10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

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

For the quarterly period ended March 31, 2006

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

R.H. DONNELLEY 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)

Registrant’s telephone number, including area code (919) 297-1600 

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 þ     No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer þ     Accelerated filer o     Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes o     No þ

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 May 1, 2006
Common Stock, par value $1 per share	69,595,294

R.H. DONNELLEY CORPORATION

INDEX TO FORM 10-Q

PART I.	FINANCIAL INFORMATION		PAGE
Item 1.	Financial Statements (Unaudited)
		Consolidated Balance Sheets at March 31, 2006 and December 31, 2005	3
		Consolidated Statements of Operations and Comprehensive (Loss) Income for the three months ended March 31, 2006 and 2005	4
		Consolidated Statements of Cash Flows for the three months ended March 31, 2006 and 2005	5
		Notes to Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		55
Item 4.	Controls and Procedures		56
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings		58
Item 4.	Submission of Matters to a Vote of Security Holders		58
Item 5.	Other Information		59
Item 6.	Exhibits		60
SIGNATURES			78

2

Part I. FINANCIAL INFORMATION
Item 1. Financial Statements

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

	March 31,			December 31,
(in thousands, except share and per share data)	2006			2005
Assets
Current Assets
Cash and cash equivalents	$	199,283		$	7,793
Accounts receivable
Billed		196,177			116,576
Unbilled		1,253,525			368,062
Allowance for doubtful accounts and sales claims		(105,301	)		(27,328	)
Net accounts receivable		1,344,401			457,310
Deferred directory costs		211,228			67,686
Other current assets		64,029			33,056
Total current assets		1,818,941			565,845
Fixed assets and computer software, net		164,238			55,687
Other non-current assets		175,412			105,891
Intangible assets, net		11,708,800			2,833,200
Goodwill		2,671,431			319,014
Total Assets	$	16,538,822		$	3,879,637
Liabilities, Redeemable Convertible Preferred Stock and Shareholders’ Equity (Deficit)
Current Liabilities
Accounts payable and accrued liabilities	$	127,371		$	68,912
Accrued interest		136,359			20,649
Deferred directory revenue		783,267			463,440
Short-term deferred income taxes, net		288,429			85,583
Current portion of long-term debt		460,523			100,234
Total current liabilities		1,795,949			738,818
Long-term debt		10,423,447			2,978,615
Deferred income taxes, net		2,146,549			65,165
Other non-current liabilities		155,411			54,305
Total liabilities		14,521,356			3,836,903
Commitments and contingencies
Redeemable convertible preferred stock (liquidation preference of $334,149 at December 31, 2005)		—			334,149
Shareholders’ Equity (Deficit)
Common stock, par value $1 per share, 400,000,000 shares authorized, 88,169,275 shares issued at March 31, 2006 and 51,621,824 shares issued at December 31, 2005		88,169			51,622
Additional paid-in capital		2,338,790			—
Warrants outstanding		13,758			13,758
Accumulated deficit		(270,814	)		(197,122	)
Treasury stock, at cost, 18,665,862 shares at March 31, 2006 and 19,733,161 shares at December 31, 2005		(162,415	)		(163,485	)
Accumulated other comprehensive income		9,978			3,812
Total shareholders’ equity (deficit)		2,017,466			(291,415	)
Total Liabilities, Redeemable Convertible Preferred Stock and Shareholders’ Equity (Deficit)	$	16,538,822		$	3,879,637

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

3

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

	Three months ended
	March 31,
(in thousands, except per share data)	2006			2005
Net revenue	$	320,479		$	207,339
Expenses
Operating expenses		180,473			102,406
General and administrative expenses		39,247			13,085
Depreciation and amortization		62,692			21,651
Total expenses		282,412			137,142
Operating income		38,067			70,197
Interest expense, net		(153,741	)		(57,497	)
(Loss) income before income taxes		(115,674	)		12,700
(Benefit) provision for income taxes		(43,956	)		4,953
Net (loss) income		(71,718	)		7,747
Preferred dividend		1,974			3,319
(Gain) loss on repurchase of redeemable convertible preferred stock		(31,195	)		133,681
Loss available to common shareholders	$	(42,497	)	$	(129,253	)
Loss per share:
Basic	$	(0.76	)	$	(4.10	)
Diluted	$	(0.76	)	$	(4.10	)
Shares used in computing loss per share:
Basic		55,607			31,543
Diluted		55,607			31,543
Comprehensive (Loss) Income
Net (loss) income		($71,718	)	$	7,747
Unrealized gain on interest rate swaps, net of tax		6,166			12,217
Comprehensive (loss) income		($65,552	)	$	19,964

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

4

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

	Three months ended
	March 31,
(in thousands)	2006			2005
Cash Flows from Operating Activities
Net (loss) income	$	(71,718	)	$	7,747
Reconciliation of net (loss) income to net cash provided by operating activities:
Depreciation and amortization		62,692			21,651
Deferred income taxes		(44,046	)		21,768
Provision for bad debts		8,457			6,800
Stock based compensation expense		16,472			—
Other non-cash charges		15,618			4,863
Changes in assets and liabilities, net of effects from acquisition:
(Increase) in accounts receivable		(104,867	)		(5,468	)
(Increase) decrease in other assets		(16,159	)		7,428
Increase in accounts payable and accrued liabilities		1,254			10,400
Increase in deferred directory revenue		319,565			50,740
Increase (decrease) in other non-current liabilities		8,722			(13,102	)
Net cash provided by operating activities		195,990			112,827
Cash Flows from Investing Activities
Additions to fixed assets and computer software		(10,396	)		(5,515	)
Merger, net of cash received		(1,888,745	)		—
Net cash used in investing activities		(1,899,141	)		(5,515	)
Cash Flows from Financing Activities
Proceeds from the issuance of debt, net of costs		2,517,466			291,742
Revolver borrowings		168,700			72,000
Revolver repayments		(44,700	)		(90,200	)
Repurchase of redeemable convertible preferred stock		(336,123	)		(277,197	)
Credit facility repayments		(418,895	)		(111,435	)
(Decrease) increase in checks not yet presented for payment		(5,925	)		1,943
Proceeds from employee stock option exercises		14,118			2,653
Net cash provided by (used in) financing activities		1,894,641			(110,494	)
Increase (decrease) in cash and cash equivalents		191,490			(3,182	)
Cash and cash equivalents, beginning of year		7,793			10,755
Cash and cash equivalents, end of period	$	199,283		$	7,573
Supplemental Information:
Cash paid:
Interest	$	122,626		$	24,502
Income taxes, net	$	231		$	508

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

5

R.H. Donnelley Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
(tabular amounts in thousands, except per share data)

1. Business and Basis of Presentation

The interim consolidated financial statements of R.H. Donnelley Corporation and its direct and indirect wholly owned subsidiaries (the “Company”, “RHD”, “we”, “us” and “our”) have been prepared in accordance with the instructions to 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, 2005 (“2005 10-K”). The results of interim periods are not necessarily indicative of results for the full year or any subsequent period. In the opinion of management, all adjustments (consisting of normal recurring 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.

Certain prior period amounts included on the Consolidated Balance Sheet have been reclassified to conform to the current period’s presentation.

Significant Business Developments

On January 31, 2006, we acquired Dex Media, Inc. (“Dex Media”) for a purchase price of $4.1 billion, consisting of 36,547,381 shares of our common stock valued at $2.2 billion and $1.9 billion in cash (the “Dex Media Merger”). Dex Media is the indirect parent of Dex Media East LLC (“Dex Media East”) and Dex Media West LLC (“Dex Media West”). We also assumed all of Dex Media’s and its subsidiaries’ outstanding indebtedness with a fair value of $5.5 billion. Dex Media is the exclusive publisher of the “official” yellow pages and white pages directories for Qwest Communications International Inc. (“Qwest”) where Qwest is the primary incumbent local exchange carrier (“ILEC”). Dex Media East operates the directory business in the following states, which are Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota (collectively, the “Dex East States”) and Dex Media West operates the directory business in the following states, which are Arizona, Idaho, Montana, Oregon, Utah, Washington and Wyoming (collectively, the “Dex West States”). Prior to the Dex Media Merger, Dex Media was a leading directory publisher in the United States. The purpose of the Dex Media Merger was to take a further step in the transformation of RHD into a leading publisher of Yellow Pages directories, as well as to combine the complementary strengths of both companies. The acquired business of Dex Media and its subsidiaries (“Dex Media Business”) now operates through Dex Media, Inc., one of RHD’s direct, wholly-owned subsidiaries. The results of the Dex Media Business have been included in the Company’s operating results commencing February 1, 2006.

Following the closing of the Dex Media Merger, we are the third largest print and online directory publisher in the United States, based on revenue. During 2006, we expect to have a total annual distribution of approximately 80 million directories, serving over 600,000 local and national advertisers with more than 625 directories in 28 states. In 2005, Dex Media published 293 directories and printed approximately 52 million copies of these directories for distribution to virtually all business and residential customers throughout the Dex East States and Dex West States. Dex Media’s Internet-based directory, DexOnline.com^TM, which is bundled with Dex Media’s print product to provide web-based access to Dex Media’s directories, further expands the distribution of Dex Media’s advertiser content. In addition to the acquired Dex Media Business, we publish Sprint-branded directories in 18 states, with major markets including Las Vegas, Nevada and Orlando and Lee County, Florida, with a total distribution of approximately 18 million serving approximately 160,000 local and national advertisers. We also publish AT&T (formerly known as SBC) branded directories in Illinois and Northwest Indiana, with a total distribution of approximately 10 million serving approximately 100,000 local and national advertisers. We also offer online city guides and search web sites in all our Sprint markets under the Best Red Yellow Pages brand at www.bestredyp.com and in the Chicagoland area at www.chicagolandyp.com.

On January 27, 2006, we repurchased the remaining 100,301 shares of our outstanding 8% redeemable convertible cumulative preferred stock (“Preferred Stock”) from investment partnerships affiliated with The Goldman Sachs Group, Inc. (collectively, the “GS Funds”) for $336.1 million in cash, including accrued cash dividends and interest (the “GS Repurchase”). Subsequent to the GS Repurchase, there are no outstanding shares of Preferred Stock. See Note 6, “Redeemable Preferred Stock and Warrants” for a description of the impact of the Preferred Stock and GS Repurchase on our consolidated financial statements for the three months ended March 31, 2006.

6

On September 1, 2004, we completed the acquisition of the directory publishing business (“AT&T Directory Business”) of AT&T, Inc. (“AT&T”) in Illinois and Northwest Indiana, including AT&T’s interests in The DonTech II Partnership (“DonTech”), a 50/50 general partnership between us and AT&T (collectively, the “AT&T Directory Acquisition”) for $1.41 billion in cash, after working capital adjustments and the settlement of a $30 million liquidation preference owed to us related to DonTech. As a result of the acquisition, we became the publisher of AT&T-branded yellow pages directories in Illinois and Northwest Indiana. The results of the AT&T Directory Business are included in our consolidated results from and after September 1, 2004. The AT&T Directory Business now operates as R.H. Donnelley Publishing & Advertising of Illinois Partnership, an indirect wholly owned subsidiary of the Company.

On January 3, 2003, we completed the acquisition of the directory business (the “SPA Directory Business”) of Sprint Corporation (now known as Sprint Nextel Corporation, “Sprint”) by acquiring all the outstanding capital stock of the various entities comprising Sprint Publishing & Advertising (“SPA”) (collectively, the “SPA Acquisition”) for $2.23 billion in cash and became the publisher of Sprint-branded yellow pages directories in 18 states. The results of the SPA Directory Business are included in our consolidated results from and after January 3, 2003. The SPA Directory Business now operates as R.H. Donnelley Publishing & Advertising, Inc., an indirect wholly owned subsidiary of the Company. We expect Sprint to spin-off its local telephone business as Embarq Corporation (“Embarq”) in May 2006. In connection with the spin-off, we expect to enter into new agreements with Embarq that will replace the related agreements with Sprint, except that Sprint will remain bound by certain non-competition obligations. All references to Sprint herein shall mean Embarq following the execution of such agreements.

2. Summary of Significant Accounting Policies

Principles of Consolidation. The consolidated financial statements include the accounts of R.H. Donnelley Corporation and its direct and indirect wholly owned subsidiaries. All intercompany transactions and balances have been eliminated.

Revenue Recognition. We earn revenue principally from the sale of advertising into our yellow pages directories. Revenue from the sale of such advertising is deferred when a directory is published and recognized ratably over the life of a directory, which is typically 12 months (the “deferral and amortization method”). The Company recognizes revenue for internet-based advertising bundled with print advertising using the deferral and amortization method. The Company recognizes revenue for advertising on its Internet-based directory, DexOnline.com, ratably over the period the advertisement appears on the site. Other products and services are recognized as delivered or fulfilled. Revenue from the sale of advertising is recorded net of an allowance for sales claims, estimated based on historical experience on a directory-by-directory basis. We increase or decrease this estimate as information or circumstances indicate that the estimate may no longer adequately represent the amount of claims we may incur for a directory in the future.

The Company enters into transactions such as exclusivity arrangements, sponsorships, and other media access transactions, where the Company’s products and services are promoted by a third party and, in exchange, the Company carries the party’s advertisement. The Company accounts for these transactions in accordance with Emerging Issues Task Force (“EITF”) Issue No. 99-17 “Accounting for Advertising Barter Transactions.” Revenue and expense related to such transactions are included in the consolidated statements of operations consistent with reasonably similar items sold or purchased for cash.

In certain cases, the Company enters into agreements with customers that involve the delivery of more than one product or service. Revenue for such arrangements is allocated in accordance with EITF Issue No. 00-21 “Revenue Arrangements with Multiple Deliverables.”

Deferred Directory Costs. Costs directly related to the selling and production of our directories are initially deferred when incurred and recognized ratably over the life of a directory after publication, which is typically 12 months. These costs include sales commissions and print, paper and initial distribution costs. Such costs that are paid prior to directory publication are classified as other current assets until publication, when they are then reclassified as deferred directory costs.

Cash and Cash Equivalents. Cash equivalents include liquid investments with a maturity of less than three months at their time of purchase. The Company places its investments with high quality financial institutions. At times, such investments may be in excess of federally insured limits.

7

Accounts Receivable. Accounts receivable consist of balances owed to us by our advertising customers. Advertisers typically enter into a twelve-month contract for their advertising. Most local advertisers are billed a pro rata amount of their contract value on a monthly basis. On behalf of national advertisers, Certified Marketing Representatives (“CMRs”) pay to the Company the total contract value of their advertising, net of their commission, within 60 days after the publication month. Billed receivables represent the amount that has been billed to advertisers. Unbilled receivables represent contractually owed amounts for published directories that have yet to be billed to advertisers. Billed receivables are recorded net of an allowance for doubtful accounts and sales claims, estimated based on historical experience on a directory-by-directory basis. We increase or decrease this estimate as information or circumstances indicate that the estimate may no longer adequately represent the amount of bad debts and sales claims we may incur.

Fixed Assets and Computer Software. Fixed assets and computer software are recorded at cost. Depreciation and amortization is provided over the estimated useful lives of the assets using the straight-line method. Estimated useful lives are thirty years for buildings, five years for machinery and equipment, ten years for furniture and fixtures, three to five years for computer equipment and five years for computer software. Leasehold improvements are amortized on a straight-line basis over the shorter of the term of the lease or the estimated useful life of the improvement.

Interest Expense and Deferred Financing Costs. Interest expense, net related to the Company’s outstanding debt was $153.7 million and $57.5 million for the three months ended March 31, 2006 and 2005, respectively. Certain costs associated with the issuance of debt instruments are capitalized and included in other non-current assets on the consolidated balance sheets. These costs are amortized to interest expense over the terms of the related debt agreements. The bond outstanding method is used to amortize deferred financing costs relating to debt instruments with respect to which we make accelerated principal payments. Other deferred financing costs are amortized using the effective interest method. Amortization of deferred financing costs included in interest expense was $5.0 million and $4.0 million for the three months ended March 31, 2006 and 2005, respectively. Apart from business combinations, it is the Company’s policy to recognize losses incurred in conjunction with debt extinguishments as a component of interest expense. In conjunction with the Dex Media Merger and as a result of purchase accounting required under generally accepted accounting principles (“GAAP”), we were required to record Dex Media’s debt at its fair value on January 31, 2006. We recognize an offset to interest expense each period for the amortization of the corresponding fair value adjustment over the life of the respective debt.

Advertising Expense. We recognize advertising expenses as incurred. These expenses include public relations, media, on-line advertising and other promotional and sponsorship costs. Total advertising expense was $9.8 million and $4.3 million for the three months ended March 31, 2006 and 2005, respectively.

Concentration of Credit Risk. Approximately 85% of our directory advertising revenue is derived from the sale of advertising to local small- and medium-sized businesses. These advertisers typically enter into 12-month advertising sales contracts and make monthly payments over the term of the contract. Some advertisers prepay the full amount or a portion of the contract value. Most new advertisers and advertisers desiring to expand their advertising programs are subject to a credit review. If the advertisers qualify, we may extend credit to them for their advertising purchase. Small- and medium-sized 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. While we do not believe that extending credit to our local advertisers will have a material adverse effect on our results of operations or financial condition, no assurances can be given. We do not require collateral from our advertisers, although we do charge late fees to advertisers that do not pay by specified due dates.

The remaining approximately 15% of our directory advertising revenue is derived from the sale of advertising to national or large regional chains, such as rental car companies, automobile repair shops and pizza delivery businesses. Substantially all of the revenue derived through national accounts is serviced through CMRs with which we contract. CMRs are independent third parties that act as agents for national advertisers. The CMRs are responsible for billing the national customers for their advertising. We receive payment for the value of advertising placed in our directory, net of the CMR’s commission, directly from the CMR. While we are still exposed to credit risk, the amount of losses from these accounts has been historically less than the local accounts as the advertisers, and in some cases the CMRs, tend to be larger companies with greater financial resources than local advertisers.

8

At March 31, 2006, we had interest rate swap agreements with major financial institutions with a notional value of $2.5 billion. 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 is used to measure interest to be paid or received and does not represent the amount of exposure to credit loss. The loss would be limited to the amount that would have been received, if any, over the remaining life of the swap agreement. The counterparties to the swap agreements are major financial institutions with credit ratings of A or higher. We do not currently foresee a material credit risk associated with these swap agreements; however, no assurances can be given.

Derivative Financial Instruments. We do not use derivative financial instruments for trading or speculative purposes. Our derivative financial instruments are limited to interest rate swap agreements used to manage exposure to fluctuations in interest rates on variable rate debt. These agreements effectively convert $2.5 billion of our variable rate debt to fixed rate debt, mitigating our exposure to increases in interest rates. Under the terms of the swap agreements, we receive variable interest based on the three-month LIBOR and pay a weighted average fixed rate of 3.90%. The swaps mature at varying dates beginning June 2006 through September 2009. The weighted average rate received on our interest rate swaps was 4.58% during the three months ended March 31, 2006. These periodic payments and receipts are recorded as interest expense.

Interest rate swaps with a notional amount of $2.1 billion have been designated as cash flow hedges to hedge three-month LIBOR-based interest payments on $2.1 billion of bank debt. To the extent the swaps provide an effective hedge, changes in the fair value of the swaps are recorded in other comprehensive income, a component of shareholders’ equity (deficit). Any ineffectiveness is recorded through earnings. As of March 31, 2006, these respective interest rate swaps provided an effective hedge of the three-month LIBOR-based interest payments on $2.1 billion of bank debt, and no ineffectiveness was included in earnings related to these interest rate swaps. For derivative instruments that are not designated or do not qualify as hedged transactions, the initial fair value, if any, and any subsequent gains or losses in the change in the fair value are reported in earnings as a component of interest expense. Interest rate swaps acquired as a result of the Dex Media Merger with a notional amount of $425 million have not been designated as cash flow hedges. For the two months ended March 31, 2006, the Company recorded a reduction to interest expense of $0.2 million as a result of the change in fair value of these interest rate swaps.

Income Taxes. We account for income taxes under the asset and liability method in accordance with SFAS No. 109, Accounting for Income Taxes (“SFAS 109”). Deferred tax liabilities or assets reflect temporary differences between amounts of assets and liabilities for financial and tax reporting purposes. Such amounts are adjusted, as appropriate, to reflect changes in tax rates expected to be in effect when the temporary differences reverse. A valuation allowance is established to offset any deferred tax assets if, based upon the available information, it is more likely than not that some or all of the deferred tax assets will not be realized. A deferred tax liability in the amount of $2.4 billion has been recognized in accordance with SFAS 109 for the difference between the assigned values for purchase accounting purposes and the tax bases of the assets and liabilities acquired as a result of the Dex Media Merger.

Earnings per Share. We account for earnings per share in accordance with Emerging Issues Task Force Issue No. 03-6, Participating Securities and the Two-Class Method under FASB Statement 128 (“EITF 03-6”), which established standards regarding the computation of earnings per share (“EPS”) by companies that have issued securities other than common stock that contractually entitle the holder to participate in dividends and earnings of the company. EITF 03-6 requires earnings available to common shareholders for the period, after deduction of preferred stock dividends, to be allocated between the common and preferred stockholders based on their respective rights to receive dividends. Basic EPS is then calculated by dividing income (loss) allocable to common shareholders by the weighted average number of shares outstanding. EITF 03-6 does not require the presentation of basic and diluted EPS for securities other than common stock. Therefore, the following EPS amounts only pertain to our common stock. Subsequent to the GS Repurchase, beginning with the second quarter of 2006, we will no longer utilize the two-class method for EPS computations.

Under the guidance of EITF 03-6, diluted EPS are calculated by dividing income (loss) allocable to common shareholders by the weighted average common shares outstanding plus dilutive potential common stock. Potential common stock includes stock options, stock appreciation rights (“SARs”), restricted stock and warrants, the dilutive effect of which is calculated using the treasury stock method, and our Preferred Stock, the dilutive effect of which is calculated using the “if-converted” method. The calculation of basic and diluted EPS for the three months ended March 31, 2006 and 2005 is presented below.

9

	Three months ended
	March 31,
	2006			2005
Basic EPS—Two—Class Method
Loss available to common shareholders	$	(42,497	)	$	(129,253	)
Amount allocable to common shareholders (1)		100	%		100	%
Loss allocable to common shareholders		(42,497	)		(129,253	)
Weighted average common shares outstanding		55,607			31,543
Basic loss per share—two—class method	$	(0.76	)	$	(4.10	)
Diluted EPS
Loss available to common shareholders	$	(42,497	)	$	(129,253	)
Amount allocable to common shares (1)		100	%		100	%
Loss allocable to common shareholders		(42,497	)		(129,253	)
Weighted average common shares outstanding		55,607			31,543
Dilutive effect of stock awards (2)		—			—
Dilutive effect of Preferred Stock assuming conversion (2)		—			—
Weighted average diluted shares outstanding		55,607			31,543
Diluted loss per share	$	(0.76	)	$	(4.10	)

(1)

In computing EPS using the two-class method, we have not allocated the net loss for the three months ended March 31, 2006 and 2005, respectively, between common and preferred shareholders since preferred shareholders had no contractual obligation to share in the net loss.

(2)

Due to the loss allocable to common shareholders reported for the three months ended March 31, 2006 and 2005, the effect of all stock-based awards and the assumed conversion of the Preferred Stock were anti-dilutive and therefore are not included in the calculation of diluted EPS. For the three months ended March 31, 2006, 1.9 million shares of stock-based awards had exercise prices that exceeded the average market price of the Company’s common stock for the period. For the three months ended March 31, 2005, no stock-based awards had exercise prices that exceeded the average market price of the Company’s common stock for the period.

Stock-Based Awards.

We maintain two shareholder approved stock incentive plans, the 2005 Stock Award and Incentive Plan (“2005 Plan”) and the 2001 Stock Award and Incentive Plan (“2001 Plan”), whereby certain employees and non-employee directors are eligible to receive stock options, SARs, limited stock appreciation rights in tandem with stock options and restricted stock. Under the 2005 Plan and 2001 Plan, 5 million and 4 million shares, respectively, were originally authorized for grant. Stock awards are typically granted at the market value of our common stock at the date of the grant, become exercisable in ratable installments or otherwise, over a period of one to five years from the date of grant, and may be exercised up to a maximum of ten years from the time of grant. The Board determines termination, vesting and other relevant provisions at the date of the grant. We have implemented a policy of issuing treasury shares held by the Company to satisfy stock issuances associated with stock-based award exercises.

Non-employee directors receive options to purchase 1,500 shares and an award of 1,500 shares of restricted stock upon election to the Board. Non-employee directors also receive, on an annual basis, options to purchase 1,500 shares and an award of 1,500 shares of restricted stock. Non-employee directors may also elect to receive additional options in lieu of all or a portion of their annual cash retainer fee.

On January 1, 2006, the Company adopted the provisions of Statement of Financial Accounting Standards No. 123 (R), Share-Based Payment (“SFAS No. 123 (R)”), using the Modified Prospective Method. Under this method, we are required to record compensation expense in the statement of operations for all employee stock-based awards granted, modified or settled after the date of adoption and for the unvested portion of previously granted stock awards that remain outstanding as of the beginning of the period of adoption based on their grant date fair values. The Company estimates forfeitures over the requisite service period when recognizing compensation expense. Estimated forfeitures are adjusted to the extent actual forfeitures differ, or are expected to materially differ, from such estimates.

10

Prior to adopting SFAS No. 123 (R), the Company accounted for stock-based awards granted to employees and non-employee directors in accordance with the intrinsic value-based method prescribed by Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (“APB 25”) and related interpretations. Compensation expense related to the issuance of stock options to employees or non-employee directors was only recognized if the exercise price of the stock option was less than the market value of the underlying common stock on the date of grant. Compensation expense related to SARs was determined at the end of each period in the amount by which the quoted market value of the underlying shares covered by the grant exceeded the grant price recognized over the vesting term. In compliance with the Modified Prospective Method, financial statement amounts for the prior periods presented in this Form 10-Q have not been restated to reflect the fair value method of expensing stock-based compensation.

The following table depicts the effect of adopting SFAS No. 123 (R) on net loss, loss available to common shareholders and loss per share for the three months ended March 31, 2006. The Company’s reported net loss, loss available to common shareholders and basic and diluted loss per share for the three months ended March 31, 2006, which reflect compensation expense related to the Company’s stock-based awards recorded in accordance with SFAS No. 123 (R), is compared to net loss, loss available to common shareholders and basic and diluted loss per share for the same period that would have been reported had such compensation expense been determined under APB 25.

	Three Months Ended March 31, 2006
	As Reported			Per APB 25
Total stock-based compensation expense	$	16,472		$	2,562
Net loss		(71,718	)		(63,093	)
Loss available to common shareholders		(42,497	)		(33,872	)
Loss per share:
Basic	$	(0.76	)	$	(0.61	)
Diluted	$	(0.76	)	$	(0.61	)

Prior to the adoption of SFAS No. 123 (R), the Company presented all tax benefits of deductions resulting from the exercise of stock-based awards as operating cash flows in the Consolidated Statements of Cash Flows. SFAS No. 123 (R) requires that these cash flows now be classified as financing cash flows. During the three months ended March 31, 2006, the Company was not able to utilize the tax benefit resulting from stock-based award exercises due to net operating loss carryforwards. As such, financing cash flows were unaffected by stock-based award exercises for the three months ended March 31, 2006.

Under SFAS No. 123 (R), the fair value for our stock options and SARs is calculated using the Black-Scholes method at the time these stock-based awards are granted. The amount, net of estimated forfeitures, is then amortized over the vesting period of the stock-based award. The weighted average fair value of stock options and SARs granted during the three months ended March 31, 2006 was $20.08. The following assumptions were used in valuing these stock-based awards for the three months ended March 31, 2006:

	Three Months Ended
	March 31, 2006
Dividend yield	0%
Expected volatility	24.57%
Risk-free interest rate	4.60%
Expected life	5 years
Forfeiture rate	5.0%

We estimate expected volatility based on the historical volatility of the price of our common stock over the expected life of our stock-based awards. The expected life represents the period of time that stock-based awards granted are expected to be outstanding, which is based on historical experience. The Company uses historical data to estimate stock-based award exercises and employee terminations. The risk-free interest rate is based on applicable U.S. Treasury yields that approximate the expected life of stock-based awards granted.

The Company grants restricted stock to certain of its employee and non-employee directors in accordance with the 2005 Plan. Under SFAS No. 123 (R), compensation expense related to these awards is measured at fair value on the date of grant based on the number of awards granted and the quoted market price of the Company’s common stock at such time.

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For the three months ended March 31, 2006, we granted 0.7 million stock options and SARs. The following table presents a summary of the Company’s stock options and SARs activity and related information for the three months ended March 31, 2006:

				Weighted
				Average
				Exercise/Grant		Aggregate
	Shares			Price Per Share		Intrinsic Value
Awards outstanding, January 1, 2006		5,798,045		$	40.67	$	120,135
Granted		652,090			64.17		—
Dex stock-based awards converted		1,725,361			12.73		83,956
Exercised		(1,047,639	)		14.11		(49,532	)
Forfeitures		(60,016	)		44.81		(995	)
Awards outstanding, March 31, 2006		7,067,841		$	39.92	$	153,564
Available for future grants at March 31, 2006		3,947,689

The total intrinsic value of stock-based awards vested during the three months ended March 31, 2006 and 2005 was $121.0 million and $68.2 million, respectively.

The following table summarizes information about stock-based awards outstanding and exercisable at March 31, 2006:

	Stock Awards Outstanding						Stock Awards Exercisable
			Weighted						Weighted
			Average		Weighted				Average		Weighted
			Remaining		Average				Remaining		Average
Range of			Contractual		Exercise/Grant				Contractual		Exercise/Grant
Exercise/Grant			Life		Price Per				Life		Price Per
Prices	Shares		(In Years)		Share		Shares		(In Years)		Share
$10.77 - $14.75		795,230		6.43	$	10.92		621,554		6.43	$	10.96
$15.22 - $19.41		372,722		2.84		15.73		372,722		2.84		15.73
$24.75 - $29.59		1,769,730		4.23		25.97		1,414,629		4.23		26.01
$30.11 - $39.21		187,031		3.91		30.92		147,389		3.91		30.71
$41.10 - $43.85		1,495,982		5.15		41.39		763,979		5.15		41.31
$46.06 - $53.74		45,006		6.13		48.63		23,266		6.13		47.98
$56.72 - $65.00		2,402,140		6.48		63.33		469,378		6.48		59.42
		7,067,841		5.39	$	39.92		3,812,917		5.39	$	30.03

The following table summarizes the status of our non-vested stock awards as of March 31, 2006, and changes during the three months ended March 31, 2006:

				Weighted Average				Weighted Average
				Grant Date		Non-vested		Grant Date
	Non-vested Stock			Exercise Price Per		Restricted		Exercise Value Per
	Options and SARs			Award		Stock		Award
Non-vested at January 1, 2006		3,669,229		$	49.39		—	$	—
Granted		652,090			64.17		94,100		64.26
Non-vested Dex Options Converted		224,597			12.73		—		—
Vested		(1,230,976	)		43.57		—		—
Forfeitures		(60,016	)		44.81		450		64.26
Non-vested at March 31, 2006		3,254,924		$	51.50		93,650	$	64.26

12

As of March 31, 2006, there was approximately $63.8 million of total unrecognized compensation cost related to non-vested stock-based awards. The cost is expected to be recognized over a weighted average period of approximately two years. After applying the Company’s estimated forfeiture rate, we expect 3.1 million non-vested stock-based awards to vest over a weighted average period of approximately two years. The intrinsic value of the non-vested stock-based awards expected to vest at March 31, 2006 is $30.6 million and the corresponding weighted average grant date exercise price is $51.50.

On February 21, 2006, the Company granted 0.1 million shares of restricted stock to certain employees. These restricted shares, which are settled in our common stock, were granted at a grant price of $64.26 per share, which was equal to the market value of the Company’s common stock on the date of grant, and vest ratably over three years. In accordance with SFAS No. 123 (R), we recognized non-cash compensation expense related to these restricted shares of $1.2 million for the three months ended March 31, 2006.

On February 21, 2006, the Company granted 0.6 million SARs to certain employees in conjunction with its annual grant of stock incentive awards. These SARs, which are settled in our common stock, were granted at a grant price of $64.26 per share, which was equal to the market value of the Company’s common stock on the grant date, and vest ratably over three years. On February 24, 2005, the Company granted 0.5 million stock SARs to certain employees in conjunction with its annual grant of stock incentive awards. These SARs, which are settled in our common stock, were granted at a grant price of $59.00 per share, which was equal to the market value of the Company’s common stock on the grant date, and vest ratably over three years. On July 28, 2004, the Company granted 0.9 million SARs to certain employees, including senior management, in connection with the AT&T Directory Acquisition. These SARs, which are settled in our common stock, were granted at a grant price of $41.58 per share, which was equal to the market value of the Company’s common stock on the grant date, and initially were scheduled to vest entirely only after five years. The maximum appreciation of the July 28, 2004 SAR grants is 100% of the initial grant price. We recognized non-cash compensation expense related to these and other smaller SAR grants of $7.2 million and $0.6 million for the three months ended March 31, 2006 and 2005, respectively.

In connection with the SPA Acquisition, the Company granted 1.5 million options (“Founders Grant”) to certain employees, including senior management, during 2002. These options were granted in October 2002 at an exercise price equal to the market value of the Company’s common stock on the date of grant. However, the award of these options was contingent upon the successful closing of the SPA Acquisition. Therefore, these options were subject to forfeiture until January 3, 2003, by which time the market value of the Company’s common stock exceeded the exercise price. Accordingly, these options were accounted for as compensatory options under APB 25 and resulted in a charge of $0.3 million for the three months ended March 31, 2005.

In connection with the Dex Media Merger, the Company granted on October 3, 2005, 1.1 million SARs to certain employees, including senior management. These SARs were granted at an exercise price of $65.00 and vest ratably over three years. The award of these SARs was contingent upon the successful completion of the Dex Media Merger. We recognized non-cash compensation expense related to these SARs of $3.7 million for the three months ended March 31, 2006.

Lastly, at January 31, 2006, stock-based awards outstanding under the existing Dex Media equity compensation plans totaled 4.0 million Dex Media option shares and had a weighted average exercise price of $5.48 per option share. As a result of the Dex Media Merger, all outstanding Dex Media equity awards were converted to RHD equity awards on February 1, 2006. Upon conversion to RHD equity awards, the number of securities to be issued upon exercise of outstanding awards totaled 1.7 million shares of RHD and had a weighted average exercise price of $12.73. At March 31, 2006, the number of RHD shares remaining available for future issuance totaled 0.1 million under the Dex Media, Inc. 2004 Incentive Award Plan. For the three months ended March 31, 2006, non-cash compensation expense related to these converted awards totaled $0.8 million.

