying amount may not be recoverable. Based on our evaluation during the three months ended March 31, 2012, we concluded that the carrying amounts of our definite-lived intangible assets and other long-lived assets were recoverable.

The Company evaluates the remaining useful lives of definite-lived intangible assets and other long-lived assets whenever events or circumstances indicate that a revision to the remaining period of amortization is warranted. The Company evaluated the remaining useful lives of definite-lived intangible assets and other long-lived assets during the three months ended March 31, 2012 by considering, among other things, the effects of obsolescence, demand, competition, which takes into consideration the price premium benefit we have over competing independent publishers in our markets as a result of directory services agreements acquired in prior acquisitions, and other economic factors, including the stability of the industry in which we operate, known technological advances, legislative actions that result in an uncertain or changing regulatory environment, and expected changes in distribution channels. Based on our evaluation of these factors during the three months ended March 31, 2012, the Company determined that the estimated useful lives of our directory services agreements, local and national customer relationships and tradenames and trademarks no longer reflect the period they are expected to contribute to future cash flows. Therefore, the Company reduced the estimated useful lives of these intangible assets. See Item 1, "Financial Statements (Unaudited)" - Note 2, "Summary of Significant Accounting Policies - Identifiable Intangible Assets" for additional information. As a result of reducing the estimated useful lives of the intangible assets noted above, the Company expects an increase in amortization expense of $161.6 million and total amortization expense of $349.4 million for 2012.

If industry and local business conditions in our markets deteriorate in excess of current estimates, potentially resulting in further declines in advertising sales and operating results, and / or if the trading value of our debt and equity securities continue to decline significantly, we will be required to assess the recoverability and useful lives of our intangible assets and other long-lived assets. These factors, including changes to assumptions used in our impairment analysis as a result of these factors, could result in future impairment charges, a reduction of remaining useful lives associated with our intangible assets and other long-lived assets and acceleration of amortization expense.

Climate Change

There is a growing concern about global climate change and the emissions of carbon dioxide. This concern has led to the possibility of federal climate change legislation as well as litigation relating to greenhouse gas emissions. While we cannot predict the impact of any proposed legislation until final, we do not believe current regulation or litigation related to global climate change is likely to have a material impact on our business, future financial position, results of operations and cash flow. Accordingly, our current financial projections do not include any impact of climate change regulation or litigation.

Healthcare Reform Legislation

During March 2010, the Patient Protection and Affordable Care Act and the Healthcare and Education Reconciliation Act of 2010 were signed into law. There has been no significant impact on our financial position, results of operations or cash flows as a result of this new legislation and we do not anticipate any significant impact in the foreseeable future.

Segment Reporting

For periods covered by this quarterly report, management reviews and analyzes its business of providing marketing solutions as one operating segment.

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New Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income (“ASU 2011-05”). ASU 2011-05 allows an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in shareholders' equity. ASU 2011-05 does not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. In December 2011, the FASB issued ASU No. 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 ("ASU 2011-12"). ASU 2011-12 defers the effective date of provisions included in ASU 2011-05 that require entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement where net income is presented and the statement where other comprehensive income is presented for both interim and annual financial statements. ASU 2011-12 further states that entities must continue to report reclassification adjustments out of accumulated comprehensive income consistent with the presentation requirements in effect before ASU 2011-05. Effective January 1, 2012, the Company adopted the applicable provisions included in ASU 2011-05 and elected to present a single continuous statement of comprehensive income. The Company continues to monitor the FASB's deliberations regarding ASU 2011-12.

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04’). ASU 2011-04 was issued to provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between U.S. Generally Accepted Accounting Principles ("GAAP") and International Financial Reporting Standards. ASU 2011-04 clarifies the FASB’s intent about the application of existing fair value measurement and disclosure requirements, changes certain fair value measurement principles and enhances fair value disclosure requirements. Effective January 1, 2012, the Company adopted the disclosure provisions included in ASU 2011-04. The adoption of ASU 2011-04 had no impact on our financial position or results of operations.

We have reviewed other accounting pronouncements that were issued as of March 31, 2012, which the Company has not yet adopted, and do not believe that these pronouncements will have a material impact on our financial position or operating results.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2012 compared to Three Months Ended March 31, 2011

Net Revenues

The components of our net revenues for the three months ended March 31, 2012 and 2011 were as follows:

	Three Months Ended March 31,
(amounts in millions)	2012			2011			$ Change			% Change
Gross advertising revenues	$	343.7		$	390.6		$	(46.9	)	(12.0	)%
Sales claims and allowances	(4.4		)	(4.7		)	0.3			6.4
Net advertising revenues	339.3			385.9			(46.6		)	(12.1	)
Other revenues	5.1			5.3			(0.2		)	(3.8	)
Total	$	344.4		$	391.2		$	(46.8	)	(12.0	)%

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Our advertising revenues are earned primarily from the sale of advertising in yellow pages directories we publish. Advertising revenues also include revenues from our Internet-based marketing solutions including online directories, such as DexKnows.com and DexNet. Advertising revenues are affected by several factors, including changes in the quantity, size and characteristics of advertisements, acquisition of new clients, renewal rates of existing clients, premium advertisements sold, changes in advertisement pricing, the introduction of new marketing solutions, an increase in competition and more fragmentation in the local business search market and general economic factors. Revenues with respect to print advertising and Internet-based marketing solutions that are sold with print advertising are recognized under the deferral and amortization method whereby revenues are initially deferred when a directory is published, net of sales claims and allowances, and recognized ratably over the directory’s life, which is typically 12 months. Revenues with respect to Internet-based marketing solutions that are sold standalone, such as DexNet, are recognized ratably over the life of the contract commencing when they are first delivered or fulfilled. Revenues with respect to our marketing solutions that are performance-based are recognized as the service is delivered or fulfilled.

Gross advertising revenues of $343.7 million for the three months ended March 31, 2012 declined $46.9 million, or 12.0%, from gross advertising revenues of $390.6 million for the three months ended March 31, 2011. The decline in gross advertising revenues for the three months ended March 31, 2012 is related to our print products, primarily as a result of continuing declines in new and recurring business, mainly driven by (1) customer attrition, (2) declines in overall advertising spending by our customers, (3) the significant impact of the weak local business conditions on consumer spending in our customers’ markets, (4) an increase in competition and more fragmentation in local business search and (5) the migration of customers to digital marketing solutions. The decline in gross advertising revenues is also a result of recognizing approximately one month of revenues from Business.com in 2011 with no comparable revenues in 2012. Declines in print advertising revenues are partially offset by increased advertising revenues associated with our digital marketing solutions, driven by new partnerships, a focus on providing targeted solution bundled packages to our customers, new digital products and services and the migration of customers to digital marketing solutions.

Expenses

The components of our expenses for the three months ended March 31, 2012 and 2011 were as follows:

	Three Months Ended March 31,
(amounts in millions)	2012		2011		$ Change			% Change
Production and distribution expenses	$	70.8	$	75.0	$	(4.2	)	(5.6	)%
Selling and support expenses	94.9		104.1		(9.2		)	(8.8	)
General and administrative expenses	30.2		38.1		(7.9		)	(20.7	)
Depreciation and amortization expenses	103.8		54.1		49.7			91.9
Total	$	299.7	$	271.3	$	28.4		10.5	%

Certain costs directly related to the selling and production of directories are initially deferred and then amortized ratably over the life of the directories under the deferral and amortization method of accounting to match revenue recognized relating to such directories, with cost recognition commencing in the month directory distribution is substantially complete. These costs are specifically identifiable to a particular directory and include sales commissions and print, paper and initial distribution costs. Sales commissions include amounts paid to employees for sales to local customers and to certified marketing representatives ("CMRs"), which act as our channel to national clients. All other expenses, such as sales person salaries, sales manager compensation, sales office occupancy, publishing and information technology services, are not specifically identifiable to a particular directory and are recognized as incurred. Our costs recognized in a reporting period consist of: (i) costs incurred in that period and fully recognized in that period; (ii) costs incurred in a prior period, a portion of which is amortized and recognized in the current period; and (iii) costs incurred in the current period, a portion of which is amortized and recognized in the current period and the balance of which is deferred until future periods. Consequently, there will be a difference between costs recognized in any given period and costs incurred in the given period, which may be significant.

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Production and Distribution Expenses

Production and distribution expenses for the three months ended March 31, 2012 were $70.8 million compared to production and distribution expenses of $75.0 million for the three months ended March 31, 2011. The primary components of the $4.2 million, or 5.6%, decrease in production and distribution expenses for the three months ended March 31, 2012 were as follows:

(amounts in millions)	Three Months Ended March 31, 2012
Lower print, paper and distribution expenses	$	(3.1	)
All other, net	(1.1		)
Total decrease in production and distribution expenses for the three months ended March 31, 2012	$	(4.2	)

Print, paper and distribution expenses for the three months ended March 31, 2012 declined $3.1 million compared to print, paper and distribution expenses for the three months ended March 31, 2011 primarily due to lower page volumes associated with declines in print advertisements, as well as ongoing PPO initiatives to reduce print-related costs.

Selling and Support Expenses

Selling and support expenses for the three months ended March 31, 2012 were $94.9 million compared to selling and support expenses of $104.1 million for the three months ended March 31, 2011. The primary components of the $9.2 million, or 8.8%, decrease in selling and support expenses for the three months ended March 31, 2012 were as follows:

(amounts in millions)	Three Months Ended March 31, 2012
Lower marketing expenses	$	(3.6	)
Lower commissions expenses	(2.3		)
Lower directory publishing expenses	(2.2		)
All other, net	(1.1		)
Total decrease in selling and support expenses for the three months ended March 31, 2012	$	(9.2	)

Marketing expenses for the three months ended March 31, 2012 declined $3.6 million compared to marketing expenses for the three months ended March 31, 2011 primarily due to lower headcount.

Commissions expenses for the three months ended March 31, 2012 declined $2.3 million compared to commissions expenses for the three months ended March 31, 2011 primarily due to lower print advertising sales and its effect on variable-based commissions, as well as lower headcount.

Directory publishing expenses for the three months ended March 31, 2012 declined $2.2 million compared to directory publishing expenses for the three months ended March 31, 2011 primarily due to declines in print advertisements and lower headcount.

General and Administrative Expenses

General and administrative (“G&A”) expenses for the three months ended March 31, 2012 were $30.2 million compared to G&A expenses of $38.1 million for the three months ended March 31, 2011. The primary components of the $7.9 million, or 20.7%, decrease in G&A expenses for the three months ended March 31, 2012 were as follows:

(amounts in millions)	Three Months Ended March 31, 2012
Restructuring charges incurred in 2011	$	(6.0	)
All other, net	(1.9		)
Total decrease in G&A expenses for the three months ended March 31, 2012	$	(7.9	)

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During the fourth quarter of 2010, the Company initiated a restructuring plan that included headcount reductions, consolidation of responsibilities and vacating leased facilities, which continued into 2011 (“Restructuring Actions”). As a result of the Restructuring Actions, the Company recognized a restructuring charge of $6.0 million during the three months ended March 31, 2011. There were no restructuring charges recognized in conjunction with the Restructuring Actions during the three months ended March 31, 2012.

Depreciation and Amortization Expenses

Depreciation and amortization expenses for the three months ended March 31, 2012 were $103.8 million compared to depreciation and amortization expenses of $54.1 million for the three months ended March 31, 2011. Amortization of intangible assets was $87.4 million for the three months ended March 31, 2012 compared to $38.2 million for the three months ended March 31, 2011. The significant increase in intangible asset amortization expense for the three months ended March 31, 2012 is a result of accelerated amortization expense due to the reduction in estimated useful lives of our directory services agreements, local and national customer relationships and tradenames and trademarks during the first quarter of 2012. See Item 1, "Financial Statements (Unaudited)" - Note 2 - "Summary of Significant Accounting Policies - Identifiable Intangible Assets" for additional information. Depreciation of fixed assets and amortization of computer software of $16.4 million for the three months ended March 31, 2012 remained level as compared to $15.9 million for the three months ended March 31, 2011.

Operating Income

Operating income was $44.7 million and $119.9 million for the three months ended March 31, 2012 and 2011, respectively. The decrease in operating income for the three months ended March 31, 2012 of $75.2 million, or 62.7%, is primarily due to continuing declines in print revenues as well as the increase in intangible asset amortization expense described above, partially offset by declines in operating expenses also described above.

Gain on Debt Repurchases, Net

As a result of the Debt Repurchases, we recognized a non-cash, pre-tax gain of $68.8 million during the three months ended March 31, 2012, consisting of the difference between the par value and purchase price of the Credit Facilities, offset by accelerated amortization of fair value adjustments to our Credit Facilities that were recognized in conjunction with our adoption of fresh start accounting and fees associated with the Debt Repurchases. See Item 1, "Financial Statements (Unaudited)" - Note 1 - "Business and Basis of Presentation - Significant Financing Developments" for additional information.

Gain on Sale of Assets, Net

On February 14, 2011, we completed the sale of substantially all net assets of Business.com, including long-lived assets, domain names, trademarks, brands, intellectual property, related content and technology platform. As a result, we recognized a gain on the sale of these assets of $13.4 million during the three months ended March 31, 2011.

Interest Expense, Net

Net interest expense of the Company was $57.1 million and $57.7 million for the three months ended March 31, 2012 and 2011, respectively. The decrease in net interest expense for the three months ended March 31, 2012 is primarily due to lower outstanding debt as a result of mandatory and accelerated debt repayments, partially offset by an increase in net interest expense as a result of the Company's election to make PIK interest payments on the Dex One Senior Subordinated Notes for the semi-annual interest period ending March 31, 2012.

