Long-Term Debt

The following table presents the fair market value of our long-term debt at March 31, 2013 based on quoted market prices on that date, as well as the carrying value of our long-term debt at March 31, 2013:



	March 31, 2013
	Fair Market Value		Carrying Value
RHDI Amended and Restated Credit Facility	$	524,533	$	746,666
Dex Media East Amended and Restated Credit Facility	363,670		511,757
Dex Media West Amended and Restated Credit Facility	370,656		486,585
Total liabilities subject to compromise	1,258,859		1,745,008
Dex One Senior Subordinated Notes	94,474		219,708
Total Dex One consolidated	$	1,353,333	$	1,964,716

The filing of the Chapter 11 Cases triggered an event of default that rendered the remaining financial obligations under the Dex One Senior Subordinated Notes and senior secured credit facilities automatically and immediately due and payable. However, any efforts to enforce the financial obligations under the Dex One Senior Subordinated Notes and senior secured credit facilities are stayed as a result of the filing of the Chapter 11 Cases in the Bankruptcy Court and during pendency of the Chapter 11 Cases unless the Bankruptcy Court approves a motion to enforce such provisions. The Bankruptcy Court has not approved such a motion and we believe it is unlikely that the Bankruptcy Court would approve such a motion during pendency of the Chapter 11 Cases. However, there can be no assurance that this will not occur. Accordingly, we have classified the Dex One Senior Subordinated Notes as current obligations as of March 31, 2013 and December 31, 2012. Our senior secured credit facilities were classified as current obligations as of December 31, 2012 however, they are now classified as liabilities subject to compromise as of March 31, 2013 for the reasons discussed in Note 3, "Reorganizations Items, Net and Liabilities Subject to Compromise."

Credit Facilities

On March 23, 2012, the Company utilized cash on hand of $69.5 million to repurchase loans under the third amended and restated RHDI credit facility dated as of January 29, 2010 (as amended, the “RHDI Amended and Restated Credit Facility”), the amended and restated Dex Media East, Inc. credit facility dated as of January 29, 2010 (as amended, the “Dex Media East Amended and Restated Credit Facility”) and the amended and restated Dex Media West, Inc. credit facility dated as of January 29, 2010 (as amended, the “Dex Media West Amended and Restated Credit Facility”) (collectively, the "Credit Facilities") totaling $142.1 million. These debt transactions are hereby referred to as the "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.

RHDI Amended and Restated Credit Facility

In conjunction with the Debt Repurchases, the Company 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, 2013, the outstanding carrying value under the RHDI Amended and Restated Credit Facility totaled $746.7 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, 2013.

Dex Media East Amended and Restated Credit Facility

In conjunction with the Debt Repurchases, the Company 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, 2013, the outstanding carrying value under the Dex Media East Amended and Restated Credit Facility totaled $511.8 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 2.7% at March 31, 2013.

Dex Media West Amended and Restated Credit Facility

In conjunction with the Debt Repurchases, the Company 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, 2013, the outstanding carrying value under the Dex Media West Amended and Restated Credit Facility totaled $486.6 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, 2013.

Notes

Dex One Senior Subordinated Notes

As of March 31, 2013, the outstanding carrying value of the Dex One Senior Subordinated Notes totaled $219.7 million. Interest on the Dex One Senior Subordinated Notes is payable semi-annually on March 31st and September 30th 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. The Dex One Senior Subordinated Notes have not been impaired by our plan of reorganization, however interest payments on the Dex One Senior Subordinated Notes for the semi-annual interest period ending March 31, 2013 will be made 50% in cash and 50% in PIK interest upon the effective date of our plan of reorganization. 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, 2013.

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 and therefore, the carrying amount of these debt obligations was an amount that was 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. This fair value adjustment had been amortized as an increase to interest expense until our filing for Chapter 11 on March 18, 2013. As a result of filing for Chapter 11 and our Credit Facilities being classified as liabilities subject to compromise at March 31, 2013 for the reasons discussed in Note 3, "Reorganizations Items, Net and Liabilities Subject to Compromise," the Company recognized the remaining unamortized fair value adjustments associated with our Credit Facilities of $31.8 million as reorganization items on the condensed consolidated statement of comprehensive income (loss) for the three months ended March 31, 2013. Therefore, our Credit Facilities are recorded at their aggregate principal amount due at March 31, 2013.