The Dex Media Merger triggered a change in control under the Company’s stock incentive plans. Accordingly, all awards granted through January 31, 2006, with the exception of stock-based awards held by senior management (who waived the change of control provisions of such awards), became fully vested. In addition, the vesting conditions related to the July 28, 2004 SARs grant, noted above, were modified as a result of the Dex Media Merger, which now vest ratably over three years from the date of grant. For the three months ended March 31, 2006, $8.5 million of non-cash compensation expense, which is included in specific amounts noted above, was recognized as a result of these modifications and all employees with unvested options were affected by these modifications. Non-cash stock-based compensation expense relating to existing stock options as of January 1, 2006, which were not modified as a result of the Dex Media Merger, totalled $3.6 million for the three months ended March 31, 2006.

13

Upon adoption of SFAS No. 123 (R), pro forma disclosure permitted by SFAS No. 123, Accounting for Stock Based Compensation (“SFAS No. 123”) is no longer a permitted alternative. As the Company adopted SFAS No. 123 (R), as of January 1, 2006, using the Modified Prospective Method, the Company has provided the following pro forma disclosures of the effect on net income and earnings per share for the three months ended March 31, 2005 as if the Company had accounted for its employee stock awards granted under the fair value method of SFAS 123 for the 2005 period.

		Three Months
		Ended
		March 31, 2005
Net income, as reported		$	7,747
Add:	Stock-based compensation expense included in
	reported net income, net of related tax effects		545
Less:	Stock-based compensation expense that would have
	been included in the determination of net income if the
	fair value method had been applied to all awards, net
	of related tax effects		(1,676	)
Pro forma net income			6,616
Loss on repurchase of Preferred Stock			(133,681	)
Preferred dividend			(3,319	)
Pro forma loss available to common shareholders		$	(130,384	)
Basic loss per share
As reported		$	(4.10	)
Pro forma		$	(4.13	)
Diluted (loss) earnings per share
As reported		$	(4.10	)
Pro forma		$	(4.13	)

The weighted average fair value of stock-based awards granted during the three months ended March 31, 2005 was $19.84. The pro forma information noted above was determined based on the fair value of stock-based awards calculated using the Black-Scholes option-pricing model with the following assumptions:

	Three Months Ended
	March 31, 2005
Dividend yield	0%
Expected volatility	30%
Risk-free interest rate	3.9%
Expected holding period	5 years

Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue 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 sales allowances, allowances for doubtful accounts, depreciation and amortization, employee benefit plans, stock-based compensation expense and restructuring reserves, among others.

14

New Accounting Pronouncements. On January 1, 2006, the Company adopted the provisions of SFAS No. 123 (R) using the Modified Prospective Method. Under this method, we are required to record compensation expense in the statement of operations for all employee stock awards granted, modified or settled after the date of adoption and for the non-vested portion of previously granted stock awards that remain outstanding as of the beginning of the period of adoption based on their grant date fair values. Upon adoption of SFAS No. 123 (R), pro forma disclosure permitted by SFAS No. 123 is no longer a permitted alternative.

The Company has reviewed other new accounting standards not identified above and does not believe any other new standards will have a material impact on the Company’s financial position or operating results.

3. Acquisitions

On January 31, 2006, we completed the Dex Media Merger for a total purchase price of $4.1 billion. Pursuant to the Agreement and Plan of Merger dated October 3, 2005 (“Merger Agreement”), each issued and outstanding share of Dex Media common stock was converted into $12.30 in cash and 0.24154 of a share of RHD common stock, resulting in an aggregate cash value of $1.9 billion and aggregate stock value of $2.2 billion, based on 36,547,381 newly issued shares of RHD common stock valued at $61.82 per share. The $61.82 share price used to value the common shares issued in the Dex Media Merger was based on the average closing price of RHD’s common stock for the two business days before and after the announcement of the Dex Media Merger on October 3, 2005, in accordance with EITF 95-19, Determination of the Measurement Date for the Market Price of Securities Issued in a Purchase Business Combination. Additionally, we assumed Dex Media’s outstanding indebtedness on January 31, 2006 with a fair value of $5.5 billion. The total allocable purchase price also includes transaction costs of $26.2 million that were directly related to the Dex Media Merger, severance and related costs for certain Dex Media employees of $6.8 million and Dex Media vested equity awards outstanding as of January 31, 2006 with an estimated fair value of $76.1 million. Upon completion of the Dex Media Merger, the Company’s stockholders and Dex Media’s stockholders own approximately 47% and 53% of the Company’s common stock, respectively. The results of the Dex Media Business have been included in the Company’s operating results commencing February 1, 2006.

On September 1, 2004, we completed the AT&T Directory Acquisition for $1.41 billion in cash, after working capital adjustments and the settlement of a $30 million liquidation preference owed to us related to DonTech. As a result of the acquisition, we became the publisher of AT&T-branded yellow pages directories in Illinois and Northwest Indiana. The results of the AT&T Directory Business are included in our consolidated results from and after September 1, 2004.

On January 3, 2003, we completed the SPA Acquisition for $2.23 billion in cash and became the publisher of Sprint-branded yellow pages directories in 18 states. The results of the SPA Directory Business are included in our consolidated results from and after January 3, 2003. We expect Sprint to spin-off its local telephone business as Embarq Corporation in May 2006. We expect to enter into new agreements with Embarq that will replace the related agreements with Sprint, except that Sprint will remain bound by certain non-competition obligations. All references to Sprint shall mean Embarq following the execution of such agreements.

The primary purpose of these acquisitions was to transform the Company into a leading publisher of yellow pages directories. These acquisitions were accounted for as purchase business combinations in accordance with SFAS No. 141, Business Combinations (“SFAS 141”). Each purchase price was allocated to the related tangible and identifiable intangible assets acquired and liabilities assumed based on their respective estimated fair values on the acquisition dates. Certain long-term intangible assets were identified and recorded at their estimated fair values. Identifiable intangible assets acquired include directory services agreements between the Company and Dex Media, the Company and AT&T and the Company and Sprint, customer relationships and acquired trademarks and trade names. In accordance with SFAS No. 142, Goodwill and Other Intangible Assets, the fair values of the identifiable intangible assets are being amortized over their estimated useful lives in a manner that best reflects the economic benefits derived from such assets. Goodwill is not amortized but is subject to impairment testing on an annual basis. See Note 4, “Intangible Assets and Goodwill,” for a further description of our intangible assets and goodwill.

15

Under purchase accounting rules, we did not assume or record the deferred revenue balance associated with the Dex Media Business of $218.3 million at January 31, 2006, the AT&T Directory Business of $204.1 million at September 1, 2004, or the SPA Business of $315.9 million at January 3, 2003. These amounts represented revenue that would have been recognized subsequent to each acquisition under the deferral and amortization method in the absence of purchase accounting. Accordingly, we did not and will not record revenue associated with directories that were published prior to each acquisition, as well as directories that were published in the month each acquisition was completed. Although the deferred revenue balances were eliminated, we retained all the rights associated with the collection of amounts due under and contractual obligations under the advertising contracts executed prior to the acquisitions. As a result, the billed and unbilled accounts receivable balances acquired in each acquisition became assets of the Company. Also under purchase accounting rules, we did not assume or record the deferred directory costs related to those directories that were published prior to each acquisition as well as directories that published in the month each acquisition was completed, totaling $289.5 million for Qwest-Dex-branded directories, $175.8 million for AT&T-branded directories and $63.3 million for Sprint-branded directories, respectively. These costs represented operating expenses that would have been recognized subsequent to the acquisitions under the deferral and amortization method in the absence of purchase accounting.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed in the Dex Media Merger on January 31, 2006:

Current assets	$	971,562
Non-current assets		108,083
Intangible assets		8,930,000
Goodwill		2,352,417
Total assets acquired		12,362,062
Current liabilities		(201,440	)
Non-current liabilities		(7,931,055	)
Total liabilities assumed		(8,132,495	)
Net assets acquired	$	4,229,567

The following unaudited condensed pro forma information has been prepared in accordance with Article 11 of Regulation S-X and SFAS 141 for the three months ended March 31, 2006 and 2005 and assumes the Dex Media Merger and related financing occurred on January 1, 2005. The following unaudited condensed pro forma information does not purport to represent what the Company’s results of operations would actually have been if the Dex Media Merger had in fact occurred on January 1, 2005 and is not necessarily representative of results of operations for any future period. The following unaudited pro forma financial information excludes the impact of purchase accounting relating to deferred revenue and deferred directory costs associated with the Dex Media Business.

	Three Months Ended
(in millions, except per share amounts)	March 31,
	2006		2005
Net revenue	$	676.5	$	670.9
Operating income		276.0		303.8
Net income		39.2		55.9
Diluted earnings per share	$	0.56	$	0.80

16

4. Intangible Assets and Goodwill

As a result of the Dex Media Merger, AT&T Directory Acquisition and the SPA Acquisition, certain intangible assets were identified and recorded at their estimated fair values. Amortization expense was $54.4 million and $18.1 million for the three months ended March 31, 2006 and 2005, respectively. The acquired intangible assets and their respective book values at March 31, 2006 are shown in the table below.

	Directory		Local		National
	Services		Customer		CMR		Trade		Advertising
	Agreements		Relationships		Relationships		names		Commitment		Total
Initial fair value:
Dex Media	$	7,325,000	$	885,000	$	205,000	$	490,000	$	25,000	$	8,930,000
AT&T		952,500		90,000		55,000		—		—		1,097,500
Sprint		1,625,000		200,000		60,000		30,000		—		1,915,000
Total		9,902,500		1,175,000		320,000		520,000		25,000		11,942,500
Accumulated amortization		165,270		43,563		12,090		11,946		831		233,700
Net intangible assets	$	9,737,230	$	1,131,437	$	307,910	$	508,054	$	24,169	$	11,708,800

In connection with the Dex Media Merger, we assumed by operation of law directory services agreements (collectively, the “Dex Directory Services Agreements”) which Dex Media had entered into with Qwest including, (1) a publishing agreement with a term of 50 years commencing November 8, 2002 (subject to automatic renewal for additional one-year terms), which grants us the right to be the exclusive official directory publisher of listings and classified advertisements of Qwest’s telephone customers in the geographic areas in the Dex Media states in which Qwest provides local telephone services and (2) a non-competition agreement with a term of 40 years commencing November 8, 2002, pursuant to which Qwest has agreed not to sell directory products consisting principally of listings and classified advertisements for subscribers in the geographic areas in the Dex Media states in which Qwest provides local telephone service. The fair value assigned to the Dex Media Directory Services Agreements of $7.3 billion was based on the multi-period excess earnings method and is being amortized under the straight-line method over 42 years. Under the multi-period excess earnings method, the projected cash flows of the intangible asset are computed indirectly, which means that future cash flows are projected with deductions made to recognize returns on appropriate contributory assets, leaving the excess, or residual net cash flow, as indicative of the intangible asset fair value.

As a result of the Dex Media Merger, we also assumed (1) an advertising commitment agreement whereby Qwest has agreed to purchase an aggregate of $20 million of advertising per year through 2017 from us at pricing on terms at least as favorable as those offered to similar large customers and (2) an intellectual property contribution agreement pursuant to which Qwest assigned and or licensed to us the Qwest intellectual property previously used in the Qwest directory services business along with (3) a trademark license agreement pursuant to which Qwest granted to us the right until November 2007 to use the Qwest Dex and Qwest Dex Advantage marks in connection with directory products and related marketing material in the Dex Media states and the right to use these marks in connection with DexOnline.com (the intangible assets reflected in (2) and (3) collectively referred to as “Trade names”). The fair value assigned to the Dex Media advertising commitment was based on the multi-period excess earnings method and is being amortized under the straight-line method over 12 years.

17

Directory services agreements between AT&T and the Company include a directory services license agreement, a non-competition agreement, an Internet Yellow Pages reseller agreement and a directory publishing listing agreement (collectively, “AT&T Directory Services Agreements”) with certain affiliates of AT&T. The directory services license agreement designates us as the official and exclusive provider of yellow pages directory services for AT&T (and its successors) in Illinois and Northwest Indiana (the “Territory”), grants us the exclusive license (and obligation as specified in the agreement) to produce, publish and distribute white pages directories in the Territory as AT&T’s agent and grants us the exclusive license (and obligation as specified in the agreement) to use the AT&T brand and logo on print directories in the Territory. The non-competition agreement prohibits AT&T (and its affiliates and successors), with certain limited exceptions, from (1) producing, publishing and distributing yellow and white pages print directories in the Territory, (2) soliciting or selling local or national yellow or white pages advertising for inclusion in such directories, and (3) soliciting or selling local Internet yellow pages advertising for certain Internet yellow pages directories in the Territory or licensing AT&T marks to any third party for that purpose. The Internet Yellow Pages reseller agreement gives us the exclusive right to sell local Internet yellow pages advertising and the non-exclusive right to sell Internet yellow pages advertising with respect to geographies outside the Territory to any advertiser (excluding national advertisers) located inside the Territory onto AT&T’s YellowPages.com platform (and any successor products as specified in the agreement). The directory publishing listing license agreement gives us the right to purchase and use basic AT&T subscriber listing information and updates for the purpose of publishing directories. The AT&T Directory Services Agreements (other than the Internet Yellow Pages reseller agreement) have initial terms of 50 years, subject to automatic renewal and early termination under specified circumstances. The Internet Yellow Pages reseller agreement has a term of 5 years. The fair value assigned to the AT&T Directory Services Agreements and the Internet Yellow Pages reseller agreement of $950.0 million and $2.5 million, respectively, was based on the present value of estimated future cash flows and is being amortized under the straight-line method over 50 years.

Directory services agreements between Sprint and the Company include a directory services license agreement, a trademark license agreement and a non-competition agreement (collectively “SPA Directory Services Agreements”) with certain affiliates of Sprint. The directory services license agreement grants us the exclusive license (and obligation as specified in the agreement) to produce, publish and distribute yellow and white pages directories for Sprint (and its successors) in 18 states where Sprint provided local telephone service at the time of the agreement. The trademark license agreement grants us the exclusive license (and obligation as specified in the agreement) to use certain specified Sprint trademarks in those markets, and the non-competition agreement prohibits Sprint (and its affiliates and successors) in those markets from selling local directory advertising, with certain limited exceptions, or producing, publishing and distributing print directories. The SPA Directory Services Agreements have initial terms of 50 years, subject to automatic renewal and early termination under specified circumstances. The fair value of these agreements of $1.6 billion was determined based on the present value of estimated future cash flows and is being amortized under the straight-line method over 50 years.

The fair values of local and national customer relationships obtained as a result of the Dex Media Merger were determined using the multi-period excess earnings method. The fair values of local and national customer relationships obtained as a result of the AT&T Directory Acquisition and SPA Acquisition were determined based on the present value of estimated future cash flows. These intangible assets are being amortized under the “income forecast” method, which assumes the value derived from customer relationships is greater in the earlier years and steadily declines over time. The weighted average useful life of these relationships is approximately 20 years.

The fair value of acquired trade names obtained as a result of the Dex Media Merger and SPA Acquisition was determined based on the “relief from royalty” method, which values the trade names based on the estimated amount that a company would have to pay in an arms length transaction to use these trade names. These assets are being amortized under the straight-line method over 15 years.

The excess purchase price for the Dex Media Merger, AT&T Directory Acquisition and the SPA Acquisition over the net tangible and identifiable intangible assets acquired of $2.4 billion, $222.0 million, which includes the adjustment below, and $97.0 million, respectively, was recorded as goodwill. During the first quarter of 2005, we recorded an adjustment increasing goodwill from the AT&T Directory Acquisition by approximately $9.0 million relating to a restructuring plan associated with the AT&T Directory Acquisition. See Note 7, “Restructuring Charges” for additional information. The total amount of goodwill that is expected to be deductible for tax purposes related to the Dex Media Merger totals approximately $2.4 billion.

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Throughout 2006, additional information could come to our attention that may require us to revise the purchase price allocation in connection with the Dex Media Merger. In accordance with SFAS No. 142, Goodwill and Other Intangible Assets, goodwill is not amortized, but is subject to periodic impairment testing. No impairment losses were recorded during this period.

5. Long-Term Debt

Long-term debt of the Company, including fair value adjustments required by GAAP as a result of the Dex Media Merger, at March 31, 2006 and December 31, 2005 consisted of the following:

	March 31, 2006		December 31, 2005
RHD
6.875% Senior Notes due 2013	$	300,000	$	300,000
6.875% Series A-1 Senior Discount Notes due 2013		332,643		—
6.875% Series A-2 Senior Discount Notes due 2013		601,491		—
8.875% Series A-3 Senior Notes due 2016		1,210,000		—
R.H. Donnelley Inc. (“RHDI”)
Credit Facility		2,094,575		2,170,915
8.875% Senior Notes due 2010		7,934		7,934
10.875% Senior Subordinated Notes due 2012		600,000		600,000
Dex Media, Inc.
8% Senior Notes due 2013		514,681		—	*
9% Senior Discount Notes due 2013		624,004		—	*
Dex Media East
Credit Facility		788,693		—	*
9.875% Senior Notes due 2009		482,505		—	*
12.125% Senior Subordinated Notes due 2012		394,518		—	*
Dex Media West
Credit Facility		1,678,938		—	*
8.5% Senior Notes due 2010		406,333		—	*
5.875% Senior Notes due 2011		8,721		—	*
9.875% Senior Subordinated Notes due 2013		838,934		—	*
Total RHD Consolidated		10,883,970		3,078,849
Less current portion		460,523		100,234
Long-term debt	$	10,423,447	$	2,978,615

* The debt balances acquired as a result of the Dex Media Merger were not obligations of RHD at December 31, 2005.

Credit Facilities

RHDI

As of March 31, 2006, RHDI’s senior secured credit facility, as amended and restated (“Credit Facility”), consists of a $313.4 million Term Loan A-2, a $116.0 million Term Loan A-3, a $1,429.5 million Term Loan D, a $350 million Term Loan D-1 and a $175 million Revolving Credit Facility (the “Revolver”) for an aggregate Credit Facility of $2,383.9 million. All Term Loans require quarterly principal and interest payments. The Credit Facility provides for a new Term Loan C for potential borrowings up to $400 million, such proceeds, if borrowed, to be used to fund acquisitions, refinance certain indebtedness or to make certain restricted payments. As of March 31, 2006, the outstanding balances of Term Loans A-2, A-3, D and D-1 were $235.8 million, $87.6 million, $1,422.0 million and $349.1 million, respectively, with no amounts outstanding under the Revolver. The Revolver, Term Loan A-2 and Term Loan A-3 mature in December 2009 and Term Loans D and D-1 mature in June 2011. The weighted average interest rate of outstanding debt under the Credit Facility was 6.63% and 6.21% at March 31, 2006 and December 31, 2005, respectively.

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As amended, as of March 31, 2006, RHDI’s Credit Facility bears interest, at our option, at either:

• The higher of (i) a base rate as determined by the Administrative Agent, Deutsche Bank Trust Company Americas or (ii) the Federal Funds Effective Rate (as defined) plus 0.50%, in each case plus a 1.00% margin on the Revolver and Term Loan A-2, a 0.75% margin on Term Loan A-3 and Term Loan D and 0.50% margin on Term Loan D-1; or

• LIBOR rate plus a 2.00% margin on the Revolver and Term Loan A-2, 1.75% margin on Term Loan A-3 and Term Loan D, and a 1.50% margin on Term Loan D-1. We may elect interest periods of 1, 2, 3 or 6 months (or 9 or 12 months if, at the time of the borrowing, all lenders agree to make such term available), for LIBOR borrowings.

On April 24, 2006, we amended RHDI’s Credit Facility (the “Amendment”) for the purpose of reducing the applicable interest rate margins on (i) the revolving portion of the Credit Facility and (ii) the outstanding term loans, other than the Tranche D-1 term loans, by refinancing the outstanding Tranche A-2 term loans, Tranche A-3 term loans and Tranche D term loans with new Tranche A-4 term loans and Tranche D-2 term loans. Please refer to Note 12, “Subsequent Events” for additional information regarding the Amendment.

Dex Media Credit Facilities

Dex Media East

The Dex Media East credit facility consists of revolving loan commitments (“Dex Media East Revolver”) and term loan commitments. The Dex Media East Revolver consists of a total principal amount of $100.0 million, which is available for general corporate purposes, subject to certain conditions. The Dex Media East term loans consist of a tranche A term loan with an initial total principal amount of $690.0 million and a tranche B term loan with an initial total principal amount of $700.0 million. As of March 31, 2006, the principal amounts owing under the tranche A and tranche B term loans were approximately $299.7 million and $429.0 million, respectively, and $60.0 million was outstanding under the Dex Media East Revolver (with an additional $1.1 million committed under a standby letter of credit). The tranche A and tranche B term loans were available only to fund a portion of the Dex East Acquisition and a portion of the Dex West Acquisition. The Dex Media East Revolver and tranche A term loan will mature in November 2008, and the tranche B term loan will mature in May 2009.

As of March 31, 2006, the Dex Media East credit facility bears interest, at our option, at either:

• The higher of (i) the base rate determined by the Administrative Agent, JP Morgan Chase Bank, N.A., plus a 0.25% margin on the Revolver and Term Loan A and a 0.75% margin on Term Loan B; and (ii) the Federal Funds Effective Rate (as defined) plus 0.50%, plus a 0.25% margin on the Revolver and Term Loan A and a 0.75% margin on Term Loan B; or

• LIBOR rate plus a 1.25% margin on the Revolver and Term Loan A and a 1.75% margin on Term Loan B. We may elect interest periods of 1, 2, 3, or 6 months (or 9 or 12 months if, at the time of the borrowing, all lenders agree to make such term available), for LIBOR borrowings.

On April 24, 2006, we amended Dex Media East’s credit facility (the “Dex Media East Amendment”) for the purpose of reducing the applicable interest rate margin on the outstanding tranche B term loans by refinancing such loans with new tranche B term loans. The Dex Media East Amendment maintains the applicable interest rate margins on the tranche A term loans and the revolving portion of the Credit Facility. Please refer to Note 12, “Subsequent Events” for additional information regarding the Dex Media East Amendment.

Dex Media West

The Dex Media West credit facility, as amended and restated in connection with the Dex Media Merger, consists of revolving loan commitments (“Dex Media West Revolver”) and term loan commitments. The Dex Media West Revolver consists of a total principal amount of $100.0 million, which is available for general corporate purposes, subject to certain conditions. The Dex Media West term loans consist of a tranche A term loan with a total principal amount of $960.0 million, a tranche B term loan with a total principal amount of $1,200.0 million, and a tranche B-1

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term loan with a total available principal amount of $503.0 million. As of March 31, 2006, the principal amounts owed under the tranche A, tranche B, and tranche B-1 term loans were approximately $324.1 million, $834.3 million, and $439.5 million, respectively, and $81.0 million was outstanding under the Dex Media West Revolver. The tranche A and tranche B term loan commitments were available only to fund a portion of the Dex West Acquisition. The tranche B-1 term loan was utilized to redeem Dex Media West’s senior notes that were put to Dex Media West in connection with the change of control offer associated with the Dex Media Merger and to fund a portion of the cash consideration paid to Dex Media’s stockholders in connection with the Dex Media Merger. The tranche A term loan and Dex Media West Revolver will mature in September 2009 and the tranche B and B-1 term loans will mature in March 2010.

As of March 31, 2006, the Dex West credit facility bears interest, at our option, at either:

• The higher of (i) the base rate determined by the Administrative Agent, JP Morgan Chase Bank, N.A., plus a 0.25% margin on the Revolver and Term Loan A, a 0.75% margin on Term Loan B, and a 0.50% margin on Term Loan B-1; and (ii) the Federal Funds Effective Rate (as defined) plus 0.50%, plus a 0.25% margin on the Revolver and Term Loan A, a 0.75% margin on Term Loan B, and a 0.50% margin on Term Loan B-1; or

• LIBOR rate plus a 1.25% margin on the Revolver and Term Loan A, 1.75% margin on Term Loan B, and a 1.50% margin on Term Loan B-1. We may elect interest periods of 1, 2, 3, or 6 months (or 9 or 12 months if, at the time of the borrowing, all lenders agree to make such term available), for LIBOR borrowings.

On April 24, 2006, we amended Dex Media West’s credit facility (the “Dex Media West Amendment”) for the purpose of reducing the applicable interest rate margin on the outstanding tranche B term loans by refinancing such loans with new tranche B-2 term loans. The Dex Media West Amendment maintains the applicable interest rate margins on the tranche A term loans, the tranche B-1 term loans and the revolving portion of the Credit Facility. Please refer to Note 12, “Subsequent Events” for additional information regarding the Dex Media West Amendment.

The Company’s credit facilities and the indentures covering the notes contain usual and customary affirmative and negative covenants that, among other things, place limitations on our ability to (i) incur additional indebtedness; (ii) pay dividends and repurchase our capital stock; (iii) enter into mergers, consolidations, acquisitions, asset dispositions and sale-leaseback transactions; (iv) make capital expenditures; (v) issue capital stock of our subsidiaries; (vi) engage in transactions with our affiliates; and (vii) make investments, loans and advances. The Company’s credit facilities also contain financial covenants relating to maximum consolidated leverage, minimum interest coverage and maximum senior secured leverage as defined therein. Substantially all of RHDI’s and its subsidiaries’ assets, including the capital stock of RHDI and its subsidiaries, are pledged to collateralize our obligation under the RHDI Credit Facility. Substantially all of the assets of Dex Media East and Dex Media West and their subsidiaries, including their capital stock, are pledged to collateralize the obligations under their respective credit facilities.

Notes

RHD

On January 14, 2005, RHD issued $300 million of 6.875% Senior Notes due January 15, 2013 (“Holdco Notes”), the proceeds of which were used to redeem 100,303 shares of the then outstanding Preferred Stock from the GS Funds, pay transaction costs and repay debt associated with RHDI’s Credit Facility. Interest is payable on the Holdco Notes semi-annually in arrears on January 15 and July 15 of each year, commencing July 15, 2005.

On January 27, 2006, in order to fund the cash portion of the Dex Media Merger purchase price, we issued $660 million aggregate principal amount at maturity ($600.5 million gross proceeds) of 6.875% Series A-2 Senior Discount Notes due January 15, 2013 and $1,210 million principal amount of 8.875% Series A-3 Senior Notes due January 15, 2016. Interest is payable semi-annually on the Series A-2 Senior Discount Notes and the Series A-3 Senior Notes. Also on January 27, 2006, we issued $365 million aggregate principal amount at maturity ($332.1 million gross proceeds) of 6.875% Series A-1 Senior Discount Notes due January 15, 2013 to fund the GS Repurchase. Interest is payable semi-annually commencing July 15, 2006. All of these notes are unsecured obligations of RHD, senior in right of payment to all future senior subordinated and subordinated indebtedness of

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RHD and structurally subordinated to all indebtedness of our subsidiaries. In connection with the issuance of these notes, we entered into a registration rights agreement, whereby we agreed, among other things to (i) file an exchange offer registration statement with the SEC with respect to these notes within 120 days after January 27, 2006, (ii) use reasonable efforts to have such exchange offer registration statement declared effective by the SEC within 180 days after January 27, 2006 and (iii) subject to certain limitations, consummate the exchange offer to which this exchange offer registration statement relates within 210 days after January 27, 2006.

RHDI

In connection with the SPA Acquisition, RHDI issued $325 million 8.875% Senior Notes due 2010 (“Senior Notes”) and $600 million 10.875% Senior Subordinated Notes due 2012 (“Subordinated Notes”). These notes are unsecured obligations of RHDI and interest is paid on these notes semi-annually on June 15th and December 15th. On December 20, 2005, we repurchased through a tender offer and exit consent solicitation $317.1 million of the Senior Notes. We are considering, among other alternatives, redemption of the remaining $7.9 million Senior Notes in 2006. Proceeds from the RHDI Credit Facility’s $350 million Term Loan D-1 were used to fund the partial repurchase, a call premium of $25.3 million and pay transaction costs. The partial repurchase of the Senior Notes has been accounted for as an extinguishment of debt.

Dex Media, Inc.

Dex Media, Inc. has issued $500 million aggregate principal amount of 8% senior notes due 2013. Interest is payable on May 15th and November 15th of each year.

Dex Media, Inc. has issued $750 million aggregate principal amount of 9% senior discount notes due 2013, under two indentures. The 9% senior discount notes were issued at an original issue discount with interest accruing at 9%, per annum, compounded semi-annually. Interest accrues in the form of increased accreted value until November 15, 2008, at which time the accreted value will be equal to the full principal amount at maturity. After November 15, 2008, the 9% senior discount notes bear cash interest at 9% per annum, payable semi-annually on May 15th and November 15th of each year.

Dex Media East

Dex Media East issued $450 million aggregate principal amount of 9.875% senior notes due 2009. Interest is payable on May 15th and November 15th of each year.

Dex Media East issued $525 million aggregate principal amount of 12.125% senior subordinated notes due 2012. As of March 31, 2006, $341.3 million aggregate principal amount was outstanding. Interest is payable on May 15th and November 15th of each year.

Dex Media West

Dex Media West issued $385 million aggregate principal amount of 8.5% senior notes due 2010. Interest is payable on February 15th and August 15th of each year.

Dex Media West issued $300 million aggregate principal amount of 5.875% senior notes due 2011. As of March 31, 2006, $8.72 million aggregate principal amount was outstanding. Interest is payable on May 15^th and November 15th of each year.

Dex Media West issued $780 million aggregate principal amount of 9.875% senior subordinated notes due 2013. As of March 31, 2006, $761.7 million aggregate principal amount was outstanding. Interest is payable on February 15th and August 15th of each year.

Impact of Dex Media Merger

The completion of the Dex Media Merger triggered change of control offers on all of the Dex Media outstanding notes, requiring us to make offers to repurchase the notes. As of March 31, 2006, $291.3 million of the 5.875% Dex Media West Senior Notes, $0.3 million of the 9.875% Dex Media East Senior Notes, $0.2 million of the 9.875% Dex Media West Senior Subordinated Notes and $0.1 million of the 9% Dex Media, Inc. Senior Discount Notes were tendered in the applicable change of control offer and repurchased by us.

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As a result of the Dex Media Merger, a premium was established to record the acquired debt at fair value upon consummation of the Dex Media Merger. This premium is amortized as a reduction of interest expense over the remaining terms of the related debt agreements using the effective interest method. A total premium of $222.3 million was recorded upon consummation of the Dex Media Merger as follows:

Dex Media Inc.
8% Senior Notes, due 2013	$	15,000
9% Senior Discount Notes, due 2013		17,177
Dex Media East
Credit Facility		—
9.875% Unsecured senior notes payable, due 2009		34,290
12.125% Unsecured senior subordinated notes payable, due 2012		54,600
Dex Media West
Credit Facility		—
8.5% Unsecured senior notes payable, due 2010		22,138
5.875% Unsecured senior notes payable, due 2011		61
9.875% Unsecured senior subordinated notes payable, due 2013		79,037
Total	$	222,303

6. Redeemable Preferred Stock and Warrants

We have 10,000,000 shares of Preferred Stock authorized for issuance. In a series of transactions related to the SPA Acquisition in November 2002 and January 2003, we issued through a private placement 200,604 shares of Preferred Stock and warrants to purchase 1.65 million shares of our common stock to the GS Funds for gross proceeds of $200 million. Exercise prices related to the warrants range between $26.28 and $28.62, which are exercisable at any time during a five-year term. On January 27, 2006, we completed the GS Repurchase and as a result, there are no outstanding shares of our Preferred Stock. At December 31, 2005, we had 100,301 shares of Preferred Stock outstanding.

Prior to the GS Repurchase, the Preferred Stock, and any accrued and unpaid dividends, were convertible by the GS Funds into common stock at any time after issuance at a price of $24.05 per share and earned a cumulative dividend of 8% compounded quarterly. We could not pay cash dividends on the Preferred Stock through September 30, 2005, during which time the dividend accreted. Accrued cash dividends on the Preferred Stock of approximately $2.5 million through January 3, 2006 were included in the purchase price of the GS Repurchase.

The net proceeds received from the issuance of Preferred Stock were allocated to the Preferred Stock, warrants and the beneficial conversion feature (“BCF”) of the Preferred Stock based on their relative fair values. The fair value of the Preferred Stock was estimated using the Dividend Discount Method, which determines the fair value based on the discounted cash flows of the security. The BCF is a function of the conversion price of the Preferred Stock, the fair value of the warrants and the fair market value of the underlying common stock on the date of issuance. In connection with each issuance of our Preferred Stock and each subsequent quarterly dividend date through September 30, 2005, a BCF was recorded because the fair value of the underlying common stock at the time of issuance was greater than the conversion price of the Preferred Stock. The BCF is treated as a deemed dividend because the Preferred Stock was convertible into common stock immediately after issuance. Commencing October 3, 2005, the Preferred Stock was no longer convertible into common stock, and consequently, we no longer recognized any BCF. The Preferred Stock dividend for the three months ended March 31, 2005 of $3.3 million consisted of the stated 8% dividend of $2.7 million and a BCF of $0.6 million.

On January 14, 2005, we repurchased 100,303 shares of our outstanding Preferred Stock from the GS Funds for $277.2 million in cash. In order to fund this repurchase, on January 14, 2005, we issued $300 million of Holdco Notes. See Note 5, Long-Term Debt, for a further discussion of the financing associated with this transaction. In connection with this Preferred Stock repurchase, we recorded a reduction in earnings available to common shareholders on the Consolidated Statement of Operations of $133.7 million to reflect the loss on the repurchase of these shares for the three months ended March 31, 2005. The excess of the cash paid to the GS Funds over the carrying amount of the repurchased Preferred Stock, plus the amount previously recognized for the BCF associated

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with these shares has been recognized as a loss on repurchase. Such amount represents a return to the GS Funds and, therefore has been treated in a manner similar to the treatment of the Preferred Stock dividend.

On January 27, 2006 we repurchased the remaining 100,301 shares of our outstanding Preferred Stock from the GS Funds for $336.1 million in cash including accrued cash dividends and interest pursuant to the terms of a Stock Purchase and Support Agreement (the “Stock Purchase Agreement”) dated October 3, 2005. The aggregate purchase price of the GS Repurchase, as defined in the Stock Purchase Agreement, was equal to: (i) the product of $64.00 and the number of shares of the Company’s common stock into which the outstanding shares of the Preferred Stock was convertible as of (and including) September 30, 2005; plus (ii) an amount equal to the amount of cash dividends that would have accrued on the outstanding shares of the Preferred Stock had the parties not entered into the Stock Purchase Agreement from and after October 1, 2005 through and including the earlier of the date on which the transactions contemplated in the Stock Purchase Agreement are completed and January 3, 2006. The purchase price also included a daily interest component (as defined) based on the number of days from January 3, 2006 to the repurchase date, January 27, 2006. In order to fund the GS Repurchase, we issued $365 million aggregate principal amount at maturity ($332.1 million gross proceeds) of 6.875% Series A-1 Senior Discount Notes due January 15, 2013. See Note 5, Long-Term Debt, for a further discussion of the financing associated with this transaction.