In conjunction with our adoption of fresh start accounting and reporting on February 1, 2010 (“Fresh Start Reporting Date”), an adjustment was established to record our outstanding debt at fair value on the Fresh Start Reporting Date. This fair value adjustment will be amortized as an increase to interest expense over the remaining term of the respective debt agreements using the effective interest method and does not impact future scheduled interest or principal payments. Amortization of the fair value adjustment included as an increase to interest expense was $7.5 million and $7.3 million for the three months ended March 31, 2012 and 2011, respectively.

During the first quarter of 2010, we entered into interest rate swap and interest rate cap agreements that are not designated as cash flow hedges. The Company’s interest expense includes income of $0.2 million and $0.7 million for the three months ended March 31, 2012 and 2011, respectively, resulting from the change in fair value of these interest rate swaps and interest rate caps.

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Income Taxes

Our quarterly income tax (provision) benefit for income taxes is measured using an estimated annual effective tax rate for the period, adjusted for discrete items that occurred within the periods presented.

For the three months ended March 31, 2012, we recorded an income tax benefit of $1.2 million, which represents an effective tax rate of (2.1)%. The effective tax rate for the three months ended March 31, 2012 differs from the federal statutory rate of 35.0% primarily due to changes in recorded valuation allowances, the impact of state income taxes and changes in deferred tax liabilities related to the stock basis of subsidiaries.

The Debt Repurchases resulted in a tax gain of $69.8 million for the three months ended March 31, 2012. Generally, the discharge of a debt obligation for an amount less than the adjusted issue price creates cancellation of debt income ("CODI"), which must be included in the taxpayer's taxable income. However, in accordance with Internal Revenue Code ("IRC") Section 108, in lieu of recognizing taxable income from CODI, the Company is required to reduce existing tax attributes. As a result, the Company recognized an estimated decrease in deferred tax assets relating to net operating losses and the basis of amortizable and depreciable property of approximately $27.2 million. These decreases were offset by a decrease in recorded valuation allowance during the three months ended March 31, 2012.

The estimated annual effective tax rate for the current year includes an estimate of the change in the valuation allowance expected to be necessary at the end of the year. The Company also recorded a decrease in the valuation allowance during the three months ended March 31, 2012 as a result of the Debt Repurchases (discussed above). In addition, the valuation allowance was decreased during the three months ended March 31, 2012 as a result of the reduction in estimated useful lives of certain intangible assets as discussed in Item 1, "Financial Statements (Unaudited)" - Note 2, "Summary of Significant Accounting Policies - Identifiable Intangible Assets," which was a change in circumstances that resulted in a change in judgment about the Company's ability to realize deferred tax assets in future years. The resulting decrease in income tax expense allocated to the three months ended March 31, 2012 relating to the changes in valuation allowance is $25.6 million, which reduces the effective tax rate for the three months ended March 31, 2012 by approximately 45.5%.

For the three months ended March 31, 2011, we recorded an income tax (provision) of $(20.2) million, which represents an effective tax rate of 26.8%. The effective tax rate for the three months ended March 31, 2011 differs from the federal statutory rate of 35.0% primarily due to changes in deferred tax liabilities related to the stock basis of subsidiaries, the impact of state income taxes and a valuation allowance that has been recorded.

Upon emergence from bankruptcy, where required pursuant to FASB Accounting Standards Codification (“ASC”) 740-30-25-7, Income Taxes, the Company recorded deferred tax liabilities related to the excess of the financial statement carrying amount over the tax basis of investments in certain subsidiaries. The estimated annual effective tax rate for the current year includes an estimate of the change in these deferred tax liabilities for the year. The resulting reduction in income tax expense allocated to the three months ended March 31, 2011 relating to the change in these deferred tax liabilities is $6.4 million, which reduced the effective tax rate for the three months ended March 31, 2011 by approximately 8.4%.

Net Income and Earnings Per Share

Net income was $57.6 million and $55.4 million for the three months ended March 31, 2012 and 2011, respectively. The increase in net income for the three months ended March 31, 2012 of $2.2 million, or 4.0%, is primarily due to the net gain on debt repurchases, declines in operating expenses and the income tax benefit described above, offset by continuing declines in print revenues as well as the increase in intangible asset amortization expense also described above.

Basic and diluted earnings per share (“EPS”) was $1.15 and $1.11 for the three months ended March 31, 2012 and 2011, respectively. See Item 1, “Financial Statements (Unaudited)” - Note 2, “Summary of Significant Accounting Policies – Earnings Per Share” for further details and computations of basic and diluted EPS.

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Non-GAAP Statistical Measures

Advertising sales is a non-GAAP statistical measure and consists of sales of advertising in print directories distributed during the period and Internet-based products and services with respect to which such advertising first appeared publicly during the period. It is important to distinguish advertising sales from net revenues, which under GAAP are recognized under the deferral and amortization method. Advertising sales in current periods will be recognized as gross advertising revenues in future periods as a result of the deferral and amortization method of revenue recognition. Advertising sales for the three months ended March 31, 2012 were $296.4 million, representing a decline of $57.4 million, or 16.2%, from advertising sales of $353.8 million for the three months ended March 31, 2011.

In order to provide more visibility into what the Company will book as revenue in the future, we are presenting an additional non-GAAP statistical measure called bookings, which represent sales activity associated with our print directories and Internet-based marketing solutions during the period. Bookings associated with our local customers represent signed contracts during the period. Bookings associated with our national customers represent what has been published or fulfilled during the period. Bookings for the three months ended March 31, 2012 were $304.5 million, representing a decline of $46.5 million, or 13.2%, from bookings of $351.0 million for the three months ended March 31, 2011.

The decrease in advertising sales and bookings for the three months ended March 31, 2012 is related to our print products and is a result of continuing declines in new and recurring business, mainly driven by (1) customer attrition, (2) declines in overall advertising spending by our customers, (3) the significant impact of the weak local business conditions on consumer spending in our customers’ markets, (4) an increase in competition and more fragmentation in local business search and (5) the migration of customers to digital marketing solutions. Declines in print advertising sales and bookings are partially offset by increased advertising sales and bookings associated with our digital marketing solutions, driven by new partnerships, a focus on providing targeted solution bundled packages to our customers, new digital products and services and the migration of customers to digital marketing solutions.

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LIQUIDITY AND CAPITAL RESOURCES

The following table presents the fair market value of our long-term debt at March 31, 2012 based on quoted market prices on that date, as well as the carrying value of our long-term debt at March 31, 2012, which includes (1) $53.7 million of unamortized fair value adjustments required by GAAP in connection with the Company’s adoption of fresh start accounting on the Fresh Start Reporting Date, (2) the issuance of an additional $10.5 million of Dex One Senior Subordinated Notes as a result of the Company's election to make paid-in-kind (“PIK”) interest payments for the semi-annual interest period ending March 31, 2012 and (3) the impact of the Debt Repurchases. See Item 2, “Management's Discussion and Analysis of Financial Condition and Results of Operations - Recent Trends and Developments Related to Our Business: Significant Financing Developments” for additional information on the Debt Repurchases.

	March 31, 2012
	Fair Market Value		Carrying Value
RHDI Amended and Restated Credit Facility	$	357,862	$	816,571
Dex Media East Amended and Restated Credit Facility	298,662		561,394
Dex Media West Amended and Restated Credit Facility	353,717		555,574
Dex One Senior Subordinated Notes	90,821		310,500
Total Dex One consolidated	1,101,062		2,244,039
Less current portion	119,372		223,317
Long-term debt	$	981,690	$	2,020,722

Credit Facilities

RHDI Amended and Restated Credit Facility

In conjunction with the Debt Repurchases, RHDI repurchased $92.0 million of loans under the RHDI Amended and Restated Credit Facility at a rate of 43.5% of par. As of March 31, 2012, the outstanding carrying value under the RHDI Amended and Restated Credit Facility totaled $816.6 million. The RHDI Amended and Restated Credit Facility requires quarterly principal and interest payments and matures on October 24, 2014. The weighted average interest rate of outstanding debt under the RHDI Amended and Restated Credit Facility was 9.0% at March 31, 2012.

Dex Media East Amended and Restated Credit Facility

In conjunction with the Debt Repurchases, DME Inc. repurchased $23.6 million of loans under the Dex Media East Amended and Restated Credit Facility at a rate of 53.0% of par. As of March 31, 2012, the outstanding carrying value under the Dex Media East Amended and Restated Credit Facility totaled $561.4 million. The Dex Media East Amended and Restated Credit Facility requires quarterly principal and interest payments and matures on October 24, 2014. The weighted average interest rate of outstanding debt under the Dex Media East Amended and Restated Credit Facility was 3.0% at March 31, 2012.

Dex Media West Amended and Restated Credit Facility

In conjunction with the Debt Repurchases, DMW Inc. repurchased $26.6 million of loans under the Dex Media West Amended and Restated Credit Facility at a rate of 64.0% of par. As of March 31, 2012, the outstanding carrying value under the Dex Media West Amended and Restated Credit Facility totaled $555.6 million. The Dex Media West Amended and Restated Credit Facility requires quarterly principal and interest payments and matures on October 24, 2014. The weighted average interest rate of outstanding debt under the Dex Media West Amended and Restated Credit Facility was 7.3% at March 31, 2012.

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Notes

Dex One Senior Subordinated Notes

Interest on the Dex One Senior Subordinated Notes is payable semi-annually on March 31^st and September 30^th of each year, commencing on March 31, 2010 through January 29, 2017. The Dex One Senior Subordinated Notes accrue interest at an annual rate of 12% for cash interest payments and 14% if the Company elects PIK interest payments. The Company may elect, no later than two business days prior to the beginning of any such semi-annual interest period, whether to make each interest payment on the Dex One Senior Subordinated Notes (i) entirely in cash or (ii) 50% in cash and 50% in PIK interest, which is capitalized as additional senior subordinated notes. In the absence of such an election for any subsequent semi-annual interest period, interest on the Dex One Senior Subordinated Notes will be payable in the form of the interest payment for the semi-annual interest period immediately preceding such subsequent semi-annual interest period. For the semi-annual interest period ending March 31, 2012, the Company made interest payments 50% in cash and 50% in PIK interest, as permitted by the indenture governing the Dex One Senior Subordinated Notes, resulting in the issuance of an additional $10.5 million of Dex One Senior Subordinated Notes at March 31, 2012. The Company will continue to make interest payments on the Dex One Senior Subordinated Notes 50% in cash and 50% in PIK interest for the semi-annual interest period ending September 30, 2012.

Impact of Fresh Start Accounting

In conjunction with our adoption of fresh start accounting, an adjustment was established to record our outstanding debt at fair value on the Fresh Start Reporting Date. The Company was required to record our Credit Facilities at a discount as a result of their fair value on the Fresh Start Reporting Date. Therefore, the carrying amount of these debt obligations is lower than the principal amount due at maturity. A total discount of $120.2 million was recorded upon adoption of fresh start accounting associated with our Credit Facilities, of which $53.7 million remains unamortized at March 31, 2012, as shown in the following table.

	Carrying Value at March 31, 2012		Unamortized Fair Value Adjustments at March 31, 2012		Outstanding Debt at March 31, 2012 Excluding the Impact of Unamortized Fair Value Adjustments
RHDI Amended and Restated Credit Facility	$	816,571	$	8,785	$	825,356
Dex Media East Amended and Restated Credit Facility	561,394		37,720		599,114
Dex Media West Amended and Restated Credit Facility	555,574		7,154		562,728
Dex One Senior Subordinated Notes	310,500		—		310,500
Total	$	2,244,039	$	53,659	$	2,297,698

In conjunction with the Debt Repurchases, we accelerated amortization of fair value adjustments to our Credit Facilities of $2.0 million, which partially offset the net gain on Debt Repurchases recognized during the three months ended March 31, 2012. See Item 2, “Management's Discussion and Analysis of Financial Condition and Results of Operations - Recent Trends and Developments Related to Our Business: Significant Financing Developments” for additional information.

Liquidity and Cash Flows

The Company’s primary sources of liquidity are existing cash on hand and cash flows generated from operations. The Company’s primary liquidity requirements will be to fund operations and service its indebtedness. The Company’s ability to meet its debt service requirements will be dependent on its ability to generate sufficient cash flows from operations. The primary sources of cash flows will consist mainly of cash receipts from the sale of our marketing solutions and can be impacted by, among other factors, general local business conditions, the continuing decline in the use of our print products, an increase in competition and more fragmentation in the local business search market, consumer confidence and the level of demand for our advertising products and services.

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Based on current financial projections, for at least the next 12-15 months, the Company expects to be able to continue to generate cash flows from operations in amounts sufficient to fund operations and capital expenditures, as well as meet debt service requirements. The Company’s financial projections also include excess cash flow that will be used to fund mandatory accelerated debt repayments at par due to cash flow sweep requirements under our Credit Facilities, as well as voluntary debt repayments at a discount to par resulting from the Amendments to our Credit Facilities and cash tender offers to purchase amounts outstanding under the Dex One Senior Subordinated Notes. However, no assurances can be made that our business will generate sufficient cash flows from operations to enable us to fund these prospective cash requirements since the current information used in our financial projections could change in the future as a result of changes in estimates and assumptions as well as risks noted in Part I - Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2011.

