Derivative Financial Instruments

12 Months Ended

Dec. 31, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

Successor Company

The Company has entered into the following interest rate swaps that effectively convert $300.0 million, or approximately 17%, of the Company’s variable rate debt to fixed rate debt as of December 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 December 31, 2012, both credit facilities are effectively fixed rate debt until such time LIBOR exceeds the stated floor. At December 31, 2012, approximately 89% 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 26% of our total debt portfolio as of December 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 0.3% for the year endedDecember 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
Total	$	200

⁽²⁾ Consists of one cap

The following tables present the fair value of our interest rate swaps and interest rate caps at December 31, 2012 and 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 consolidated balance sheets at December 31, 2012 and 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 years ended December 31, 2012 and 2011 and the eleven months ended December 31, 2010.

							(Gain) Loss Recognized in Interest Expense From the Change in Fair Value of Interest Rate Swaps
	Fair Value Measurements at December 31,						Years Ended December 31,						Eleven Months Ended December 31, 2010
Interest Rate Swaps	2012			2011			2012			2011
Accounts payable and accrued liabilities	$	(413	)	$	(2,269	)	$	(1,856	)	$	(2,106	)	$	4,376
Other non-current liabilities	—			(425		)	(425		)	(1,565		)	1,989
Total	$	(413	)	$	(2,694	)	$	(2,281	)	$	(3,671	)	$	6,365
							Loss Recognized in Interest Expense From the Change in Fair Value of Interest Rate Caps
	Fair Value Measurements at December 31,						Years Ended December 31,						Eleven Months Ended December 31, 2010
Interest Rate Caps	2012			2011			2012			2011
Prepaid expenses and other current assets	$	—		$	1		$	1		$	4		$	64
Other non-current assets	—			4			4			299			1,766
Total	$	—		$	5		$	5		$	303		$	1,830

The Company recognized expense related to our interest rate swaps and interest rate caps, including accrued interest, of $1.9 million, $2.8 million and $13.2 million during the years ended December 31, 2012 and 2011 and eleven months ended December 31, 2010, respectively.

Predecessor Company

As a result of filing the Chapter 11 petitions, the Predecessor Company did not have any interest rate swaps designated as cash flow hedges. During the one month ended January 31, 2010, the Predecessor Company recognized interest expense of $2.3 million associated with the change in fair value of its interest rate swaps. During the one month ended January 31, 2010, the Predecessor Company recognized expense of $3.0 million related to interest rate swaps into earnings, including accrued interest. In accordance with fresh start accounting, unamortized amounts previously charged to accumulated other comprehensive loss of $15.3 million related to the Predecessor Company’s interest rate swaps were eliminated as of the Fresh Start Reporting Date.