As a result of the GS Repurchase, (i) the purchase agreement among the Company and the GS Funds relating to the Preferred Stock has terminated and is null and void and of no further force or effect, without any further action of the Company or the GS Funds being required, (ii) none of the GS Funds has any further rights to designate any directors of the Company or to veto any corporate action of the Company, as provided in the purchase agreement relating to the Preferred Stock or otherwise, (iii) the registration rights agreement, dated November 25, 2002, among the Company and the GS Funds has terminated and is null and void and of no further force or effect, without any further action of the Company or the GS Funds being required, and, as of the closing of the GS Repurchase, none of the GS Funds has any registration rights with respect to any securities of the Company, including, without limitation, any warrants to purchase shares of the Company’s common stock or any shares of the Company’s common stock that may be issued or issuable upon exercise of any such warrants.

Subject to the preceding paragraph, the GS Funds have retained their warrants to purchase approximately 1.65 million shares of the Company’s common stock.

As a result of the GS Repurchase, the recorded value of the Preferred Stock was accreted to its redemption value of $336.1 million at January 27, 2006. For the three months ended March 31, 2006, the accretion in redemption value from December 31, 2005 of $2.0 million, which represented accrued dividends and interest, was recorded as a reduction to income available to common shareholders and the reversal of the previously recorded BCF of approximately $31.2 million related to these shares was recognized as an increase to income available to common shareholders on the Consolidated Statement of Operations.

7. Restructuring Charges

The table below shows the activity in our restructuring reserves for the three months ended March 31, 2006.

	2003		2005		2006
	Restructuring		Restructuring		Restructuring
	Actions		Actions		Actions		Total
Balance at December 31, 2005	$	1,577	$	6,472	$	—	$	8,049
Additions to reserve charged to goodwill		—		—		6,839		6,839
Payments		151		317		—		468
Balance at March 31, 2006	$	1,426	$	6,155		6,839	$	14,420

During the first quarter of 2006, $6.8 million was charged to goodwill representing severance and related costs for certain Dex Media executive officers in connection with the Dex Media Merger. No payments were made to these executive officers for severance and related costs during the three months ended March 31, 2006. We will continue to assess the restructuring plan related to the Dex Media Merger, which may include employee severance and relocation and facility utilization charges, as well as a review of assets for impairment, and anticipate completion of the restructuring plan during the fourth quarter of 2006.

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During the first quarter of 2005, we completed a restructuring relating to the integration of the AT&T Directory Business. Approximately 63 employees were affected by the restructuring; 57 were terminated during the first quarter of 2005 and 6 were relocated to our corporate headquarters in Cary, North Carolina. Additionally, we have vacated certain of our leased facilities in Chicago, Illinois. We estimated the costs associated with the terminated employees and the abandonment of certain of our leased facilities to be approximately $8.8 million and such costs were charged against goodwill during the first quarter of 2005. Payments of $0.4 million were made with respect to severance, relocation and retention during the three months ended March 31, 2005. Residual payments related to relocation for the three months ended March 31, 2006 were immaterial. Net payments of $0.3 million were made during the three months ended March 31, 2006 with respect to leased facilities in Chicago, Illinois. The remaining lease payments will be made through 2012. No payments were made with respect to the leased facilities for the three months ended March 31, 2005.

Following the SPA Acquisition on January 3, 2003, we consolidated publishing and technology operations, sales offices and administrative personnel and relocated the headquarters functions in Overland Park, Kansas and Purchase, New York to Cary, North Carolina. Approximately 140 people were affected by the relocation of the headquarters functions in Overland Park, Kansas and Purchase, New York, of which 75 have been included in the restructuring reserve. The remaining 65 people relocated with the Company. In 2003, a $2.2 million reserve was recorded, with an offsetting charge to goodwill, representing the closure of the pre-press publishing facility operated by SPA in Blountville, Tennessee. The reserve represented the remaining lease payments, net of estimated sub-lease income, on the pre-press facility. Net payments of $0.1 million were made with respect to the former pre-press publishing facility during the three months ended March 31, 2006 and 2005 and the remaining payments will be made through 2012. A reserve of $2.1 million was recorded during the second quarter of 2004, representing the estimated fair value of the remaining lease payments, net of estimated sub-lease income, on the former headquarters office lease in New York. Net payments of $0.1 million and $0.2 million were made with respect to the former headquarters office lease during the three months ended March 31, 2006 and 2005, respectively, and the remaining payments will be made through 2006.

8. Benefit Plans

Retirement Plans. We have a cash balance defined benefit pension plan covering substantially all legacy RHD employees with at least one year of service. The benefits to be paid to employees are based on age, years of service and a percentage of total annual compensation. The percentage of compensation allocated to a retirement account ranges from 3.0% to 12.5% depending on age and years of service (“cash balance benefit”). Benefits for certain employees who were participants in the predecessor The Dun & Bradstreet Corporation (“D&B”) defined benefit pension plan are also determined based on the participant’s average compensation and years of service (“final average pay benefit”) and benefits to be paid will equal the greater of the final average pay benefit or the cash balance benefit. Pension costs, on an annual basis, are determined using the projected unit credit actuarial cost method. Our funding policy is to contribute an amount at least equal to the minimum legal funding requirement. We were not required to make and have not made any contributions for the three months ended March 31, 2006. In addition, no contributions were required or made for the three months ended March 31, 2005. The underlying pension plan assets are invested in diversified portfolios consisting primarily of equity and debt securities. A measurement date of December 31 is used for the majority of our plan assets.

As a result of the Dex Media Merger, we also have a noncontributory defined benefit pension plan covering substantially all management and occupational (union) employees within Dex Media. Pension costs, on an annual basis, are determined using the projected unit credit actuarial cost method. Our funding policy is to contribute with the objective of accumulating sufficient assets to pay all benefits when due. No contributions were required or made for the two months ended March 31, 2006. The underlying pension plan assets are invested in diversified portfolios consisting primarily of equity and debt securities. A measurement date of December 31 is used for all of our plan assets.

We also have an unfunded non-qualified defined benefit pension plan, the Pension Benefit Equalization Plan (“PBEP”), which covers senior executives and certain key employees. Benefits are based on years of service and compensation (including compensation not permitted to be taken into account under the previously mentioned defined benefit pension plan).

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Savings Plans. As a result of the Dex Media Merger, we now offer two defined contribution savings plans to substantially all RHD and Dex Media employees. Under the RHD plan, we contribute $0.50 for each dollar contributed by a participating employee, up to a maximum of 6% of each participating employee’s salary (including bonus and commissions). Under the Dex Media plan, we contribute 100% on the first 4% of employee contributions and 50% on the next 2% contributed by participating management employees, up to a maximum of 6% of each participating employee’s eligible earnings. Under the Dex Media plan, we also contribute 81% of the first 6% of occupational employee contributions not to exceed 4.86% of eligible earnings for any one pay period. Under the Dex Media plan, company matching contributions are limited to $4,860 per employee annually.

Other Postretirement Benefits. As a result of the Dex Media Merger, we now have two unfunded postretirement benefit plans that provide certain healthcare and life insurance benefits to certain full-time employees who reach retirement age while working for the respective companies.

Information presented below for the three months ended March 31, 2006 includes combined amounts for the legacy RHD benefit plans and the acquired Dex Media benefit plans for the two months ended March 31, 2006. Information presented below for the three months ended March 31, 2005 excludes amounts relating to the Dex Media benefit plans since they were not obligations of the Company at that time. In accordance with SFAS No. 132, Employers’ Disclosures About Pensions and Other Postretirement Benefits (Revised 2003), the following table provides the components of net periodic benefit cost for the three months ended March 31, 2006 and 2005:

	Pension						Postretirement
	Benefits						Benefits
	Three Months						Three Months
	Ended March 31,						Ended March 31,
	2006			2005			2006		2005
Service cost	$	2,744		$	1,342		$	516	$	188
Interest cost		3,412			1,593			904		272
Expected return on plan assets		(4,206	)		(2,090	)		—		—
Unrecognized prior service cost		50			38			242		240
Amortization of unrecognized loss		468			320			65		25
Net periodic benefit cost	$	2,468		$	1,203		$	1,727	$	725

9. Business Segments

Management reviews and analyzes its business of publishing yellow pages directories as one operating segment.

10. Litigation

We are involved in various legal proceedings arising in the ordinary course of our business, as well as certain litigation and tax matters. In many of these matters, plaintiffs allege that they have suffered damages from errors or omissions of improper listings contained in directories published by us. We periodically assess our liabilities and contingencies in connection with these matters based upon the latest information available to us. For those matters where it is probable that we have incurred a loss and the loss or range of loss can be reasonably estimated, we record reserves in our consolidated financial statements. In other instances, we are unable to make a reasonable estimate of any liability because of the uncertainties related to both the probable outcome and amount or range of loss. As additional information becomes available, we adjust our assessment and estimates of such liabilities accordingly.

The Company is exposed to potential defamation and breach of privacy claims arising from our publication of directories and our methods of collecting, processing and using advertiser and telephone subscriber data. If such data were determined to be inaccurate or if data stored by us were improperly accessed and disseminated by us or by unauthorized persons, the subjects of our data and users of the data we collect and publish could submit claims against the Company. Although to date we have not experienced any material claims relating to defamation or breach of privacy, we may be party to such proceedings in the future that could have a material adverse effect on our business.

26

Based on our review of the latest information available, we believe our ultimate liability in connection with pending or threatened legal proceedings will not have a material adverse effect on our results of operations, cash flows or financial position. No material amounts have been accrued in our financial statements with respect to any of such matters.

During the three months ended March 31, 2006, there were no material changes to the information set forth in the 2005 10-K regarding the Legacy Tax Matter (as defined in the 2005 10-K).

11. Guarantees

R.H. Donnelley Inc. is a direct wholly owned subsidiary of the Company and the issuer of the Senior Notes and Subordinated Notes. The Company and the direct and indirect 100% owned subsidiaries of R.H. Donnelley Inc. jointly and severally, fully and unconditionally, guarantee these debt instruments. At March 31, 2006 and December 31, 2005, R.H. Donnelley Inc.’s direct wholly-owned subsidiaries were R.H. Donnelley Publishing & Advertising, Inc., R.H. Donnelley APIL, Inc., DonTech Holdings, LLC, The DonTech II Partnership, R.H. Donnelley Publishing & Advertising of Illinois Holdings, LLC, R.H. Donnelley Publishing & Advertising of Illinois Partnership and Get Digital Smart.com Inc.

The Company does not guarantee any debt instruments of Dex Media, Inc., Dex Media East or Dex Media West. R.H. Donnelley Inc., Dex Media, Inc., Dex Media East and Dex Media West do not guarantee any of the Company’s outstanding debt.

In general, substantially all of the net assets of the Company and its subsidiaries are restricted from being paid as dividends to any third party, and our subsidiaries are restricted from paying dividends, loans or advances to R.H. Donnelley Corporation with very limited exceptions, under the terms of our credit facilities. See Note 5, “Long-Term Debt,” for a further description of our debt instruments.

R.H. Donnelley Corporation
Consolidating Condensed Balance Sheet
March 31, 2006

	R.H. Donnelley		R.H.				Dex Media Inc					Consolidated
	Corporation		Donnelley Inc.		Guarantor		and					R.H. Donnelley
	(Parent)		(Issuer)		Subsidiaries		Subsidiaries		Eliminations			Corporation
Assets
Cash and cash equivalents	$	185,619	$	9,039	$	3,604	$	1,021	$	—		$	199,283
Accounts receivable, net		—		—		413,751		930,650		—			1,344,401
Deferred directory costs		—		—		63,029		148,199		—			211,228
Other current assets		12,886		5,190		18,399		28,026		(472	)		64,029
Total current assets		198,505		14,229		498,783		1,107,896		(472	)		1,818,941
Investment in subsidiaries		4,576,381		1,583,249		—		—		(6,159,630	)		—
Fixed assets, net		1,948		51,900		5,460		104,930		—			164,238
Other assets		92,224		205,912		1,681		9,713		(134,118	)		175,412
Intercompany receivables		260,338		1,496,383		1,209,923		36,255		(3,002,899	)		—
Intercompany notes receivable		—		1,761,476		—		—		(1,761,476	)		—
Intangible assets, net		—		—		2,814,958		8,893,842		—			11,708,800
Goodwill		—		—		319,014		2,352,417		—			2,671,431
Total assets	$	5,129,396	$	5,113,149	$	4,849,819	$	12,505,053	$	(11,058,595	)	$	16,538,822
Liabilities and Shareholders’ Equity
Accounts payable & accrued liabilities	$	38,845	$	50,635	$	28,984	$	145,266	$	—		$	263,730
Deferred directory revenue		—		—		422,109		361,158		—			783,267
Short-term deferred income taxes, net		—		38,302		38,749		211,737		(359	)		288,429
Current portion LTD		—		85,362		—		375,161		—			460,523
Total current liabilities		38,845		174,299		489,842		1,093,322		(359	)		1,795,949
Long-term debt		2,444,134		2,617,147		—		5,362,166		—			10,423,447
Intercompany payables		620,550		1,550,356		912,552		18,161		(3,101,619	)		—
Intercompany notes payable		—		—		1,761,476		—		(1,761,476	)		—
Deferred income taxes, net		—		27,701		79,807		2,060,840		(21,799	)		2,146,549
Other long-term liabilities		8,401		38,689		22,893		99,140		(13,712	)		155,411
Shareholders’ equity		2,017,466		704,957		1,583,249		3,871,424		(6,159,630	)		2,017,466
Total liabilities and shareholders’ equity	$	5,129,396	$	5,113,149	$	4,849,819	$	12,505,053	$	(11,058,595	)	$	16,538,822

27

R.H. Donnelley Corporation
Consolidating Condensed Balance Sheet
December 31, 2005

	R.H. Donnelley										Consolidated
	Corporation			R.H. Donnelley Inc.							R.H. Donnelley
	(Parent)			(Issuer)		Guarantor Subsidiaries		Eliminations			Corporation
Assets
Cash and cash equivalents	$	830		$	2,703	$	4,260	$	—		$	7,793
Accounts receivable, net		—			—		457,310		—			457,310
Deferred directory costs		—			—		67,686		—			67,686
Other current assets		—			13,162		52,327		(32,433	)		33,056
Total current assets		830			15,865		581,583		(32,433	)		565,845
Investment in subsidiaries		662,971			1,514,314		—		(2,177,285	)		—
Fixed assets, net		—			50,059		5,628		—			55,687
Other assets		12,197			200,974		1,669		(108,949	)		105,891
Intercompany receivable					24,919		213,545		(238,464	)		—
Intercompany notes receivable		—			1,789,436		—		(1,789,436	)		—
Intangible assets, net		—			—		2,833,200		—			2,833,200
Goodwill		—			—		319,014		—			319,014
Total assets	$	675,998		$	3,595,567	$	3,954,639	$	(4,346,567	)	$	3,879,637
Liabilities, Preferred Stock and Shareholders’ (Deficit) Equity
Accounts payable and accrued liabilities	$	8,780		$	48,698	$	32,103	$	(20	)	$	89,561
Deferred directory revenue		—			—		463,440		—			463,440
Current deferred income taxes, net		—			36,751		80,616		(31,784	)		85,583
Current portion LTD		—			100,234		—		—			100,234
Total current liabilities		8,780			185,683		576,159		(31,804	)		738,818
Long-term debt		300,000			2,678,615		—		—			2,978,615
Intercompany notes payable		331,840							(331,840	)		—
Non-current intercompany payable		—			—		1,789,436		(1,789,436	)		—
Deferred income taxes, net		(7,356	)		25,028		50,346		(2,853	)		65,165
Other long-term liabilities					43,270		24,384		(13,349	)		54,305
Redeemable convertible Preferred Stock		334,149			—		—		—			334,149
Shareholders’ (deficit) equity		(291,415	)		662,971		1,514,314		(2,177,285	)		(291,415	)
Total liabilities, preferred stock and shareholders’ (deficit) equity	$	675,998		$	3,595,567	$	3,954,639	$	(4,346,567	)	$	3,879,637

28

R.H. Donnelley Corporation
Consolidating Condensed Statement of Operations
For the Three Months Ended March 31, 2006

	R.H. Donnelley			R.H. Donnelley						Dex Media						Consolidated
	Corporation			Inc.			Guarantor			Inc and						R.H. Donnelley
	(Parent)			(Issuer)			Subsidiaries			Subsidiaries			Eliminations			Corporation
Net revenue	$	—		$	—		$	261,369		$	59,110		$	—		$	320,479
Expenses		842			29,796			122,352			130,239			(817	)		282,412
Partnership and equity income		(46,027	)		68,932			—			—			(22,905	)		—
Operating (loss) income		(46,869	)		39,136			139,017			(71,129	)		(22,088	)		38,067
Interest expense		(38,539	)		(17,472	)		(32,461	)		(65,269	)		—			(153,741	)
Other income		(14	)		—			(364	)		—			378			—
Pre-tax (loss) income		(85,422	)		21,664			106,192			(136,398	)		(21,710	)		(115,674	)
Income tax benefit (expense)		13,704			15,648			(37,260	)		53,059			(1,195	)		43,956
Net (loss) income		(71,718	)		37,312			68,932			(83,339	)		(22,905	)		(71,718	)
Preferred dividend		1,974			—			—			—			—			1,974
Gain on repurchase of preferred stock		(31,195	)		—			—			—			—			(31,195	)
(Loss) income available to common shareholders	$	(42,497	)	$	37,312		$	68,932		$	(83,339	)	$	(22,905	)	$	(42,497	)

R.H. Donnelley Corporation
Consolidating Condensed Statement of Operations
For the Three Months Ended March 31, 2005

	R.H. Donnelley			R.H. Donnelley									Consolidated
	Corporation			Inc.			Guarantor						R.H. Donnelley
	(Parent)			(Issuer)			Subsidiaries			Eliminations			Corporation
Net revenue		—		$	—			247,108			(39,769	)	$	207,339
Expenses		—			7,035			158,318			(28,211	)		137,142
Operating (loss) income		—			(7,035	)		88,790			(11,558	)		70,197
Interest expense		(4,555	)		(6,988	)		(45,954	)		—			(57,497	)
Pre-tax (loss) income		(4,555	)		(14,023	)		42,836			(11,558	)		12,700
Income tax benefit (expense)		1,718			3,827			(14,818	)		4,320			(4,953	)
Net (loss) income		(2,837	)		(10,196	)		28,018			(7,238	)		7,747
Preferred dividend		3,319			—			—			—			3,319
Loss on repurchase of preferred stock		133,681			—			—			—			133,681
(Loss) income available to common shareholders	$	(139,837	)	$	(10,196	)	$	28,018		$	(7,238	)	$	(129,253	)

29

R.H. Donnelley Corporation
Consolidating Condensed Statement of Cash Flows
For the Three Months Ended March 31, 2006

	R.H.			R.H.
	Donnelley			Donnelley						Dex Media Inc						Consolidated
	Corporation			Inc.			Guarantor			and						R.H. Donnelley
	(Parent)			(Issuer)			Subsidiaries			Subsidiaries			Eliminations			Corporation
Cash flow from operations	$	131,237		$	14,634		$	111,647		$	76,725		$	(138,253	)	$	195,990
Cash flow from investing activities: Purchase of fixed assets		(2,325	)		(3,412	)		(158	)		(4,501	)		—			(10,396	)
Acquisitions, net of cash received		(1,755,568	)		—			—			—			(133,177	)		(1,888,745	)
Dividends from Parent		—			—			—			(265,745	)		265,745			—
Net cash flow from investing activities		(1,757,893	)		(3,412	)		(158	)		(270,246	)		132,568			(1,899,141	)
Cash flow from investing activities Proceeds from issuance of debt		2,079,680			—			—			437,786			—			2,517,466
Revolver borrowings		—			3,700			—			165,000			—			168,700
Revolver repayments		—			(8,700	)		—			(36,000	)		—			(44,700	)
Repurchase of redeemable convertible preferred stock		(336,123	)		—			—			—			—			(336,123	)
Debt repayments		—			(71,340	)		—			(347,555	)		—			(418,895	)
Increase in checks not yet presented for payment		—			(1,690	)		(361	)		(3,874	)		—			(5,925	)
Stock option exercises		14,118			—			—			—			—			14,118
Intercompany notes and other		53,770			73,144			(111,784	)		(40,555	)		25,425			—
Net cash flow from financing activities		1,811,445			(4,886	)		(112,145	)		174,802			25,425			1,894,641
Change in cash		184,789			6,336			(656	)		(18,719	)		19,740			191,490
Cash at beginning of year		830			2,703			4,260			19,740			(19,740	)		7,793
Cash at end of period	$	185,619		$	9,039		$	3,604		$	1,021		$	—		$	199,283

R.H. Donnelley Corporation
Consolidating Condensed Statement of Cash Flows
For the Three Months Ended March 31, 2005

				R.H.
	R.H. Donnelley			Donnelley									Consolidated
	Corporation			Inc.			Guarantor						R.H. Donnelley
	(Parent)			(Issuer)			Subsidiaries			Eliminations			Corporation
Cash flow from operations	$	—		$	(738	)	$	120,879		$	(7,314	)	$	112,827
Cash flow from investing activities		—			(5,475	)		(40	)		—			(5,515	)
Cash flow from financing activities:
Proceeds from issuance of debt		291,742			—			—			—			291,742
Borrowings under revolver		—			72,000			—			—			72,000
Repurchase of preferred stock		(277,197	)		—			—			—			(277,197	)
Debt repayments		—			(201,635	)		—			—			(201,635	)
Intercompany transfers		(17,198	)		133,693			(123,809	)		7,314			—
Other		2,653			—			1,943			—			4,596
Net cash flow from financing activities		—			4,058			(121,866	)		7,314			(110,494	)
Change in cash		—			(2,155	)		(1,027	)		—			(3,182	)
Cash at beginning of year		—			6,008			4,747			—			10,755
Cash at end of period	$	—		$	3,853		$	3,720		$	—		$	7,573

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12. Subsequent Events

On April 24, 2006, we amended R.H. Donnelley Inc.’s Credit Facility for the purpose of reducing the applicable interest rate margins on (i) the revolving portion of the Credit Facility and (ii) the outstanding term loans, other than the Tranche D-1 term loans, by refinancing the outstanding Tranche A-2 term loans, Tranche A-3 term loans and Tranche D term loans with new Tranche A-4 term loans and Tranche D-2 term loans. After giving effect to the Amendment, the interest rates applicable to the loans are, at our option, the LIBOR rate or base rate plus the following applicable margins:

							Initial Amount of
	LIBOR Loans			Base Rate Loans			Facility/Commitment
Revolver		1.25	%		0.25	%	$	175.0 million
Tranche A-4 Term Loans		1.25	%		0.25	%	$	323.4 million
Tranche D-1 Term Loans		1.50	%		0.50	%	$	350.0 million
Tranche D-2 Term Loans		1.50	%		0.50	%	$	1,422.0 million

On April 24, 2006, we amended Dex Media East’s Credit Facility for the purpose of reducing the applicable interest rate margin on the outstanding tranche B term loans by refinancing such loans with new tranche B term loans. The Dex Media East Amendment maintains the applicable interest rate margins on the tranche A term loans and the revolving portion of the Credit Facility. After giving effect to the Dex Media East Amendment, the interest rates applicable to the loans are, at our option, the LIBOR rate or base rate plus the following applicable margins:

							Initial Amount of
	LIBOR Loans			Base Rate Loans			Facility/Commitment
Revolver		1.25	%		0.25	%	$100.0 million
Tranche A Term Loans		1.25	%		0.25	%	$690.0 million
New Tranche B Term Loans		1.50	%		0.50	%	$429.0 million

On April 24, 2006, we amended Dex Media West’s Credit Facility for the purpose of reducing the applicable interest rate margin on the outstanding tranche B term loans by refinancing such loans with new tranche B-2 term loans. The Dex Media West Amendment maintains the applicable interest rate margins on the tranche A term loans, the tranche B-1 term loans and the revolving portion of the Credit Facility. After giving effect to the Dex Media West Amendment, the interest rates applicable to the loans are, at our option, the LIBOR rate or base rate plus the following applicable margins:

							Initial Amount of
	LIBOR Loans			Base Rate Loans			Facility/Commitment
Revolver		1.25	%		0.25	%	$100.0 million
Tranche A Term Loans		1.25	%		0.25	%	$960.0 million
Tranche B-1 Term Loans		1.50	%		0.50	%	$503.0 million
Tranche B-2 Term Loans		1.50	%		0.50	%	$834.3 million

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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 Form 10-Q regarding 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”, “could”, and similar expressions, are used to identify such forward-looking statements. All forward-looking statements reflect only our current beliefs and assumptions with respect to our future results, business plans, and prospects, and are based solely on information currently available to us. 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 imposed by law, any forward-looking statements. Such risks and uncertainties are described in detail in Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2005 (“2005 10-K”). Unless otherwise indicated, the terms “Company”, “we”, “us” and “our” refer to R.H. Donnelley Corporation and its direct and indirect wholly owned subsidiaries.

Significant Business Developments

On January 31, 2006, we acquired Dex Media, Inc. (“Dex Media”) for a purchase price of $4.1 billion, consisting of 36,547,381 shares of our common stock valued at $2.2 billion and $1.9 billion in cash (the “Dex Media Merger”). Dex Media is the indirect parent of Dex Media East LLC (“Dex Media East”) and Dex Media West LLC (“Dex Media West”). We also assumed all of Dex Media’s and its subsidiaries’ outstanding indebtedness with a fair value of $5.5 billion. Dex Media is the exclusive publisher of the “official” yellow pages and white pages directories for Qwest Communications International Inc. (“Qwest”) where Qwest is the primary incumbent local exchange carrier (“ILEC”). Dex Media East operates the directory business in the following states, which are Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota (collectively the “Dex East States”) and Dex Media West operates the directory business in the following states, which are Arizona, Idaho, Montana, Oregon, Utah, Washington and Wyoming (collectively the “Dex West States”). Prior to the Dex Media Merger, Dex Media was a leading directory publisher in the United States. The purpose of the Dex Media Merger was to take a further step in the transformation of RHD into a leading publisher of Yellow Pages directories, as well as to combine the complementary strengths of both companies. The acquired business of Dex Media and its subsidiaries (“Dex Media Business”) now operates as Dex Media, Inc., one of RHD’s direct, wholly owned subsidiaries. The results of the Dex Media Business have been included in the Company’s operating results commencing February 1, 2006.

In connection with the Dex Media Merger, we assumed by operation of law directory services agreements (collectively, the “Dex Directory Services Agreements”) which Dex Media had entered into with Qwest including, (1) a publishing agreement with a term of 50 years commencing November 8, 2002 (subject to automatic renewal for additional one-year terms), which grants us the right to be the exclusive official directory publisher of listings and classified advertisements of Qwest’s telephone customers in the geographic areas in the Dex Media states in which Qwest provides local telephone services and (2) a non-competition agreement with a term of 40 years commencing November 8, 2002, pursuant to which Qwest has agreed not to sell directory products consisting principally of listings and classified advertisements for subscribers in the geographic areas in the Dex Media states in which Qwest provides local telephone service.

As a result of the Dex Media Merger, we also assumed (1) an advertising commitment agreement whereby Qwest has agreed to purchase an aggregate of $20 million of advertising per year through 2017 from us at pricing on terms at least as favorable as those offered to similar large customers and (2) an intellectual property contribution agreement pursuant to which Qwest assigned and or licensed to us the Qwest intellectual property previously used in the Qwest directory services business along with (3) a trademark license agreement pursuant to which Qwest granted to us the right until November 2007 to use the Qwest Dex and Qwest Dex Advantage marks in connection with directory products and related marketing material in the Dex Media states and the right to use these marks in connection with DexOnline.com (collectively “Trade names”).

32

The Dex Media Merger was accounted for as a purchase business combination and the purchase price was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values as of January 31, 2006. Under purchase accounting rules, we have not assumed the deferred revenue balance of Dex Media at January 31, 2006. This amount represented revenue that would have been recognized in 2006 under our deferral and amortization revenue recognition method had the Dex Media Merger not occurred. Accordingly, we will never record revenue associated with directories that published prior to the Dex Media Merger. Although the deferred revenue balance was eliminated, we retained all of the rights associated with the collection of amounts due under and obligations under the advertising contracts executed prior to the Dex Media Merger. As a result, Dex Media’s accounts receivable balances remain our assets. Also under purchase accounting rules, we did not assume deferred directory costs of Dex Media at January 31, 2006 related to those directories that were published prior to the Dex Media Merger. These costs represented operating expenses that would have been recognized by Dex Media in 2006 under the deferral and amortization method had the Dex Media Merger not occurred.

The preliminary allocation of the purchase price to the fair value of assets acquired and liabilities assumed is shown in the table below.

Calculation of Allocable Purchase Price
(in thousands)

Cash paid to Dex Media shareholders			$	1,861,111
RHD value of shares issued to Dex Media shareholders				2,259,359
Allocable transaction and other direct costs of the Merger				26,169
Dex Media severance and related costs				6,839
Dex Media vested equity awards				76,089
Dex Media outstanding debt at fair value				5,509,269
Total allocable purchase price			$	9,738,836
Estimated allocation of purchase price:
Non-compete/directory services license agreements			$	7,325,000
Customer relationships				1,090,000
Trademarks and other				515,000
Dex Media net assets acquired	212,753
Dex Media unbilled customers receivables, net as of January 31, 2006	661,057
Estimated profit on acquired sales contracts	87,193
Fair value adjustments:
Eliminate pre-merger deferred revenue	218,024
Eliminate pre-merger deferred directory costs	(228,674	)
Eliminate pre-merger deferred financing costs	(106,774	)
Eliminate Dex Media pre-merger deferred income taxes	(62,393	)
Deferred income taxes relating to the Dex Media Merger	(2,324,767	)
Fair value of net liabilities assumed				(1,543,581	)
Goodwill				2,352,417
Total allocable purchase price			$	9,738,836

33

On January 27, 2006, and pursuant to the Stock Purchase and Support Agreement dated October 3, 2005, we repurchased the remaining 100,301 shares of our outstanding 8% redeemable convertible cumulative preferred stock (“Preferred Stock”) from investment partnerships affiliated with The Goldman Sachs Group, Inc. (collectively, the “GS Funds”) for $336.1 million in cash including accrued cash dividends and interest (the “GS Repurchase”). Subsequent to the GS Repurchase, there are no outstanding shares of Preferred Stock. See Item 1, “Financial Statements (Unaudited) — Note 6, Redeemable Preferred Stock and Warrants” for a description of the impact the Preferred Stock and GS Repurchase had on our consolidated financial statements for the three months ended March 31, 2006.

Corporate Overview

Following the closing of the Dex Media Merger, we are the third largest print and online directory publisher in the United States, based on revenue. During 2006, we expect to have a total annual distribution of approximately 80 million directories, serving over 600,000 local and national advertisers with more than 625 directories in 28 states. In 2005, Dex Media published 293 directories and printed approximately 52 million copies of these directories for distribution to virtually all business and residential customers throughout the following Dex Media states: Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington and Wyoming. Dex Media’s Internet-based directory, DexOnline.com ^TM, which is bundled with Dex Media’s print product to provide web-based access to Dex Media’s directories, further expands the distribution of Dex Media’s advertiser content. In addition to the acquired Dex Media Business, we publish Sprint-branded directories in 18 states, with major markets including Las Vegas, Nevada and Orlando and Lee County, Florida, with a total distribution of approximately 18 million serving approximately 160,000 local and national advertisers. We also publish AT&T (formerly known as SBC)-branded directories in Illinois and Northwest Indiana, with a total distribution of approximately 10 million serving approximately 100,000 local and national advertisers. We also offer online city guides and search web sites in all our Sprint markets under the Best Red Yellow Pages brand at www.bestredyp.com and in the Chicagoland area at www.chicagolandyp.com.

Segment Reporting

Management reviews and analyzes its business of publishing yellow pages directories as one operating segment.

Critical Accounting Estimates

The preparation of financial statements in accordance with generally accepted accounting principles (“GAAP”) requires management to estimate the effect of various matters that are inherently uncertain as of the date of the financial statements. Each of these estimates varies in regard to the level of judgment involved and its potential impact on the Company’s reported financial results. Estimates are deemed critical when a different estimate could have reasonably been used or when changes in the estimate are reasonably likely to occur from period to period, and could materially impact the Company’s financial condition, changes in financial condition or results of operations. The Company’s significant accounting polices are discussed in Note 2 of the consolidated financial statements included in Item 1 of this Quarterly Report. The critical estimates inherent in these accounting polices are discussed below. Management believes the current assumptions and other considerations used to estimate these amounts in the Company’s consolidated financial statements are appropriate.

Allowance for Doubtful Accounts and Sales Claims

We record our revenue net of an allowance for sales claims. Additionally, we record a provision for bad debts. The provision for bad debts and allowance for sales claims are estimated for each directory based on historical experience. We also evaluate the current condition of our customer balances, bankruptcy filings, any change in credit policy, historical charge-off patterns, recovery rates and other data when determining our allowance for doubtful accounts. We review these estimates periodically to assess whether any additional adjustment is needed based on economic events or other circumstances, including actual experience at the end of the billing and collection cycle with respect to each directory. We believe the allowance for doubtful accounts and sales claims is adequate to cover anticipated losses under current conditions. However, significant deterioration in any of the factors noted above or in the overall economy could materially change these expectations. The provisions for sales claims and doubtful accounts are estimated based on a percentage of revenue. Accordingly, an additional 1% change in these allowance percentages would have impacted net loss by approximately $1.9 million for the three months ended March 31, 2006.

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Pension Benefits

Our pension plan obligations and related assets of the Company’s (including Dex Media) defined benefit retirement plans are presented in Note 8 of the consolidated financial statements included in Item 1 of this Quarterly Report and Note 10 of the consolidated financial statements included in Item 8 of our 2005 10-K. Plan assets consist primarily of marketable equity and debt instruments and are valued using market quotations. Plan obligations and annual pension expense are determined by independent actuaries through the use of a number of assumptions. Key assumptions in measuring the plan obligations include the discount rate, the rate of future salary increases and the long-term expected return on plan assets. The methodology used to determine the discount rate for 2006 discounts the projected plan cash flows to the measurement date using the spot rates provided in the Citigroup Pension Discount Curve. A single discount rate is then computed so that the present value of the benefit cash flows using this single rate equals the present value computed using the Citigroup Pension Discount Curve. A 1% change in the discount rate would affect annual net loss by approximately $3.0 million; a 1% change in the long-term rate of return on plan assets would affect annual net loss by approximately $2.6 million; and a 1% change in assumed salary increases would affect annual net loss by approximately $1.5 million. Salary increase assumptions are based upon historical experience and anticipated future management actions. Asset returns are based upon the anticipated average rate of earnings expected on invested funds of the plan over the long-term.