The Amendments provide greater flexibility to repurchase amounts outstanding under our Credit Facilities. As noted above, on March 23, 2012, RHDI, DME Inc. and DMW Inc. collectively utilized cash on hand of $69.5 million to repurchase loans under the Credit Facilities of $142.1 million. We may from time to time seek to repurchase additional amounts outstanding under our Credit Facilities, as permitted by the Amendments. We also have the ability to repurchase the Dex One Senior Subordinated Notes in the open market. On April 19, 2012, the Company utilized cash on hand of $26.5 million to repurchase $98.2 million aggregate principal amount of Dex One Senior Subordinated Notes. We may also from time to time seek to retire or purchase additional Dex One Senior Subordinated Notes through cash purchases in open market purchases, privately negotiated transactions or otherwise, subject to applicable securities laws and regulations. Such purchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Each of our Credit Facilities require significant balloon payments upon maturity in October 2014. If the Company is unable to extend the maturity or significantly reduce our outstanding indebtedness prior to maturity by either (1) open market repurchases as permitted by the Amendments to our Credit Facilities, (2) obtaining additional financing and/or (3) refinancing our existing indebtedness, we will not be able to generate cash flows from operations in amounts sufficient to fund operations and capital expenditures and/or satisfy debt service requirements at that time. In addition, if the Company was to become non-compliant with restrictive covenants under our debt agreements prior to October 2014, default provisions would be triggered under our Credit Facilities and outstanding balances could become due immediately. The Company continues to monitor and assess all available options and opportunities that would allow us to accomplish these financing initiatives; however, no assurances can be made that these financing initiatives will be attained.

As provided for in our Credit Facilities, each of the Company’s operating subsidiaries are permitted to fund a share of the Parent Company’s interest obligations on the Dex One Senior Subordinated Notes. Other funds, based on a percentage of each operating subsidiaries’ excess cash flow, as defined in each credit agreement, may be provided to the Parent Company to fund specific activities, such as acquisitions.  In addition, each of our operating subsidiaries are permitted to send up to $5 million annually to the Parent Company. Lastly, our operating subsidiaries fund on a proportionate basis those expenses paid by the Parent Company to fund the daily operations of our operating subsidiaries. Except for certain limited situations, including those noted above, the Credit Facilities restrict the ability of the Company and its subsidiaries to dividend assets to any third party, and of our subsidiaries to pay dividends, loans or advances to us.

The Company currently believes that the limitations and restrictions imposed by our Credit Facilities noted above will not impact our ability to fund operations and capital expenditures, as well as meet debt service requirements, specifically at the Parent Company level. However, no assurances can be made that these limitations and restrictions will not have an impact on our ability to fund operations and capital expenditures, as well as meet debt service requirements specifically at the Parent Company level in the future.

See Part I - Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2011 for additional information regarding risks and uncertainties associated with our business, which could have a significant impact on our future liquidity and cash flows. See Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Trends and Developments Related to Our Business” for additional information related to trends and uncertainties with respect to our business, which could have a significant impact on our future liquidity and cash flows.

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Aggregate outstanding debt at March 31, 2012 was $2,244.0 million, which includes (1) $53.7 million of unamortized fair value adjustments required by GAAP in connection with the Company’s adoption of fresh start accounting on the Fresh Start Reporting Date, (2) the issuance of an additional $10.5 million of Dex One Senior Subordinated Notes as a result of the Company's election to make PIK interest payments for the semi-annual interest period ending March 31, 2012 and (3) the impact of the Debt Repurchases. During the three months ended March 31, 2012, we made mandatory principal payments under our Credit Facilities at par of $45.5 million and made accelerated principal payments under our Credit Facilities at par of $98.7 million. In addition, as a result of the Debt Repurchases, the Company utilized cash on hand of $69.5 million to repurchase loans under the Credit Facilities of $142.1 million. In total, we made debt payments with cash on hand of $213.7 million and reduced amounts outstanding under our Credit Facilities by $286.4 million during the three months ended March 31, 2012. We made aggregate net cash interest payments of $42.2 million during the three months ended March 31, 2012. At March 31, 2012, we had $115.2 million of cash and cash equivalents before checks not yet presented for payment of $0.5 million.

Three Months Ended March 31, 2012

Cash provided by operating activities for the three months ended March 31, 2012 was $78.1 million and included net income adjusted for non-cash items such as depreciation and amortization, partially offset by the net gain on Debt Repurchases and changes in assets and liabilities primarily driven by changes in deferred directory revenues.

Cash used in investing activities for the three months ended March 31, 2012 was $5.0 million and relates to the purchase of fixed assets, primarily computer equipment, software and leasehold improvements, partially offset by proceeds from the sale of assets.

Cash used in financing activities for the three months ended March 31, 2012 was $215.9 million and includes the following:

• $213.7 million in principal payments on our Credit Facilities;

• $2.0 million in debt issuance costs and other financing items; and

• $0.1 million in the decreased balance of checks not yet presented for payment.

Three Months Ended March 31, 2011

Cash provided by operating activities was $109.5million for the three months ended March 31, 2011 and included net income adjusted for non-cash items such as depreciation and amortization, partially offset by changes in assets and liabilities primarily driven by changes in deferred directory revenues.

Cash provided by investing activities for the three months ended March 31, 2011 was $10.5million and relates to the sale of substantially all net assets of Business.com, partially offset by the purchase of fixed assets, primarily computer equipment, software and leasehold improvements.

Cash used in financing activities for the three months ended March 31, 2011 was $111.3million and includes the following:

• $94.8million in principal payments on our Credit Facilities;

• $0.3 million provided by other financing items; and

• $16.7 million in the decreased balance of checks not yet presented for payment.

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Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

Contractual Obligations

As a result of the Debt Repurchases, we have presented updated annual commitments for principal and interest payments on our debt obligations for the next five years and thereafter as of March 31, 2012. There have been no significant changes to the other contractual obligations presented in our Annual Report on Form 10-K for the year ended December 31, 2011. The debt repayments and related interest payments as presented in this table include (1) the scheduled principal and interest payments under the current debt agreements, (2) an estimate of additional debt repayments and the related impact on interest payments resulting from cash flow sweep requirements under our Credit Facilities and (3) assumes the issuance of additional Dex One Senior Subordinated Notes and the related impact on interest payments as a result of the Company's election to make PIK interest payments commencing for the semi-annual interest period ending March 31, 2012 until maturity. Our Credit Facilities require that a certain percentage of annual excess cash flow, as defined in the debt agreements, be used to repay amounts under the Credit Facilities. The debt repayments exclude fair value adjustments required by GAAP as a result of our adoption of fresh start accounting of $53.7 million, as these adjustments do not impact our payment obligations.

	Payments Due by Period
(amounts in millions)	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
Principal Payments on Long-Term Debt (1)	$	2,420.3	$	275.3	$	1,712.0	$	433.0	$	—
Interest on Long-Term Debt (2)	422.6		146.1		225.1		51.4		—
Total	$	2,842.9	$	421.4	$	1,937.1	$	484.4	$	—

⁽¹⁾ Included in long-term debt are scheduled principal amounts owed under the Credit Facilities and the Dex One Senior Subordinated Notes as of March 31, 2012, including the current portion of long-term debt, an estimate of additional debt repayments resulting from cash flow sweep requirements under our Credit Facilities, and assumes the issuance of additional Dex One Senior Subordinated Notes as a result of the Company's election to make PIK interest payments commencing for the semi-annual interest period ending March 31, 2012 until maturity.

⁽²⁾ Interest on debt represents cash interest payment obligations assuming all indebtedness as of March 31, 2012 will be paid in accordance with its contractual maturity, assumes interest rates on variable interest debt as of March 31, 2012 will remain unchanged in future periods, reflects the impact on interest payments resulting from an estimate of additional debt repayments due to cash flow sweep requirements under our Credit Facilities, as well as the impact on interest payments as a result of the Company's election to make PIK interest payments commencing for the semi-annual interest period ending March 31, 2012 until maturity.Please refer to “Liquidity and Capital Resources” for interest rates on the Credit Facilities and the Dex One Senior Subordinated Notes.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk and Risk Management

The Company’s Credit Facilities each bear interest at variable rates and, accordingly, our earnings and cash flow are affected by changes in interest rates. Management believes that it is prudent to mitigate the interest rate risk on a portion of its variable rate borrowings. To satisfy our objectives and requirements, the Company has entered into interest rate swap and interest rate cap agreements, which have not been designated as cash flow hedges, to manage our exposure to interest rate fluctuations on our variable rate debt.

The Company has entered into the following interest rate swaps that effectively convert $300.0 million, or approximately 16%, of the Company’s variable rate debt to fixed rate debt as of March 31, 2012. Since the RHDI Amended and Restated Credit Facility and the Dex Media West Amended and Restated Credit Facility are subject to a LIBOR floor of 3.00% and the LIBOR rate is below that floor at March 31, 2012, both credit facilities are effectively fixed rate debt until such time LIBOR exceeds the stated floor. At March 31, 2012, approximately 86% of our total debt outstanding consisted of variable rate debt, excluding the effect of our interest rate swaps. Including the effect of our interest rate swaps, total fixed rate debt comprised approximately 27% of our total debt portfolio as of March 31, 2012.

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Interest Rate Swaps – Dex Media East

Effective Dates	Notional Amount			Pay Rates	Maturity Dates
(amounts in millions)
February 26, 2010	$	100	(1)	1.796%	February 28, 2013
March 5, 2010	100		(1)	1.688%	January 31, 2013
March 10, 2010	100		(1)	1.75%	January 31, 2013
Total	$	300

Under the terms of the interest rate swap agreements, we receive variable interest based on the three-month LIBOR and pay a weighted average fixed rate of 1.7%. The weighted average rate received on our interest rate swaps was 0.5% for the three months ended March 31, 2012. These periodic payments and receipts are recorded as interest expense.

Under the terms of the interest rate cap agreements, the Company will receive payments based on the spread in rates if the three-month LIBOR rate increases above the cap rates noted in the table below. The Company paid $2.1 million for the interest rate cap agreements entered into during the first quarter of 2010. We are not required to make any future payments related to these interest rate cap agreements.

Interest Rate Caps – RHDI

Effective Dates	Notional Amount			Cap Rates	Maturity Dates
(amounts in millions)
February 26, 2010	$	100	(2)	3.5%	February 28, 2013
March 8, 2010	100		(2)	3.5%	January 31, 2013
March 10, 2010	100		(2)	3.0%	April 30, 2012
Total	$	300

(1) Consists of one swap

(2) Consists of one cap

We use derivative financial instruments for hedging purposes only and not for trading or speculative purposes. By using derivative financial instruments to hedge exposures to changes in interest rates, the Company exposes itself to credit risk and market risk. Credit risk is the possible failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk for the Company. When the fair value of a derivative contract is negative, the Company owes the counterparty and, therefore, it is not subject to credit risk. The Company minimizes the credit risk in derivative financial instruments by entering into transactions with major financial institutions with credit ratings of AA- or higher, or the equivalent dependent upon the credit rating agency.

Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates. The market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

Market Risk Sensitive Instruments

All derivative financial instruments are recognized as either assets or liabilities on the condensed consolidated balance sheets with measurement at fair value. On a quarterly basis, the fair values of our interest rate swaps and interest rate caps are determined based on quoted market prices. These derivative instruments have not been designated as cash flow hedges and as such, the initial fair value and any subsequent gains or losses on the change in the fair value of the interest rate swaps and interest rate caps are reported in earnings as a component of interest expense. Any gains or losses related to the quarterly fair value adjustments are presented as an operating activity on the condensed consolidated statements of cash flows.

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Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Management conducted an evaluation, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of March 31, 2012. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that such disclosure controls and procedures are effective and sufficient to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Act of 1934 is recorded, processed, summarized and reported within the time periods specific in the SEC’s rules and forms. In addition, based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that such disclosure controls and procedures are effective and sufficient to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Act of 1934 is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

(b) Changes in Internal Controls Over Financial Reporting

There have not been any changes in the Company’s internal controls over financial reporting during the Company’s most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are subject to various lawsuits, claims, and regulatory and administrative proceedings arising out of our business covering matters such as general commercial, governmental regulations, intellectual property, employment, tax and other actions. In the opinion of management, the ultimate resolution of these matters, including the two cases described below, will not have a material adverse effect on our results of operations, cash flows or financial position.

Beginning on October 23, 2009, a series of putative securities class action lawsuits were commenced against certain former Company officers in the United States District Court for the District of Delaware on behalf of all persons who purchased or otherwise acquired our publicly traded securities between July 26, 2007 and the time we filed for bankruptcy on May 28, 2009, alleging that such officers issued false and misleading statements regarding our business and financial condition and seeking damages and equitable relief. On August 19, 2010, an amended consolidated class action complaint was filed as the operative securities class action complaint (the “Securities Class Action Complaint”). The Company is not named as a defendant in the Securities Class Action Complaint. On December 30, 2011, the parties to the Securities Class Action Complaint entered into a memorandum of understanding containing the essential terms of a settlement of all disputes between them. On February 17, 2012, a formal stipulation of settlement was filed with the court. Pursuant to the stipulation of settlement, in exchange for a complete release of all claims, the Company's director's and officer's liability insurers will create a $25 million settlement fund for the benefit of the settlement class. The Company is not making any financial contribution to the settlement fund. The stipulation of settlement is subject to final court approval, which we expect to receive during the second quarter of 2012.

On December 7, 2009, a putative ERISA class action lawsuit was commenced in the United States District Court for the Northern District of Illinois on behalf of certain participants in, or beneficiaries of, the R.H. Donnelley 401(k) Savings Plan at any time between July 26, 2007 and January 29, 2010 and whose plan accounts included investments in R.H. Donnelley common stock. The putative ERISA class action complaint contains allegations against certain current and former directors, officers and employees similar to those set forth in the Securities Class Action Complaint as well as allegations of breaches of fiduciary duties under ERISA and seeks damages and equitable relief. The Company is not named as a defendant in this ERISA class action. The parties to the ERISA class action suit have tentatively agreed to the essential terms of a settlement of all disputes between them. The terms of the proposed settlement provide that, in exchange for a complete release of all claims, the Company's fiduciary liability insurers will create a $2.1 million settlement fund for the benefit of the settlement class. The Company is not making any financial contribution to the settlement fund. The terms of the final settlement agreement between the parties will be subject to final court approval, which we expect to receive during the second half of 2012.