Intangible Assets and Goodwill Valuation and Amortization

Our intangible assets consist of directory services agreements between the Company and each of Dex Media, AT&T, Inc. (“AT&T”) and Sprint Corporation (now known as Sprint Nextel Corporation, “Sprint”), respectively, established customer relationships, trademarks and trade names, and an advertising agreement. The intangible assets are being amortized over the period the assets are expected to contribute to the cash flow of the Company, which reflect the expected pattern of benefit. Our recorded goodwill resulted from the Dex Media Merger, the acquisition of the directory publishing business of AT&T, Inc. (“AT&T Directory Acquisition”) and the acquisition of the directory business of Sprint Corporation (now known as Sprint Nextel Corporation, “Sprint”) (“SPA Acquisition”), and is not subject to amortization but is subject to periodic impairment testing.

The intangible assets are subject to an impairment test in accordance with Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-lived Assets (“SFAS 144”), and the goodwill is subject to periodic impairment testing in accordance with Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (“SFAS 142”). The Company reviews the carrying value of its intangible assets for impairment at least annually or more frequently whenever events or circumstances indicate that their carrying amounts may not be recoverable. The impairment test for the intangible assets is performed by comparing the carrying amount of the intangible assets to the sum of the undiscounted expected future cash flows relating to these assets. In accordance with SFAS 144, impairment exists if the sum of the future undiscounted cash flows is less than the carrying amount of the intangible asset, or to its related group of assets. Impairment would result in a write-down of the intangible asset to its estimated fair value based on the discounted future cash flows. Goodwill is tested for impairment by comparing the carrying amount of the reporting unit goodwill to which it was assigned to the implied fair value of the reporting unit goodwill. In accordance with SFAS 142, impairment exists if the carrying amount of the reporting unit goodwill exceeds its implied fair value. Impairment would result in a write-down equal to the difference between the carrying amount and the implied fair value of the reporting unit goodwill.

We use certain estimates and assumptions in our impairment evaluation, including, but not limited to, projected future cash flows, revenue growth, customer attrition levels, and estimated write-offs. As of March 31, 2006, management believes that there was no impairment to the intangible assets or goodwill. However, significant deterioration in our business, the assumptions underlying the impairment evaluations, or in the overall economy, could result in impairment charges in future reporting periods. Had the aggregate net book value of the intangible assets and goodwill at March 31, 2006 been impaired by 1%, net loss would have been adversely impacted by approximately $89.2 million.

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Additionally, management must assess whether the remaining useful lives of the intangible assets represent the period that the intangible assets are expected to contribute to our cash flow. In our assessment process, we used certain estimates and assumptions, including projected future cash flows, customer attrition levels and industry and economic conditions. If the estimated remaining useful lives change, the remaining carrying amount of the intangible asset would be amortized prospectively over that revised remaining useful life. For the three months ended March 31, 2006, amortization of intangible assets was approximately $54.4 million. Had the remaining useful lives of the intangible assets been shortened by 10%, net loss would have been adversely impacted by approximately $6 million.

New Accounting Pronouncements

On January 1, 2006, the Company adopted the provisions of SFAS No. 123 (R) using the Modified Prospective Method. Under this method, we are required to record compensation expense in the statement of operations for all employee stock awards granted, modified or settled after the date of adoption and for the unvested portion of previously granted stock awards that remain outstanding as of the beginning of the period of adoption based on their grant date fair values. Upon adoption of SFAS No. 123 (R), pro forma disclosure permitted by SFAS No. 123 is no longer a permitted alternative.

The Company has reviewed other new accounting standards not identified above and does not believe any other new standards will have a material impact on the Company’s financial position or operating results.

Collective Bargaining Agreement

As of March 31, 2006, 12% and 23% of RHD’s employees were members of the International Brotherhood of Electrical Workers (“IBEW”) and the Communication Workers of America (“CWA”), respectively. The collective bargaining agreements covering the IBEW and the CWA will expire in May 2006 and October 2006, respectively. On May 5, 2006, we reached a tentative agreement for a new three-year contract between the Company and the IBEW. A ratification vote by IBEW members is expected within the 30 days following the date of the tentative agreement.

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RESULTS OF OPERATIONS
Three months ended March 31, 2006 and 2005

Factors Affecting Comparability

Acquisitions

As a result of the Dex Media Merger and AT&T Directory Acquisition, the related financings and associated purchase accounting, our 2006 reported GAAP results are not comparable to our 2005 reported GAAP results. Under the deferral and amortization method of revenue recognition, the billable value of directories published is recognized as revenue in subsequent reporting periods. However, purchase accounting precluded us from recognizing directory revenue and certain expenses associated with directories that published prior to each acquisition, including all directories published in the month each acquisition was completed. Thus, our reported 2006 and 2005 GAAP results are not indicative of our underlying operating and financial performance. Accordingly, management is presenting adjusted pro forma information for 2006 that, among other things, eliminates the purchase accounting impact on revenue and certain expenses related to the Dex Media Merger and assumes the Dex Media Merger and related financing occurred at the beginning of 2006, and combined adjusted information for 2005 reflecting the sum of RHD’s 2005 adjusted results (reflecting adjustments relating to the AT&T Directory Acquisition) and Dex Media’s reported GAAP results during the period. Management believes that the presentation of this adjusted pro forma and combined adjusted information will help financial statement users better and more easily compare current period underlying operating results against what the combined company performance would more likely have been in the comparable prior period. All of the adjusted pro forma and combined adjusted amounts disclosed under the caption “Adjusted Pro Forma and Combined Adjusted Amounts and Other Non-GAAP Measures” or elsewhere are non-GAAP measures, which are reconciled to the most comparable GAAP measures under that caption below. While the adjusted pro forma and combined adjusted results each exclude the effects of purchase accounting, and certain other non-recurring items, to better reflect underlying operating results in the respective periods, because of differences between RHD, AT&T and Dex Media and their respective predecessor accounting policies, the pro forma adjusted and combined adjusted results are not strictly comparable and should not be treated as such.

GAAP Reported Results

Net Revenue

The components of our net revenue for the three months ended March 31, 2006 and 2005 were as follows:

	Three Months Ended March 31,
(amounts in millions)	2006			2005			$ Change
Gross directory advertising revenue	$	323.1		$	206.9		$	116.2
Sales claims and allowances		(8.1	)		(2.0	)		(6.1	)
Net directory advertising revenue		315.0			204.9			110.1
Other revenue		5.5			2.4			3.1
Total	$	320.5		$	207.3		$	113.2

Our directory advertising revenue is earned primarily from the sale of advertising in yellow pages directories we publish, net of sales allowances. Directory advertising revenue also includes revenue for Internet-based advertising bundled with print advertising. Directory advertising revenue is affected by several factors, including changes in the quantity and size of advertisements sold, defectors and new advertisers as well as the proportion of premium advertisements sold, changes in the pricing of advertising, changes in the quantity and mix of advertising purchased per account and the introduction of additional products which generate incremental revenue. Revenue from directory advertising sales is recognized under the deferral and amortization method, whereby revenue from advertising sales is initially deferred when the directory is published and recognized ratably over the directory’s life, which is typically 12 months. The Company recognizes revenue for advertising on its internet-based directory, DexOnline.com, ratably over the period the advertisement appears on the site. Other products and services are recognized as delivered or fulfilled.

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Other revenue includes barter revenue, late fees paid on outstanding customer balances, commissions earned on sales contracts with respect to advertising placed into other publishers’ directories, sales of directories and certain other print and internet products.

Total net revenue in the three months ended March 31, 2006 was $320.5 million compared to $207.3 million in the same period in the prior year. The increase in total net revenue in 2006 is primarily a result of the Dex Media Merger as well as purchase accounting resulting from the AT&T Directory Acquisition. Gross directory advertising revenue in the first quarter of 2006 includes $60.7 million in revenues for Dex Media-branded directories with no comparable revenue in the same period in 2005. Due to purchase accounting, directory revenue for the three months ended March 31, 2006 excluded the amortization of advertising sales for Dex Media-branded directories published before February 2006 under the deferral and amortization method totaling $356.0 million that would have been reported in the period absent purchase accounting. Purchase accounting resulting from the Dex Media Merger will continue to adversely impact reported net revenue during 2006. Purchase accounting resulting from the AT&T Directory Acquisition negatively impacted net revenue for the three months ended March 31, 2005 by $51.9 million due to AT&T-branded directories that published prior to the AT&T Directory Acquisition, which would have been recognized during the period had it not been for purchase accounting required under GAAP. We expect total revenue in 2006 to be significantly higher than 2005 due to the inclusion of results from the acquired Dex Media Business as well as the lack of impact of purchase accounting related to the AT&T Directory Acquisition in 2006.

Expenses

The components of our total expenses for the three months ended March 31, 2006 and 2005 were as follows:

	Three Months Ended March 31,
(amounts in millions)	2006		2005		$ Change
Operating expenses	$	180.5	$	102.4	$	78.1
G&A expenses		39.2		13.0		26.2
D&A expenses		62.7		21.7		41.0
Total	$	282.4	$	137.1	$	145.3

Substantially all expenses are derived from our directory publishing business. Certain costs directly related to the selling and production of directories are initially deferred and recognized ratably over the life of the directory. These costs include sales commissions and print, paper and initial distribution costs. Sales commissions include commissions paid to employees for sales to local advertisers and to certified marketing representatives, which act as our channel to national advertisers. All other expenses 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 that 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. All deferred costs related to the sale and production of directories are recognized ratably over the life of each directory under the deferral and amortization method of accounting, with cost recognition commencing in the month of directory distribution.

Operating Expenses

Total operating expenses in the three months ended March 31, 2006 were $180.5 million compared to $102.4 million in the same period in the prior year. The primary components of the $78.1 million increase in operating expenses are shown below:

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	Change
(amounts in millions)
Expenses recorded in the first quarter of 2006 resulting from the Dex Media Merger	$	60.7
Expenses excluded from the first quarter of 2005 due to purchase accounting from the AT&T Directory Acquisition		8.0
Stock-based compensation expense resulting from the adoption of SFAS No. 123 (R)		5.9
Increased sales costs due to higher advertising sales results in certain markets		5.6
Lower cost uplift expense		(3.7	)
All other		1.6
Total increase in operating expenses for the first quarter of 2006, compared to the same period in 2005	$	78.1

Operating expenses for the three months ended March 31, 2006 increased $78.1 million compared to the same period in 2005 primarily as a result of the Dex Media Merger. Expenses of $60.7 million incurred to support the Dex Media business include bad debt, commissions, salesperson expenses, printing, distribution, advertising and other operating expenses. There were no comparable expenses for the three months ended March 31, 2005.

Similar to the deferral and amortization method of revenue recognition, certain costs directly related to the selling and production of our directories are initially deferred when incurred and recognized ratably over the life of a directory. As a result of purchase accounting required by GAAP, deferred commissions, print and delivery costs totaling $97.6 million for directories that published prior to the Dex Media Merger were not reported in the three months ended March 31, 2006. Directory expenses for the three months ended March 31, 2006 include the amortization of deferred directory costs relating to Dex Media-branded directories published beginning in February 2006. In addition, for the three months ended March 31, 2005, $8.0 million of deferred commissions, print and delivery costs for directories that published prior to the AT&T Directory Acquisition were not reported due to purchase accounting.

As a result of purchase accounting required by GAAP, we recorded the deferred directory costs related to directories that were scheduled to publish subsequent to the Dex Media Merger, AT&T Directory Acquisition and SPA Acquisition at their fair value, determined as (a) the estimated billable value of the published directory less (b) the expected costs to complete the directories, plus (c) a normal profit margin. We refer to this purchase accounting entry as “cost uplift.” The fair value of these costs was determined to be $87.2 million, $81.3 million and $14.8 million for the Dex Media Merger, the AT&T Directory Acquisition and the SPA Acquisition, respectively. These costs are amortized as operating expenses over the terms of the applicable directories and such amortization totaled $13.3 million for the three months ended March 31, 2006 relating to the Dex Media Merger and the AT&T Directory Acquisition and $17.0 million for the three months ended March 31, 2005 relating to the AT&T Directory Acquisition, or a decline of $3.7 million in the three months ended March 31, 2006.

Purchase accounting resulting from the Dex Media Merger will continue to impact reported expenses in 2006. We expect operating expenses in 2006 to be significantly higher than 2005 due to the inclusion of results from the acquired Dex Media Business as well as the lack of impact of purchase accounting related to the AT&T Directory Acquisition in 2006.

Operating expenses for the three months ended March 31, 2006 were also impacted by $5.9 million of non-cash stock-based compensation expense resulting from SFAS 123 (R), which the Company adopted effective January 1, 2006, with no comparable expense in the prior year. This includes $3.1 million of non-cash stock-based compensation expense resulting from modifications to stock-based awards as a result of the Dex Media Merger.

During the three months ended March 31, 2006, we also incurred approximately $5.6 million of additional selling expenses, including commission and salesperson costs, compared to the similar period in 2005, due to improved sales results in certain markets.

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General and Administrative Expenses

General and administrative (“G&A”) expenses in the three months ended March 31, 2006 and 2005 were $39.2 million and $13.0 million, respectively. The primary components of the $26.2 million increase in G&A expenses is shown in the table below:

	Change
(amounts in millions)
Increased general and administrative expenses resulting from the Dex Media Merger	$	16.8
Stock-based compensation expense resulting from the adoption of SFAS No. 123 (R)		10.6
All other general and administrative expenses		(1.2	)
Total increase in general and administrative expenses for the first quarter of 2006, compared to the same period in 2005	$	26.2

G&A expenses were impacted by $16.8 million of increased general and administrative expenses primarily to support the acquired Dex Media Business. General and administrative expenses include billing, credit and collection, financial services, human resources and administrative services. G&A expenses for the three months ended March 31, 2006 were also impacted by $10.6 million of non-cash stock-based compensation expense resulting from SFAS 123 (R), which the Company adopted effective January 1, 2006, with no comparable expense in the prior year. This includes $5.4 million of non-cash stock-based compensation expense resulting from modifications to stock-based awards as a result of the Dex Media Merger. On an annual basis, we expect G&A expenses in 2006 to be significantly higher than 2005 due to the inclusion of results from the acquired Dex Media Business, as well as non-cash stock-based compensation expense recognized under SFAS 123 (R).

Depreciation and Amortization

Depreciation and amortization (“D&A”) expenses for the three months ended March 31, 2006 and 2005 were $62.7 million and $21.7 million, respectively. Amortization of intangible assets was $54.4 million and $18.1 million for the three months ended March 31, 2006 and 2005, respectively. The increase in amortization expense is due to the dramatic increase in intangible assets resulting from the Dex Media Merger. On an annual basis, we expect amortization expense in 2006 to be significantly higher than 2005 as a result of the Dex Media Merger. Depreciation of fixed assets and amortization of computer software was $8.3 million and $3.6 million in the three months ended March 31, 2006 and 2005, respectively. The increase in depreciation expense was primarily due to the depreciable assets acquired in the Dex Media Merger.

Operating Income

Operating income for the three months ended March 31, 2006 and 2005 was as follows:

	Three Months Ended March 31,
(amounts in millions)	2006		2005		$ Change
Total	$	38.1	$	70.2	$	(32.1	)

Operating income for the three months ended March 31, 2006 of $38.1 million decreased by $32.1 million from operating income of $70.2 million in the same period in the prior year. The decrease in operating income during the first quarter of 2006 was primarily a result of the purchase accounting impact on our revenues and expenses resulting from the Dex Media Merger as well as the impact of adopting SFAS No. 123(R), as described above. While net revenue increased in 2006 by $113.2 million over net revenue in the same period in 2005, primarily resulting from the Dex Media Merger and the 2005 purchase accounting impact resulting from the AT&T Directory Acquisition, offsetting that increase in net revenue was an increase in total operating expenses in 2006 of $145.3 million, also primarily as a result of the Dex Media Merger and the 2005 purchase accounting impact resulting from the AT&T Directory Acquisition. The primary reason that our costs relating to the Dex Media Merger increased more than our revenues in the first quarter of 2006 is because

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while all directory advertising revenue is deferred under our deferral and amortization method, only a portion of total costs related to publication of the directories are deferred under the deferral and amortization method. Therefore, under purchase accounting, when the entire balance of deferred revenue and deferred directory costs were eliminated at the time of the Dex Media Merger, the elimination had a disproportionately higher impact on revenues than it did on expenses. Accordingly, after the adjustments required by purchase accounting, operating expenses in the first quarter of 2006 were disproportionately higher than the related revenue. If the effects of purchase accounting were eliminated, adjusted operating income in 2006 would have been substantially higher (and relatively proportional to the increase in net revenues) compared to GAAP operating income in 2005. See “Adjusted Pro Forma and Combined Adjusted Amounts and Other Non-GAAP Measures” below.

Purchase accounting resulting from the Dex Media Merger will continue to impact reported results during 2006.

Interest Expense, Net

Net interest expense for the three months ended March 31, 2006 was $153.7 million compared to $57.5 million in the same period in 2005. The increase in net interest expense of $96.2 million is a result of dramatically higher outstanding debt balances associated with the Dex Media Merger, combined with higher interest rates, compared to the prior year. See “Liquidity and Capital Resources” for a further description of our debt obligations and the provisions of the related debt instruments. Net interest expense in 2006 includes $5.1 million of non-cash amortization of deferred financing costs, compared to $4.0 million of non-cash amortization of deferred financing costs in the same period in the prior year.

Income Taxes

The effective tax rate on loss before income taxes of 38.0% for the three months ended March 31, 2006 compares to 39.0% on income before income taxes for the same period in the prior year. The year-to-date effective rate as of March 31, 2006 reflects a decrease in the state and local tax rate as a result of the integration of the Dex Media Merger combined with favorable treatment of certain purchase accounting adjustments. A deferred tax liability in the amount of $2.4 billion has been recognized in accordance with SFAS 109 for the difference between the assigned values for purchase accounting purposes and the tax bases of the assets and liabilities acquired as a result of the Dex Media Merger.

Net (Loss) Income, (Loss) Available to Common Shareholders and (Loss) Per Share

Net (loss) income for the three months ended March 31, 2006 and 2005 was $(71.7) million and $7.7 million, respectively. The results for 2006 and 2005 were adversely affected by purchase accounting that precluded us from recognizing deferred revenue and certain expenses associated with those directories published prior to the Dex Media Merger and AT&T Directory Acquisition, including all directories published in the month each acquisition was completed. Purchase accounting resulting from the Dex Media Merger will continue to impact reported results during 2006.

Prior to the GS Repurchase in January 2006, the 8% dividend on our Preferred Stock reduced earnings available to common shareholders from which earnings per share amounts are calculated. The amount of the Preferred Stock dividend included the stated 8% dividend, plus a deemed dividend for a beneficial conversion feature (“BCF”). The BCF is a function of the conversion price of the Preferred Stock, the fair value of the related warrants issued with the Preferred Stock and the fair market value of the underlying common stock on the date of issuance of the Preferred Stock. In connection with the issuance of our Preferred Stock and each subsequent quarterly accrued dividend through October 3, 2005, a BCF was recorded because the fair value of the underlying common stock at the time of issuance of the preferred stock was greater than the conversion price of the Preferred Stock. The full amount of the BCF was treated as a deemed dividend because the Preferred Stock was convertible into common stock immediately after issuance in January 2003. The Preferred Stock dividend in the first quarter of 2005 of $3.3 million consisted of the stated 8% dividend of $2.7 million and a BCF of $0.6 million.

On January 14, 2005, we repurchased 100,303 shares of our outstanding Preferred Stock from the GS Funds for $277.2 million in cash. In connection with the Preferred Stock repurchase, we recorded a reduction in earnings available to common shareholders of $133.7 million to reflect the loss on the repurchase of these shares. The excess of the cash paid to the GS Funds over the carrying amount of the repurchased Preferred Stock, plus the amount previously recognized for the BCF associated with these shares has been recognized as the loss on repurchase.

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On January 27, 2006, we repurchased the remaining 100,301 shares of our outstanding Preferred Stock from the GS Funds for $336.1 million in cash. As a result of the GS Repurchase becoming a probable event under the terms of the Stock Purchase Agreement on October 3, 2005 (See Note 6, “Redeemable Preferred Stock and Warrants”), the recorded value of the Preferred Stock was accreted to its redemption value of $334.1 million at December 31, 2005 and $336.1 million at January 27, 2006. For the three months ended March 31, 2006, accretion in the redemption value of $2.0 million, which represented accrued dividends and interest, has been recorded as a reduction in earnings available to common shareholders and the previously recorded BCF of approximately $31.2 million related to these shares has been recognized as an increase in earnings available to common shareholders.

The resulting loss available to common shareholders was $42.5 million and $129.3 million in the three months ended March 31, 2006 and 2005, respectively.

All earnings per share (“EPS”) amounts have been calculated using the two-class method. See Note 2, “Summary of Significant Accounting Policies,” in Part 1 — Item 1 of this Quarterly Report for further details and computations of the basic and diluted EPS amounts. For the three months ended March 31, 2006 and 2005, basic and diluted EPS were $(0.76) and $(4.10), respectively. Because there was a reported net loss available to common shareholders in each period, the calculation of diluted EPS was anti-dilutive compared to basic EPS. Diluted EPS cannot be greater than basic EPS (or less of a loss). Therefore, reported basic EPS and diluted EPS, respectively, for the three months ended March 31, 2006 and 2005 were the same.

Adjusted Pro Forma and Combined Adjusted Amounts and Other Non-GAAP Measures

As a result of the Dex Media Merger and AT&T Directory Acquisition, the related financings and associated purchase accounting, our 2006 reported GAAP results are not comparable to our 2005 reported GAAP results. Under the deferral and amortization method of revenue recognition, the billable value of directories published is recognized as revenue in subsequent reporting periods. However, purchase accounting precluded us from recognizing directory revenue and certain expenses associated with directories that published prior to each acquisition, including all directories published in the month each acquisition was completed. Thus, our reported 2006 and 2005 GAAP results are not indicative of our underlying operating and financial performance. Accordingly, management is presenting adjusted pro forma information for 2006 that, among other things, eliminates the purchase accounting impact on revenue and certain expenses related to the Dex Media Merger and assumes the Dex Media Merger and related financing occurred at the beginning of 2006, and combined adjusted information for 2005 reflecting the sum of RHD’s 2005 adjusted results (reflecting adjustments relating to the AT&T Directory Acquisition) and Dex Media’s reported GAAP results during the period. Management believes that the presentation of this adjusted pro forma and combined adjusted information will help financial statement users better and more easily compare current period underlying operating results against what the combined company performance would more likely have been in the comparable prior period. All of the adjusted pro forma and combined adjusted amounts disclosed below or elsewhere are non-GAAP measures, which are reconciled to the most comparable GAAP measures below. While the adjusted pro forma and combined adjusted results each exclude the effects of purchase accounting, and certain other non-recurring items, to better reflect underlying operating results in the respective periods, because of differences between RHD, AT&T and Dex Media and their respective predecessor accounting policies, the pro forma adjusted and combined adjusted results are not strictly comparable and should not be treated as such.

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	Three months ended March 31, 2006
(amounts in millions)	Adjustments
	Reported					Adjusted
	GAAP					Pro Forma
Net revenue	$	320.5	$	356.0	(1)	$	676.5
Expenses, other than depreciation and amortization		219.7		97.6	(2)		317.3
Depreciation and amortization		62.7		20.5	(3)		83.2
Operating income	$	38.1	$	237.9		$	276.0

	Three months ended March 31, 2005
(amounts in millions)	Adjustments
	Reported					Dex Media			Combined
	GAAP		Adjustments			GAAP			Adjusted
Net revenue	$	207.3	$	51.9	(4)	$	411.7	(6)	$	670.9
Expenses, other than depreciation and amortization		115.4		(8.0	) (5)		177.4	(6)		284.8
Depreciation and amortization		21.7		—			93.2	(6)		114.9
Operating income	$	70.2	$	59.9		$	141.1		$	271.2

(1)	Represents revenue for directories that published prior to the Dex Media Merger, plus revenue for all January 2006 published directories as reported by Dex Media, which would have been recognized during the period absent purchase accounting required under GAAP.
(2)	Represents (a) expenses for directories that published prior to the Dex Media Merger, plus expenses for all January 2006 published directories as reported by Dex Media, which would have been recognized during the period absent purchase accounting required under GAAP, (b) exclusion of expenses reported by Dex Media directly related to the Dex Media Merger and (c) the exclusion of cost uplift recorded in purchase accounting to eliminate the profit on sales contracts completed prior to the transaction date for directories that published after the transaction date.
(3)	Represents the additional amortization expense related to the identifiable intangible assets acquired in the Dex Media Merger over their estimated useful lives for January 2006.
(4)	Represents revenue for directories that published prior to the AT&T Directory Acquisition, plus all September 2004 published directories, which would have been recognized during the period had it not been for purchase accounting required under GAAP.

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(5)

Represents elimination of amortized deferred cost uplift recorded in purchase accounting to eliminate the profit on sales contracts completed prior to the AT&T Directory Acquisition for directories that published after the acquisition date, net of expenses for directories that published prior to the AT&T Directory Acquisition, including September 2004 published directories, which would have been recognized during the period had it not been for purchase accounting required under GAAP.

(6)

Represents net revenue, expenses and depreciation and amortization reported by Dex Media for the three months ended March 31, 2005.

2006 Adjusted Pro Forma Revenue Compared to 2005 Combined Adjusted Revenue

The components of 2006 adjusted pro forma revenue and 2005 combined adjusted revenue for the three months ended March 31 of each year are as follows:

	Three Months Ended March 31, 2006
	Adjustments
	Reported			Dex Media			Adjusted Pro
(amounts in millions)	GAAP			Merger			Forma
Gross directory advertising revenue	$	323.1		$	356.6	(1)	$	679.7
Sales claims and allowances		(8.1	)		(6.8	)(1)		(14.9	)
Net directory advertising revenue		315.0			349.8			664.8
Other revenue		5.5			6.2	(2)		11.7
Net revenue	$	320.5		$	356.0		$	676.5

	Three Months Ended March 31, 2005
	Adjustments
				AT&T
	Reported			Directory			Dex Media			Combined
(amounts in millions)	GAAP			Acquisition			GAAP			Adjusted
Gross directory advertising revenue	$	206.9		$	52.2	(3)	$	406.9	(4)	$	666.0
Sales claims and allowances		(2.0	)		(0.3	)(3)		—			(2.3	)
Net directory advertising revenue		204.9			51.9			406.9			663.7
Other revenue		2.4			—			4.8	(4)		7.2
Net revenue	$	207.3		$	51.9		$	411.7		$	670.9

(1)	Represents gross revenue and sales claims and allowances for directories that published prior to the Dex Media Merger, plus revenue and sales claims and allowances for all January 2006 published directories as reported by Dex Media, which would have been recognized during the period had it not been for purchase accounting required under GAAP.
(2)	Other revenue includes barter revenue, late fees paid on outstanding customer balances, commissions earned on sales contracts with respect to advertising placed into other publishers’ directories, sales of directories and certain other print and internet products, plus other revenue reported by Dex Media for January 2006.

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(3)	Represents gross revenue and sales claims and allowances for directories that published prior to the AT&T Directory Acquisition, which would have been recognized during the period had it not been for purchase accounting required under GAAP.
(4)	Represents 2005 reported results for Dex Media.

Adjusted pro forma net revenue for the three months ended March 31, 2006 was $676.5 million, an increase of $5.6 million from combined adjusted net revenue of $670.9 million for the three months ended March 31, 2005. Under the deferral and amortization method of revenue recognition, revenue from directory advertising sales is initially deferred when a directory is published and recognized ratably over the life of the directory, which is typically 12 months. The increase in adjusted gross directory advertising revenues for the quarter ended March 31, 2006 versus the prior year period was primarily due to the amortization of revenue from higher sales performances in certain of our larger markets.

2006 Adjusted Pro Forma Expenses Compared to 2005 Combined Adjusted Expenses and 2006 Adjusted Pro Forma Operating Income Compared to 2005 Combined Adjusted Operating Income

Adjusted pro forma operating and G&A expenses in the three months ended March 31, 2006 of $317.3 million increased by $32.5 million from combined adjusted operating and G&A expenses of $284.8 million in the comparable period in the prior year. The primary components of the $32.5 million increase are shown below:

	Change
(amounts in millions)
Stock-based compensation expense resulting from adoption of SFAS No. 123 (R)	$	16.5
Increased internet production costs		7.0
Increased sales expenses		5.1
Increased print, paper and distribution costs		2.9
All other		1.0
Total increase in adjusted operating and G&A expenses for the first quarter of 2006, compared to the same period in 2005 combined adjusted operating and G&A expenses	$	32.5

Adjusted pro forma expenses were impacted by $16.5 million of non-cash stock-based compensation expense resulting from SFAS No. 123 (R) which the Company adopted effective January 1, 2006, with no comparable expense in the prior year. For the three months ended March 31, 2006, $8.5 million of the reported $16.5 million of non-cash compensation expense resulted from modifications to stock awards outstanding as a result of the Dex Media Merger. Adjusted pro forma expenses for the three months ended March 31, 2006 increased by $7.0 million from combined adjusted expenses in the same period in 2005 due to increased Internet production costs as we expanded our digital product line offerings. Adjusted pro forma sales expenses were $5.1 million higher in the first quarter of 2006, compared to combined adjusted expenses in the first quarter of 2005, due to favorable sales performances in certain larger markets. Adjusted pro forma print, paper and distribution costs were $2.9 million greater primarily due to increased page counts and directory volumes in certain markets as compared to the combined adjusted expenses in the prior year.

Adjusted pro forma depreciation and amortization (“D&A”) for the three months ended March 31, 2006 of $83.2 million includes incremental D&A as if the Dex Media Merger occurred on January 1, 2006. Combined adjusted D&A for the three months ended March 31, 2005 of $114.9 million represents D&A reported by both RHD and Dex Media. The decrease in adjusted pro forma D&A of $31.7 million from combined adjusted D&A is primarily related to differences between RHD and Dex Media’s valuation and useful life assumptions utilized for the amortization of Dex Media’s intangible assets.

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Adjusted pro forma operating income for the three months ended March 31, 2006 was $276.0 million, an increase of $4.8 million from combined adjusted operating income in the three months ended March 31, 2005 of $271.2 million, reflecting the variances between revenues and expenses from period to period described above.

Advertising Sales

Management reviews and evaluates the value of advertising sales in directories that published during the period (“advertising sales”) as its primary sales performance measure. Advertising sales consist of sales of advertising in printed directories in the month the applicable directory is delivered, as well as on Internet-based directories when the advertisement is first placed on the site. Management believes that a comparison of advertising sales for the same directories from one period to the next gives a better indication of underlying sales trends, economic conditions and business confidence than a comparison of directory revenue recognized using the deferral and amortization method. Because we recognize directory revenue ratably over the life of a directory under the deferral and amortization method, the amount of revenue recognized during a period is not directly related to the sales trends, economic conditions and business confidence during that period. Advertising sales are similar to a “same-store” sales measure. If events occur during the current period that affect the comparability of advertising sales to the prior year period, such as changes in directory publication dates, then prior year advertising sales amounts are adjusted to conform to the current period presentation.

Advertising sales for the three months ended March 31, 2006 were consistent with the similar period in the prior year, reflecting the transition of our Dex Media business and continued growth in our major Sprint markets, offset by a decline associated with our rebuilding efforts in our AT&T markets. Advertising sales are a non-GAAP measure for which the most comparable GAAP measure is net revenue. A reconciliation of advertising sales to net revenue reported in accordance with GAAP is presented below:

(Amounts in millions)
	Three Months Ended March 31,
	2006			2005
Reconciliation of advertising sales to net revenue — GAAP, net revenue — pro forma adjusted and net revenue combined adjusted
RHD advertising sales disclosed in March 31, 2005 Form 10-Q				$	256.6
Dex Media implied publication sales for first quarter 2005, disclosed in Dex Media’s second quarter 2005 press release					452.2
Combined adjustments for changes in publication dates and definition of advertising sales					(1.6	)
RHD pro forma advertising sales	$	707.0			707.2
Advertising sales percentage change over prior year		0.0	%
Less pre-acquisition Dex Media advertising sales not recognized as current period revenue, less combined current period advertising sales not recognized as revenue due to the deferral method of accounting,. plus combined net revenue reported in the period for advertising sales from prior periods.		(392.0	)		(502.3	)
Net directory advertising revenue		315.0			204.9
Other revenue		5.5			2.4
Net revenue — GAAP	$	320.5		$	207.3

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LIQUIDITY AND CAPITAL RESOURCES

Credit Facilities

R.H. Donnelley Inc. (“RHDI”)

As of March 31, 2006, RHDI’s senior secured credit facility, as amended and restated (“Credit Facility”), consists of a $313.4 million Term Loan A-2, a $116.0 million Term Loan A-3, a $1,429.5 million Term Loan D, a $350 million Term Loan D-1 and a $175 million Revolving Credit Facility (the “Revolver”) for an aggregate Credit Facility of $2,383.9 million. All Term Loans require quarterly principal and interest payments. The Credit Facility provides for a new Term Loan C for potential borrowings up to $400 million, such proceeds, if borrowed, to be used to fund acquisitions, refinance certain indebtedness or to make certain restricted payments. As of March 31, 2006, the outstanding balances of Term Loans A-2, A-3, D and D-1 were $235.8 million, $87.6 million, $1,422.0 million and $349.1 million, respectively, with no amounts outstanding under the Revolver. The Revolver, Term Loan A-2 and Term Loan A-3 mature in December 2009 and Term Loans D and D-1 mature in June 2011. The weighted average interest rate of outstanding debt under the Credit facility was 6.63% and 4.79 % at March 31, 2006 and 2005, respectively.

As further amended on April 24, 2006, RHDI’s Credit Facility bears interest, at our option, at either:

• The higher of (i) a base rate as determined by the Administrative Agent, Deutsche Bank Trust Company Americas, plus a 0.25% margin on the Revolver and Term Loan A-4 and a 0.50% margin on Term Loan D-1 and Term Loan D-2; and (ii) the Federal Funds Effective Rate (as defined) plus 0.50%, plus a 0.25% margin on the Revolver and Term Loan A-4 and a 0.50% margin on Term Loan D-1 and Term Loan D-2; or

• LIBOR rate plus a 1.25% margin on the Revolver and Term Loan A-4 and a 1.50% margin on Term Loan D-1 and Term Loan D-2. We may elect interest periods of 1, 2, 3 or 6 months (or 9 or 12 months if, at the time of the borrowing, all lenders agree to make such term available), for LIBOR borrowings.

Dex Media East

As of March 31, 2006, the Dex Media East credit facility consisted of revolving loan commitments (“Dex Media East Revolver”) and term loan commitments. The Dex Media East Revolver consists of a total principal amount of $100.0 million, which is available for general corporate purposes, subject to certain conditions. The Dex Media East term loans consist of a tranche A term loan with an initial total principal amount of $690.0 million and a tranche B term loan with an initial total principal amount of $700.0 million. As of March 31, 2006, the principal amounts owing under the tranche A and tranche B term loans were approximately $299.7 million and $429.0 million, respectively, and $60.0 million was outstanding under the Dex Media East Revolver. The tranche A and tranche B term loans were available only to fund a portion of the Dex Media East Acquisition and a portion of the Dex Media West Acquisition. The Dex Media East Revolver and tranche A term loan will mature in November 2008, and the tranche B term loan will mature in May 2009.

As further amended on April 24, 2006, the Dex Media East credit facility bears interest, at our option, at either:

• The higher of (i) the base rate determined by the Administrative Agent, JP Morgan Chase Bank, N.A., plus a 0.25% margin on the Revolver and Term Loan A and a 0.50% margin on Term Loan B; and (ii) the Federal Funds Effective Rate (as defined) plus 0.50%, plus a 0.25% margin on the Revolver and Term Loan A and a 0.50% margin on Term Loan B; or

• LIBOR rate plus a 1.25% margin on the Revolver and Term Loan A and a 1.50% margin on Term Loan B. We may elect interest periods of 1, 2, 3, or 6 months (or 9 or 12 months if, at the time of the borrowing, all lenders agree to make such term available), for LIBOR borrowings.

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Dex Media West

As of March 31, 2006, the Dex Media West credit facility, as amended and restated in connection with the Dex Media Merger, consists of revolving loan commitments (“Dex Media West Revolver”) and term loan commitments. The Dex Media West Revolver consists of a total principal amount of $100.0 million, which is available for general corporate purposes, subject to certain conditions. The Dex Media West term loans consist of a tranche A term loan in a total principal amount of $960.0 million, a tranche B term loan in a total principal amount of $1,200.0 million, and a tranche B-1 term loan in a total principal amount of $503.0 million. As of March 31, 2006, the principal amounts owing under the tranche A, tranche B, and tranche B-1 term loans were approximately $324.1 million, $834.3 million, and $439.5 million, respectively, and $81.0 million was outstanding under the Dex Media West Revolver. The tranche A and tranche B term loan commitments were available only to fund a portion of the Dex West Acquisition, and the tranche B-1 was utilized to redeem Dex Media West’s notes put to Dex Media West in connection with a change of control offer and to fund a portion of the cash consideration to be paid to Dex Media’s stockholders in connection with the Dex Media Merger.

As further amended on April 24, 2006, the Dex Media West credit facility bears interest, at our option, at either:

• The higher of (i) the base rate determined by the Administrative Agent, JP Morgan Chase Bank, N.A., plus a 0.25% margin on the Revolver and Term Loan A and a 0.50% margin on Term Loan B-1 and Term Loan B-2; and (ii) the Federal Funds Effective Rate (as defined) plus 0.50%, plus a 0.25% margin on the Revolver and Term Loan A and a 0.50% margin on Term Loan B-1 and Term Loan B-2; or

• LIBOR rate plus a 1.25% margin on the Revolver and Term Loan A and a 1.50% margin on Term Loan B-1 and Term Loan B-2. We may elect interest periods of 1, 2, 3, or 6 months (or 9 or 12 months if, at the time of the borrowing, all lenders agree to make such term available), for LIBOR borrowings.

The Company’s credit facilities and the indentures covering the notes contain usual and customary affirmative and negative covenants that, among other things, place limitations on our ability to (i) incur additional indebtedness; (ii) pay dividends and repurchase our capital stock; (iii) enter into mergers, consolidations, acquisitions, asset dispositions and sale-leaseback transactions; (iv) make capital expenditures; (v) issue capital stock of our subsidiaries; (vi) engage in transactions with our affiliates; and (vii) make investments, loans and advances. The Company’s credit facilities also contain financial covenants relating to maximum consolidated leverage, minimum interest coverage and maximum senior secured leverage as defined therein. Substantially all of RHDI’s and its subsidiaries’ assets, including the capital stock of RHDI and its subsidiaries, are pledged to collateralize our obligation under the RHDI Credit Facility. Substantially all of the assets of Dex Media East and Dex Media West and their subsidiaries, including their capital stock, are pledged to collateralize the obligations under their respective credit facilities.

Notes and Preferred Stock

RHD

On January 14, 2005, RHD issued $300 million of 6.875% Senior Notes due January 15, 2013 (“Holdco Notes”), the proceeds of which were used to redeem 100,303 shares of the then outstanding Preferred Stock from the GS Funds, pay transaction costs and repay debt associated with RHDI’s Credit Facility.

On January 27, 2006, in order to fund the cash portion of the Dex Media Merger purchase price, we issued $660 million aggregate principal amount at maturity ($600.5 million gross proceeds) of 6.875% Series A-2 Senior Discount Notes due January 15, 2013 and $1,210 million principal amount of 8.875% Series A-3 Senior Notes due January 15, 2016. Interest is payable semi-annually on the Series A-2 Senior Discount Notes and the Series A-3 Senior Notes. Also on January 27, 2006, we issued $365 million aggregate principal amount at maturity ($332.1 million gross proceeds) of 6.875% Series A-1 Senior Discount Notes due January 15, 2013 to fund the GS Repurchase. Interest is payable semi-annually commencing July 15, 2006. All of these notes are unsecured obligations of RHD, senior in right of payment to all future senior subordinated and subordinated indebtedness of RHD and structurally subordinated to all indebtedness of our subsidiaries. In connection with the issuance of these

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notes, we entered into a registration rights agreement, whereby we agreed, among other things to (i) file an exchange offer registration statement with the SEC with respect to these notes within 120 days after January 27, 2006, (ii) use reasonable efforts to have such exchange offer registration statement declared effective by the SEC within 180 days after January 27, 2006 and (iii) subject to certain limitations, consummate the exchange offer to which this exchange offer registration statement relates within 210 days after January 27, 2006.

RHDI

In connection with the SPA Acquisition, RHDI issued $325 million 8.875% Senior Notes due 2010 and $600 million 10.875% Senior Subordinated Notes due 2012 . These notes are unsecured obligations of RHDI and interest is paid on these notes semi-annually on June 15th and December 15th. On December 20, 2005, we repurchased through a tender offer and exit consent solicitation $317.1 million of the Senior Notes. We are considering, among other alternatives, redemption of the remaining $7.9 million Senior Notes in 2006. Proceeds from the RHDI Credit Facility’s $350 million Term Loan D-1 were used to fund the partial repurchase, a call premium of $25.3 million and pay transaction costs.

Dex Media, Inc.

Dex Media, Inc. has issued $500 million aggregate principal amount of 8% senior notes due 2013. Interest is payable on May 15th and November 15th of each year.

Dex Media, Inc. has issued $750 million aggregate principal amount of 9% senior discount notes due 2013, under two indentures. The 9% senior discount notes were issued at an original issue discount with interest accruing at 9%, per annum, compounded semi-annually. Interest accrues in the form of increased accreted value until November 15, 2008, at which time the accreted value will be equal to the full principal amount at maturity. After November 15, 2008, the 9% senior discount notes bear cash interest at 9% per annum, payable semi-annually on May 15th and November 15th of each year.

Dex Media East

Dex Media East issued $450 million aggregate principal amount of 9.875% senior notes due 2009. Interest is payable on May 15th and November 15th of each year.

Dex Media East issued $525 million aggregate principal amount of 12.125% senior subordinated notes due 2012. Interest is payable on May 15th and November 15th of each year.

Dex Media West

Dex Media West issued $385 million aggregate principal amount of 8.5% senior notes due 2010. Interest is payable on February 15th and August 15th of each year.

Dex Media West issued $300 million aggregate principal amount of 5.875% senior notes due 2011. Interest is payable on May 15^th and November 15th of each year.

Dex Media West issued $780 million aggregate principal amount of 9.875% senior subordinated notes due 2013. Interest is payable on February 15th and August 15th of each year.

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The sources and uses of funds in connection with the Dex Media Merger and the GS Repurchase are summarized as follows:

Sources:	(Dollars in thousands)
New RHD Series A-1 Senior Discount Notes due 2013	$	332,081
New RHD Series A-2 Senior Discount Notes due 2013		600,475
New RHD Series A-3 Senior Notes due 2016		1,210,000
Amended Dex Media West credit facility		444,193
Short-term interest income on Series A-2 Senior Discount Notes and Series A-3 Senior Notes (1)		836
Cash from balance sheet(2)		21,539
Total sources	$	2,609,124
Uses:
Cash portion of the Dex Media Merger consideration	$	1,861,111
GS Repurchase		336,123
Refinance Dex Media West 5.875% Senior notes due November 2011		291,835
Fees and expenses(3)		120,055
Total uses	$	2,609,124

(1)	Represents short-term interest income from the proceeds of the Series A-2 Senior Discount Notes and Series A-3 Senior Notes from January 27, 2006 (the issuance date of the notes) through January 31, 2006 (the closing of the Dex Media Merger).
(2)	After giving effect to (1) the Dex Media Merger and related financings and (2) the GS Repurchase and related financings, $21.5 million was paid from cash on hand.
(3)	Includes fees and expenses relating to (1) the Dex Media Merger and related financings and (2) the GS Repurchase and related financings.

Following the Dex Media Merger, Dex Media is a wholly owned subsidiary of RHD. Our primary source of liquidity will continue to be cash flow generated from operations as well as available borrowing capacity under our and the Dex Media East Revolver and the Dex Media West Revolver. We expect that our primary liquidity requirements will be to fund operations and for debt service on our indebtedness, including Dex Media’s and its subsidiaries’ indebtedness. Our ability to meet our debt service requirements will be dependent on our ability to generate sufficient cash from operations and make additional borrowings under the combined company’s credit facilities. Our primary sources of cash flow will consist mainly of cash receipts from the sale of advertising in our yellow pages directories and can be impacted by, among other factors, general economic conditions, competition from other yellow pages directory publishers and other alternative products, consumer confidence and the level of demand for yellow pages advertising. We believe that cash flows from operations, along with borrowing capacity under our and Dex Media’s revolvers, will be adequate to fund our operations and capital expenditures and to meet our debt service requirements for at least the next 12 to 24 months. However, we make no assurances that our business will generate sufficient cash flow from operations or that sufficient borrowing will be available under our and Dex Media’s revolvers or Term Loan C to enable us to fund our operations, capital expenditures and meet all debt service requirements, pursue all of our strategic initiatives, or for other purposes.

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As a result of the Dex Media Merger and in accordance with SFAS No. 141, Business Combinations (“SFAS No. 141”), we are required to record Dex Media’s consolidated outstanding debt at its fair value. The following table illustrates the book value and fair value of Dex Media’s consolidated outstanding debt as of January 31, 2006:

	Book Value at		Fair Value at		Fair Value
	January 31, 2006		January 31, 2006		Adjustment
Dex Media Credit Facilities	$	1,950.1	$	1,950.1	$	—
Dex Media, Inc. 8% Senior Notes		500.0		515.0		15.0
Dex Media, Inc. 9% Senior Discount Notes		598.8		616.0		17.2
Dex Media East 9.875% Senior Notes		450.0		484.3		34.3
Dex Media East 12.125% Senior Subordinated Notes		341.3		395.9		54.6
Dex Media West 8.5% Senior Notes		385.0		407.1		22.1
Dex Media West 5.875% Senior Notes		300.0		300.1		0.1
Dex Media West 9.875% Senior Subordinated Notes		761.8		840.8		79.0
Total consolidated outstanding debt at January 31, 2006	$	5,287.0	$	5,509.3	$	222.3

As of March 31, 2006, the unamortized fair value adjustment due to purchase accounting was $216.2 million, which does not impact future scheduled interest or principal payments.

Primarily as a result of our business combinations and Preferred Stock repurchase transactions we have a significant amount of debt service. Aggregate outstanding debt as of March 31, 2006 was $10,884.0 million. The completion of the Dex Media Merger triggered change of control offers on all of Dex Media’s and its subsidiaries outstanding notes, requiring us to make offers to repurchase the notes. As of March 31, 2006, $291.3 million of the 5.875% Dex Media West Senior Notes and $0.3 million of the 9.875% Dex Media East Senior Notes, $0.2 million of the 9.875% Dex Media West Senior Subordinated Notes and $0.1 million of the 9% Dex Media, Inc. Senior Discount Notes were tendered in the applicable change of control offer and repurchased by us.

During the three months ended March 31, 2006, we made scheduled principal payments of $77.0 million and prepaid an additional $50.0 million in principal under the RHDI, Dex Media East and Dex Media West credit facilities. Additionally, we made revolver payments of $44.7 million offset by revolver borrowings of $168.7 million under the RHDI, Dex Media East and Dex Media West credit facilities.

Cash flow provided by operating activities was $196.0 million for the three months ended March 31, 2006. Key contributors to operating cash flow include the following:

• $71.7 million in net loss.

• $59.3 million of net non-cash charges primarily consisting of $62.7 million of depreciation and amortization, $8.5 million in bad debt provision, $16.5 million of stock-based compensation expense and $15.6 million in other non-cash charges, offset by $44.0 million in deferred taxes.

• $214.7 million net source of cash from a $319.6 million increase in deferred directory revenue, offset by an increase in accounts receivable of $104.9 million. The change in deferred revenue and accounts receivable are analyzed together given the fact that when a directory is published, the annual billing value of that directory is initially deferred and unbilled accounts receivable are established. Each month thereafter, a proportionate share of the billing value (typically one twelfth) is recognized as revenue and billed to customers. Additionally, under purchase accounting rules, deferred revenue was not recorded on directories that were published prior to the Dex Media Merger, however we retained all the rights associated with the collection of amounts due under the advertising contracts executed prior to the merger.

• $16.2 million net use of cash from an increase in other assets, consisting of a $16.8 million increase in prepaid expenses and a $3.9 million increase in other current and non-current assets, offset by a $4.5 million decrease in deferred directory costs.

• $1.2 million net source of cash from a decrease in accounts payable and accrued liabilities, primarily reflecting a $35.5 million decrease in accrued liabilities, offset by a $27.7 million increase in accrued interest payable on outstanding debt and a $9.0 million increase in trade accounts payable.

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• $8.7 million net source of cash from an increase in other non-current liabilities.

Cash used by investing activities for the three months ended March 31, 2006 was $1,899.1 million and includes the following:

• $10.4 million used to purchase fixed assets, primarily computer equipment, software and leasehold improvements.

• $1,888.7 million in cash payments in connection with the Dex Media Merger including merger fees net of cash received from Dex Media.

Cash provided by financing activities for the three months ended March 31, 2006 was $1,894.6 million and includes the following:

• $2,517.4 million in net borrowings, consisting of $2,142.5 million related to the Series A-2 Senior Discount Notes and Series A-3 Senior Notes, which were used to fund the cash portion of the Dex Media Merger and Series A-1 Senior Discount Notes, which were used to fund the GS Repurchase. Net borrowings also consist of $444.2 million of the Dex Media West tranche B-1 term loan, $150.0 million of which was used to fund the cash portion of the Dex Media Merger and $294.2 million of which was used to fund the purchase of the 5.875% Dex Media West Senior Notes, 9.875% Dex Media West Senior Subordinated Notes and 9% Dex Media, Inc. Senior Discount Notes in conjunction with change of control offers. These borrowings were net of financing costs of $69.3 million.

• $463.6 million in principal payments on debt borrowed under the Credit Facilities. Of this amount, $77.0 million represents scheduled principal payments, $50.0 million represents principal payments made on an accelerated basis, at our option, from excess cash flow generated from operations, $291.9 represents Dex Media senior notes put back to the Company for repurchase and $44.7 million represents principal payments on the Revolver.

• $336.1 million used to repurchase the remaining 100,301 shares of our Preferred Stock in January 2006.

• $168.7 million source in borrowings under the revolvers.

• $14.1 million in proceeds from the exercise of employee stock options.

• $5.9 million used in the decreased balance of checks not yet presented for payment.

Cash flows provided by operating activities was $112.8 million for the three months ended March 31, 2005. Key contributors to operating cash flow include the following:

• $62.8 million consisting of $7.7 million in net income plus $55.1 million of net non-cash charges consisting of $21.7 million of depreciation and amortization, $6.8 million in bad debt provision, $21.8 million in deferred taxes and $4.8 million in other non-cash charges.

• $45.2 million net source of cash from a $50.7 million increase in deferred directory revenue less an increase in accounts receivable of $5.5 million. We analyze the change in deferred revenue and accounts receivable together because when a directory is published, the annual billing value of that directory is initially deferred and unbilled accounts receivable are established. Each month thereafter, typically one-twelfth of the billing value is recognized as revenue and billed to customers. In connection with the AT&T Directory Acquisition, while we did not record the deferred revenue for directories published prior to the acquisition due to purchase accounting, we did acquire the associated unbilled receivables and the rights to bill and collect these receivables, which totaled approximately $207.3 million.

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• $10.4 million net source of cash from an increase in accounts payable and accrued liabilities, reflecting a $29.6 million increase in accrued interest payable on outstanding notes due semi-annually on June 15 and December 15, partially offset by a decease of accrued bonuses and other accrued liabilities of $19.2 million.

• $13.1 million net use of cash from a $19.7 decrease in deferred taxes and a $6.1 million increase in other non-current liabilities reflecting a $5.2 million increase in the restructuring reserve relating to the AT&T Directory Business.

Cash used in investing activities for the three months ended March 31, 2005 was $5.5 million used to purchase fixed assets, primarily computer equipment and software.

Cash used in financing activities through March 31, 2005 was $110.5 million and includes the following:

• $291.7 million in net proceeds from the issuance of Holdco Notes for the redemption of outstanding Preferred Stock.

• $277.2 million used for the redemption of Preferred Stock.

• $72.0 million in borrowings under the Revolver.

• $201.6 million of debt repayments including $46.4 million in scheduled and mandatory payments, $65.0 million in pre-payments and $90.2 million of Revolver repayments (including $18.2 million from the outstanding Revolver balance at December 31, 2004).

• $1.9 million in the increased value of checks not presented for payment.

• $2.7 million in proceeds from the exercise of employee stock options.

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Contractual Obligations

The contractual obligations table presented below sets forth our annual commitments as of March 31, 2006 for principal and interest payments on our debt, as well as other cash obligations for the next five years and thereafter. The debt repayments as presented in this table include only the scheduled principal payments under our current debt agreements and do not include any anticipated prepayments.

	Payment Due by Period
(amounts in millions)
			Less than		1-3		4-5		After 5
Contractual Obligations	Total		1 Year		Years		Years		Years
Long-Term Debt (1)	$	10,899.4	$	460.5	$	996.5	$	3,632.9	$	5,809.5
Interest on Long-Term Debt(2).		4,972.0		728.9		1,493.9		1,323.3		1,425.9
Operating Leases (3).		93.4		18.6		36.2		20.3		18.3
Unconditional Purchase Obligations (4)		195.4		71.8		97.0		26.6		—
Other Long-Term Liabilities (5)		83.4		6.2		13.4		13.1		50.7
Total Contractual Obligations	$	16,243.6	$	1,286.0	$	2,637.0	$	5,016.2	$	7,304.4

(1)	Included in long-term debt are amounts owed under RHDI’s Credit Facility and Dex Media East and Dex Media West’s Credit Facilities and RHD and its subsidiaries’ Notes. Refer to Note 5, “Long-Term Debt,” for a detailed description of RHD’s long-term debt.
(2)	Interest on debt represents cash interest payment obligations assuming all indebtedness at March 31, 2006 will be paid in accordance with its contractual maturity and assumes interest rates on variable interest debt as of March 31, 2006 will remain unchanged in future periods.
(3)	We enter into operating leases in the normal course of business. Substantially all lease agreements have fixed payment terms based on the passage of time. Some lease agreements provide us with renewal or early termination options. Our future operating lease obligations would change if we exercised these renewal or early termination options and if we entered into additional operating lease agreements. The amounts in the table assume we do not exercise any such renewal or early termination options or enter into any additional lease agreements.
(4)	We have unconditional purchase obligations with three vendors regarding the purchase of paper that expire at various times through December 31, 2006. Our purchase obligations of $25.9 million for the remainder of 2006 are based on annual minimum quantities at pre-established pricing. Amounts in the table above reflect such pricing and minimum quantities under this contract. Should the market price of the paper drop below the pre-established pricing, our vendor is obligated to negotiate with us a lower paper price. Any quantities used above the contractual minimums would increase our payment obligations. We have no contractual obligations beyond 2006. In connection with our software system modernization and on-going support services related to the Amdocs software system, we are obligated to pay Amdocs approximately $36.4 million over the periods 2006 through 2009. In connection with the AT&T Directory Acquisition, we entered into an Internet Yellow Pages reseller agreement whereby we are obligated to pay to AT&T $15.4 million over the 5-year term of the agreement with approximately $14.0 million remaining under the agreement. In addition, unconditional purchase obligations include obligations acquired as a result of the Dex Media Merger. These purchase obligations include amounts contractually owed by Dex Media for on-going support services related to the Amdocs software system that was completed in 2004, as well as certain information technology, communications and billing and collection services provided by Qwest.

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⁽⁵⁾ We have defined benefit plans covering substantially all employees. Our funding policy is to contribute an amount at least equal to the minimum legal funding requirement. No contributions were required for the three months ended March 31, 2006. Based on past performance and the uncertainty of the dollar amounts to be paid, if any, we have excluded such amounts from the above table. We have an unfunded postretirement plan that provides certain healthcare and life insurance benefits to certain full-time employees who reach retirement age while working for the Company. Those expected future benefit payments, including administrative expenses, net of employee contributions, are included in the table above. We expect to make contributions of approximately $0.1 million and $0.9 million to our nonqualified retirement plan and postretirement plan, respectively, in 2006.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk and Risk Management

The RHDI Credit Facility and the Dex Media West and Dex Media East credit facilities bear interest at variable rates and, accordingly, our earnings and cash flow are affected by changes in interest rates. The RHDI Credit Facility requires that we maintain hedge agreements to provide either a fixed interest rate or interest rate protection on at least 50% of our total outstanding debt. The Dex Media East and Dex Media West credit facilities require that we maintain hedge agreements to provide a fixed rate on at least 33% of their respective indebtedness. The Company has entered into the following interest rate swaps that effectively convert variable rate debt to fixed rate debt as of March 31, 2006. Under the terms of the agreements, the Company receives variable interest based on three-month LIBOR and pays a fixed rate of interest.

Effective Dates	Notional Amounts			Pay rates	Maturity Dates
(amounts in millions)
April 1, 2003	$	255	(3)	2.850%	March 31, 2007
May 8, 2003		125	(2), (5)	3.638—4.085%	November 8, 2007—May 8, 2008
June 21, 2004		50	(1)	3.230%	June 21, 2006
June 23, 2004		50	(1)	3.170%	June 23, 2006
June 28, 2004		50	(1)	3.110%	June 28, 2006
July 2, 2004		50	(1)	3.200%	July 3, 2006
September 7, 2004		200	(3)	3.490%—3.750%	September 8, 2008—September 7, 2009
September 15, 2004		250	(4)	3.200%—3.910%	September 15, 2007—September 15, 2009
September 17, 2004		150	(3)	3.210%—3.740%	September 17, 2007—September 17, 2009
September 23, 2004		150	(3)	3.160%—3.438%	September 24, 2007—September 24, 2008
October 20, 2004		300	(4), (6)	3.31%—3.40%	October 20, 2006—October 26, 2006
December 14, 2005		150	(3)	4.74%—4.752%	June 20, 2008—December 22, 2008
December 15, 2005		150	(3)	4.7475%	December 20, 2007
February 14, 2006		350	(4)	4.925%—4.9435%	February 14, 2008—February 17, 2009
February 28, 2006		50	(1)	4.93275%	February 28, 2008
March 10, 2006		150	(2)	5.01%	March 10, 2008
Total	$	2,480

(1)	Consists of one swap
(2)	Consists of two swaps
(3)	Consists of three swaps
(4)	Consists of four swaps
(5)	Denotes swaps entered into by Dex Media East and acquired by RHD as a result of the Dex Media Merger. Swaps have not been designated as cash flow hedges.
(6)	Denotes swaps entered into by Dex Media West and acquired by RHD as a result of the Dex Media Merger. Swaps have not been designated as cash flow hedges.

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The outstanding interest rate swaps expose us to credit risk in the event that the counterparties to the agreements do not or cannot meet their obligations. The notional amount is used to measure interest to be paid or received and does not represent the amount of exposure to credit loss. The loss would be limited to the amount that would have been received, if any, over the remaining life of the swap agreements. The counterparties to the swaps are major financial institutions, and we expect the counterparties to be able to perform their obligations under the swaps. We use derivative financial instruments for hedging purposes only and not for trading or speculative purposes.

Market Risk Sensitive Instruments

The Company utilizes a combination of fixed-rate 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 meet this objective, the Company has entered into fixed interest rate swap agreements to manage fluctuations in cash flows resulting from changes in interest rates on variable-rate debt. Certain interest rate swap agreements have been designated as cash flow hedges. In accordance with the provisions of SFAS 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS 137 and SFAS 138, the swaps are recorded at fair value. On a quarterly basis, the fair values of the swaps are determined based on quoted market prices and, assuming effectiveness, the differences between the fair value and the book value of the swaps are recognized in other comprehensive income, a component of shareholders’ equity. Any ineffectiveness of the swaps is required to be recognized in earnings. The swaps and the hedged item (three-month LIBOR-based interest payments on $2,055 million of bank debt) have been designed so that the critical terms (interest reset dates, duration and index) coincide. Assuming the critical terms continue to coincide, the cash flows from the swaps will exactly offset the cash flows of the hedged item and no ineffectiveness will exist.

For derivative instruments that are not designated or do not qualify as hedged transactions, the initial fair value, if any, and any subsequent gains or losses on the change in the fair value are reported in earnings as a component of interest expense. Interest rate swaps acquired as a result of the Dex Media Merger with a notional amount of $425 million have not been designated as cash flow hedges. Resulting gains or losses on the change in the fair value of these interest rate swaps have been recognized in earnings as a component of interest expense.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures. Based on their evaluation, as of the end of the period covered by this Quarterly Report on Form 10-Q, of the effectiveness 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) the principal executive officer and principal financial officer of the Company have each 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 Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission’s rules and forms and that, including without limitation, ensuring information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

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(b)	Changes in Internal Control Over Financial Reporting. There have been changes in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
	Management believes the Dex Media Merger represented a material change in internal control over financial reporting since management’s last assessment of the Company’s internal control over financial reporting. The Company and the acquired business presently utilize separate information and accounting systems and review and approval processes. In addition, the Company implemented internal control over financial reporting to include consolidation of Dex Media.
	The Company has implemented internal controls over financial reporting specific to accounting for stock-based compensation under SFAS 123 (R). The quarter ended March 31, 2006 is the first quarter in which the Company adopted and accounted for stock-based compensation under the revised rules.
	There were no other changes in our internal control over financial reporting made during our most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are involved in various legal proceedings arising in the ordinary course of our business, as well as certain litigation and tax matters. In many of these matters, plaintiffs allege that they have suffered damages from errors or omissions of improper listings contained in directories published by us. We periodically assess our liabilities and contingencies in connection with these matters based upon the latest information available to us. For those matters where it is probable that we have incurred a loss and the loss or range of loss can be reasonably estimated, we record reserves in our consolidated financial statements. In other instances, we are unable to make a reasonable estimate of any liability because of the uncertainties related to both the probable outcome and amount or range of loss. As additional information becomes available, we adjust our assessment and estimates of such liabilities accordingly.

The Company is exposed to potential defamation and breach of privacy claims arising from our publication of directories and our methods of collecting, processing and using advertiser and telephone subscriber data. If such data were determined to be inaccurate or if data stored by us were improperly accessed and disseminated by us or by unauthorized persons, the subjects of our data and users of the data we collect and publish could submit claims against the Company. Although to date we have not experienced any material claims relating to defamation or breach of privacy, we may be party to such proceedings in the future that could have a material adverse effect on our business.

Based on our review of the latest information available, we believe our ultimate liability in connection with pending or threatened legal proceedings will not have a material adverse effect on our results of operations, cash flows or financial position. No material amounts have been accrued in our financial statements with respect to any of such matters.

During the three months ended March 31, 2006, there were no material changes to the information set forth in the 2005 10-K regarding the Legacy Tax Matter (as defined in the 2005 10-K).

Item 4. Submission of Matters to a Vote of Security Holders

On January 26, 2006, a special meeting of RHD’s stockholders (the “Meeting”) was held in Cary, North Carolina to approve the Merger Agreement and the transactions contemplated by the Merger Agreement, including the issuance of shares of RHD common stock in the Dex Media Merger.

At the Meeting, RHD’s stockholders approved the Dex Media Merger Agreement and the transactions contemplated by the Dex Media Merger Agreement, including the issuance of shares of RHD common stock in the Dex Media Merger, as follows.

					Abstentions and
	Votes For		Votes Against		Broker Non-Votes
Proposal to approve the Merger Agreement and the transactions contemplated by the Merger Agreement, including the issuance of RHD common stock in the Dex Media Merger		30,560,073		93,926		136,040

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Item 5. Other Information

The Company’s 2006 Annual Meeting of Stockholders will be held on Thursday, June 1, 2006, at 10:00 a.m. local time, at the Embassy Suites Hotel, 210 Harrison Oaks Boulevard, Cary, North Carolina 27513. Proposals of the Company’s stockholders intended to be presented at the Company’s 2007 Annual Meeting of Stockholders must be received by the Company no later than December 26, 2006 to be included in the Company’s proxy statement and form of proxy relating to the 2007 Annual Meeting. Any stockholder intending to propose any matter at the 2007 Annual Meeting but not intending for the Company to include the matter in its proxy statement and proxy related to the 2007 Annual Meeting must notify the Company by March 11, 2007 of such intention. If the Company does not receive such notice by that date, the notice will be considered untimely.

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Item 6. Exhibits

     (a) Exhibits:

Exhibit No.	Document
2.1#	Stock Purchase Agreement, dated as of September 21, 2002, by and among the Company, Sprint Corporation and Centel Directories LLC (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 1, 2002, Commission File No. 001-07155)
2.2	Supplemental Agreement to Stock Purchase Agreement, dated as of December 31, 2002, by and among the Company, Sprint Corporation and Centel Directories LLC (incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 17, 2003, Commission File No. 001-07155)
2.3#	Preferred Stock and Warrant Purchase Agreement, dated as of September 21, 2002, among the Company and investment partnerships affiliated with The Goldman Sachs Group, Inc. (incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 1, 2002, Commission File No. 001-07155). This Agreement is no longer in effect.
2.4#	Purchase Agreement, dated as of July 28, 2004, by and among the Company, Ameritech Corporation and Ameritech Publishing, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 2, 2004, Commission File No. 001-07155)
2.5	Amendment No. 1 to the Purchase Agreement, dated as of September 1, 2004, by and among the Company, Ameritech Corporation and Ameritech Publishing, Inc. (incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on September 3, 2004, Commission File No. 001-07155)
2.6#	Agreement and Plan of Merger, dated as of October 3, 2005, among the Company, Dex Media, Inc. and Forward Acquisition Corp. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 6, 2005, Commission File No. 001-07155)
2.7	Purchase Agreement, dated as of August 19, 2002, by and between Qwest Dex, Inc., Qwest Services Corporation, and Qwest Communications International Inc., on the one hand, and Dex Holdings LLC, on the other hand (incorporated by reference to Exhibit 2.1 to Dex Media, Inc.’s Registration Statement on Form S-4 filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)
2.8	Amendment No. 1, dated September 9, 2003, to Purchase Agreement, dated as of August 19, 2002, by and between Qwest Dex, Inc., Qwest Services Corporation, and Qwest Communications International Inc., on the one hand, and Dex Holdings LLC, on the other hand (incorporated by reference to Exhibit 2.2 to Dex Media, Inc.’s Registration Statement on Form S-4 filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)]
3.1	Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q for the three months ended March 31, 1999, filed with the Securities and Exchange Commission on May 14, 1999 Commission File No. 001-07155)

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Exhibit No.	Document
3.2	Third Amended and Restated By-laws of the Company (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on April 21, 2006, Commission File No. 001-07155)
3.3	Certificate of Designations of Convertible Cumulative Preferred Stock of R.H. Donnelley Corporation (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 17, 2003, Commission File No. 001-07155.
3.4*	Certificate of Elimination of Convertible Cumulative Preferred Stock of R.H. Donnelley Corporation.
4.1	Rights Agreement, dated as of October 27, 1998, between the Company and First Chicago Trust Company (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form 8-A, filed with the Securities and Exchange Commission on November 5, 1998, Commission File No. 001-07155)
4.2	Amendment No. 1 to Rights Agreement, dated as of February 26, 2001, by and among the Company, First Chicago Trust Company of New York (as initial Rights Agent) and The Bank of New York (as successor Rights Agent) (incorporated by reference to Exhibit 4.5 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000, filed with the Securities and Exchange Commission on March 28, 2001, Commission File No. 001-07155)
4.3	Amendment No. 2 to Rights Agreement, dated as of September 21, 2002, between the Company and The Bank of New York, as successor Rights Agent (incorporated by reference to Exhibit 4.1 to Amendment No. 1 to the Registration Statement on Form 8-A, filed with the Securities and Exchange Commission on October 1, 2002, Commission File No. 001-07155)
4.4	Amendment No. 3, dated as of October 3, 2005, to the Rights Agreement, dated as of October 27, 1998, as amended, between the Company and The Bank of New York, as successor rights agent (incorporated by reference to Exhibit 4.1 to Amendment No. 2 to the Company’s Registration Statement on Form 8-A, filed with the Securities and Exchange Commission on October 6, 2005, Commission File No. 001-7155)
4.5*	Form of Warrant Agreement, dated as of November 25, 2002, between the Company and investment partnerships affiliated with The Goldman Sachs Group, Inc.
4.6*	Form of Warrant Agreement, dated January 3, 2003, between the Company and investment partnerships affiliated with The Goldman Sachs Group, Inc.
4.7	Registration Rights Agreement, dated as of November 25, 2002, among the Company and investment partnerships affiliated with The Goldman Sachs Group, Inc. (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 December 3, 2002, Commission File No. 001-07155). This Agreement is no longer in effect.
4.8	Indenture, dated as of December 3, 2002, between R.H. Donnelley Inc. (as successor to R.H. Donnelley Finance Corporation I), as Issuer, and The Bank of New York, as Trustee, with respect to the 8.875% Senior Notes due 2010 (incorporated by reference to Exhibit 4.13 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 20, 2003, Commission File No. 001-07155)