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Item 1A. Risk Factors

There have been no material changes in our risk factors from those disclosed in Part I - Item 1A to our Annual Report on Form 10-K for the year ended December 31, 2011. The risk factors disclosed in our Annual Report on Form 10-K, in addition to the other information set forth in this Quarterly Report on Form 10-Q could materially affect our business, financial condition or results. Additional risks and uncertainties not currently known to us or that we currently deem immaterial also may materially adversely affect our business, financial condition or results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information regarding shares acquired from employees during the three months ended March 31, 2012 as payment to satisfy minimum tax withholding obligations in connection with the vesting of restricted stock awarded to employees pursuant to the Dex One Equity Incentive Plan. We retired these shares in the first quarter of 2012.

Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs
January 1, 2012 - January 31, 2012	6,784	$	2.04	—	—
February 1, 2012 - February 29, 2012	—	—		—	—
March 1, 2012 - March 31, 2012	18,096	1.68		—	—
Total	24,880	$	1.78	—	—

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Item 6. Exhibits

Exhibit No.	Document
10.1	First Amendment dated March 9, 2012 to the Credit Agreement, dated as of October 24, 2007, as amended and restated as of January 29, 2010, by and among Dex Media East, Inc., as borrower, the Company, Dex Media, Inc., the lenders from time to time parties thereto, and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on March 9, 2012, Commission File No. 001-07155).
10.2	First Amendment dated March 9, 2012 to the Credit Agreement, dated as of June 6, 2008, as amended and restated as of January 29, 2010, by and among Dex Media West, Inc., as borrower, the Company, Dex Media Inc., the lenders from time to time parties thereto, and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on March 9, 2012, Commission File No. 001-07155).
10.3	First Amendment dated March 9, 2012 to the Third Amended and Restated Credit Agreement, dated as of January 29, 2010 by and among R.H. Donnelly Inc., as borrower, the Company, the lenders from time to time parties thereto, and Deutsche Bank Trust Company Americas, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on March 9, 2012, Commission File No. 001-07155).
10.4*	Form of Restricted Stock Unit Agreement (Performance Shares).
31.1*	Certification of Quarterly Report on Form 10-Q for the period ended March 31, 2012 by Alfred T. Mockett, Chief Executive Officer and President of Dex One Corporation under Section 302 of the Sarbanes-Oxley Act.
31.2*	Certification of Quarterly Report on Form 10-Q for the period ended March 31, 2012 by Gregory W. Freiberg, Executive Vice President and Chief Financial Officer of Dex One Corporation under Section 302 of the Sarbanes-Oxley Act.
32.1*	Certification of Quarterly Report on Form 10-Q for the period ended March 31, 2012, under Section 906 of the Sarbanes-Oxley Act by Alfred T. Mockett, Chief Executive Officer and President, and Gregory W. Freiberg, Executive Vice President and Chief Financial Officer, for Dex One Corporation.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

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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.

			DEX ONE CORPORATION
Date:	April 26, 2012	By:	/s/ Gregory W. Freiberg
			Gregory W. Freiberg Executive Vice President and Chief Financial Officer
			(Principal Financial Officer)
			/s/ Sylvester J. Johnson
			Sylvester J. Johnson Vice President, Controller and Chief Accounting Officer
			(Principal Accounting Officer)

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Exhibit Index

Exhibit No.	Document
10.1	First Amendment dated March 9, 2012 to the Credit Agreement, dated as of October 24, 2007, as amended and restated as of January 29, 2010, by and among Dex Media East, Inc., as borrower, the Company, Dex Media, Inc., the lenders from time to time parties thereto, and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on March 9, 2012, Commission File No. 001-07155).
10.2	First Amendment dated March 9, 2012 to the Credit Agreement, dated as of June 6, 2008, as amended and restated as of January 29, 2010, by and among Dex Media West, Inc., as borrower, the Company, Dex Media Inc., the lenders from time to time parties thereto, and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on March 9, 2012, Commission File No. 001-07155).
10.3	First Amendment dated March 9, 2012 to the Third Amended and Restated Credit Agreement, dated as of January 29, 2010 by and among R.H. Donnelly Inc., as borrower, the Company, the lenders from time to time parties thereto, and Deutsche Bank Trust Company Americas, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on March 9, 2012, Commission File No. 001-07155).
10.4*	Form of Restricted Stock Unit Agreement (Performance Shares).
31.1*	Certification of Quarterly Report on Form 10-Q for the period ended March 31, 2012 by Alfred T. Mockett, Chief Executive Officer and President of Dex One Corporation under Section 302 of the Sarbanes-Oxley Act.
31.2*	Certification of Quarterly Report on Form 10-Q for the period ended March 31, 2012 by Gregory W. Freiberg, Executive Vice President and Chief Financial Officer of Dex One Corporation under Section 302 of the Sarbanes-Oxley Act.
32.1*	Certification of Quarterly Report on Form 10-Q for the period ended March 31, 2012, under Section 906 of the Sarbanes-Oxley Act by Alfred T. Mockett, Chief Executive Officer and President, and Gregory W. Freiberg, Executive Vice President and Chief Financial Officer, for Dex One Corporation.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

______________________

* Filed herewith.

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EX-10.4

EXHIBIT 10.4

DEX ONE CORPORATION EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT (PERFORMANCE SHARES)

* * * * *

Participant:    [____________]

Grant Date:    [____________]

Target Number of Restricted Stock Units (the “Target RSUs”):        [____________]

Maximum Number of Shares of Common Stock that may be issued pursuant to this Agreement (the “Maximum Shares”):    [____________]

* * * * *

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”), dated as of the Grant Date specified above, is entered into by and between Dex One Corporation, a corporation organized in the State of Delaware (the “Company”), and the Participant specified above, pursuant to the Dex One Corporation Equity Incentive Plan, as in effect and as amended from time to time (the “Plan”), which is administered by the Committee.

WHEREAS, it has been determined under the Plan that it would be in the best interests of the Company to grant the Restricted Stock Units (“RSUs”) provided herein to the Participant.

NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the parties hereto hereby mutually covenant and agree as follows:

1.Incorporation By Reference; Plan Document Receipt. This Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the Restricted Stock Unit Award provided hereunder), all of which terms and provisions are made a part of and incorporated in this Agreement as if they were each expressly set forth herein. Any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan. The Participant hereby acknowledges receipt of a true copy of the Plan and that the Participant has read the Plan carefully and fully understands its content. In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of this Agreement shall control. Without limiting the generality of the preceding sentences, the number of shares of Common Stock subject to this Restricted Stock Unit Award shall be subject to adjustment as provided in Section 5.7 of the Plan.

2.Grant of Restricted Stock Unit Award. The Company hereby grants to the Participant, as of the Grant Date specified above, the number of Target RSUs specified above, with the actual number of shares of Common Stock to be issued pursuant to this Award contingent upon satisfaction of the vesting conditions described in Section 3 hereof, subject to Section 4, which may not exceed the Maximum Shares. Except as otherwise provided by the Plan, the Participant agrees and understands that nothing contained in this Agreement provides, or is intended to provide, the Participant with any protection against potential future dilution of the Participant’s interest in the Company for any reason, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of the shares of Common Stock underlying the RSUs, except as otherwise specifically provided for in the Plan or this Agreement.

3.Vesting.

(a)    The RSUs subject to this Award shall be subject to both a time-based vesting condition (the “Time-Based Condition”) and a performance-based vesting condition (the “Performance Condition”), as described herein. None of the RSUs (or any portion thereof) shall be “vested” for purposes of this Agreement unless and until both the Time-Based Condition and the Performance Condition for such RSUs are satisfied.

(i)    The Time-Based Condition for the RSUs shall be satisfied as of the date that the Company’s financial results for calendar year 2014 are ratified by the Board (which shall occur following the end of such calendar year and prior to March 15, 2015), subject to the Participant’s continued service with the Company or any of its Subsidiaries through the date of such ratification. There shall be no proportionate or partial satisfaction of the Time-Based Condition prior to the date of such ratification, except as specifically provided in this Agreement.

(ii)    The Performance Condition shall be satisfied as to the number of Target RSUs for each of calendar year 2012, 2013 and 2014, subject to the Company’s satisfaction of the applicable level of performance, in each case as determined pursuant to the tables below.

Calendar Year 2012. 1/3rd (33.33%) of the Target RSUs (the “2012 RSUs”) shall be eligible to satisfy the Performance Condition based upon the Company’s performance in calendar year 2012 in accordance with the following schedule:

Level of Performance	Ad Sales	Percentage of 2012 RSUs for which the Performance Condition is Satisfied
Threshold	[ ]	50%
Target	[ ]	100%
Maximum	[ ]	150%

Calendar Year 2013. 1/3rd (33.33%) of the Target RSUs (the “2013 RSUs”) shall be eligible to satisfy the Performance Condition based upon the Company’s performance in calendar year 2013 in accordance with the following schedule, with the particular levels of performance to be determined by the Committee within sixty (60) days of the beginning of calendar year 2013:

Level of Performance	Ad Sales	Percentage of 2013 RSUs for which the Performance Condition is Satisfied
Threshold	[ ]	50%
Target	[ ]	100%
Maximum	[ ]	150%

Calendar Year 2014. 1/3rd (33.33%) of the Target RSUs (the “2014 RSUs”) shall be eligible to satisfy the Performance Condition based upon the Company’s performance in calendar year 2014 in accordance with the following schedule, with the particular levels of performance to be determined by the Committee within sixty (60) days of the beginning of calendar year 2014:

Level of Performance	Ad Sales	Percentage of 2014 RSUs for which the Performance Condition is Satisfied
Threshold	[ ]	50%
Target	[ ]	100%
Maximum	[ ]	150%

For purposes of this Section 3(a)(ii), (A) the term “Ad Sales” shall mean the non-GAAP statistical measure consisting of sales of advertising in print directories distributed during the applicable period and Internet-based products and services with respect to which such advertising first appeared publicly during the applicable period, as determined by the Committee in its reasonable discretion. For the avoidance of doubt, in no event shall the Performance Condition be deemed satisfied unless Ad Sales for the applicable performance period equal or exceed the threshold level for such period. To the extent that actual Ad Sales for the applicable calendar year are between the threshold and target levels or between the target and maximum levels described in each table, the percentage at which the Performance Condition is satisfied for such calendar year shall be determined on a pro rata basis using straight line interpolation; provided that the Performance Condition shall not be satisfied and no Target RSUs for a calendar year shall become vested if the actual Ad Sales are less than the threshold level of performance for such calendar year; and provided, further, that the maximum number of Target RSUs that satisfy the Performance Condition for any calendar year shall not exceed 150% of the Target RSUs eligible to satisfy the Performance Condition in such calendar year.

(b)Certain Terminations. Notwithstanding the foregoing, in the event of the Participant’s termination of service with the Company and its Subsidiaries pursuant to a Qualifying Termination (as defined in Section 3(e) below), then:

(i)    the Time-Based Condition shall be deemed satisfied as to the number of RSUs for which the Performance Conditions were satisfied for any calendar year (if any) ending prior to such Qualifying Termination;

(ii)    the Time-Based Condition and the Performance Condition shall be deemed satisfied for the calendar year that includes the Qualifying Termination in an amount equal to the product of (A) a fraction, the numerator of which is the number of days on and after January 1, 2012 occurring prior to the date of such Qualifying Termination and the denominator of which is the number of days in the period beginning on January 1, 2012 and ending on December 31, 2014 and (B) the number of RSUs for which the Performance Condition is satisfied for the applicable calendar year, determined in accordance with the tables in Section 3(a)(ii) above; and

(iii)    the Time-Based Condition and the Performance Condition shall be deemed satisfied for any calendar year following the calendar year that includes the Qualifying Termination and is specified in the tables in Section 3(a)(ii) above (if any) in an amount equal to the product of (A) a fraction, the numerator of which is the number of days on and after January 1, 2012 occurring prior to the date of such Qualifying Termination and the denominator of which is the number of days in the period beginning on January 1, 2012 and ending on December 31, 2014 and (B) the number of RSUs that would vest in such calendar year had the Performance Condition for such calendar year been satisfied at the target level specified in the tables in Section 3(a)(ii) above.

(c)Change in Control. The Performance Condition for any calendar year that includes or is subsequent to a Change in Control shall become satisfied upon the occurrence of a Change in Control as to the number of RSUs that would have vested in such calendar year had the Performance Condition been satisfied at the target level specified in the tables in Section 3(a)(ii), so long as the Participant has remained continuously employed until the date of such Change in Control, and the RSUs shall continue to be subject to the Time-Based Condition. Notwithstanding the foregoing, (i) in the event that the Participant has remained continuously employed until the date of such Change in Control and the RSUs are not substituted in accordance with Section 5.8(a)(2) of the Plan, the Time-Based Condition shall be deemed satisfied for all such RSUs for which the Performance Condition was satisfied immediately upon such Change in Control (taking into account the accelerated Performance Conditions described in this paragraph), and (ii) in the event of a Participant’s Qualifying Termination following a Change in Control, the Time-Based Condition shall be deemed satisfied for any RSUs for which the Performance Condition was previously satisfied (including satisfaction of the Performance Condition pursuant to the provisions of this Section 3(c)).