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Exhibit No.	Document
4.9	Form of 8.875% Senior Notes due 2010 (included in Exhibit 4.8)
4.10	Supplemental Indenture, dated as of January 3, 2003, among R.H. Donnelley Inc., as Issuer, the Company and the other guarantors signatory thereto, as Guarantors, and The Bank of New York, as Trustee, with respect to the 8.875% Senior Notes due 2010 of R.H. Donnelley, Inc. (incorporated by reference to Exhibit 4.14 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 20, 2003, Commission File No. 001-07155)
4.11	Second Supplemental Indenture, dated as of September 1, 2004, by and among R.H. Donnelley Inc., the guarantors party thereto and The Bank of New York, as Trustee, with respect to the 8.875% Senior Notes due 2010 of R.H. Donnelley Inc. (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on September 3, 2004, Commission File No. 001-07155)
4.12	Third Supplemental Indenture, dated as of December 6, 2005, by and among R.H. Donnelley Inc., as Issuer, the Company and the subsidiary guarantors named therein, as Guarantors, and The Bank of New York, as Trustee, with respect to the 8.875% Senior Notes due 2010 of R.H. Donnelley, Inc. (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 20, 2005, Commission File No. 001-07155)
4.13	Guarantees relating to the 8.875% Senior Notes due 2010 (incorporated by reference to Exhibit 4.16 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 20, 2003, Commission File No. 001-07155)
4.14	Senior Guarantees relating to Second Supplemental Indenture to the Indenture governing the 8.875% Senior Notes due 2010 (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on September 3, 2004, Commission File No. 001-07155)
4.15	Indenture, dated as of December 3, 2002, between R.H. Donnelley Inc. (as successor to R.H. Donnelley Finance Corporation I), as Issuer, and The Bank of New York, as Trustee, with respect to the 10.875% Senior Subordinated Notes due 2012 (incorporated by reference to Exhibit 4.17 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 20, 2003, Commission File No. 001-07155)
4.16	Form of 10.875% Senior Subordinated Notes due 2012 (included in Exhibit 4.15)
4.17	Supplemental Indenture, dated as of January 3, 2003, among R.H. Donnelley Inc., as Issuer, the Company and the other guarantors signatory thereto, as Guarantors, and The Bank of New York, as Trustee, with respect to the 10.875% Senior Subordinated Notes due 2012 (incorporated by reference to Exhibit 4.18 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 20, 2003, Commission File No. 001-07155)
4.18	Second Supplemental Indenture, dated as of January 9, 2004, among R.H. Donnelley Inc., as Issuer, the Company and other guarantors signatory thereto, as Guarantors, and The Bank of New York, as Trustee, with respect to the 10.875% Senior Subordinated Notes due 2012 (incorporated by reference to Exhibit 4.21 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 12, 2004, Commission File No. 001-07155)

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Exhibit No.	Document
4.19	Third Supplemental Indenture, dated as of September 1, 2004, by and among R.H. Donnelley Inc., and the guarantors party thereto, as Guarantors, and The Bank of New York, as Trustee, with respect to the 10.875% Senior Subordinated Notes due 2012 of R.H. Donnelley Inc. (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on September 3, 2004, Commission File No. 001-07155)
4.20	Guarantees relating to the 10.875% Senior Subordinated Notes due 2012 (incorporated by reference to Exhibit 4.20 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 20, 2003, Commission File No. 001-07155)
4.21	Senior Subordinated Guarantees relating to the Third Supplemental Indenture to the Indenture governing the 10.875% Notes due 2012 (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on September 3, 2004, Commission File No. 001-07155)
4.22	Indenture, dated as of November 10, 2003, between Dex Media, Inc. and U.S. Bank National Association, as Trustee, with respect to the 8% Notes due 2013 (incorporated by reference to Exhibit 4.1 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)
4.23	Form of 8% Notes due 2013 (included in Exhibit 4.22)
4.24	Supplemental Indenture, dated as of January 31, 2006, between U.S. Bank National Association, as Trustee, and Dex Media, Inc. (f/k/a Forward Acquisition Corp.) with respect to Dex Media, Inc.’s 8% Notes due 2013 (incorporated by reference to Exhibit 4.1 to Dex Media, Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 6, 2006, Commission File No. 333-131626)
4.25	Indenture, dated November 10, 2003, between Dex Media, Inc. and U.S. Bank National Association, as Trustee, with respect to Dex Media, Inc.’s 9% Discount Notes due 2013 (incorporated by reference to Exhibit 4.3 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)
4.26	Form of 9% Discount Notes due 2013 (included in Exhibit 4.25)
4.27	Supplemental Indenture, dated as of January 31, 2006, between U.S. Bank National Association, as Trustee, and Dex Media, Inc. (f/k/a Forward Acquisition Corp.) with respect to Dex Media, Inc.’s 9% Discount Notes due 2013 (incorporated by reference to Exhibit 4.1 to Dex Media, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 6, 2006, Commission File No. 333-131626)
4.28	Indenture, dated February 11, 2004, between Dex Media, Inc. and U.S. Bank National Association, as Trustee with respect to Dex Media, Inc.’s 9% Discount Notes due 2013 (incorporated by reference to Exhibit 4.5 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)
4.29	Form of 9% Discount Notes due 2013 (included in Exhibit 4.28)

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Exhibit No.	Document
4.30	Supplemental Indenture, dated as of January 31, 2006, between U.S. Bank National Association, as Trustee, and Dex Media, Inc. (f/k/a Forward Acquisition Corp.) with respect to Dex Media, Inc.’s 9% Discount Notes due 2014 (incorporated by reference to Dex Media, Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 6, 2006, Commission File No. 333-131626)
4.31	Indenture, dated November 8, 2002, among Dex Media East LLC, Dex Media East Finance Co. and U.S. Bank National Association, as Trustee with respect to Dex Media East LLC’s 9 7/8% Senior Notes due 2009 (incorporated by reference to Exhibit 4.7 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)
4.32	Form of 9 7/8% Senior Notes due 2009 (included in Exhibit 4.31)
4.33	Indenture, dated November 8, 2002, among Dex Media East LLC, Dex Media East Finance Co. and U.S. Bank National Association, as Trustee, with respect to Dex Media East LLC’s 12 1/8% Senior Subordinated Notes due 2012 (incorporated by reference to Exhibit 4.9 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)
4.34	Form of 12 1/8% Senior Subordinated Notes due 2012 (included in Exhibit 4.33)
4.35	Indenture, dated August 29, 2003, among Dex Media West LLC, Dex Media West Finance Co. and U.S. Bank National Association, as Trustee, with respect to Dex Media West LLC’s 8 1/2% Senior Notes due 2010 (incorporated by reference to Exhibit 4.11 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)
4.36	Form of 8 1/2% Senior Notes due 2010 (included in Exhibit 4.35)
4.37	Indenture, dated August 29, 2003, among Dex Media West LLC, Dex Media West Finance Co. and U.S. Bank National Association, as Trustee, with respect to Dex Media West LLC’s 9 7/8% Senior Subordinated Notes due 2013 (incorporated by reference to Exhibit 4.13 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)
4.38	Form of 9 7/8% Senior Subordinated Notes due 2013 (included in Exhibit 4.37)
4.39	Note Registration Rights Agreement, dated November 10, 2003, among Dex Media, Inc. and J.P. Morgan Securities Inc., Banc of America Securities LLC and Lehman Brothers Inc. (incorporated by reference to Exhibit 4.15 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)
4.40	Discount Note Registration Rights Agreement, dated November 10, 2003, among Dex Media, Inc. and J.P. Morgan Securities Inc., Banc of America Securities LLC and Lehman Brothers Inc. (incorporated by reference to Exhibit 4.16 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)

64

Exhibit No.	Document
4.41	Discount Note Registration Rights Agreement, dated February 11, 2004, among Dex Media, Inc. and J.P. Morgan Securities Inc. and Lehman Brothers Inc. (incorporated by reference to Exhibit 4.17 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)
4.42	Indenture, dated November 24, 2004, among Dex Media West LLC, Dex Media West Finance Co., and U.S. Bank National Association, as Trustee, with respect to Dex Media West LLC’s 5 7/8% Senior Notes due 2011 (incorporated by reference to Exhibit 4.7 to Dex Media West LLC and Dex Media West Finance Co.’s Registration Statement on Form S-4, declared effective by the Securities and Exchange Commission on February 3, 2005, Commission File No. 333-121259
4.43	Form of 5 7/8% Senior Notes due 2011 (included in Exhibit 4.42)
4.44#	Indenture, dated as of January 14, 2005, among the Company and The Bank of New York, as Trustee, with respect to the Company’s 6.78% Senior Notes due 2013 of the Company (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 19, 2005, Commission File No. 001-07155)
4.45	Form of 6 7/8% Senior Notes due 2013 (included in Exhibit 4.44)
4.46	Indenture, dated January 27, 2006, between the Company, as Issuer, and The Bank of New York, as Trustee, with respect to the Company’s 6.875% Series A-1 Senior Discount Notes due 2013 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 2, 2006, Commission File No. 001-07155)
4.47	Form of 6.875% Series A-1 Senior Discount Note due 2013, included in Exhibit 4.46)
4.48	Indenture, dated January 27, 2006, between the Company (as successor to R.H. Donnelly Finance Corporation III), as Issuer, and The Bank of New York, as Trustee, with respect to the Company’s 6.875% Series A-2 Senior Discount Notes due 2013 (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 2, 2006, Commission File No. 001-07155)
4.49	Form of 6.875% Series A-2 Senior Discount Note due 2013 (included in Exhibit 4.48)
4.50	Supplemental Indenture, dated January 31, 2006, by and between the Company and The Bank of New York, as Trustee, with respect to the Company’s 6.875% Series A-2 Senior Discount Notes due 2013 (incorporated by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 2, 2006, Commission File No. 001-07155)
4.51	Indenture, dated January 27, 2006, between the Company (as successor to R.H. Donnelly Finance Corporation III), as Issuer, and The Bank of New York, as Trustee, with respect to the Company’s 8.875% Series A-3 Senior Notes due 2016 (incorporated by reference to Exhibit 4.6 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 2, 2006, Commission File No. 001-07155)
4.52	Form of 8.875% Series A-3 Senior Note due 2016 (included in Exhibit 4.51)

65

Exhibit No.	Document
4.53	Supplemental Indenture, dated January 31, 2006, by and between the Company and The Bank of New York, as Trustee, with respect to the Company’s 8.875% Series A-3 Senior Notes due 2016 (incorporated by reference to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 2, 2006, Commission File No. 001-07155)
4.54	Registration Rights Agreement, dated as of January 14, 2005, among the Company and the initial purchasers that are party thereto (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 19, 2005, Commission File No. 001-07155)
4.55	Registration Rights Agreement, dated January 27, 2006, by and between the Company and the initial purchasers identified therein (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 February 2, 2006, Commission File No. 001-07155)
10.1#	Form of Distribution Agreement between the Company (f/k/a The Dun & Bradstreet Corporation) and The New Dun & Bradstreet Corporation (incorporated by reference to Exhibit 99.2 to the Current Report on Form 8-K of the Company (f/k/a The Dun & Bradstreet Corporation), filed with the Securities and Exchange Commission on September 30, 1998, Commission File No. 001-07155)
10.2#	Form of Tax Allocation Agreement between the Company (f/k/a The Dun & Bradstreet Corporation) and The New Dun & Bradstreet Corporation (incorporated by reference to Exhibit 99.3 to the Current Report on Form 8-K of the Company (f/k/a The Dun & Bradstreet Corporation), filed with the Securities and Exchange Commission on September 30, 1998, Commission File No. 001-07155)
10.3#	Amended and Restated Indemnity and Joint Defense Agreement dated as of July 30, 2004, by and among VNU, N.V., VNU, Inc., ACNielson Corporation, AC Nielson (US), Inc., Nielson Media Research, Inc., the Company, the Dun & Bradstreet Corporation, Moody’s Corporation, and IMS Health Incorporated (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on August 9, 2004, Commission File No. 001-07155)
10.4#	DonTech II Partnership Agreement, effective August 19, 1997, by and between R.H. Donnelley Inc. (f/k/a The Reuben H. Donnelley Corporation) and R.H. Donnelley Publishing and Advertising of Illinois Partnership, as successor to Ameritech Publishing of Illinois, Inc. (incorporated by reference to Exhibit 10.10 to Amendment No. 1 to the Company’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on August 7, 1998, Registration No. 333-59287)
10.5	Amendment No. 1 to DonTech II Partnership Agreement, dated as of January 28, 2000, between R.H. Donnelley Inc. and R.H. Donnelley Publishing and Advertising of Illinois Partnership, as successor to Ameritech Publishing of Illinois, Inc. (incorporated by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 12, 2004, Commission File No. 001-07155)
10.6#	Revenue Participation Agreement, dated as of August 19, 1997, by and between R.H. Donnelley Publishing and Advertising of Illinois Partnership, as successor to APIL Partners Partnership, and R.H. Donnelley APIL, Inc., as assignee of R.H. Donnelley Inc. (f/k/a The Reuben H. Donnelley Corporation) (incorporated by reference to Exhibit 10.11 to Amendment No. 1 to the Company’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on August 7, 1998, Registration No. 333-59287)

66

Exhibit No.	Document
10.7#	Master Agreement, executed August 19, 1997, by and among R.H. Donnelley Inc. (f/k/a The Reuben H. Donnelley Corporation), the Company (f/k/a The Dun & Bradstreet Corporation), The Am-Don Partnership a/k/a DonTech, DonTech II, Ameritech Publishing, Inc., Ameritech Publishing of Illinois, Inc., Ameritech Corporation, DonTech I Publishing Company LLC and the APIL Partners Partnership (incorporated by reference to Exhibit 10.12 to Amendment No. 1 to the Company’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on August 7, 1998, Registration No. 333-59287) This agreement is no longer in effect.
10.8#	Exclusive Sales Agency Agreement, effective August 19, 1997, between R.H. Donnelley Publishing and Advertising of Illinois Partnership, as successor to APIL Partners Partnership, and DonTech II (incorporated by reference to Exhibit 10.13 to Amendment No. 1 to the Company’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on August 7, 1998, Registration No. 333-59287)
10.9	Agreement for Publishing Services, dated as of January 1, 2002, between Ameritech Publishing Inc. and R.H. Donnelley Inc. (certain portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to an Application for an Order Granting Confidential Treatment) (incorporated by reference to Exhibit 10.13 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on May 10, 2002, Commission File No. 001-07155) This agreement is no longer in effect
10.10^	Key Employees’ Performance Unit Plan, as amended and restated (incorporated by reference to Exhibit 10.15 to Amendment No. 3 to the Company’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on September 28, 1998, Registration No. 333-59287)
10.11^	1991 Key Employees’ Stock Option Plan, as amended and restated through April 25, 2000 (incorporated by reference to Exhibit 10.17 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on November 13, 2000, Commission File No. 001-07155)
10.12^	Amended and Restated 1998 Directors’ Stock Plan (incorporated by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 27, 2000, Commission File No. 001-07155)
10.13^	Pension Benefit Equalization Plan (incorporated by reference to Exhibit 10.16 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 27, 2002, Commission File No. 001-07155)
10.14^	2001 Stock Award and Incentive Plan (incorporated by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 27, 2002, Commission File No. 001-07155)
10.15^	2005 Stock Award and Incentive Plan (incorporated by reference to Exhibit 10.15 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on August 5, 2005, Commission File No. 001-07155)
10.16^	Form of Non-Qualified Stock Option Agreement under 2005 Plan (incorporated by reference to Exhibit 10.16 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on August 5, 2005, Commission File No. 001-07155)

67

Exhibit No.	Document
10.17^	Form of Annual Incentive Program Award under 2005 Plan (incorporated by reference to Exhibit 10.17 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on August 5, 2005, Commission File No. 001-07155)
10.18^	Form of Performance Unit Program Award (incorporated by reference to Exhibit 99.04 to the Company’s Registration Statement on Form S-8, filed with the Securities and Exchange Commission on July 25, 2001, Registration No. 333-65822)
10.19^*	Form of Restricted Stock Award Agreement under 2005 Plan
10.20^	Form of Stock Appreciation Rights Awards Agreement under 2005 Plan (incorporated by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 6, 2005, Commission File No. 001-07155)
10.21^	Form of R.H. Donnelley Corporation Restricted Stock Units Agreement under 2005 Plan (incorporated by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, filed with the Securities and Exchange Commission on March 16, 2006, Commission File No. 001-07155)
10.22^	Deferred Compensation Plan (incorporated by reference to Exhibit 4.01 to the Company’s Registration Statement on Form S-8, filed with the Securities and Exchange Commission on November 24, 1999, Registration No. 333-91613)
10.23^	Form of Amendment of Awards, Consent and Waiver (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 November 14, 2005, Commission File No. 001-07155)
10.24^	Stock Option Plan of Dex Media, Inc., effective as of November 8, 2002 (incorporated by reference to Exhibit 10.27 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)
10.25^	First Amendment to Stock Option Plan of Dex Media, Inc., effective as of September 9, 2003 (incorporated by reference to Exhibit 10.28 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)
10.26^	Second Amendment to Stock Option Plan of Dex Media, Inc., effective as of December 18, 2003 (incorporated by reference to Exhibit 10.29 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)
10.27^	Dex Media, Inc. 2004 Incentive Award Plan (incorporated by reference to Exhibit 4.5 to Dex Media, Inc.’s Registration Statement on Form S-8, filed with the Securities and Exchange Commission on November 19, 2004, Commission file No. 333-120631)
10.28^	Amended and Restated Employment Agreement, dated October 3, 2005, between the Company and David C. Swanson (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 6, 2005, Commission File No. 001-07155)

68

Exhibit No.	Document
10.29^	Amended and Restated Employment Agreement, dated October 3, 2005, between the Company and Peter J. McDonald (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 6, 2005, Commission File No. 001-07155)
10.30^	Amended and Restated Employment Agreement, dated October 3, 2005, between the Company and Steven M. Blondy (incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 6, 2005, Commission File No. 001-07155)
10.31^	Employment Agreement, dated as of February 21, 2006, by and between the Company and George A. Burnett (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 February 23, 2006, Commission File No. 001-07155)
10.32^	Employment Agreement, dated as of January 1, 2001, between the Company and Robert J. Bush (incorporated by reference to Exhibit 10.37 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 28, 2001, Commission File No. 001-07155)
10.33^	Amendment No. 1 to Employment Agreement, dated as of February 27, 2001, between the Company and Robert J. Bush (incorporated by reference to Exhibit 10.38 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 28, 2001, Commission File No. 001-07155)
10.34	Letter Agreement, dated as of November 25, 2002, among the Company, R.H. Donnelley Inc. and investment partnerships affiliated with The Goldman Sachs Group, Inc (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 December 3, 2002, Commission File No. 001-07155). This Agreement is no longer in effect.
10.35	Letter Agreement, dated as of July 22, 2003, among the Company and investment partnerships affiliated with The Goldman Sachs Group, Inc. (incorporated by reference to Exhibit 10.45 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on August 13, 2003, Commission File No. 001-07155). This Agreement is no longer in effect.
10.36	Letter Agreement, dated as of January 3, 2003, among the Company, R.H. Donnelley Inc. and investment partnerships affiliated with The Goldman Sachs Group, Inc (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 17, 2003, Commission File No. 001-07155). This Agreement is no longer in effect.
10.37#	Directory Services License Agreement, dated as of January 3, 2003, by and among R.H. Donnelley Publishing & Advertising, Inc. (f/k/a Sprint Publishing & Advertising, Inc.), CenDon L.L.C., R.H. Donnelley Directory Company (f/k/a Centel Directory Company), Sprint Corporation, Sprint Directory Trademark Company, LLC and the Sprint Local Telecommunications Division (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 17, 2003, Commission File No. 001-07155)

69

Exhibit No.	Document
10.38#	Stock Purchase Agreement, dated as of January 10, 2005, by and among the Company and certain investment partnerships affiliated with The Goldman Sachs Group, Inc. (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 January 11, 2005, Commission File No. 001-07155)
10.39#	Trademark License Agreement, dated as of January 3, 2003, by and among Sprint Directory Trademark Company, LLC, R.H. Donnelley Publishing & Advertising, Inc. (f/k/a Sprint Publishing & Advertising, Inc.), CenDon L.L.C. and R.H. Donnelley Directory Company (f/k/a Centel Directory Company) (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 January 17, 2003, Commission File No. 001-07155)
10.40#	Publisher Trademark License Agreement, dated as of January 3, 2003, by and among R.H. Donnelley Publishing & Advertising, Inc. (f/k/a Sprint Publishing & Advertising, Inc.), R.H. Donnelley Directory Company (f/k/a Centel Directory Company) and Sprint Corporation (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 January 17, 2003, Commission File No. 001-07155)
10.41	Non-Competition Agreement, dated as of January 3, 2003, by and among the Company, R.H. Donnelley Publishing & Advertising, Inc. (f/k/a Sprint Publishing & Advertising, Inc.), CenDon L.L.C., R.H. Donnelley Directory Company (f/k/a Centel Directory Company), Sprint Corporation and the Sprint Local Telecommunications Division (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 17, 2003, Commission File No. 001-07155)
10.42	Subscriber Listings Agreement, dated as of January 3, 2003, by and among R.H. Donnelley Publishing & Advertising, Inc. (f/k/a Sprint Publishing & Advertising, Inc.), CenDon L.L.C., R.H. Donnelley Directory Company (f/k/a Centel Directory Company), Sprint Corporation and the Sprint Local Telecommunications Division (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 17, 2003, Commission File No. 001-07155)
10.43#	Directory Services License Agreement, dated as of September 1, 2004, among the Company, R.H. Donnelley Publishing & Advertising of Illinois Partnership (f/k/a The APIL Partners Partnership), DonTech II Partnership, Ameritech Corporation, SBC Directory Operations, Inc. and SBC Knowledge Ventures, L.P. (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 September 3, 2004, Commission File No. 001-07155)
10.44	Non-Competition Agreement, dated as of September 1, 2004, between the Company and SBC Communications, Inc. (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 September 3, 2004, Commission File No. 001-07155)
10.45	SMARTpages Reseller Agreement, dated as of September 1, 2004, among SBC Communications, Inc., Southwestern Bell Yellow Pages, Inc., SBC Knowledge Ventures, L.P., the Company, R.H. Donnelley Publishing & Advertising of Illinois Partnership (f/k/a The APIL Partners Partnership) and DonTech II Partnership (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 September 3, 2004, Commission File No. 001-07155)

70

Exhibit No.	Document
10.46	Ameritech Directory Publishing Listing License Agreement, dated as of September 1, 2004, among R.H. Donnelley Publishing & Advertising of Illinois Partnership (f/k/a The APIL Partners Partnership), DonTech II Partnership and Ameritech Services Inc. (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on September 3, 2004, Commission File No. 001-07155)
10.47	Amended and Restated Billing and Collection Agreement, dated September 1, 2003, by and between Qwest Corporation and Dex Media East LLC (f/k/a SGN LLC) (incorporated by reference to Exhibit 10.8 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)
10.48	Billing and Collection Agreement, dated as of September 1, 2003, by and between Qwest Corporation and Dex Media West LLC (f/k/a GPP LLC) (incorporated by reference to Exhibit 10.9 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)
10.49	Non-Competition and Non-Solicitation Agreement, dated November 8, 2002, by and among Dex Media East LLC (f/k/a SGN LLC), Dex Media West LLC (f/k/a GPP LLC), Dex Holdings LLC and Qwest Corporation, Qwest Communications International Inc. and Qwest Dex, Inc. (incorporated by reference to Exhibit 10.10 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)
10.50	Publishing Agreement by and among Dex Media, Inc., Dex Media East LLC (f/k/a SGN LLC), Dex Media West LLC (f/k/a/ GPP LLC) and Qwest Corporation, dated November 8, 2002, as amended (incorporated by reference to Exhibit 10.19 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)
10.51	Employee Cost Sharing Agreement by and among Dex Media Service LLC, Dex Media, Inc., Dex Media East LLC and Dex Media West LLC, effective as of December 31, 2003 (incorporated by reference to Exhibit 10.30 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)
10.52	Intercompany License Agreement by and among Dex Media, Inc., Dex Media East LLC and Dex Media West LLC, effective as of September 9, 2003 (incorporated by reference to Exhibit 10.32 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)
10.53#	Amended and Restated Credit Agreement, dated as of September 1, 2004, by and among, R.H. Donnelley Inc., as borrower, the Company, the lenders from time to time parties thereto, J.P. Morgan Securities Inc. and Bear, Stearns & Co. Inc., as joint lead arrangers and joint bookrunners, JPMorgan Chase Bank and Bear Stearns Corporate Lending Inc., as co-syndication agents, Citicorp North America, Inc. and Goldman Sachs Credit Partners L.P., as co-documentation agents, and Deutsche Bank Trust Company Americas, as administrative agent (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on September 3, 2004, Commission File No. 001-07155)

71

Exhibit No.	Document
10.54	First Amendment, dated as of December 6, 2004, to the Amended and Restated Credit Agreement, dated as of September 1, 2004, by and among the Company, R.H. Donnelley Inc., the lenders from time to time parties thereto, Deutsche Bank Trust Company Americas, as administrative agent and J.P. Morgan Securities Inc. as sole bookrunner and sole lead arranger and the other agents party thereto (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 December 8, 2004, Commission File No. 001-07155)
10.55	Second Amendment, dated as of January 7, 2005, to the Amended and Restated Credit Agreement, dated as of September 1, 2004, by and among the Company, R.H. Donnelley Inc., the lenders from time to time parties thereto, Deutsche Bank Trust Company Americas, as administrative agent and the other agents party thereto (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 January 11, 2005, Commission File No. 001-07155)
10.56	Commitment Letter, dated October 2, 2005, among the Company, J.P. Morgan Securities Inc. and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 6, 2005, Commission File No. 001-07155)
10.57#	Second Amended and Restated Credit Agreement, dated December 13, 2005, among the Company, RHDI, the several banks and other financial institutions or entities from time to time parties thereto as lenders, J.P. Morgan Securities Inc. and Deutsche Bank Trust Company Americas, as co-lead arrangers and joint-bookrunners, JPMorgan Chase Bank, N.A., as syndication agent, Bear Stearns Corporate Lending Inc., Credit Suisse, Cayman Islands Branch, Goldman Sachs Credit Partners L.P., UBS Securities LLC and Wachovia Bank, National Association, as co-documentation agents, and Deutsche Bank Trust Company Americas, as administrative agent (incorporated by reference to Exhibit 10.1, the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 19, 2005, Commission File No. 001-07155)
10.58	First Amendment, dated as of April 24, 2006, to the Second Amended and Restated Credit Agreement, dated December 13, 2005, among the Company, RHDI, the several banks and other financial institutions or entities from time to time parties thereto as lenders, and Deutsche Bank Trust Company Americas, as administrative agent (incorporated by reference to Exhibit 10.1, the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on April 28, 2006, Commission File No. 001-07155)
10.59	Amended and Restated Guaranty and Collateral Agreement, dated as of September 1, 2004, by and among the Company, R.H. Donnelley Inc., R.H. Donnelley APIL, Inc., R.H. Donnelley Publishing & Advertising, Inc., Get Digital Smart.com Inc., R.H. Donnelley Publishing & Advertising of Illinois Partnership, DonTech II Partnership, DonTech Holdings, LLC, and R.H. Donnelley Publishing & Advertising of Illinois Holdings, LLC (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on September 3, 2004, Commission File No. 001-07155)
10.60	Second Amended and Restated Guaranty and Collateral Agreement, dated as of December 13, 2005, by and among the Company, R.H. Donnelley, Inc., and the subsidiaries of R.H. Donnelley, Inc. party thereto, and Deutsche Bank Trust Company Americas, as collateral 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 December 19, 2005, Commission File No. 001-07155)

72

Exhibit No.	Document
10.61	Reaffirmation, dated as of December 6, 2004, by the Company, R.H. Donnelley, Inc. and its subsidiaries in favor of Deutsche Bank Trust Company Americas, 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 December 8, 2004, Commission File No. 001-07155)
10.62	Reaffirmation, dated as of April 24, 2006, among R.H. Donnelley Corporation, R.H. Donnelley Inc. and its subsidiaries and Deutsche Bank Trust Company Americas, 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 April 28, 2006, Commission File No. 001-07155)
10.63#	Second Amendment and Restatement of Credit Agreement, dated as of October 31, 2003, by and among Dex Media, Inc., Dex Media East, Inc., Dex Media East LLC, JPMorgan Chase Bank, as administrative agent, J.P. Morgan Securities Inc. and Banc of America Securities LLC, as joint bookrunners and joint lead arrangers, J.P. Morgan Europe, Limited, as London Agent, and Bank of America, N.A., Lehman Commercial Paper Inc., Wachovia Bank, National Association and Deutsche Bank Trust Company Americas, as co-syndication agents (incorporated by reference to Exhibit 10.1 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)
10.64	Third Amendment, dated as of June 11, 2004, to the Credit Agreement, dated as of November 8, 2002, as amended and restated as of October 31, 2003, by and among Dex Media, Inc., Dex Media East, Inc., Dex Media East LLC, JPMorgan Chase Bank, as administrative agent, J.P. Morgan Securities Inc. and Banc of America Securities LLC, as joint bookrunners and joint lead arrangers, and Bank of America, N.A., Wachovia Bank, National Association, Lehman Commercial Paper Inc. and Deutsche Bank Trust Company Americas, as co-syndication agents (incorporated by reference to Exhibit 10.2 to Dex Media, Inc.’s Registration Statement on Form S-1 and amendments thereto, declared effective by the Securities and Exchange Commission on July 21, 2004, Commission File No. 333-115489)
10.65	Fourth Amendment, dated as of November 24, 2004, to the Credit Agreement, dated as of November 8, 2002, as amended and restated as of October 31, 2003, by and among Dex Media, Inc., Dex Media East, Inc., Dex Media East LLC, JPMorgan Chase Bank, as administrative agent, J.P. Morgan Securities Inc. and Banc of America Securities LLC, as joint bookrunners and joint lead arrangers, and Bank of America, N.A., Wachovia Bank, National Association, Lehman Commercial Paper Inc. and Deutsche Bank Trust Company Americas, as co-syndication agents (incorporated by reference to Exhibit 10.3 to Dex Media, Inc.’s Registration Statement on Form S-1, declared effective by the Securities and Exchange Commission on January 25, 2005, Commission file No. 333-121859)
10.66	Fifth Amendment, dated as of June 16, 2005, to the Credit Agreement, dated as of November 8, 2002, as amended and restated as of July 27, 2004, by and among Dex Media, Inc., Dex Media East, Inc., Dex Media East LLC, JPMorgan Chase Bank, as administrative agent, J.P. Morgan Securities Inc. and Banc of America Securities LLC, as joint bookrunners and co-lead arrangers, and Bank of America, N.A., Wachovia Bank, National Association, Lehman Commercial Paper Inc. and Deutsche Bank Trust company Americas, as co-syndication agents (incorporated by reference to Exhibit 10.6 to Dex Media, Inc.’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on August 4, 2005, Commission File No. 001-32249)

73

Exhibit No.	Document
10.67	Guarantee and Collateral Agreement, dated as of November 8, 2002, by and among Dex Media East, Inc., Dex Media East LLC (f/k/a SGN LLC), Dex Media East Finance Co., LCI International, Inc. (Dex Media International, Inc.) and JPMorgan Chase Bank, as collateral agent (incorporated by reference to Exhibit 10.2 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)
10.68	Agreement to Amend and Restate, dated December 13, 2005, among the Company and lenders that are party to the Credit Agreement, dated as of November 8, 2002, as amended, referenced therein (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 19, 2005, Commission File No. 001-07155)
10.69#	Amended and Restated Credit Agreement, dated January 31, 2006, by and among Dex Media, Inc. (f/k/a Forward Acquisition Corp.), Dex Media East, Inc., Dex Media East LLC, JPMorgan Chase Bank, N.A., as administrative agent, and the other entities from time to time parties thereto (incorporated by reference to Exhibit 10.3 to Dex Media, Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 6, 2006, Commission File No. 333-131626)
10.70	Reaffirmation Agreement, dated January 31, 2006, by and among Dex Media, Inc. (f/k/a Forward Acquisition Corp.), Dex Media East, Inc., Dex Media East LLC and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.4 to Dex Media, Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 6, 2006, Commission File No. 333-131626)
10.71#	Credit Agreement, dated as of September 9, 2003, among Dex Media, Inc., Dex Media West, Inc., Dex Media West LLC, JPMorgan Chase Bank, as administrative agent, J.P. Morgan Securities Inc. and Banc of America Securities LLC, as joint bookrunners and joint lead arrangers, and Bank of America, N.A., Wachovia Bank, National Association, Lehman Commercial Paper Inc. and Deutsche Bank Trust Company Americas, as co-syndication agents (incorporated by reference to Exhibit 10.4 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472). This Credit Agreement has been amended and restated.
10.72	First Amendment, dated as of October 31, 2003, to the Credit Agreement, dated as of September 9, 2003, among Dex Media, Inc., Dex Media West, Inc., Dex Media West LLC, JPMorgan Chase Bank, as administrative agent, J.P. Morgan Securities Inc. and Banc of America Securities LLC, as joint bookrunners and joint lead arrangers, and Bank of America, N.A., Wachovia Bank, National Association, Lehman Commercial Paper Inc. and Deutsche Bank Trust Company Americas, as co-syndication agents (incorporated by reference to Exhibit 10.5 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472). This Credit Agreement has been amended and restated.