(d)Forfeiture. Except as otherwise provided herein, all RSUs for which both the Time-Based Condition and the Performance Condition have not been satisfied prior to a Participant’s termination of service with the Company and its Subsidiaries for any reason (after taking into account any accelerated vesting on account of such termination as provided in this Agreement) shall be immediately forfeited upon such termination and the Participant shall have no further rights to such RSUs hereunder.

(e)Certain Definitions. For purposes of this Agreement, the following terms shall have the meanings provided below:

(i)    “Qualifying Termination” means a termination of the Participant’s service by the Company without “Cause” or by the Participant for “Good Reason.”

(ii)     “Cause,” means (i) the Participant’s willful and continued failure substantially to perform the duties of his or her position (other than as a result of total or partial incapacity due to physical or mental illness or as a result of a termination by Executive for Good Reason, as hereinafter defined), (ii) any willful act or omission by the Participant constituting dishonesty, fraud or other

malfeasance, which in any such case is demonstrably (and, in the case of other malfeasance, materially) injurious to the financial condition or business reputation of the Company, or (iii) the Participant’s conviction of a felony under the laws of the United States or any state thereof or any other jurisdiction in which the Company conducts business which materially impairs the value of Participant’s services to the Company. For purposes of this definition, no act or failure to act shall be deemed “willful” unless effected by the Participant not in good faith and without a reasonable belief that such action or failure to act was in or not opposed to the best interests of the Employer.

(iii)    “Change in Control” shall mean the occurrence of any of the following events:

(1)    Any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any company owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company), is or becomes the “beneficial owner” (as defined in rule 13d‑3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities;

(2)    During any period of twelve (12) consecutive months, individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person (as defined above) who has entered into an agreement with the Company to effect a transaction described in subsections (1), (3) or (4) of this definition) whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof;

(3)    The shareholders of the Company have approved a merger or consolidation of the Company with any other company and all other required governmental approvals of such merger or consolidation have been obtained, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 60% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person (as defined above) becomes the beneficial owner (as defined above) of more than 30% of the combined voting power of the Company’s then outstanding securities;

(4)    The shareholders of the Company have approved a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, and all other required governmental approvals of such transaction have been obtained; or

(5)    Any other event that would be required to be reported as a “change in control” on Form 8-K under the Exchange Act or which the Board determines constitutes a Change in Control.

(iv)    “Good Reason” mean without such Participant’s consent: (a) material diminution in (i) the Participant’s then current title, but only if such diminution accompanies a diminution in the

Participant’s position, duties or responsibilities, or (ii) the Participant’s then-current position, duties or responsibilities; or (b) the assignment to the Participant of duties and responsibilities that are inconsistent, in a material respect, with the scope of duties and responsibilities associated with the Participant’s then current position; or (c) material reduction in such Participant’s total compensation opportunity under any and all base salary, annual incentive, long term incentive, stock award and other compensatory plans and programs made available to the Participant by Company in connection with his or her employment, except for any such reduction that reasonably proportionately adversely impacts all other similarly situated employees, or (d) material relocation of the Participant’s principal workplace without his or her consent (for purposes of this definition, “material relocation” shall mean a relocation of the Participant’s principal workplace by a distance that exceeds fifty (50) miles. Notwithstanding the foregoing, “Good Reason” shall only be found to exist if the Participant has provided written notice to the Company of the condition giving rise to Good Reason within ninety (90) days following the occurrence of the condition giving rise to Good Reason, the Company does not cure such condition within thirty (30) days following the receipt of such notice from the Participant, and the Participant resigns within 180 days following the initial existence of such condition.

4.Delivery of Shares. Following the satisfaction of both the Time-Based Condition and the Performance Condition with respect to any part of the RSUs granted hereunder, the Participant shall receive the number of shares of Common Stock that correspond to the number of such RSUs, which shall be delivered no later than March 15 of the calendar year following the calendar year in which or with respect to which both such vesting conditions were satisfied; provided that the Participant shall be obligated to pay to the Company the aggregate par value of the shares of Common Stock to be issued within ten (10) days following the issuance of such Common Stock unless such Common Stock has been issued by the Company from the Company’s treasury; provided further that, rather than deliver such shares of Common Stock, the Company may, at the discretion of the Committee, deliver an amount of cash equal to the Fair Market Value of the Common Stock that is not otherwise delivered, paid at the same time such Common Stock would otherwise be required to be delivered pursuant to this Section 4.

Example: Assume that a Participant has a Qualifying Termination on April 1 of calendar year 2013 (therefore remaining employed for 25% of calendar year 2013), that the Performance Condition for 2012 was satisfied at the maximum level and that the Company determined following the conclusion of calendar year 2013 that the Performance Condition for 2013 was satisfied at the threshold level. Upon such termination both the Time-Based Condition and the Performance Condition are satisfied as to the sum of the following RSUs; (i) the product of 1/3 of the Target RSUs and 150%, (ii) 5/12ths of the product of 1/3 of the Target RSUs and 50% and (iii) 5/12ths of the product of 1/3 of the Target RSUs and 100%. A number of shares of Common Stock equal to this number of RSUs would be delivered following the Company’s determination of the level of performance for calendar year 2013, but in no event later than March 15, 2014, and the Participant shall have no further rights to any additional RSUs or shares of Common Stock pursuant to this Agreement.

5.No Rights as Stockholder. The Participant shall have no rights as a stockholder (including, without limitation, voting rights and rights to dividends) with respect to any shares of Common Stock covered by any RSU unless and until the Participant has become the holder of record of such shares.

6.Non-Transferability. No portion of the RSUs may be sold, assigned, transferred, encumbered, hypothecated or pledged by the Participant, other than to the Company as a result of forfeiture of the RSUs as provided herein, unless and until payment is made in respect of vested RSUs in accordance with the provisions hereof and the Participant has become the holder of record of the vested shares of Common Stock issuable hereunder.

7.Governing Law. All questions concerning the construction, validity and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to the choice of law principles thereof.

8.Withholding of Tax. The Company shall have the power and the right to deduct or withhold, or require the Participant to remit to the Company, an amount sufficient to satisfy any federal, state, local and foreign taxes of any kind (including, but not limited to, the Participant’s FICA and SDI obligations) which the Company, in its sole discretion, deems necessary to be withheld or remitted to comply with the Code and/or any other applicable law, rule or regulation with respect to the RSUs and, if the Participant fails to do so, the Company may otherwise refuse to issue or transfer any shares of Common Stock otherwise required to be issued pursuant to this Agreement. Any statutorily required withholding obligation with regard to the Participant may be satisfied by reducing the amount of cash or shares of Common Stock otherwise deliverable to the Participant hereunder, as provided in Section 5.5 of the Plan.

9.Securities Representations. This Agreement is being entered into by the Company in reliance upon the following express representations and warranties of the Participant. The Participant hereby acknowledges, represents and warrants that:

(a)    The Participant has been advised that the Participant may be an “affiliate” within the meaning of Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”) and in this connection the Company is relying in part on the Participant’s representations set forth in this Section 9.

(b)    If the Participant is deemed an affiliate within the meaning of Rule 144 of the Securities Act, the shares of Common Stock issuable hereunder must be held indefinitely unless an exemption from any applicable resale restrictions is available or the Company files an additional registration statement (or a “re-offer prospectus”) with regard to such shares of Common Stock and the Company is under no obligation to register such shares of Common Stock (or to file a “re-offer prospectus”).

(c)    If the Participant is deemed an affiliate within the meaning of Rule 144 of the Securities Act, the Participant understands that (i) the exemption from registration under Rule 144 will not be available unless (A) a public trading market then exists for the Common Stock of the Company, (B) adequate information concerning the Company is then available to the public, and (C) other terms and conditions of Rule 144 or any exemption therefrom are complied with, and (ii) any sale of the shares of Common Stock issuable hereunder may be made only in limited amounts in accordance with the terms and conditions of Rule 144 or any exemption therefrom.

10.Entire Agreement; Amendment. This Agreement, together with the Plan, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter. The Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan. This Agreement may also be modified or amended by a writing signed by both the Company and the Participant. The Company shall give written notice to the Participant of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof.

11.Notices. Any notice hereunder by the Participant shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the General Counsel (or its designee) of the Company, or, if not available, the Board. Any notice hereunder by the Company shall be given to the Participant in writing and such notice shall be deemed duly given only upon receipt thereof at such address as the Participant may have on file with the Company.

12.No Right to Service. Nothing in this Agreement shall interfere with or limit in any way the right of the Company or its Subsidiaries to terminate the Participant’s service at any time, for any reason and with or without Cause.

13.Transfer of Personal Data. The Participant authorizes, agrees and unambiguously consents to the transmission by the Company (or any Subsidiary) of any personal data information related to the RSUs awarded under this Agreement for legitimate business purposes. This authorization and consent is freely given by the Participant.

14.Compliance with Laws. The grant of RSUs and the issuance of shares of Common Stock hereunder shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act, the Exchange Act and in each case any respective rules and regulations promulgated thereunder) and any other law, rule regulation or exchange requirement applicable thereto. The Company shall not be obligated to issue the RSUs or any shares of Common Stock pursuant to this Agreement if any such issuance would violate any such requirements. As a condition to the settlement of the RSUs, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation.

15.Section 409A. Notwithstanding anything herein or in the Plan to the contrary, the RSUs are intended to be exempt from the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent as is reasonable under the circumstances.

16.Binding Agreement; Assignment. This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns. The Participant shall not assign (except in accordance with Section 6 hereof) any part of this Agreement without the prior express written consent of the Company.

17.Headings. The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.

18.Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.

19.Further Assurances. Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated thereunder.

20.Severability. The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

21.Acquired Rights. The Participant acknowledges and agrees that: (a) the Company may terminate or amend the Plan at any time, subject to the limitations contained in the Plan or this Agreement; (b) the Award of RSUs made under this Agreement is completely independent of any other award or grant and is made at the sole discretion of the Company; (c) no past grants or awards (including, without limitation, the RSUs awarded hereunder) give the Participant any right to any grants or awards in the future whatsoever; and (d) any benefits granted under this Agreement are not part of the Participant’s ordinary salary, and shall not be considered as part of such salary in the event of severance, redundancy or resignation.

* * * * *

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

DEX ONE CORPORATION

By:_____________________________    

Name:___________________________    

Title:____________________________    

PARTICIPANT

Name:___________________________

EX-31.1

CERTIFICATION Exhibit 31.1

I, Alfred T. Mockett, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Dex One Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	April 26, 2012	By:	/s/ Alfred T. Mockett
			Alfred T. Mockett
			Chief Executive Officer and President

EX-31.2

CERTIFICATION Exhibit 31.2

I, Gregory W. Freiberg, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Dex One Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	April 26, 2012	By:	/s/ Gregory W. Freiberg
			Gregory W. Freiberg
			Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Dex One Corporation for the period ended March 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer's knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Dex One Corporation as of the dates and for the periods expressed in the Report.

/s/ Alfred T. Mockett	/s/ Gregory W. Freiberg
Alfred T. Mockett	Gregory W. Freiberg
Chief Executive Officer and President	Executive Vice President and Chief Financial Officer
April 26, 2012	April 26, 2012

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

XML

Long-Term Debt

3 Months Ended

Mar. 31, 2012

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

The following table presents the fair market value of our long-term debt at March 31, 2012 based on quoted market prices on that date, as well as the carrying value of our long-term debt at March 31, 2012, which includes (1) $53.7 million of unamortized fair value adjustments required by GAAP in connection with the Company’s adoption of fresh start accounting on the Fresh Start Reporting Date, (2) the issuance of an additional $10.5 million of Dex One Senior Subordinated Notes as a result of the Company's election to make paid-in-kind (“PIK”) interest payments for the semi-annual interest period ending March 31, 2012 and (3) the impact of the Debt Repurchases. See Note 1, “Business and Basis of Presentation - Significant Financing Developments” for additional information on the Debt Repurchases.

	March 31, 2012
	Fair Market Value		Carrying Value
RHDI Amended and Restated Credit Facility	$	357,862	$	816,571
Dex Media East Amended and Restated Credit Facility	298,662		561,394
Dex Media West Amended and Restated Credit Facility	353,717		555,574
Dex One Senior Subordinated Notes	90,821		310,500
Total Dex One consolidated	1,101,062		2,244,039
Less current portion	119,372		223,317
Long-term debt	$	981,690	$	2,020,722

Credit Facilities

RHDI Amended and Restated Credit Facility

In conjunction with the Debt Repurchases, RHDI repurchased $92.0 million of loans under the RHDI Amended and Restated Credit Facility at a rate of 43.5% of par. As of March 31, 2012, the outstanding carrying value under the RHDI Amended and Restated Credit Facility totaled $816.6 million. The RHDI Amended and Restated Credit Facility requires quarterly principal and interest payments and matures on October 24, 2014. The weighted average interest rate of outstanding debt under the RHDI Amended and Restated Credit Facility was 9.0% at March 31, 2012.

Dex Media East Amended and Restated Credit Facility

In conjunction with the Debt Repurchases, DME Inc. repurchased $23.6 million of loans under the Dex Media East Amended and Restated Credit Facility at a rate of 53.0% of par. As of March 31, 2012, the outstanding carrying value under the Dex Media East Amended and Restated Credit Facility totaled $561.4 million. The Dex Media East Amended and Restated Credit Facility requires quarterly principal and interest payments and matures on October 24, 2014. The weighted average interest rate of outstanding debt under the Dex Media East Amended and Restated Credit Facility was 3.0% at March 31, 2012.

Dex Media West Amended and Restated Credit Facility

In conjunction with the Debt Repurchases, DMW Inc. repurchased $26.6 million of loans under the Dex Media West Amended and Restated Credit Facility at a rate of 64.0% of par. As of March 31, 2012, the outstanding carrying value under the Dex Media West Amended and Restated Credit Facility totaled $555.6 million. The Dex Media West Amended and Restated Credit Facility requires quarterly principal and interest payments and matures on October 24, 2014. The weighted average interest rate of outstanding debt under the Dex Media West Amended and Restated Credit Facility was 7.3% at March 31, 2012.

Notes

Dex One Senior Subordinated Notes

Interest on the Dex One Senior Subordinated Notes is payable semi-annually on March 31^st and September 30^th of each year, commencing on March 31, 2010 through January 29, 2017. The Dex One Senior Subordinated Notes accrue interest at an annual rate of 12% for cash interest payments and 14% if the Company elects PIK interest payments. The Company may elect, no later than two business days prior to the beginning of any such semi-annual interest period, whether to make each interest payment on the Dex One Senior Subordinated Notes (i) entirely in cash or (ii) 50% in cash and 50% in PIK interest, which is capitalized as additional senior subordinated notes. In the absence of such an election for any subsequent semi-annual interest period, interest on the Dex One Senior Subordinated Notes will be payable in the form of the interest payment for the semi-annual interest period immediately preceding such subsequent semi-annual interest period. For the semi-annual interest period ending March 31, 2012, the Company made interest payments 50% in cash and 50% in PIK interest, as permitted by the indenture governing the Dex One Senior Subordinated Notes, resulting in the issuance of an additional $10.5 million of Dex One Senior Subordinated Notes at March 31, 2012. The Company will continue to make interest payments on the Dex One Senior Subordinated Notes 50% in cash and 50% in PIK interest for the semi-annual interest period ending September 30, 2012.

Impact of Fresh Start Accounting

In conjunction with our adoption of fresh start accounting, an adjustment was established to record our outstanding debt at fair value on the Fresh Start Reporting Date. The Company was required to record our Credit Facilities at a discount as a result of their fair value on the Fresh Start Reporting Date. Therefore, the carrying amount of these debt obligations is lower than the principal amount due at maturity. A total discount of $120.2 million was recorded upon adoption of fresh start accounting associated with our Credit Facilities, of which $53.7 million remains unamortized at March 31, 2012, as shown in the following table.

	Carrying Value at March 31, 2012		Unamortized Fair Value Adjustments at March 31, 2012		Outstanding Debt at March 31, 2012 Excluding the Impact of Unamortized Fair Value Adjustments
RHDI Amended and Restated Credit Facility	$	816,571	$	8,785	$	825,356
Dex Media East Amended and Restated Credit Facility	561,394		37,720		599,114
Dex Media West Amended and Restated Credit Facility	555,574		7,154		562,728
Dex One Senior Subordinated Notes	310,500		—		310,500
Total	$	2,244,039	$	53,659	$	2,297,698

In conjunction with the Debt Repurchases, we accelerated amortization of fair value adjustments to our Credit Facilities of $2.0 million, which partially offset the net gain on Debt Repurchases recognized during the three months ended March 31, 2012. See Note 1, “Business and Basis of Presentation - Significant Financing Developments” for additional information.

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Restructuring Charges

3 Months Ended

Mar. 31, 2012

Restructuring and Related Activities [Abstract]

Restructuring Charges

Restructuring Charges

During the fourth quarter of 2010, the Company initiated a restructuring plan that included headcount reductions, consolidation of responsibilities and vacating leased facilities, which continued into 2011 (“Restructuring Actions”). The Company did not recognize a restructuring charge to earnings related to the Restructuring Actions during the three months ended March 31, 2012. Cash payments of $6.4 million were made in conjunction with the Restructuring Actions during the three months ended March 31, 2012. The Company recognized a restructuring charge to earnings of $6.0 million and made cash payments of $8.5 million related to the Restructuring Actions during the three months ended March 31, 2011. The following table shows the activity in our restructuring reserve associated with the Restructuring Actions during the three months ended March 31, 2012:

Three Months Ended March 31, 2012
Balance at January 1, 2012	$	7,967
Payments	(6,434		)
Balance at March 31, 2012	$	1,533

Restructuring charges that are charged to earnings are included in production and distribution expenses, selling and support expenses or general and administrative expenses on the unaudited condensed consolidated statements of comprehensive income, as applicable.

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Current Assets
Cash and cash equivalents	$ 115,201	$ 257,939
Accounts receivable:
Billed	129,371	161,980
Unbilled	460,814	497,422
Allowance for doubtful accounts	(41,086)	(53,696)
Net accounts receivable	549,099	605,706
Deferred directory costs	120,039	130,744
Short-term deferred income taxes, net	68,929	67,793
Prepaid expenses and other current assets	43,479	51,384
Total current assets	896,747	1,113,566
Fixed assets and computer software, net	140,305	151,545
Other non-current assets	14,930	13,001
Intangible assets, net	2,094,731	2,182,092
Total Assets	3,146,713	3,460,204
Current Liabilities
Accounts payable and accrued liabilities	89,932	126,158
Accrued interest	26,078	29,245
Deferred directory revenues	588,321	644,101
Current portion of long-term debt	223,317	326,300
Total current liabilities	927,648	1,125,804
Long-term debt	2,020,722	2,184,057
Deferred income taxes, net	73,937	75,492
Other non-current liabilities	75,530	84,718
Total Liabilities	3,097,837	3,470,071
Commitments and contingencies
Shareholders' Equity (Deficit)
Common stock, par value $.001 per share, authorized - 300,000,000 shares; issued and outstanding - 50,281,677 shares at March 31, 2012 and 50,233,617 shares at December 31, 2011	50	50
Additional paid-in capital	1,461,121	1,460,057
Accumulated deficit	(1,384,984)	(1,442,556)
Accumulated other comprehensive loss	(27,311)	(27,418)
Total shareholders' equity (deficit)	48,876	(9,867)
Total Liabilities and Shareholders' Equity (Deficit)	$ 3,146,713	$ 3,460,204

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Business and Basis of Presentation

3 Months Ended

Mar. 31, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business and Basis of Presentation

Business and Basis of Presentation

The interim condensed consolidated financial statements of Dex One Corporation and its direct and indirect wholly-owned subsidiaries (“Dex One,” the “Company,” “we,” “us” and “our”) have been prepared in accordance with the Securities and Exchange Commission’s (“SEC”) instructions to this Quarterly Report on Form 10-Q and should be read in conjunction with the financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2011. The interim condensed consolidated financial statements include the accounts of Dex One and its direct and indirect wholly-owned subsidiaries. As of March 31, 2012, R.H. Donnelley Corporation ("RHD"), R.H. Donnelley Inc. (“RHDI” or "RHDI Inc."), Dex Media, Inc. (“Dex Media”), Dex One Digital, Inc. ("Dex One Digital"), formerly known as Business.com, Inc. (“Business.com”), and Dex One Service, Inc. (“Dex One Service”) were our only direct wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated. 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 material adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of financial position, results of operations and cash flows at the dates and for the periods presented have been included.

Business Overview

We are a marketing solutions company that helps local businesses and consumers connect with each other. Our proprietary and affiliate provided marketing solutions combine multiple media platforms, which help drive large volumes of consumer leads to our customers, and assist our customers in managing their presence among those consumers. Our marketing consultants strive to be trusted advisors and offer local businesses personalized marketing consulting services and exposure across leading media platforms used by consumers searching for local businesses. These platforms include online and mobile local search solutions, major search engines, and print directories.

Our proprietary marketing solutions include our Dex published yellow pages directories, which we co-brand with other recognizable brands in the industry such as CenturyLink and AT&T, our Internet yellow pages site, DexKnows.com and our mobile applications, Dex Mobile and CityCentral. Our growing list of marketing solutions also includes local business and market analysis, message and image creation, target market identification, advertising and digital profile creation, web sites, mobile web sites, reputation management, online video development and promotion, keyword optimization strategies and programs, distribution strategies, social strategies and tracking and reporting. Our digital lead generation solutions are powered by our search engine marketing product, Dex Net, which extends our customers’ reach to our leading Internet and mobile partners to attract consumers searching for local businesses, products and services within our markets.

Significant Financing Developments

On March 20, 2012, the Company announced the commencement of a cash tender offer to purchase the maximum aggregate principal amount of our outstanding $300 million 12%/14% Senior Subordinated Notes due 2017 (“Dex One Senior Subordinated Notes”) for $26.0 million. The Offer to Purchase included a purchase price range accepted for purchase of $270 to $300 per $1,000 principal amount of the Dex One Senior Subordinated Notes plus an amount in cash in lieu of the accrued and unpaid interest calculated at a rate of 12% per annum on the aggregate principal amount of the Dex One Senior Subordinated Notes from March 31, 2012 to, but not including, the payment date. The cash tender offer expired on April 19, 2012. See Note 11, “Subsequent Events” for additional information on the cash tender offer to purchase the Dex One Senior Subordinated Notes.

On March 9, 2012, RHDI, Dex Media East, Inc. ("DME Inc.") and Dex Media West, Inc. ("DMW Inc.") each entered into the First Amendment (the "Amendments") to the amended and restated RHDI credit facility (“RHDI Amended and Restated Credit Facility”), the amended and restated DME Inc. credit facility (“Dex Media East Amended and Restated Credit Facility”) and the amended and restated DMW Inc. credit facility (“Dex Media West Amended and Restated Credit Facility”) (collectively, the "Credit Facilities"), respectively, with certain financial institutions. The Amendments permit RHDI, DME Inc. and DMW Inc. to make open market repurchases and retire loans under their respective Credit Facilities at a discount to par through December 31, 2013, provided that such discount is acceptable to those lenders who choose to participate. Repurchases may be made with existing cash on hand, subject to certain restrictions and terms noted in the Amendments. RHDI, DME Inc. and DMW Inc. are under no obligation to make such repurchases at any time throughout the term noted in the Amendments.

On March 14, 2012, under the terms and conditions of the Amendments, RHDI commenced an offer to utilize up to $40 million to repurchase loans under the RHDI Amended and Restated Credit Facility at a price of 41.5% to 45.5% of par, DME Inc. commenced an offer to utilize up to $12.5 million to repurchase loans under the Dex Media East Amended and Restated Credit Facility at a price of 50.5% to 54.5% of par and DMW Inc. commenced an offer to utilize up to $23.5 million to repurchase loans under the Dex Media West Amended and Restated Credit Facility at a price of 60.0% to 64.0% of par. The offers expired on March 21, 2012. On March 23, 2012, RHDI, DME Inc. and DMW Inc. collectively utilized cash on hand of $69.5 million to repurchase loans under the Credit Facilities of $142.1 million ("Debt Repurchases"). The Debt Repurchases have been accounted for as an extinguishment of debt resulting in a non-cash, pre-tax gain of $68.8 million during the three months ended March 31, 2012, consisting of the difference between the par value and purchase price of the Credit Facilities, offset by accelerated amortization of fair value adjustments to our Credit Facilities that were recognized in conjunction with our adoption of fresh start accounting and fees associated with the Debt Repurchases. The following table provides detail of the repurchases made on each of our Credit Facilities and the calculation of the net gain on Debt Repurchases for the three months ended March 31, 2012:

	Three Months Ended March 31, 2012
RHDI Amended and Restated Credit Facility (repurchased at 43.5% of par)	$	91,954
Dex Media East Amended and Restated Credit Facility (repurchased at 53.0% of par)	23,585
Dex Media West Amended and Restated Credit Facility (repurchased at 64.0% of par)	26,593
Total Credit Facilities repurchased	142,132
Total purchase price	(69,519		)
Accelerated amortization of fair value adjustments to Credit Facilities	(2,002		)
Fees associated with the Debt Repurchases	(1,848		)
Net gain on Debt Repurchases	$	68,763

The net gain on Debt Repurchases is included in "Gain on debt repurchases, net" on the unaudited condensed consolidated statement of comprehensive income.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2012

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Identifiable Intangible Assets

The Company reviews the carrying value of definite-lived intangible assets and other long-lived assets whenever events or circumstances indicate that their carrying amount may not be recoverable. The Company reviewed the following information, estimates and assumptions during the three months ended March 31, 2012 to determine if the carrying amounts of our definite-lived intangible assets and other long-lived assets were recoverable:

• Historical financial information, including revenue, profit margins, customer attrition data and price premiums enjoyed relative to competing independent publishers;

• Long-term financial projections, including, but not limited to, revenue trends and profit margin trends;

• Intangible asset and other long-lived asset carrying values and any changes in current and future use;

• Trading values of our debt and equity securities; and

• Other Company-specific information.

Based on our evaluation during the three months ended March 31, 2012, we concluded that the carrying amounts of our definite-lived intangible assets and other long-lived assets were recoverable.