74

Exhibit No.	Document
10.73	Second Amendment, dated as of June 11, 2004, to the Credit Agreement, dated as of September 9, 2003, as amended as of October 31, 2003, by and among Dex Media, Inc., Dex Media West, Inc., Dex Media West LLC, JPMorgan Chase Bank, as administrative agent, J.P. Morgan Securities Inc. and Banc of America Securities LLC, as joint bookrunners and joint lead arrangers, and Bank of America, N.A., Wachovia Bank, National Association, Lehman Commercial Paper Inc. and Deutsche Bank Trust Company Americas, as co-syndication agents (incorporated by reference to Exhibit 10.7 to Dex Media, Inc.’s Registration Statement on Form S-1, declared effective by the Securities and Exchange Commission on July 21, 2004, Commission File No. 333-115489). This Credit Agreement has been amended and restated.
10.74	Third Amendment, dated as of November 24, 2004, to the Credit Agreement, dated as of September 9, 2003, among Dex Media, Inc., Dex Media West, Inc., Dex Media West LLC JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as administrative agent, J.P. Morgan Securities Inc. and Banc of America Securities LLC, as joint bookrunners and joint lead arrangers, and Bank of America, N.A., Wachovia Bank, National Association, Lehman Commercial Paper Inc. and Deutsche Bank Trust Company Americas, as co-syndication agents (incorporated by reference to Exhibit 10.9 to Dex Media, Inc.’s Registration Statement on Form S-1, declared effective by the Securities and Exchange Commission on January 25, 2005, Commission File No. 333-121859). This Credit Agreement has been amended and restated.
10.75	Fourth Amendment, dated as of June 16, 2005, to the Credit Agreement dated as of September 9, 2003, as amended and restated as of July 27, 2004, by and among Dex Media, Inc., Dex Media West, Inc., Dex Media West LLC, JPMorgan Chase Bank, N.A., as administrative agent, J.P. Morgan Securities Inc. and Banc of America Securities LLC, as joint bookrunners and co-lead arrangers, and Bank of America, N.A., Wachovia Bank, National Association, Lehman Commercial Paper Inc. and Deutsche Bank Trust Company Americas, as co-syndication agents (incorporated by reference to Exhibit 10.5 to Dex Media, Inc.’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on August 4, 2005, Commission File No. 001-32249). This Credit Agreement has been amended and restated.
10.76	Guarantee and Collateral Agreement, dated as of September 9, 2003, among Dex Media West, Inc., Dex Media West LLC, Dex Media West Finance Co. and JPMorgan Chase Bank, as collateral agent (incorporated by reference to Exhibit 10.7 to Dex Media, Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on April 14, 2004, Commission File No. 333-114472)
10.77	Agreement to Amend and Restate, dated December 13, 2005, among the Company and the lenders that are party to the Credit Agreement, dated as of September 9, 2003, as amended, referenced therein (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 December 19, 2005, Commission File No. 001-07155)
10.78#	Amended and Restated Credit Agreement, dated January 31, 2006, by and among Dex Media, Inc. (f/k/a Forward Acquisition Corp.), Dex Media West, Inc., Dex Media West LLC, JPMorgan Chase Bank, N.A., as administrative agent, and the other entities from time to time parties thereto (incorporated by reference to Exhibit 10.1 to Dex Media, Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 6, 2006, Commission File No. 333-131626)

75

Exhibit No.	Document
10.79	Reaffirmation Agreement, dated January 31, 2006, by and among Dex Media, Inc. (f/k/a Forward Acquisition Corp.), Dex Media West, Inc., Dex Media West LLC, JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.2 to Dex Media, Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 6, 2006, Commission File No. 333-131626)
10.80#	Closing Agreement, dated as of December 13, 2004, by and between the Company and the Commissioner of the Internal Revenue Service (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 16, 2004, Commission File No. 001-07155)
10.81	Closing Agreement, dated as of July 21, 2005, by and between the Company and the Commissioner of the Internal Revenue Service (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 3, 2005, Commission File No. 001-07155)
10.82	Sponsor Stockholders Agreement, dated as of October 3, 2005, among the Company, Welsh, Carson, Anderson & Stowe IX, L.P., WD GP Associates LLC and WD Investors LLC (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 October 6, 2005, Commission File No. 001-07155)
10.83	Sponsor Stockholders Agreement, dated as of October 3, 2005, among the Company, Carlyle Partners III, L.P., CP III Coinvestment, L.P., Carlyle High Yield Partners, L.P., Carlyle-Dex Partners L.P. and Carlyle-Dex Partners II, L.P. (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 October 6, 2005, Commission File No. 001-07155)
10.84	Support Agreement, dated October 3, 2005, among the Company, Welsh, Carson, Anderson & Stowe IX, L.P., WD GP Associates LLC and WD Investors LLC. (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 October 6, 2005, Commission File No. 001-07155)
10.85	Support Agreement, dated October 3, 2005, among the Company, Carlyle Partners III, L.P., CP III Coinvestment, L.P., Carlyle High Yield Partners, L.P., Carlyle-Dex Partners L.P. and Carlyle-Dex Partners II, L.P. (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 6, 2005, Commission File No. 001-07155)
10.86#	Stock Purchase and Support Agreement, dated as of October 3, 2005, among the Company and the stockholders listed on Schedule A attached thereto (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 6, 2005, Commission File No. 001-07155)
10.87^	Board of Director Compensation Plan (incorporated by reference to Exhibit 10.85 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, filed with the Securities and Exchange Commission on March 16, 2006, Commission File No. 001-07155)

76

Exhibit No.	Document
10.88	First Amendment, dated as of April 24, 2006, to the Credit Agreement, dated as of September 9, 2003, as amended and restated as of January 31, 2006, among Dex Media, Inc., Dex Media West, Inc., Dex Media West LLC, the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and the other agents parties thereto (incorporated by reference to Exhibit 10.1 to Dex Media, Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on April 28, 2006, Commission File No. 333-131626).
10.89	Reaffirmation Agreement, dated as of April 24, 2006, among Dex Media, Inc., Dex Media West, Inc., Dex Media West LLC, Dex Media West Finance Co. and JPMorgan Chase Bank, N.A., as collateral agent (incorporated by reference to Exhibit 10.2 to Dex Media, Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on April 28, 2006, Commission File No. 333-131626).
10.90	First Amendment, dated as of April 24, 2006, to the Credit Agreement, dated as of November 8, 2002, as amended and restated as of January 31, 2006, among Dex Media, Inc., Dex Media East, Inc., Dex Media East LLC, the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and the other agents parties thereto (incorporated by reference to Exhibit 10.3 to Dex Media, Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on April 28, 2006, Commission File No. 333-131626).
10.91	Reaffirmation Agreement, dated as of April 24, 2006, among Dex Media, Inc., Dex Media East, Inc., Dex Media East LLC, Dex Media East Finance Co., Dex Media International, Inc. and JPMorgan Chase Bank, N.A., as collateral agent (incorporated by reference to Exhibit 10.4 to Dex Media, Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on April 28, 2006, Commission File No. 333-131626).
31.1*	Certification of Quarterly Report on Form 10-Q for the period ended March 31, 2006 by David C. Swanson, Chairman and Chief Executive Officer of R.H. Donnelley 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, 2006 by Steven M. Blondy, Executive Vice President and Chief Financial Officer of R.H. Donnelley 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, 2006 under Section 906 of the Sarbanes-Oxley Act by David C. Swanson, Chairman and Chief Executive Officer, and Steven M. Blondy, Executive Vice President and Chief Financial Officer, for R.H. Donnelley Corporation

*	Filed herewith
^	Management contract or compensatory plan
#	The Company agrees to furnish supplementally a copy of any omitted exhibits or schedules to the Securities and Exchange Commission upon request.

77

SIGNATURES

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

	R.H. DONNELLEY CORPORATION
Date: May 10, 2006	By:	/s/ Steven M. Blondy
		Steven M. Blondy
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)

Date: May 10, 2006	By:	/s/ Jeffrey A. Smith
		Jeffrey A. Smith
		Vice President and Controller (Principal Accounting Officer)

78

Exhibit Index

Exhibit No.	Document
3.4*	Certificate of Elimination of Convertible Cumulative Preferred Stock of R.H. Donnelley Corporation.
4.5*	Form of Warrant Agreement, dated as of November 25, 2002, between the Company and investment partnerships affiliated with The Goldman Sachs Group, Inc.
4.6*	Form of Warrant Agreement, dated January 3, 2003, between the Company and investment partnerships affiliated with The Goldman Sachs Group, Inc.
10.19*	Form of Restricted Stock Award Agreement under 2005 Plan
31.1*	Certification of Quarterly Report on Form 10-Q for the period ended March 31, 2006 by David C. Swanson, Chairman and Chief Executive Officer of R.H. Donnelley 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, 2006 by Steven M. Blondy, Executive Vice President and Chief Financial Officer of R.H. Donnelley 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, 2006 under Section 906 of the Sarbanes-Oxley Act by David C. Swanson, Chairman and Chief Executive Officer, and Steven M. Blondy, Executive Vice President and Chief Financial Officer, for R.H. Donnelley Corporation

* Filed herewith

79

EX-3.4

EXHIBIT 3.4

PAGE 1

Delaware

The First State

     I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF DESIGNATION OF “R.H. DONNELLEY CORPORATION”, FILED IN THIS OFFICE ON THE THIRTY-FIRST DAY OF MARCH, A.D. 2006, AT 7:41 O’CLOCK P.M.

     A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF DEEDS.

	[SEAL]	/s/ Harriet Smith Windsor
		Harriet Smith Windsor, Secretary of State
0788791     8100		AUTHENTICATION: 4640352
060309439		DATE: 04-03-06

State of Delaware
Secretary of State
Division of Corporations
Delivered 08:26 PM 03/31/2006
FILED 07:41 PM 03/31/2006
SRV 060309439 — 0788791 FILE

CERTIFICATE OF ELIMINATION
OF
CONVERTIBLE CUMULATIVE
PREFERRED STOCK
OF
R.H. DONNELLEY CORPORATION

Pursuant to Section 151 of the General
Corporation Law of the State of Delaware

     R.H. Donnelley Corporation (the “Company”), a corporation organized and existing under the laws of the State of Delaware, in accordance with the provisions of Section 151(g) of the General Corporation Law of the State of Delaware, hereby certifies as follows:

     FIRST:      The Restated Certificate of Incorporation of the Company, as amended (the “Certificate of Incorporation”), has authorized 10,000,000 shares of preferred stock, par value $1 per share (the “Preferred Stock”).

     SECOND:      The Company filed on January 3, 2003, in the office of the Secretary of State of the State of Delaware, a Certificate of Designations of Convertible Cumulative Preferred Stock (the “Certificate of Designations”), which established the designation, amount, voting powers, preferences, other special rights, qualifications, limitations and restrictions of a series of Preferred Stock designated as the Company’s Convertible Cumulative Preferred Stock (the “Convertible Preferred Stock”), with the number of shares constituting such series being 250,000.

     THIRD:      No issued shares of the Convertible Preferred Stock remain outstanding and no shares of the Convertible Preferred Stock will be issued pursuant to the Certificate of Designations.

     FOURTH:      On February 21, 2006, at a duly convened meeting of the Board of Directors, the Board of Directors of the Company adopted the following resolution:

     RESOLVED, that, because no shares of the Convertible Preferred Stock remain outstanding and no shares of the Convertible Preferred Stock will be issued pursuant to the Certificate of Designations, the Chief Executive Officer, the President, the Chief Financial Officer, any Vice President and the Secretary of the Company (the “Authorized Officers”) are hereby authorized and directed to file a Certificate of Elimination of the Convertible Preferred Stock with the office of the Secretary of State of the State of Delaware setting forth a copy of this resolution, whereupon all matters set forth in the Certificate of Designations with respect to the Convertible Preferred Stock shall be eliminated from the Certificate of Incorporation, and the 250,000 shares of Preferred

Stock designated as Convertible Preferred Stock shall resume the status of authorized and unissued shares of Preferred Stock.

     FIFTH:      Accordingly, all matters set forth in the Certificate of Designations with respect to the Convertible Preferred Stock shall be eliminated from the Certificate of Incorporation, and the 250,000 shares of Preferred Stock designated as Convertible Preferred Stock shall resume the status of authorized and unissued shares of Preferred Stock.

[signature page follows]

2

     IN WITNESS WHEREOF, the Company has caused this Certificate to be signed in its name and on its behalf and attested on this 29^th day of March 2006 by duly authorized officers of the Company.

		R.H. DONNELLEY CORPORATION
		By:	/s/ Steven M. Blondy
			Name: Steven M. Blondy Title: Senior Vice President and CFO
ATTEST:
By:	/s/ Robert J. Bush
	Name: Robert J. Bush Title: Secretary

3

EX-4.5

EXHIBIT 4.5

This Warrant was originally issued on November 25, 2002 and such issuance was not registered under the Securities Act of 1933, as amended.

R.H. DONNELLEY CORPORATION

FORM OF

STOCK PURCHASE WARRANT

Date of Issuance: November 25, 2002 Certificate No. ____________

     FOR VALUE RECEIVED, R.H. Donnelley Corporation, a Delaware corporation (the “Company”), hereby grants to _________ or its registered assigns (the “Registered Holder”) the right to purchase from the Company ____________ shares of the Company’s Common Stock at the Exercise Price. This Warrant is one of several warrants (collectively, the “Series 1 Warrants”) issued by the Company to certain investors (the “Investors”) pursuant to the letter agreement, dated as of November 25, 2002 (the “Letter Agreement”). Certain capitalized terms used herein are defined in Section 4 and capitalized terms used in this Warrant but not defined herein shall have the meanings ascribed thereto in the Letter Agreement. The amount and kind of securities obtainable pursuant to the purchase rights granted hereunder and the purchase price for such securities are subject to adjustment pursuant to the provisions contained in this Warrant.

     This Warrant is subject to the following provisions:

     Section 1. Exercise of Warrant. (a) Exercise Period. The Registered Holder may exercise, in whole or in part (but not as to a fractional share of Common Stock), the purchase rights represented by this Warrant at any time and from time to time after the Date of Issuance to and including the fifth anniversary of the earlier of (i) the issuance of warrants under the Purchase Agreement or (ii) termination of the Purchase Agreement prior to the closing thereunder (the “Exercise Period”).

          (a) Exercise Procedure. (i) This Warrant shall be deemed to have been exercised when the Company has received all of the following items (the “Exercise Time”):

     (A) a completed Exercise Agreement, as defined in Section 1(c), executed by the Person exercising all or part of the purchase rights represented by this Warrant (the “Purchaser”);

     (B) this Warrant;

     (C) if this Warrant is not registered in the name of the Purchaser, an Assignment or Assignments in the form set forth in Exhibit I evidencing the assignment of this Warrant to the Purchaser, in which case the Registered Holder shall have complied with the provisions set forth in Section 6; and

     (D) either (1) a check payable to the Company in an amount equal to the product of the Exercise Price multiplied by the number of shares of Common Stock being purchased upon such exercise (the “Aggregate Exercise Price”), or (2) a written notice to the Company that the Purchaser is exercising the Warrant (or a portion thereof) by authorizing the Company to withhold from issuance a number of shares of Common Stock issuable upon such exercise of the Warrant that when multiplied by the Current Market Price of the Common Stock is equal to the Aggregate Exercise Price (which withheld shares shall no longer be issuable under this Warrant).

          (ii) Certificates for shares of Common Stock purchased upon exercise of this Warrant shall be delivered by the Company to the Purchaser within five Business Days after the date on which the Exercise Time occurs. Unless this Warrant has expired or all of the purchase rights represented hereby have been exercised, the Company shall prepare a new Warrant, substantially identical hereto, representing the purchase rights formerly represented by this Warrant that have not expired or been exercised and shall within such five-Business Day period deliver such new Warrant to the Person designated for delivery in the Exercise Agreement.

          (iii) The Common Stock issuable upon the exercise of this Warrant shall be deemed to have been issued to the Purchaser at the Exercise Time, and the Purchaser shall be deemed for all purposes to have become the record holder of such Common Stock as of the Exercise Time.

          (iv) The issuance of certificates for shares of Common Stock upon exercise of this Warrant shall be made without charge to the Registered Holder or the Purchaser for any issuance tax in respect thereof if issued to the Registered Holder or other cost incurred by the Company in connection with such exercise and the related issuance of shares of Common Stock. Each share of Common Stock issuable upon exercise of this Warrant shall upon payment of the Exercise Price therefor, be fully paid and nonassessable and free from all liens and charges with respect to the issuance thereof.

          (v) The Company shall not close its books against the transfer of this Warrant or of any share of Common Stock issued or issuable upon the exercise of this Warrant in any manner that interferes with the timely and proper exercise of this Warrant.

          (vi) Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a registered public offering or the sale of the Company, the exercise of any portion of this Warrant may, at the election of the holder hereof, be conditioned upon the consummation of the public offering or sale of the Company in which case such exercise shall not be deemed to be effective until the consummation of such transaction.

          (vii) The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of issuance upon the exercise of the Series 1 Warrants, such number of shares of Common Stock issuable upon the exercise of all outstanding Series 1 Warrants. The Company shall take all such actions as may be necessary to assure that all such shares of Common Stock may be so issued without violation of any law or governmental regulation applicable to the Company or any requirements of any

2

domestic securities exchange upon which shares of Common Stock may be listed (except for official notice of issuance that shall be immediately delivered by the Company upon each such issuance). The Company shall not take any action that would cause the number of authorized but unissued shares of Common Stock to be less than the number of such shares required to be reserved hereunder for issuance upon exercise of the Series 1 Warrants.

          (c) Exercise Agreement. Upon any exercise of this Warrant, the Exercise Agreement shall be substantially in the form set forth in Exhibit II (the “Exercise Agreement”), except that if the shares of Common Stock are not to be issued in the name of the Person in whose name this Warrant is registered, the Exercise Agreement shall also state the name of the Person to whom the certificates for the shares of Common Stock are to be issued, and if the number of shares of Common Stock to be issued does not include all the shares of Common Stock purchasable hereunder, it shall also state the name of the Person to whom a new Warrant for the unexercised portion of the purchase rights hereunder is to be delivered. Such Exercise Agreement shall be dated the actual date of execution thereof.

          (d) Fractional Shares. If a fractional share of Common Stock would be issuable upon exercise of the purchase rights represented by this Warrant, the Company shall, unless prohibited by any agreement to which the Company is a party, within five Business Days after the date on which the Exercise Time occurs, deliver to the Purchaser a check payable to the Purchaser in lieu of such fractional share in an amount equal to the difference between Current Market Price of such fractional share as of the date on which the Exercise Time occurs and the Exercise Price of such fractional share.

          Section 2. Adjustment of Exercise Price and Number of Shares. In order to prevent dilution of the purchase rights granted under this Warrant, the Exercise Price shall be subject to adjustment from time to time as provided in this Section 2, and the number of shares of Common Stock obtainable upon exercise of this Warrant shall be subject to adjustment from time to time as provided in this Section 2.

          (a) The Exercise Price shall be subject to adjustment as follows:

          (i) In case the Company shall at any time or from time to time after the Date of Issuance (A) pay a dividend or make a distribution in shares of Common Stock or Convertible Securities into Common Stock, (B) subdivide or reclassify the outstanding shares of Common Stock into a greater number of shares of Common Stock, (C) combine or reclassify the outstanding shares of Common Stock into a smaller number of shares, or (D) otherwise issue by reclassification of the shares of Common Stock any shares of capital stock of the Company, then, and in each such case, the Exercise Price in effect immediately prior to such action and the number of shares of Common Stock obtainable upon exercise of this Warrant shall be proportionately adjusted so that the holder of this Warrant shall be entitled to receive the number of shares of Common Stock or other securities of the Company upon exercise of this Warrant which such holder would have owned or have been entitled to receive after the happening of any of the events described above had such Warrant been exercised immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this Section 2(a)(i) shall become applicable (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of

3

holders of shares of Common Stock entitled to receive such dividend or distribution and (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. Such adjustment shall be made successively.

          (ii) In case the Company shall at any time or from time to time after the Date of Issuance declare, order, pay or make a dividend or other distribution (including without limitation any distribution of stock or other securities, evidences of indebtedness, property or assets or rights or warrants to subscribe for securities of the Company or any of its Subsidiaries) on its Common Stock (other than (A) regular quarterly dividends payable in cash or (B) dividends or distributions of shares of Common Stock referred to in Section 2(a)(i)) (any one of the foregoing other than the items specified in clause (A) or (B) referred to as “Securities or Assets”), then and in each such case, unless the Company elects to reserve shares or other units of such Securities or Assets for distribution to the holders of the Series 1 Warrants upon the exercise of such Series 1 Warrants so that any such holder exercising its Series 1 Warrants will receive upon such exercise, in addition to the shares of the Common Stock to which such holder is entitled, the amount and kind of such Securities or Assets which such holder would have received if such holder had, immediately prior to the record date for the distribution of the Securities or Assets, exercised its Warrant for Common Stock, the Exercise Price shall be adjusted so that such Exercise Price shall equal the price determined by multiplying the Exercise Price in effect immediately prior to the date of such distribution by a fraction of which the numerator shall be the Current Market Price of the Common Stock on such record date less the then fair market value (as determined by the Board in good faith) of the portion of the capital stock or assets or evidences of indebtedness so distributed or of such rights or warrants applicable to one share of Common Stock, and of which the denominator shall be the Current Market Price of the Common Stock on such record date; provided, however, that if the then fair market value (as so determined) of the portion of the Securities or Assets so distributed applicable to one share of Common Stock is equal to or greater than the Current Market Price of the Common Stock on the record date mentioned above, in lieu of the foregoing adjustment, adequate provision shall be made so that each holder of the Series 1 Warrants shall have the right to receive the amount and kind of Securities or Assets which such holder would have received had such holder exercised its Warrant immediately prior to the record date for the distribution of the Securities or Assets. Such adjustment shall become effective immediately after the record date for the determination of shareholders entitled to receive such distribution.

          (iii) In case the Company shall issue or sell any Common Stock (or rights, Options, warrants or other Convertible Securities) (collectively, “Additional Shares”) at any time after the date hereof until November 25, 2005 without consideration or for a consideration per share (or having a exercise, exchange or exercise price per share) (such per share amount, the “Sale Price”) less than the greater of (A) the Current Market Price per share of Common Stock on the date preceding the earlier of the issuance or public announcement of the issuance of such Additional Shares of Common Stock and (B) the Exercise Price as of the date of such issuance of shares (or, in the case of Convertible Securities, less than the greater of the Current Market Price or the Exercise Price, as the case may be, as of the date of issuance of the rights, Options, warrants or other securities in respect of which shares of Common Stock were issued) then, and in each such case, the Exercise Price shall be reduced to an amount determined by multiplying (A) the Exercise Price in effect on the day immediately prior to such date by (B) a fraction, the

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numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding immediately prior to such sale or issuance multiplied by the greater of (a) the then applicable Exercise Price per share and (b) the Current Market Price per share of Common Stock on the date preceding the earlier of the issuance or public announcement of the issuance of such Additional Shares of Common Stock (the greater of (a) and (b) above hereinafter referred to as the “Adjustment Price”) and (2) the aggregate consideration receivable by the Company for the total number of shares of Common Stock so issued (or into or for which the rights, Options, warrants or other securities are convertible, exercisable or exchangeable), and the denominator of which shall equal to the product of (I) the sum of (x) the total number of shares of Common Stock outstanding immediately prior to such sale or issue and (y) the number of additional shares of Common Stock issued (or into or for which the rights, Options, warrants or other securities may be converted, exercised or exchanged), multiplied by (II) the Adjustment Price. In case any portion of the consideration to be received by the Company shall be in a form other than cash, the fair market value of such noncash consideration shall be utilized in the foregoing computation. Such fair market value shall be determined in good faith by the Board of Directors. Upon each such adjustment of the Exercise Price hereunder, the number of Shares of Common Stock acquirable upon exercise of this Warrant shall be adjusted to the number of shares determined by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of shares of Common Stock acquirable upon exercise of this Warrant immediately prior to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment. An adjustment made pursuant to this subsection (iii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively to the close of business on the date of such issuance. For purposes of this subsection (iii), the aggregate consideration receivable by the Company in connection with the issuance of shares of Common Stock or of rights, warrants or other Convertible Securities shall be deemed to be equal to the sum of the aggregate offering price (before deduction of underwriting discounts or commissions and expenses payable to third parties) of all such Common Stock, rights, warrants and Convertible Securities plus the aggregate amount (as determined on the date of issuance), if any, payable upon exercise or exercise of any such rights, warrants and Convertible Securities into shares of Common Stock. If, subsequent to the date of issuance of such right, warrants or other Convertible Securities, the conversion or exercise price thereof is reduced, such aggregate amount shall be recalculated and the Exercise Price and the number of shares of Common Stock obtainable upon exercise of this Warrant shall be adjusted retroactively to give effect to such reduction. On the expiration of any option or the termination of any right to convert or exchange any securities into Additional Shares, the Exercise Price then in effect hereunder shall forthwith be increased to the Exercise Price which would have been in effect at the time of such expiration or termination (but taking into account other adjustments or potential made following the time of issuance of such Options or securities) had such option or security, to the extent outstanding immediately prior to such expiration or termination, never been issued and the number of shares of Common Stock obtainable upon exercise of this Warrant shall be correspondingly adjusted. If Common Stock is sold as a unit with other securities, the aggregate consideration received for such Common Stock shall be deemed to be net of the fair market value (as determined by the Board of Directors in good faith) of such other securities. The issuance or reissuance of (A) any shares of Common Stock or rights, warrants or other Convertible Securities (whether treasury shares or newly issued shares) (1) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding

5

shares of Common Stock requiring an adjustment in the Exercise Price pursuant to subsection (i) of this Section 2(a); (2) pursuant to any restricted stock or stock option plan or program of the Company involving the grant of Options or rights to acquire shares of Common Stock after the date hereof to directors, officers and employees of the Company and its Subsidiaries; (3) pursuant to any option, warrant, right, or Convertible Security outstanding as of the Date of Issuance; (4) pursuant to any securities issued to a bank or other similar financial institution solely in connection with the Senior Credit Facility and the Senior Subordinated Credit Facility; or (5) pursuant to an underwritten offering registered with the SEC if the offering price is greater than the Exercise Price then in effect; (B) the Preferred Stock and any shares of Common Stock issuable upon conversion or exercise thereof, or (C) the Series 1 Warrants and any shares of Common Stock issuable upon exercise thereof, shall not be deemed to constitute an issuance of Common Stock or Convertible Securities by the Company to which this subsection (iii) applies. No adjustment shall be made pursuant to this subsection (iii) in connection with any transaction to which Section 2(b) applies.

          (iv) For purposes of this Section 2(a), the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Company.

          (v) All calculations of the Exercise Price pursuant to this Section 2(a) shall be made to the nearest one one-hundredth of a cent. Anything in this Section 2(a) to the contrary notwithstanding, (A) the Company shall not be required to give effect to any adjustment in the Exercise Price unless and until the net effect of one or more adjustments (each of which shall be carried forward), determined as above provided, shall have resulted in a reduction of the Exercise Price of at least 1%, and when the cumulative net effect of more than one adjustment so determined shall be to reduce the Exercise Price by at least 1%, such reduction in Exercise Price shall thereupon be given effect and (B) in no event shall the then current Exercise Price be increased as a result of any calculation made at any time pursuant to this Section 2(a).

          (b) (i) In case of any capital reorganization or reclassification of outstanding shares of Common Stock (other than a reclassification to which Section 2(a)(i) shall apply), or in case of any merger or consolidation of the Company with or into another Person (as defined below), or in case of any sale or conveyance to another Person of all or substantially all of the assets of the Company or any compulsory share exchange pursuant to which share exchange the shares of Common Stock are converted into other securities, cash or other property (each of the foregoing being referred to as a “Transaction”), this Warrant shall thereafter be exercisable for, in lieu of the shares of Common Stock issuable upon such exercise prior to consummation of such Transaction, the kind and amount of shares of stock and other securities and property receivable (including cash) upon the consummation of such Transaction by a holder of that number of shares of Common Stock into which the Warrant was exercisable for immediately prior to such Transaction (including, on a pro rata basis, the cash, securities or property received by holders of Common Stock in any tender or exchange offer that is a step in such Transaction).

          (ii) Notwithstanding anything contained herein to the contrary, the Company will not effect any Transaction unless, prior to the consummation thereof, (A) the Surviving Person shall agree that the Series 1 Warrants shall be treated as provided in paragraph (i) of this Section 2(b) and the agreements governing such Transaction shall so provide and (B) the

6

Surviving Person thereof shall assume, by written instrument mailed, by first-class mail, postage prepaid, to each holder of the Series 1 Warrants at such holder’s address as it appears in the records of the Company, the obligation to deliver to such holder such cash or other securities to which, in accordance with the foregoing provisions, such holder is entitled and such Surviving Person shall have mailed, by first-class mail, postage prepaid, to each holder of the Series 1 Warrants at such holder’s address as it appears in the records of the Company, and an opinion of independent counsel for such Person stating that such assumption agreement is a valid, binding and enforceable agreement of the Surviving Person.

          (c) In any case, if necessary, appropriate adjustment (as determined in good faith by the Board of Directors) shall be made in the application of the provisions set forth in this Section 2 with respect to rights and interests thereafter of the holders of the Series 1 Warrants to the end that the provisions set forth herein for the protection of the purchase rights of the Series 1 Warrants shall thereafter be applicable, as nearly as reasonably may be, to any such other shares of stock and other securities (other than the Common Stock) and property deliverable upon exercise of the Series 1 Warrants remaining outstanding with such adjustments in the Exercise Price and the number of shares of Common Stock obtainable upon exercise of this Warrant and such other adjustments in the provisions hereof as the Board of Directors shall in good faith determine to be appropriate. In case securities or property other than Common Stock shall be issuable or deliverable upon exercise as aforesaid, then all references in this Section 2 shall be deemed to apply, so far as appropriate and as nearly as may be, to such other securities or property.

          (d) If the Company shall pay any dividend or make any other distribution to the holders of its Common Stock (other than regularly quarterly dividends payable in cash) or shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other right, or there shall be any Transaction, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company, then, in any one or more of said cases the Company shall give at least 15 days prior written notice to the holders of the Series 1 Warrants by first-class mail, postage prepaid, at their respective addresses as they shall appear in the records of the Company of the earlier of the dates on which (i) the books of the Company shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such Transaction, dissolution, liquidation or winding up shall take place. Such notice shall also specify that date as of which the holders of the Common Stock of record shall participate in said dividend, distribution of subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken.

          Section 3. Reports as to Adjustments. Upon the occurrence of any event specified in Section 2(a) that would result in any adjustment of the Exercise Price, then, and in each such case, the Company shall promptly deliver by first-class mail, postage prepaid, at their respective addresses as they shall appear in the records of the Company, a certificate signed by the President or a Vice President and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the Company setting forth in reasonable detail the event requiring the adjustment and the method by which such adjustment was calculated and specifying the

7

Exercise Price then in effect and the number of shares of Common Stock obtainable upon exercise of the Series 1 Warrants following such adjustment. Where appropriate, such notice to the holders of the Series 1 Warrants may be given in advance and included as part of the notice required pursuant to Section 2(d).

          Section 4. Definitions. The following terms have meanings set forth below:

          “Business Day” means any day other than a Saturday, Sunday, or any day on which banks in New York City are authorized or obligated by applicable law to close.

          “Common Stock” means, collectively, the Company’s Common Stock, par value $1 per share (including any associated Right, as defined in and issued pursuant to the Rights Agreement, dated as of October 27, 1998, as amended, by and between the Company and The Bank of New York (successor to First Chicago Trust Company of New York), as Rights Agent.

          “Convertible Securities” means any stock or securities (directly or indirectly, after the passage of time or otherwise) convertible into or exercisable or exchangeable for Common Stock.

          “Current Market Price,” when used with reference to shares of Common Stock or other securities on any date, shall mean the closing price per share of Common Stock or such other securities on such date and, when used with reference to shares of Common Stock or other securities for any period, shall mean the average of the daily closing prices per share of Common Stock or such other securities for such period. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Common Stock or such other securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Common Stock or such other securities are listed or admitted to trading or, if the Common Stock or such other securities are not listed or admitted to trading on any national securities exchange, the last quoted sale price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or such other system then in use, or, if on any such date the Common Stock or such other securities are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock or such other securities selected by the Board of Directors of the Company. If the Common Stock or such other securities are not publicly held or so listed or publicly traded, “Current Market Price” shall mean the fair market value per share of Common Stock or of such other securities as determined by an independent investment banking firm with an established national reputation as a valuer of equity securities selected by the Company and reasonably acceptable to the holders of a majority of the shares of Preferred Stock outstanding at the time.

          “Exercise Price” shall mean $26.28.

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          “Options” means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.

          “Person” or “person” means any corporation, individual, limited liability company, joint stock company, joint venture, partnership, unincorporated association, governmental regulatory entity, country, state or political subdivision thereof, trust, municipality or other entity.

          “Purchase Agreement” means the Preferred Stock and Warrant Purchase Agreement, dated as of September 21, 2002, by and among the Company and the investors listed in Schedule A thereto.

          “Surviving Person” shall mean the continuing or surviving Person of a merger, consolidation or other corporate combination, the Person receiving a transfer of all or a substantial part of the properties and assets of the Company, or the Person consolidating with or merging into the Company in a merger, consolidation or other corporate combination in which the Company is the continuing or surviving Person, but in connection with which the Preferred Stock, Series 1 Warrants or Common Stock of the Company is exchanged or converted into the securities of any other Person or the right to receive cash or any other property.

          “Trading Day” shall mean a day on which the principal national securities exchange on which the Common Stock is listed or admitted to trading is open for the transaction of business or, if the Common Stock is not listed or admitted to trading on any national exchange, a Business Day.

          Section 5. No Voting Rights; Limitations of Liability. This Warrant shall not entitle the holder hereof to any voting rights or other rights as a stockholder of the Company. No provision hereof, in the absence of affirmative action by the Registered Holder to purchase Common Stock, and no enumeration herein of the rights or privileges of the Registered Holder shall give rise to any liability of such holder for the Exercise Price of Common Stock acquirable by exercise hereof or as a stockholder of the Company.

          Section 6. Warrant Transferable. Subject to the transfer conditions referred to in the legend endorsed hereon, if any, this Warrant and all rights hereunder are transferable, in whole or in part, without charge to the Registered Holder, upon surrender of this Warrant with a properly executed Assignment (in the form of Exhibit I) at the principal office of the Company.

          Section 7. Warrant Exchangeable for Different Denominations. This Warrant is exchangeable, upon the surrender hereof by the Registered Holder at the principal office of the Company, for new Series 1 Warrants of like tenor representing in the aggregate the purchase rights hereunder, and each of such new Series 1 Warrants shall represent such portion of such purchase rights as is designated by the Registered Holder at the time of such surrender. The date the Company initially issues this Warrant shall be deemed to be the “Date of Issuance” hereof regardless of the number of times new certificates representing the unexpired and unexercised purchase rights formerly represented by this Warrant shall be issued. All Series 1 Warrants representing portions of the purchase rights hereunder are referred to herein as the “Series 1 Warrants.”

9

          Section 8. Replacement. Upon receipt of evidence reasonably satisfactory to the Company (an affidavit of the Registered Holder shall be satisfactory) of the ownership and the loss, theft, destruction or mutilation of any certificate evidencing the Series 1 Warrants, and in the case of any such loss, theft or destruction, upon receipt of indemnity reasonably satisfactory to the Company (provided that if the holder is a financial institution or other institutional investor its own agreement shall be satisfactory), or, in the case of any such mutilation upon surrender of such certificate, the Company shall (at its expense) execute and deliver in lieu of such certificate a new certificate of like kind representing the number of Series 1 Warrants of such class represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate.

          Section 9. Notices. Except as otherwise expressly provided hereunder, all notices referred to herein shall be in writing and shall be delivered by registered or certified mail, return receipt requested and postage prepaid, or by reputable overnight courier service, charges prepaid, and shall be deemed to have been given when so mailed or sent (i) to the Company, at its principal executive offices, Attention: General Counsel and (ii) to any Registered Holder, at such holder’s address as it appears in the stock records of the Company (unless otherwise indicated by any such holder).

          Section 10. Amendment and Waiver. Any provision of this Warrant may be amended or modified in whole or in part at any time by an agreement in writing among the Company and the holder of this Warrant. No failure on the part of either the Company or the holder of this Warrant to exercise, and no delay in exercising, any right shall operate as a waiver thereof nor shall any single or partial exercise by either the Company or the holder of this Warrant of any right preclude any other or future exercise thereof or the exercise of any other right.

          Section 11. Descriptive Headings; Governing Law. The descriptive headings of the several Sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. References in this Warrant to Sections and Exhibits are references to Sections of, and Exhibits to, this Warrant unless otherwise noted. The corporation laws of the State of Delaware shall govern all issues concerning the relative rights of the Company and its stockholders. All other questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by the internal law of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Delaware.