Amortization expense related to the Company’s intangible assets was $87.4 million and $38.2 million for the three months ended March 31, 2012 and 2011, respectively. Our intangible assets and their respective book values at March 31, 2012 are shown in the following table:

	Directory Services Agreements			Local Customer Relationships			National Customer Relationships			Trade Names and Trademarks			Technology, Advertising Commitments & Other			Total
Gross intangible assets carrying value	$	1,330,000		$	560,000		$	175,000		$	380,000		$	85,500		$	2,530,500
Accumulated amortization	(215,716		)	(116,421		)	(27,647		)	(53,641		)	(22,344		)	(435,769		)
Net intangible assets	$	1,114,284		$	443,579		$	147,353		$	326,359		$	63,156		$	2,094,731

The Company evaluates the remaining useful lives of definite-lived intangible assets and other long-lived assets whenever events or circumstances indicate that a revision to the remaining period of amortization is warranted. If the estimated remaining useful lives change, the remaining carrying amount of the intangible assets and other long-lived assets would be amortized prospectively over that revised remaining useful life. The Company evaluated the remaining useful lives of definite-lived intangible assets and other long-lived assets during the three months ended March 31, 2012 by considering, among other things, the effects of obsolescence, demand, competition, which takes into consideration the price premium benefit we have over competing independent publishers in our markets as a result of directory services agreements acquired in prior acquisitions, and other economic factors, including the stability of the industry in which we operate, known technological advances, legislative actions that result in an uncertain or changing regulatory environment, and expected changes in distribution channels. Based on our evaluation of these factors during the three months ended March 31, 2012, the Company determined that the estimated useful lives of our directory services agreements, local and national customer relationships and tradenames and trademarks no longer reflect the period they are expected to contribute to future cash flows. Therefore, the Company reduced the estimated useful lives of these intangible assets as shown in the following table:

Intangible Asset	Previous Weighted Average Useful Lives	Revised Weighted Average Useful Lives	Amortization Methodology
Directory services agreements	25 years	10 years	Income forecast method (1)
Local customer relationships	13 years	9 years	Income forecast method (1)
National customer relationships	24 years	9 years	Income forecast method (1)
Tradenames and trademarks	13 years	9 years	Straight-line method

⁽¹⁾ These intangible assets are being amortized under the income forecast method, which assumes the value derived from these intangible assets is greater in the earlier years and steadily declines over time.

The weighted average useful lives of technology, advertising commitments and other remain at seven years. The combined weighted average useful life of our intangible assets at March 31, 2012 is nine years. As a result of reducing the estimated useful lives of the intangible assets noted above, the Company expects an increase in amortization expense of $161.6 million and total amortization expense of $349.4 million for 2012. Amortization expense for all intangible assets for the five succeeding years is estimated to be approximately $301.6 million, $257.5 million, $217.1 million, $210.4 million and $206.2 million, respectively.

If industry and local business conditions in our markets deteriorate in excess of current estimates, potentially resulting in further declines in advertising sales and operating results, and / or if the trading value of our debt and equity securities continue to decline significantly, we will be required to assess the recoverability and useful lives of our intangible assets and other long-lived assets. These factors, including changes to assumptions used in our impairment analysis as a result of these factors, could result in future impairment charges, a reduction of remaining useful lives associated with our intangible assets and other long-lived assets and acceleration of amortization expense.

Interest Expense

In conjunction with our adoption of fresh start accounting and reporting on February 1, 2010 ("Fresh Start Reporting Date"), an adjustment was established to record our outstanding debt at fair value on the Fresh Start Reporting Date. This fair value adjustment will be amortized as an increase to interest expense over the remaining term of the respective debt agreements using the effective interest method and does not impact future scheduled interest or principal payments. Amortization of the fair value adjustment included as an increase to interest expense was $7.5 million and $7.3 million for the three months ended March 31, 2012 and 2011, respectively.

During the first quarter of 2010, we entered into interest rate swap and interest rate cap agreements that are not designated as cash flow hedges. The Company’s interest expense includes income of $0.2 million and $0.7 million for the three months ended March 31, 2012 and 2011, respectively, resulting from the change in fair value of these interest rate swaps and interest rate caps.

Advertising Expense

We recognize advertising expenses as incurred. These expenses include media, public relations, promotional, branding and sponsorship costs and on-line advertising. Total advertising expense for the Company was $4.1 million and $3.1 million for the three months ended March 31, 2012 and 2011, respectively.

Concentration of Credit Risk

Trade Receivables

Approximately 85% of our advertising revenue is derived from the sale of our marketing solutions to local businesses. These customers typically enter into 12-month advertising sales contracts and make monthly payments over the term of the contract. Commencing in late 2011, the Company began to offer customers the ability to purchase digital marketing solutions for shorter time frames than our standard one year contract. Some customers prepay the full amount or a portion of the contract value. Most new customers and customers desiring to expand their advertising programs are subject to a credit review. If the customers qualify, we may extend credit to them in the form of a trade receivable for their advertising purchase. Local businesses tend to have fewer financial resources and higher failure rates than large businesses. In addition, full collection of delinquent accounts can take an extended period of time and involve significant costs. We do not require collateral from our customers, although we do charge late fees to customers that do not pay by specified due dates.

The remaining approximately 15% of our advertising revenue is derived from the sale of our marketing solutions to national or large regional chains. The majority of the revenue derived through national accounts is serviced through certified marketing representatives ("CMRs") from which we accept orders. CMRs are independent third parties that act as agents for national customers. The CMRs are responsible for billing the national customers for their advertising. We receive payment for the value of advertising placed in our directories, net of the CMR’s commission, directly from the CMR.

Derivative Financial Instruments

At March 31, 2012, we had interest rate swap and interest rate cap agreements with major financial institutions with a notional amount of $300.0 million and $300.0 million, respectively. We are exposed to credit risk in the event that one or more of the counterparties to the agreements does not, or cannot, meet their obligation. The notional amount for interest rate swaps is used to measure interest to be paid or received and does not represent the amount of exposure to credit loss. Any loss would be limited to the amount that would have been received over the remaining life of the interest rate swap agreement. Under the terms of the interest rate cap agreements, the Company will receive payments based on the spread in rates if the three-month LIBOR rate increases above the negotiated cap rates. Any loss would be limited to the amount that would have been received based on the spread in rates over the remaining life of the interest rate cap agreement. The counterparties to the interest rate swap and interest rate cap agreements are major financial institutions with credit ratings of AA- or higher, or the equivalent dependent upon the credit rating agency.

Earnings Per Share

The calculation of basic and diluted earnings per share (“EPS”) is presented below.

	Three Months Ended March 31,
	2012		2011
Basic EPS
Net income	$	57,572	$	55,410
Weighted average common shares outstanding	50,254		50,040
Basic EPS	$	1.15	$	1.11
Diluted EPS
Net income	$	57,572	$	55,410
Weighted average common shares outstanding	50,254		50,040
Dilutive effect of stock awards	9		—
Weighted average diluted shares outstanding	50,263		50,040
Diluted EPS	$	1.15	$	1.11

Diluted EPS is calculated by dividing net income by the weighted average common shares outstanding plus dilutive potential common stock. Potential common stock includes stock options and restricted stock, the dilutive effect of which is calculated using the treasury stock method. For the three months ended March 31, 2012 and 2011, 2.7 million shares and 1.8 million shares, respectively, of the Company’s stock-based awards had exercise prices that exceeded the average market price of the Company’s common stock for the respective period.

Fair Value of Financial Instruments

At March 31, 2012 and December 31, 2011, the fair value of cash and cash equivalents, accounts receivable, net and accounts payable and accrued liabilities approximated their carrying value based on the net short-term nature of these instruments. Estimates of fair value may be affected by assumptions made and, accordingly, are not necessarily indicative of the amounts the Company could realize in a current market exchange.

As required by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The Company had interest rate swaps with a notional amount of $300.0 million and $500.0 million at March 31, 2012 and December 31, 2011, respectively, and interest rate caps with a notional amount of $300.0 million and $400.0 million at March 31, 2012 and December 31, 2011, respectively, that are measured at fair value on a recurring basis. The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at March 31, 2012 and December 31, 2011, respectively, and the level within the fair value hierarchy in which the fair value measurements were included.

	Fair Value Measurements Using Significant Other Observable Inputs (Level 2)
Derivatives:	March 31, 2012			December 31, 2011
Interest Rate Swap – Liabilities	$	(2,441	)	$	(2,694	)
Interest Rate Cap – Assets	$	—		$	5

There were no transfers of assets or liabilities into or out of Levels 1, 2 or 3 of the fair value hierarchy during the three months ended March 31, 2012 or year ended December 31, 2011. The Company has established a policy of recognizing transfers between levels of the fair value hierarchy as of the end of a reporting period.

The Company’s long-term debt obligations are not measured at fair value on a recurring basis, however we present the fair value of the Dex One Senior Subordinated Notes and our Credit Facilities in Note 4, “Long-Term Debt.” The Company has utilized quoted market prices, where available, to compute the fair market value of these long-term debt obligations at March 31, 2012. The Dex One Senior Subordinated Notes are categorized within Level 1 of the fair value hierarchy and our Credit Facilities are categorized within Level 2 of the fair value hierarchy.

Valuation Techniques – Interest Rate Swaps and Interest Rate Caps

Fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Company uses prices and inputs that are current as of the measurement date.

Fair value for our derivative instruments was derived using pricing models based on a market approach. Pricing models take into account relevant observable market inputs that market participants would use in pricing the asset or liability. The pricing models used to determine fair value for each of our derivative instruments incorporate specific contract terms for valuation inputs, including effective dates, maturity dates, interest rate swap pay rates, interest rate cap rates and notional amounts, as disclosed and presented in Note 5, “Derivative Financial Instruments,” interest rate yield curves, and the creditworthiness of the counterparty and the Company. Counterparty credit risk and the Company’s credit risk could have a material impact on the fair value of our derivative instruments, our results of operations or financial condition in a particular reporting period. At March 31, 2012, the impact of applying counterparty credit risk in determining the fair value of our derivative instruments was an increase to our derivative instruments liability of less than $0.1 million. At March 31, 2012, the impact of applying the Company’s credit risk in determining the fair value of our derivative instruments was a decrease to our derivative instruments liability of $0.8 million.

Many pricing models do not entail material subjectivity because the methodologies employed do not necessitate significant judgment, and the pricing inputs are observed from actively quoted markets, as is the case for our derivative instruments. The pricing models used by the Company are widely accepted by the financial services industry. As such and as noted above, our derivative instruments are categorized within Level 2 of the fair value hierarchy.

Fair Value Control Processes– Interest Rate Swaps and Interest Rate Caps

The Company employs control processes to validate the fair value of its derivative instruments derived from the pricing models. These control processes are designed to assure that the values used for financial reporting are based on observable inputs wherever possible. In the event that observable inputs are not available, the control processes are designed to assure that the valuation approach utilized is appropriate and consistently applied and that the assumptions are reasonable.

Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and certain expenses and the disclosure of contingent assets and liabilities. Actual results could differ materially from those estimates and assumptions. Estimates and assumptions are used in the determination of recoverability of long-lived assets, sales allowances, allowances for doubtful accounts, depreciation and amortization, employee benefit plans expense, restructuring expense and accruals, deferred income taxes, certain assumptions pertaining to our stock-based awards, and certain estimates and assumptions used in our impairment evaluation and useful lives assessment of definite-lived intangible assets and other long-lived assets, among others.

New Accounting Pronouncements

In June 2011, the FASB issued Accounting Standards Update ("ASU") No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income (“ASU 2011-05”). ASU 2011-05 allows an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in shareholders' equity. ASU 2011-05 does not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. In December 2011, the FASB issued ASU No. 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 ("ASU 2011-12"). ASU 2011-12 defers the effective date of provisions included in ASU 2011-05 that require entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement where net income is presented and the statement where other comprehensive income is presented for both interim and annual financial statements. ASU 2011-12 further states that entities must continue to report reclassification adjustments out of accumulated comprehensive income consistent with the presentation requirements in effect before ASU 2011-05. Effective January 1, 2012, the Company adopted the applicable provisions included in ASU 2011-05 and elected to present a single continuous statement of comprehensive income. The Company continues to monitor the FASB's deliberations regarding ASU 2011-12.

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04’). ASU 2011-04 was issued to provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between GAAP and International Financial Reporting Standards. ASU 2011-04 clarifies the FASB’s intent about the application of existing fair value measurement and disclosure requirements, changes certain fair value measurement principles and enhances fair value disclosure requirements. Effective January 1, 2012, the Company adopted the disclosure provisions included in ASU 2011-04. The adoption of ASU 2011-04 had no impact on our financial position or results of operations.

We have reviewed other accounting pronouncements that were issued as of March 31, 2012, which the Company has not yet adopted, and do not believe that these pronouncements will have a material impact on our financial position or operating results.

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)	Mar. 31, 2012	Dec. 31, 2011
Shareholders' Equity (Deficit)
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	300,000,000	300,000,000
Common stock, shares issued (in shares)	50,281,677	50,233,617
Common stock, shares outstanding (in shares)	50,281,677	50,233,617

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Document and Entity Information	3 Months Ended
	Mar. 31, 2012	Apr. 16, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	DEX ONE CORPORATION
Entity Central Index Key	0000030419
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		50,306,677

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Net revenues	$ 344,428	$ 391,235
Expenses:
Production and distribution expenses (exclusive of depreciation and amortization shown separately below)	70,802	75,059
Selling and support expenses	94,923	104,059
General and administrative expenses	30,226	38,097
Depreciation and amortization	103,751	54,082
Total expenses	299,702	271,297
Operating income	44,726	119,938
Gain on debt repurchases, net	68,763	0
Gain on sale of assets, net	0	13,437
Interest expense, net	(57,084)	(57,720)
Income before income taxes	56,405	75,655
(Provision) benefit for income taxes	1,167	(20,245)
Net income	57,572	55,410
Other comprehensive income:
Benefit plans adjustment, net of tax	107	0
Comprehensive income	$ 57,679	$ 55,410
Earnings per share:
Basic (in dollars per share)	$ 1.15	$ 1.11
Diluted (in dollars per share)	$ 1.15	$ 1.11
Shares used in computing earnings per share:
Basic (in shares)	50,254	50,040
Diluted (in shares)	50,263	50,040

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Benefit Plans

3 Months Ended

Mar. 31, 2012

General Discussion of Pension and Other Postretirement Benefits [Abstract]

Benefit Plans

Benefit Plans

The following table provides the components of the Company’s net periodic benefit credit for the three months ended March 31, 2012 and 2011, respectively.

	Pension Benefits
	Three Months Ended March 31,
	2012			2011
Interest cost	$	2,800		$	3,190
Expected return on plan assets	(3,612		)	(3,523		)
Amortization of net loss	259			—
Net periodic benefit credit	$	(553	)	$	(333	)

The Company made contributions to its pension plans of $7.0 million and $11.4 million during the three months ended March 31, 2012 and 2011, respectively. We expect to make total contributions of approximately $16.3 million to our pension plans in 2012.

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Income Taxes

3 Months Ended

Mar. 31, 2012

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our quarterly income tax (provision) benefit for income taxes is measured using an estimated annual effective tax rate for the period, adjusted for discrete items that occurred within the periods presented.

For the three months ended March 31, 2012, we recorded an income tax benefit of $1.2 million, which represents an effective tax rate of (2.1)%. The effective tax rate for the three months ended March 31, 2012 differs from the federal statutory rate of 35.0% primarily due to changes in recorded valuation allowances, the impact of state income taxes and changes in deferred tax liabilities related to the stock basis of subsidiaries.

The Debt Repurchases resulted in a tax gain of $69.8 million for the three months ended March 31, 2012. Generally, the discharge of a debt obligation for an amount less than the adjusted issue price creates cancellation of debt income ("CODI"), which must be included in the taxpayer's taxable income. However, in accordance with Internal Revenue Code ("IRC") Section 108, in lieu of recognizing taxable income from CODI, the Company is required to reduce existing tax attributes. As a result, the Company recognized an estimated decrease in deferred tax assets relating to net operating losses and the basis of amortizable and depreciable property of approximately $27.2 million. These decreases were offset by a decrease in recorded valuation allowance during the three months ended March 31, 2012.

The estimated annual effective tax rate for the current year includes an estimate of the change in the valuation allowance expected to be necessary at the end of the year. The Company also recorded a decrease in the valuation allowance during the three months ended March 31, 2012 as a result of the Debt Repurchases (discussed above). In addition, the valuation allowance was decreased during the three months ended March 31, 2012 as a result of the reduction in estimated useful lives of certain intangible assets as discussed in Note 2, "Summary of Significant Accounting Policies - Identifiable Intangible Assets," which was a change in circumstances that resulted in a change in judgment about the Company's ability to realize deferred tax assets in future years. The resulting decrease in income tax expense allocated to the three months ended March 31, 2012 relating to the changes in valuation allowance is $25.6 million, which reduces the effective tax rate for the three months ended March 31, 2012 by approximately 45.5%.

For the three months ended March 31, 2011, we recorded an income tax (provision) of $(20.2) million, which represents an effective tax rate of 26.8%. The effective tax rate for the three months ended March 31, 2011 differs from the federal statutory rate of 35.0% primarily due to changes in deferred tax liabilities related to the stock basis of subsidiaries, the impact of state income taxes and a valuation allowance that has been recorded.

Upon emergence from bankruptcy, where required pursuant to FASB ASC 740-30-25-7, Income Taxes, the Company recorded deferred tax liabilities related to the excess of the financial statement carrying amount over the tax basis of investments in certain subsidiaries. The estimated annual effective tax rate for the current year includes an estimate of the change in these deferred tax liabilities for the year. The resulting reduction in income tax expense allocated to the three months ended March 31, 2011 relating to the change in these deferred tax liabilities is $6.4 million, which reduced the effective tax rate for the three months ended March 31, 2011 by approximately 8.4%.

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Other Information

3 Months Ended

Mar. 31, 2012

Disposal Group, Not Discontinued Operation, Disposal Disclosures [Abstract]

Other Information

Other Information

On February 14, 2011, we completed the sale of substantially all net assets of Business.com, including long-lived assets, domain names, trademarks, brands, intellectual property, related content and technology platform. As a result, we recognized a gain on the sale of these assets of $13.4 million during the three months ended March 31, 2011.

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Business Segments

3 Months Ended

Mar. 31, 2012

Segment Reporting [Abstract]

Business Segments

Business Segments

For the periods covered by this quarterly report, management reviews and analyzes its business of providing marketing solutions as one operating segment.

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Legal Proceedings

3 Months Ended

Mar. 31, 2012

Loss Contingency [Abstract]

Legal Proceedings

Legal Proceedings

We are subject to various lawsuits, claims, and regulatory and administrative proceedings arising out of our business covering matters such as general commercial, governmental regulations, intellectual property, employment, tax and other actions. In the opinion of management, the ultimate resolution of these matters, including the two cases described below, will not have a material adverse effect on our results of operations, cash flows or financial position.

Beginning on October 23, 2009, a series of putative securities class action lawsuits were commenced against certain former Company officers in the United States District Court for the District of Delaware on behalf of all persons who purchased or otherwise acquired our publicly traded securities between July 26, 2007 and the time we filed for bankruptcy on May 28, 2009, alleging that such officers issued false and misleading statements regarding our business and financial condition and seeking damages and equitable relief. On August 19, 2010, an amended consolidated class action complaint was filed as the operative securities class action complaint (the “Securities Class Action Complaint”). The Company is not named as a defendant in the Securities Class Action Complaint. On December 30, 2011, the parties to the Securities Class Action Complaint entered into a memorandum of understanding containing the essential terms of a settlement of all disputes between them. On February 17, 2012, a formal stipulation of settlement was filed with the court. Pursuant to the stipulation of settlement, in exchange for a complete release of all claims, the Company's director's and officer's liability insurers will create a $25 million settlement fund for the benefit of the settlement class. The Company is not making any financial contribution to the settlement fund. The stipulation of settlement is subject to final court approval, which we expect to receive during the second quarter of 2012.

On December 7, 2009, a putative ERISA class action lawsuit was commenced in the United States District Court for the Northern District of Illinois on behalf of certain participants in, or beneficiaries of, the R.H. Donnelley 401(k) Savings Plan at any time between July 26, 2007 and January 29, 2010 and whose plan accounts included investments in R.H. Donnelley common stock. The putative ERISA class action complaint contains allegations against certain current and former directors, officers and employees similar to those set forth in the Securities Class Action Complaint as well as allegations of breaches of fiduciary duties under ERISA and seeks damages and equitable relief. The Company is not named as a defendant in this ERISA class action. The parties to the ERISA class action suit have tentatively agreed to the essential terms of a settlement of all disputes between them. The terms of the proposed settlement provide that, in exchange for a complete release of all claims, the Company's fiduciary liability insurers will create a $2.1 million settlement fund for the benefit of the settlement class. The Company is not making any financial contribution to the settlement fund. The terms of the final settlement agreement between the parties will be subject to final court approval, which we expect to receive during the second half of 2012.

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Subsequent Events

3 Months Ended

Mar. 31, 2012

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On April 19, 2012, under the terms and conditions of the Offer to Purchase, the Company utilized cash on hand of $26.5 million to repurchase $98.2 million aggregate principal amount of Dex One Senior Subordinated Notes, representing 27% of par value. The repurchase of the Dex One Senior Subordinated Notes will be accounted for as an extinguishment of debt and the Company will recognize a non-cash gain as a result of the repurchase during the second quarter of 2012.

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Cash Flows Provided By Operating Activities	$ 78,109	$ 109,533
Cash Flows from Investing Activities
Additions to fixed assets and computer software	(5,005)	(4,860)
Proceeds from sale of assets	20	15,391
Net cash (used in) provided by investing activities	(4,985)	10,531
Cash Flows from Financing Activities
Credit facilities repayments	(213,743)	(94,846)
Debt issuance costs and other financing items, net	(1,979)	315
Decrease in checks not yet presented for payment	(140)	(16,743)
Net cash used in financing activities	(215,862)	(111,274)
(Decrease) increase in cash and cash equivalents	(142,738)	8,790
Cash and cash equivalents, beginning of period	257,939	127,852
Cash and cash equivalents, end of period	115,201	136,642
Supplemental Information:
Cash interest, net	42,198	63,716
Cash income taxes, net	3,018	(626)
Non-cash Financing Activities:
Reduction of debt from debt repurchases	$ (72,613)	$ 0

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Derivative Financial Instruments

3 Months Ended

Mar. 31, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

We do not use derivative financial instruments for trading or speculative purposes and our derivative financial instruments are limited to interest rate swap and interest rate cap agreements. The Company utilizes a combination of fixed rate debt and variable rate debt to finance its operations. The variable rate debt exposes the Company to variability in interest payments due to changes in interest rates. Management believes that it is prudent to mitigate the interest rate risk on a portion of its variable rate borrowings. To satisfy our objectives and requirements, the Company has entered into interest rate swap and interest rate cap agreements, which have not been designated as cash flow hedges, to manage our exposure to interest rate fluctuations on our variable rate debt.

All derivative financial instruments are recognized as either assets or liabilities on the condensed consolidated balance sheets with measurement at fair value. On a quarterly basis, the fair values of our interest rate swaps and interest rate caps are determined based on observable inputs. These derivative instruments have not been designated as cash flow hedges and as such, the initial fair value and any subsequent gains or losses on the change in the fair value of the interest rate swaps and interest rate caps are reported in earnings as a component of interest expense. Any gains or losses related to the quarterly fair value adjustments are presented as a non-cash operating activity on the condensed consolidated statements of cash flows.

By using derivative financial instruments to hedge exposures to changes in interest rates, the Company exposes itself to credit risk and market risk. Credit risk is the possible failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk for the Company. When the fair value of a derivative contract is negative, the Company owes the counterparty and, therefore, it is not subject to credit risk. The Company minimizes the credit risk in derivative financial instruments by entering into transactions with major financial institutions with credit ratings of AA- or higher, or the equivalent dependent upon the credit rating agency.

Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates. The market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

See Note 2, “Summary of Significant Accounting Policies – Fair Value of Financial Instruments” for additional information regarding our interest rate swaps and interest rate caps.

The Company has entered into the following interest rate swaps that effectively convert $300.0 million, or approximately 16%, of the Company’s variable rate debt to fixed rate debt as of March 31, 2012. Since the RHDI Amended and Restated Credit Facility and the Dex Media West Amended and Restated Credit Facility are subject to a LIBOR floor of 3.00% and the LIBOR rate is below that floor at March 31, 2012, both credit facilities are effectively fixed rate debt until such time LIBOR exceeds the stated floor. At March 31, 2012, approximately 86% of our total debt outstanding consisted of variable rate debt, excluding the effect of our interest rate swaps. Including the effect of our interest rate swaps, total fixed rate debt comprised approximately 27% of our total debt portfolio as of March 31, 2012.

Interest Rate Swaps – Dex Media East

Effective Dates	Notional Amount			Pay Rates	Maturity Dates
(amounts in millions)
February 26, 2010	$	100	(1)	1.796%	February 28, 2013
March 5, 2010	100		(1)	1.688%	January 31, 2013
March 10, 2010	100		(1)	1.75%	January 31, 2013
Total	$	300

⁽¹⁾ Consists of one swap

Under the terms of the interest rate swap agreements, we receive variable interest based on the three-month LIBOR and pay a weighted average fixed rate of 1.7%. The weighted average rate received on our interest rate swaps was 0.5% for the three months ended March 31, 2012. These periodic payments and receipts are recorded as interest expense.

Under the terms of the interest rate cap agreements, the Company will receive payments based on the spread in rates if the three-month LIBOR rate increases above the cap rates noted in the table below. The Company paid $2.1 million for the interest rate cap agreements entered into during the first quarter of 2010. We are not required to make any future payments related to these interest rate cap agreements.

Interest Rate Caps – RHDI

Effective Dates	Notional Amount			Cap Rates	Maturity Dates
(amounts in millions)
February 26, 2010	$	100	(2)	3.5%	February 28, 2013
March 8, 2010	100		(2)	3.5%	January 31, 2013
March 10, 2010	100		(2)	3.0%	April 30, 2012
Total	$	300

⁽²⁾ Consists of one cap

The following tables present the fair value of our interest rate swaps and interest rate caps at March 31, 2012 and December 31, 2011. The fair value of our interest rate swaps is presented in accounts payable and accrued liabilities and other non-current liabilities and the fair value of our interest rate caps is presented in prepaid expenses and other current assets and other non-current assets on the condensed consolidated balance sheet at March 31, 2012 and December 31, 2011. The following tables also present the (gain) loss recognized in interest expense from the change in fair value of our interest rate swaps and interest rate caps for the three months ended March 31, 2012 and 2011, respectively.

	Fair Value Measurements at						(Gain) Loss Recognized in Interest Expense from the Change in Fair Value of Interest Rate Swaps
							Three Months Ended March 31,
Interest Rate Swaps	March 31, 2012			December 31, 2011			2012			2011
Accounts payable and accrued liabilities	$	(2,441	)	$	(2,269	)	$	172		$	(33	)
Other non-current liabilities	—			(425		)	(425		)	(819		)
Total	$	(2,441	)	$	(2,694	)	$	(253	)	$	(852	)
	Fair Value Measurements at						Loss Recognized in Interest Expense from the Change in Fair Value of Interest Rate Caps
							Three Months Ended March 31,
Interest Rate Caps	March 31, 2012			December 31, 2011			2012			2011
Prepaid expenses and other current assets	$	—		$	1		$	1		$	3
Other non-current assets	—			4			4			142
Total	$	—		$	5		$	5		$	145

The Company recognized expense related to our interest rate swaps and interest rate caps, including accrued interest, of $0.9 million and $0.8 million during the three months ended March 31, 2012 and 2011, respectively.