          Section 12. Severability. Should any part of this Warrant for any reason be declared invalid, such decision shall not affect the validity of the remaining portion, which remaining portion shall remain in full force and effect as if this Warrant had been executed with the invalid portion thereof eliminated, and it is hereby declared the intention of the Company hereto that it would have executed the remaining portion of this Warrant without including therein any such parts or parts which may, for any reason, be hereafter declared invalid.

          Section 13. Entire Agreement. This Warrant and the Letter Agreement and the documents described herein and therein or attached or delivered pursuant hereto or thereto set

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forth the entire agreement between the Company and the Registered Holder with respect to the transactions contemplated by this Warrant.

* * * * * *

11

          IN WITNESS WHEREOF, the Company has caused this Warrant to be signed and attested by its duly authorized officers under its corporate seal and to be dated the Date of Issuance hereof.

	R.H. DONNELLEY CORPORATION
	By:
		Name: Title:
Attest:
Name:
Title:

EXHIBIT I

ASSIGNMENT

     FOR VALUE RECEIVED, ____________ hereby sells, assigns and transfers all of the rights of the undersigned under the attached Warrant (Certificate No. ______) with respect to the number of shares of the Common Stock, par value $1 per share, of R.H. Donnelley Corporation, a Delaware corporation, covered thereby set forth below, unto:

Names of Assignee Address No. of Shares

Signature:

Address:

Witness:

EXHIBIT II

EXERCISE AGREEMENT

To: R.H. Donnelley Corporation Dated:

     The undersigned, pursuant to the provisions set forth in the attached Warrant (Certificate No. ______), hereby agrees to subscribe for the purchase of ____________ shares of the Common Stock, par value $1 per share (the “Common Stock”), of R.H. Donnelley Corporation, a Delaware corporation (the “Company”), covered by such Warrant and makes payment herewith in full therefor at the price per share provided by such Warrant.

     The undersigned¹ represents to the Company as follows:

     (i) such Person (as defined in the Warrant) is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act of 1933 (the “Securities Act”) and was not organized for the specific purpose of acquiring the Common Stock issuable upon exercise thereof;

     (ii) such person has sufficient knowledge, sophistication and experience in financial and business matters as are necessary to evaluate the risks and merits of an investment in the Company;

     (iii) such Person has had an opportunity to discuss the Company’s business, management and financial affairs with the Company’s management;

     (iv) the Common Stock being acquired by such Person is being acquired for its own account for the purpose of investment and not with a view to or for sale in connection with any distribution thereof; and

     (v) such Person understands that (A) none of the shares of Common Stock issuable upon the exercise of the Warrant have been registered under the Securities Act and are being issued in reliance upon federal and state exemptions for transactions not involving any public offering, (B) the shares of Common Stock issuable upon the exercise of the Warrant must be held indefinitely unless a subsequent disposition thereof is registered under the Securities Act or is exempt from such registration, (C) the shares of Common Stock issuable upon the exercise of the Warrant will bear a legend to such effect, as applicable, and (D) the Company will make a notation on its transfer books to such effect.

[NAME OF PERSON]
By:
	Name:
	Title:
	Address:

1 In the event that the shares of Common Stock are not issued in the name of the Person (as defined in the Warrant) in whose name the Warrant is registered or if the number of shares of Common Stock to be issued does not include all of the shares purchasable under the Warrant, then this Exercise Agreement shall be modified to include applicable language with respect to the provisions of this Exercise Agreement

EX-4.6

EXHIBIT 4.6

This Warrant was originally issued on January 3, 2003, and such issuance was not registered under the Securities Act of 1933, as amended.

R.H. DONNELLEY CORPORATION

FORM OF

STOCK PURCHASE WARRANT

Date of Issuance: January 3, 2003 Certificate No. ____________

     FOR VALUE RECEIVED, R.H. Donnelley Corporation, a Delaware corporation (the “Company”), hereby grants to ____________ or its registered assigns (the “Registered Holder”) the right to purchase from the Company ____________ shares of the Company’s Common Stock at the Exercise Price. This Warrant is one of several warrants (collectively, the “Series 2 Warrants”) issued by the Company to certain investors (the “Investors”) pursuant to the Preferred Stock and Warrant Purchase Agreement, dated as of September 21, 2002 (as amended, the “Purchase Agreement”). Certain capitalized terms used herein are defined in Section 4 and capitalized terms used in this Warrant but not defined herein shall have the meanings ascribed thereto in the Purchase Agreement. The amount and kind of securities obtainable pursuant to the purchase rights granted hereunder and the purchase price for such securities are subject to adjustment pursuant to the provisions contained in this Warrant.

     This Warrant is subject to the following provisions:

     Section 1. Exercise of Warrant. (a) Exercise Period. The Registered Holder may exercise, in whole or in part (but not as to a fractional share of Common Stock), the purchase rights represented by this Warrant at any time and from time to time after the Date of Issuance to and including the fifth anniversary thereof (the “Exercise Period”).

          (a) Exercise Procedure. (i) This Warrant shall be deemed to have been exercised when the Company has received all of the following items (the “Exercise Time”):

     (A) a completed Exercise Agreement, as defined in Section 1(c), executed by the Person exercising all or part of the purchase rights represented by this Warrant (the “Purchaser”);

     (B) this Warrant;

     (C) if this Warrant is not registered in the name of the Purchaser, an Assignment or Assignments in the form set forth in Exhibit I evidencing the assignment of this Warrant to the Purchaser, in which case the Registered Holder shall have complied with the provisions set forth in Section 6; and

     (D) either (1) a check payable to the Company in an amount equal to the product of the Exercise Price multiplied by the number of shares of Common Stock being

purchased upon such exercise (the “Aggregate Exercise Price”), or (2) a written notice to the Company that the Purchaser is exercising the Warrant (or a portion thereof) by authorizing the Company to withhold from issuance a number of shares of Common Stock issuable upon such exercise of the Warrant that when multiplied by the Current Market Price of the Common Stock is equal to the Aggregate Exercise Price (which withheld shares shall no longer be issuable under this Warrant).

          (ii) Certificates for shares of Common Stock purchased upon exercise of this Warrant shall be delivered by the Company to the Purchaser within five Business Days after the date on which the Exercise Time occurs. Unless this Warrant has expired or all of the purchase rights represented hereby have been exercised, the Company shall prepare a new Warrant, substantially identical hereto, representing the purchase rights formerly represented by this Warrant that have not expired or been exercised and shall within such five-Business Day period deliver such new Warrant to the Person designated for delivery in the Exercise Agreement.

          (iii) The Common Stock issuable upon the exercise of this Warrant shall be deemed to have been issued to the Purchaser at the Exercise Time, and the Purchaser shall be deemed for all purposes to have become the record holder of such Common Stock as of the Exercise Time.

          (iv) The issuance of certificates for shares of Common Stock upon exercise of this Warrant shall be made without charge to the Registered Holder or the Purchaser for any issuance tax in respect thereof if issued to the Registered Holder or other cost incurred by the Company in connection with such exercise and the related issuance of shares of Common Stock. Each share of Common Stock issuable upon exercise of this Warrant shall upon payment of the Exercise Price therefor, be fully paid and nonassessable and free from all liens and charges with respect to the issuance thereof.

          (v) The Company shall not close its books against the transfer of this Warrant or of any share of Common Stock issued or issuable upon the exercise of this Warrant in any manner that interferes with the timely and proper exercise of this Warrant.

          (vi) Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a registered public offering or the sale of the Company, the exercise of any portion of this Warrant may, at the election of the holder hereof, be conditioned upon the consummation of the public offering or sale of the Company in which case such exercise shall not be deemed to be effective until the consummation of such transaction.

          (vii) The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of issuance upon the exercise of the Series 2 Warrants, such number of shares of Common Stock issuable upon the exercise of all outstanding Series 2 Warrants. The Company shall take all such actions as may be necessary to assure that all such shares of Common Stock may be so issued without violation of any law or governmental regulation applicable to the Company or any requirements of any domestic securities exchange upon which shares of Common Stock may be listed (except for official notice of issuance that shall be immediately delivered by the Company upon each such

2

issuance). The Company shall not take any action that would cause the number of authorized but unissued shares of Common Stock to be less than the number of such shares required to be reserved hereunder for issuance upon exercise of the Series 2 Warrants.

          (b) Exercise Agreement. Upon any exercise of this Warrant, the Exercise Agreement shall be substantially in the form set forth in Exhibit II (the “Exercise Agreement”), except that if the shares of Common Stock are not to be issued in the name of the Person in whose name this Warrant is registered, the Exercise Agreement shall also state the name of the Person to whom the certificates for the shares of Common Stock are to be issued, and if the number of shares of Common Stock to be issued does not include all the shares of Common Stock purchasable hereunder, it shall also state the name of the Person to whom a new Warrant for the unexercised portion of the purchase rights hereunder is to be delivered. Such Exercise Agreement shall be dated the actual date of execution thereof.

          (c) Fractional Shares. If a fractional share of Common Stock would be issuable upon exercise of the purchase rights represented by this Warrant, the Company shall, unless prohibited by any agreement to which the Company is a party, within five Business Days after the date on which the Exercise Time occurs, deliver to the Purchaser a check payable to the Purchaser in lieu of such fractional share in an amount equal to the difference between Current Market Price of such fractional share as of the date on which the Exercise Time occurs and the Exercise Price of such fractional share.

          Section 2. Adjustment of Exercise Price and Number of Shares. In order to prevent dilution of the purchase rights granted under this Warrant, the Exercise Price shall be subject to adjustment from time to time as provided in this Section 2, and the number of shares of Common Stock obtainable upon exercise of this Warrant shall be subject to adjustment from time to time as provided in this Section 2.

          (a) The Exercise Price shall be subject to adjustment as follows:

          (i) In case the Company shall at any time or from time to time after the Date of Issuance (A) pay a dividend or make a distribution in shares of Common Stock or Convertible Securities into Common Stock, (B) subdivide or reclassify the outstanding shares of Common Stock into a greater number of shares of Common Stock, (C) combine or reclassify the outstanding shares of Common Stock into a smaller number of shares, or (D) otherwise issue by reclassification of the shares of Common Stock any shares of capital stock of the Company, then, and in each such case, the Exercise Price in effect immediately prior to such action and the number of shares of Common Stock obtainable upon exercise of this Warrant shall be proportionately adjusted so that the holder of this Warrant shall be entitled to receive the number of shares of Common Stock or other securities of the Company upon exercise of this Warrant which such holder would have owned or have been entitled to receive after the happening of any of the events described above had such Warrant been exercised immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this Section 2(a)(i) shall become applicable (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution and (y) in the case of any such subdivision, reclassification or combination, at the close of business on the

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day upon which such corporate action becomes effective. Such adjustment shall be made successively.

          (ii) In case the Company shall at any time or from time to time after the Date of Issuance declare, order, pay or make a dividend or other distribution (including without limitation any distribution of stock or other securities, evidences of indebtedness, property or assets or rights or warrants to subscribe for securities of the Company or any of its Subsidiaries) on its Common Stock (other than (A) regular quarterly dividends payable in cash or (B) dividends or distributions of shares of Common Stock referred to in Section 2(a)(i)) (any one of the foregoing other than the items specified in clause (A) or (B) referred to as “Securities or Assets”), then and in each such case, unless the Company elects to reserve shares or other units of such Securities or Assets for distribution to the holders of the Series 2 Warrants upon the exercise of such Series 2 Warrants so that any such holder exercising its Series 2 Warrants will receive upon such exercise, in addition to the shares of the Common Stock to which such holder is entitled, the amount and kind of such Securities or Assets which such holder would have received if such holder had, immediately prior to the record date for the distribution of the Securities or Assets, exercised its Warrant for Common Stock, the Exercise Price shall be adjusted so that such Exercise Price shall equal the price determined by multiplying the Exercise Price in effect immediately prior to the date of such distribution by a fraction of which the numerator shall be the Current Market Price of the Common Stock on such record date less the then fair market value (as determined by the Board in good faith) of the portion of the capital stock or assets or evidences of indebtedness so distributed or of such rights or warrants applicable to one share of Common Stock, and of which the denominator shall be the Current Market Price of the Common Stock on such record date; provided, however, that if the then fair market value (as so determined) of the portion of the Securities or Assets so distributed applicable to one share of Common Stock is equal to or greater than the Current Market Price of the Common Stock on the record date mentioned above, in lieu of the foregoing adjustment, adequate provision shall be made so that each holder of the Series 2 Warrants shall have the right to receive the amount and kind of Securities or Assets which such holder would have received had such holder exercised its Warrant immediately prior to the record date for the distribution of the Securities or Assets. Such adjustment shall become effective immediately after the record date for the determination of shareholders entitled to receive such distribution.

          (iii) In case the Company shall issue or sell any Common Stock (or rights, Options, warrants or other Convertible Securities) (collectively, “Additional Shares”) at any time after the date hereof until January 3, 2006 without consideration or for a consideration per share (or having a exercise, exchange or exercise price per share) (such per share amount, the “Sale Price”) less than the greater of (A) the Current Market Price per share of Common Stock on the date preceding the earlier of the issuance or public announcement of the issuance of such Additional Shares of Common Stock and (B) the Exercise Price as of the date of such issuance of shares (or, in the case of Convertible Securities, less than the greater of the Current Market Price or the Exercise Price, as the case may be, as of the date of issuance of the rights, Options, warrants or other securities in respect of which shares of Common Stock were issued) then, and in each such case, the Exercise Price shall be reduced to an amount determined by multiplying (A) the Exercise Price in effect on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding immediately prior to such sale or issuance multiplied by the greater of (a) the then applicable

4

Exercise Price per share and (b) the Current Market Price per share of Common Stock on the date preceding the earlier of the issuance or public announcement of the issuance of such Additional Shares of Common Stock (the greater of (a) and (b) above hereinafter referred to as the “Adjustment Price”) and (2) the aggregate consideration receivable by the Company for the total number of shares of Common Stock so issued (or into or for which the rights, Options, warrants or other securities are convertible, exercisable or exchangeable), and the denominator of which shall equal to the product of (I) the sum of (x) the total number of shares of Common Stock outstanding immediately prior to such sale or issue and (y) the number of additional shares of Common Stock issued (or into or for which the rights, Options, warrants or other securities may be converted, exercised or exchanged), multiplied by (II) the Adjustment Price. In case any portion of the consideration to be received by the Company shall be in a form other than cash, the fair market value of such noncash consideration shall be utilized in the foregoing computation. Such fair market value shall be determined in good faith by the Board of Directors. Upon each such adjustment of the Exercise Price hereunder, the number of Shares of Common Stock acquirable upon exercise of this Warrant shall be adjusted to the number of shares determined by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of shares of Common Stock acquirable upon exercise of this Warrant immediately prior to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment. An adjustment made pursuant to this subsection (iii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively to the close of business on the date of such issuance. For purposes of this subsection (iii), the aggregate consideration receivable by the Company in connection with the issuance of shares of Common Stock or of rights, warrants or other Convertible Securities shall be deemed to be equal to the sum of the aggregate offering price (before deduction of underwriting discounts or commissions and expenses payable to third parties) of all such Common Stock, rights, warrants and Convertible Securities plus the aggregate amount (as determined on the date of issuance), if any, payable upon exercise or exercise of any such rights, warrants and Convertible Securities into shares of Common Stock. If, subsequent to the date of issuance of such right, warrants or other Convertible Securities, the conversion or exercise price thereof is reduced, such aggregate amount shall be recalculated and the Exercise Price and the number of shares of Common Stock obtainable upon exercise of this Warrant shall be adjusted retroactively to give effect to such reduction. On the expiration of any option or the termination of any right to convert or exchange any securities into Additional Shares, the Exercise Price then in effect hereunder shall forthwith be increased to the Exercise Price which would have been in effect at the time of such expiration or termination (but taking into account other adjustments or potential made following the time of issuance of such Options or securities) had such option or security, to the extent outstanding immediately prior to such expiration or termination, never been issued and the number of shares of Common Stock obtainable upon exercise of this Warrant shall be correspondingly adjusted. If Common Stock is sold as a unit with other securities, the aggregate consideration received for such Common Stock shall be deemed to be net of the fair market value (as determined by the Board of Directors in good faith) of such other securities. The issuance or reissuance of (A) any shares of Common Stock or rights, warrants or other Convertible Securities (whether treasury shares or newly issued shares) (1) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the Exercise Price pursuant to subsection (i) of this Section 2(a); (2) pursuant to any restricted stock or stock option plan or program of the

5

Company involving the grant of Options or rights to acquire shares of Common Stock after the date hereof to directors, officers and employees of the Company and its Subsidiaries; (3) pursuant to any option, warrant, right, or Convertible Security outstanding as of the Date of Issuance; (4) pursuant to any securities issued to a bank or other similar financial institution solely in connection with the Senior Credit Facility and the Senior Subordinated Credit Facility; or (5) pursuant to an underwritten offering registered with the SEC if the offering price is greater than the Exercise Price then in effect; (B) the Preferred Stock and any shares of Common Stock issuable upon conversion or exercise thereof, or (C) the Series 2 Warrants and any shares of Common Stock issuable upon exercise thereof, shall not be deemed to constitute an issuance of Common Stock or Convertible Securities by the Company to which this subsection (iii) applies. No adjustment shall be made pursuant to this subsection (iii) in connection with any transaction to which Section 2(b) applies.

          (iv) For purposes of this Section 2(a), the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Company.

          (v) All calculations of the Exercise Price pursuant to this Section 2(a) shall be made to the nearest one one-hundredth of a cent. Anything in this Section 2(a) to the contrary notwithstanding, (A) the Company shall not be required to give effect to any adjustment in the Exercise Price unless and until the net effect of one or more adjustments (each of which shall be carried forward), determined as above provided, shall have resulted in a reduction of the Exercise Price of at least 1%, and when the cumulative net effect of more than one adjustment so determined shall be to reduce the Exercise Price by at least 1%, such reduction in Exercise Price shall thereupon be given effect and (B) in no event shall the then current Exercise Price be increased as a result of any calculation made at any time pursuant to this Section 2(a).

          (b) (i) In case of any capital reorganization or reclassification of outstanding shares of Common Stock (other than a reclassification to which Section 2(a)(i) shall apply), or in case of any merger or consolidation of the Company with or into another Person (as defined below), or in case of any sale or conveyance to another Person of all or substantially all of the assets of the Company or any compulsory share exchange pursuant to which share exchange the shares of Common Stock are converted into other securities, cash or other property (each of the foregoing being referred to as a “Transaction”), this Warrant shall thereafter be exercisable for, in lieu of the shares of Common Stock issuable upon such exercise prior to consummation of such Transaction, the kind and amount of shares of stock and other securities and property receivable (including cash) upon the consummation of such Transaction by a holder of that number of shares of Common Stock into which the Warrant was exercisable for immediately prior to such Transaction (including, on a pro rata basis, the cash, securities or property received by holders of Common Stock in any tender or exchange offer that is a step in such Transaction).

          (ii) Notwithstanding anything contained herein to the contrary, the Company will not effect any Transaction unless, prior to the consummation thereof, (A) the Surviving Person shall agree that the Series 2 Warrants shall be treated as provided in paragraph (i) of this Section 2(b) and the agreements governing such Transaction shall so provide and (B) the Surviving Person thereof shall assume, by written instrument mailed, by first-class mail, postage prepaid, to each holder of the Series 2 Warrants at such holder’s address as it appears in the

6

records of the Company, the obligation to deliver to such holder such cash or other securities to which, in accordance with the foregoing provisions, such holder is entitled and such Surviving Person shall have mailed, by first-class mail, postage prepaid, to each holder of the Series 2 Warrants at such holder’s address as it appears in the records of the Company, and an opinion of independent counsel for such Person stating that such assumption agreement is a valid, binding and enforceable agreement of the Surviving Person.

          (c) In any case, if necessary, appropriate adjustment (as determined in good faith by the Board of Directors) shall be made in the application of the provisions set forth in this Section 2 with respect to rights and interests thereafter of the holders of the Series 2 Warrants to the end that the provisions set forth herein for the protection of the purchase rights of the Series 2 Warrants shall thereafter be applicable, as nearly as reasonably may be, to any such other shares of stock and other securities (other than the Common Stock) and property deliverable upon exercise of the Series 2 Warrants remaining outstanding with such adjustments in the Exercise Price and the number of shares of Common Stock obtainable upon exercise of this Warrant and such other adjustments in the provisions hereof as the Board of Directors shall in good faith determine to be appropriate. In case securities or property other than Common Stock shall be issuable or deliverable upon exercise as aforesaid, then all references in this Section 2 shall be deemed to apply, so far as appropriate and as nearly as may be, to such other securities or property.

          (d) If the Company shall pay any dividend or make any other distribution to the holders of its Common Stock (other than regularly quarterly dividends payable in cash) or shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other right, or there shall be any Transaction, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company, then, in any one or more of said cases the Company shall give at least 15 days prior written notice to the holders of the Series 2 Warrants by first-class mail, postage prepaid, at their respective addresses as they shall appear in the records of the Company of the earlier of the dates on which (i) the books of the Company shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such Transaction, dissolution, liquidation or winding up shall take place. Such notice shall also specify that date as of which the holders of the Common Stock of record shall participate in said dividend, distribution of subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken.

          Section 3. Reports as to Adjustments. Upon the occurrence of any event specified in Section 2(a) that would result in any adjustment of the Exercise Price, then, and in each such case, the Company shall promptly deliver by first-class mail, postage prepaid, at their respective addresses as they shall appear in the records of the Company, a certificate signed by the President or a Vice President and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the Company setting forth in reasonable detail the event requiring the adjustment and the method by which such adjustment was calculated and specifying the Exercise Price then in effect and the number of shares of Common Stock obtainable upon exercise of the Series 2 Warrants following such adjustment. Where appropriate, such notice to

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the holders of the Series 2 Warrants may be given in advance and included as part of the notice required pursuant to Section 2(d).

          Section 4. Definitions. The following terms have meanings set forth below:

          “Business Day” means any day other than a Saturday, Sunday, or any day on which banks in New York City are authorized or obligated by applicable law to close.

          “Common Stock” means, collectively, the Company’s Common Stock, par value $1 per share (including any associated Right, as defined in and issued pursuant to the Rights Agreement, dated as of October 27, 1998, as amended, by and between the Company and The Bank of New York (successor to First Chicago Trust Company of New York), as Rights Agent.

          “Convertible Securities” means any stock or securities (directly or indirectly, after the passage of time or otherwise) convertible into or exercisable or exchangeable for Common Stock.

          “Current Market Price,” when used with reference to shares of Common Stock or other securities on any date, shall mean the closing price per share of Common Stock or such other securities on such date and, when used with reference to shares of Common Stock or other securities for any period, shall mean the average of the daily closing prices per share of Common Stock or such other securities for such period. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Common Stock or such other securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Common Stock or such other securities are listed or admitted to trading or, if the Common Stock or such other securities are not listed or admitted to trading on any national securities exchange, the last quoted sale price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or such other system then in use, or, if on any such date the Common Stock or such other securities are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock or such other securities selected by the Board of Directors of the Company. If the Common Stock or such other securities are not publicly held or so listed or publicly traded, “Current Market Price” shall mean the fair market value per share of Common Stock or of such other securities as determined by an independent investment banking firm with an established national reputation as a valuer of equity securities selected by the Company and reasonably acceptable to the holders of a majority of the shares of Preferred Stock outstanding at the time.

          “Exercise Price” shall mean $28.62.

          “Options” means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.

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          “Person” or “person” means any corporation, individual, limited liability company, joint stock company, joint venture, partnership, unincorporated association, governmental regulatory entity, country, state or political subdivision thereof, trust, municipality or other entity.

          “Surviving Person” shall mean the continuing or surviving Person of a merger, consolidation or other corporate combination, the Person receiving a transfer of all or a substantial part of the properties and assets of the Company, or the Person consolidating with or merging into the Company in a merger, consolidation or other corporate combination in which the Company is the continuing or surviving Person, but in connection with which the Preferred Stock, Series 2 Warrants or Common Stock of the Company is exchanged or converted into the securities of any other Person or the right to receive cash or any other property.

          “Trading Day” shall mean a day on which the principal national securities exchange on which the Common Stock is listed or admitted to trading is open for the transaction of business or, if the Common Stock is not listed or admitted to trading on any national exchange, a Business Day.

          Section 5. No Voting Rights; Limitations of Liability. This Warrant shall not entitle the holder hereof to any voting rights or other rights as a stockholder of the Company. No provision hereof, in the absence of affirmative action by the Registered Holder to purchase Common Stock, and no enumeration herein of the rights or privileges of the Registered Holder shall give rise to any liability of such holder for the Exercise Price of Common Stock acquirable by exercise hereof or as a stockholder of the Company.

          Section 6. Warrant Transferable. Subject to the transfer conditions referred to in the legend endorsed hereon, if any, this Warrant and all rights hereunder are transferable, in whole or in part, without charge to the Registered Holder, upon surrender of this Warrant with a properly executed Assignment (in the form of Exhibit I) at the principal office of the Company.

          Section 7. Warrant Exchangeable for Different Denominations. This Warrant is exchangeable, upon the surrender hereof by the Registered Holder at the principal office of the Company, for new Series 2 Warrants of like tenor representing in the aggregate the purchase rights hereunder, and each of such new Series 2 Warrants shall represent such portion of such purchase rights as is designated by the Registered Holder at the time of such surrender. The date the Company initially issues this Warrant shall be deemed to be the “Date of Issuance” hereof regardless of the number of times new certificates representing the unexpired and unexercised purchase rights formerly represented by this Warrant shall be issued. All Series 2 Warrants representing portions of the purchase rights hereunder are referred to herein as the “Series 2 Warrants.”

          Section 8. Replacement. Upon receipt of evidence reasonably satisfactory to the Company (an affidavit of the Registered Holder shall be satisfactory) of the ownership and the loss, theft, destruction or mutilation of any certificate evidencing the Series 2 Warrants, and in the case of any such loss, theft or destruction, upon receipt of indemnity reasonably satisfactory to the Company (provided that if the holder is a financial institution or other institutional investor its own agreement shall be satisfactory), or, in the case of any such

9

mutilation upon surrender of such certificate, the Company shall (at its expense) execute and deliver in lieu of such certificate a new certificate of like kind representing the number of Series 2 Warrants of such class represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate.

          Section 9. Notices. Except as otherwise expressly provided hereunder, all notices referred to herein shall be in writing and shall be delivered by registered or certified mail, return receipt requested and postage prepaid, or by reputable overnight courier service, charges prepaid, and shall be deemed to have been given when so mailed or sent (i) to the Company, at its principal executive offices, Attention: General Counsel and (ii) to any Registered Holder, at such holder’s address as it appears in the stock records of the Company (unless otherwise indicated by any such holder).

          Section 10. Amendment and Waiver. Any provision of this Warrant may be amended or modified in whole or in part at any time by an agreement in writing among the Company and the holder of this Warrant. No failure on the part of either the Company or the holder of this Warrant to exercise, and no delay in exercising, any right shall operate as a waiver thereof nor shall any single or partial exercise by either the Company or the holder of this Warrant of any right preclude any other or future exercise thereof or the exercise of any other right.

          Section 11. Descriptive Headings; Governing Law. The descriptive headings of the several Sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. References in this Warrant to Sections and Exhibits are references to Sections of, and Exhibits to, this Warrant unless otherwise noted. The corporation laws of the State of Delaware shall govern all issues concerning the relative rights of the Company and its stockholders. All other questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by the internal law of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Delaware.

          Section 12. Severability. Should any part of this Warrant for any reason be declared invalid, such decision shall not affect the validity of the remaining portion, which remaining portion shall remain in full force and effect as if this Warrant had been executed with the invalid portion thereof eliminated, and it is hereby declared the intention of the Company hereto that it would have executed the remaining portion of this Warrant without including therein any such parts or parts which may, for any reason, be hereafter declared invalid.

          Section 13. Entire Agreement. This Warrant and the Purchase Agreement and the documents described herein and therein or attached or delivered pursuant hereto or thereto set forth the entire agreement between the Company and the Registered Holder with respect to the transactions contemplated by this Warrant.

* * * * * *

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     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed and attested by its duly authorized officers under its corporate seal and to be dated the Date of Issuance hereof.

	R.H. DONNELLEY CORPORATION
	By:
		Name: Title:
Attest:
Name:
Title:

EXHIBIT I

ASSIGNMENT

     FOR VALUE RECEIVED, ____________ hereby sells, assigns and transfers all of the rights of the undersigned under the attached Warrant (Certificate No. ______) with respect to the number of shares of the Common Stock, par value $1 per share, of R.H. Donnelley Corporation, a Delaware corporation, covered thereby set forth below, unto:

Names of Assignee Address No. of Shares

Signature:

Address:

Witness:

EXHIBIT II

EXERCISE AGREEMENT

To: R.H. Donnelley Corporation Dated:

     The undersigned, pursuant to the provisions set forth in the attached Warrant (Certificate No. ____________), hereby agrees to subscribe for the purchase of ____________ shares of the Common Stock, par value $1 per share (the “Common Stock”), of R.H. Donnelley Corporation, a Delaware corporation (the “Company”), covered by such Warrant and makes payment herewith in full therefor at the price per share provided by such Warrant.

     The undersigned¹ represents to the Company as follows:

     (i) such Person (as defined in the Warrant) is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act of 1933 (the “Securities Act”) and was not organized for the specific purpose of acquiring the Common Stock issuable upon exercise thereof;

     (ii) such person has sufficient knowledge, sophistication and experience in financial and business matters as are necessary to evaluate the risks and merits of an investment in the Company;

     (iii) such Person has had an opportunity to discuss the Company’s business, management and financial affairs with the Company’s management;

     (iv) the Common Stock being acquired by such Person is being acquired for its own account for the purpose of investment and not with a view to or for sale in connection with any distribution thereof; and

     (v) such Person understands that (A) none of the shares of Common Stock issuable upon the exercise of the Warrant have been registered under the Securities Act and are being issued in reliance upon federal and state exemptions for transactions not involving any public offering, (B) the shares of Common Stock issuable upon the exercise of the Warrant must be held indefinitely unless a subsequent disposition thereof is registered under the Securities Act or is exempt from such registration, (C) the shares of Common Stock issuable upon the exercise of the Warrant will bear a legend to such effect, as applicable, and (D) the Company will make a notation on its transfer books to such effect.

[NAME OF PERSON]
By:
	Name:
	Title:
	Address:

1 In the event that the shares of Common Stock are not issued in the name of the Person (as defined in the Warrant) in whose name the Warrant is registered or if the number of shares of Common Stock to be issued does not include all of the shares purchasable under the Warrant, then this Exercise Agreement shall be modified to include applicable language with respect to the provisions of this Exercise Agreement

EX-10.19 5 g01454exv10w19.htm EX-10.19

Exhibit 10.19

R.H. DONNELLEY CORPORATION

RESTRICTED STOCK UNITS AGREEMENT

     RESTRICTED STOCK UNITS AGREEMENT (this “RSU Agreement”) made as of the date specified on Annex A attached hereto (the “Grant Date”), between R.H. Donnelley Corporation, a Delaware corporation (the “Company”), and the undersigned individual (“you” or “Participant”), pursuant to the R.H. Donnelley Corporation 2005 Stock Award and Incentive Plan (as may be amended from time to time, the “2005 Plan”), a copy of which you may access electronically on the RHD Intranet under “Human Resources.” Unless otherwise defined herein, the terms defined in the 2005 Plan shall have the same defined meanings in this RSU Agreement.

     In consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the validity and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereunder, agree as follows:

     1. Grant of Restricted Stock Units. The Company hereby grants to the Participant an award of Restricted Stock Units (“RSUs”) in the number specified on Annex A. Each RSU represents a forfeitable right to receive one share of the Company’s Common Stock, par value $1.00 per share (a “Share”), at a specified future date, if the terms and conditions of the 2005 Plan and this RSU Agreement have been met. RSUs are granted under Section 6(e) of the 2005 Plan, are in all respects limited and conditioned as hereinafter provided, and are subject to the terms and conditions of the 2005 Plan, which terms and conditions are and automatically shall be incorporated herein by reference and made a part hereof and shall control in the event of any conflict with any terms of this RSU Agreement. RSUs are Non-409A Awards as specified in the 2005 Plan, except that RSUs as to which the Participant would qualify for Retirement in a year before the stated vesting date specified in Section 3 shall be deemed 409A Awards as specified in the 2005 Plan.

     2. Account for Employee. The Company shall maintain a bookkeeping account for Participant (the “Account”) reflecting the number of RSUs then credited to Participant hereunder as a result of the grant of RSUs and any crediting of additional RSUs to Participant pursuant to payments equivalent to dividends paid on Shares under Section 6 hereof (“Dividend Equivalents”).

     3. Vesting of RSUs. The RSUs will become vested at the stated vesting date(s) as specified on Annex A. For purposes of this RSU Agreement, “vested” and “vesting” means that the RSUs will not be forfeited upon a voluntary Termination (as defined below) of employment by the Participant, and will be subject to settlement in accordance with Section 5. RSUs remain subject to forfeiture, however, as provided under Section 7(b). Vesting may occur at times earlier than the applicable stated vesting date(s) under this Section 3, as provided under Sections 4 and 9.

     4. Termination of Employment.

     (a) Termination by Death, Disability or Retirement. If the Participant’s employment Terminates (as defined below) by reason of death, Disability (as defined below) or Retirement (as defined below), the RSUs shall immediately become vested.

     (b) Effect of Other Termination. Unless otherwise determined by the Committee, if the Participant’s employment Terminates for any reason, other than death, Disability or Retirement, RSUs not yet vested at the date of such Termination shall be forfeited.

     (c) Definitions. The term “Disability” shall have the meaning defined for such term in the long-term disability plan of the Company, as in effect at the Grant Date, and the term “Retirement” shall mean Participant’s Termination after attaining (i) age 55 years with 10 years of service with the Company or any of its subsidiaries or affiliates or (ii) age 65 years without regard to years of such service. “Termination” (and “Terminates” and similar terms) means Participant’s “separation from service” from the Company and its subsidiaries and affiliates within the meaning of Proposed Treasury Regulation § 1.409A-1(h) and any successor regulation.

     (d) Effect of Forfeiture. Once RSUs are forfeited (including under Section 7(b)), no subsequent event will result in vesting or settlement of the forfeited RSUs.

     5. Settlement.

     (a) Time of Settlement of RSUs. RSUs, if not previously settled or forfeited, will be settled promptly at the earliest of the following times:

(i)	The stated vesting date of the RSUs applicable under Section 3. (This applies both to RSUs that become vested at the stated vesting date and RSUs that became vested earlier upon the Participant’s Retirement).
(ii)	In the event of Participant’s death or the Participant’s Termination due to Disability, at the time of such event.
(iii)	In the event of a Change in Control, at the time of such Change in Control, except that such settlement will apply to RSUs as to which the Participant has qualified for Retirement or would qualify for Retirement before the stated vesting date only if the Change in Control constitutes “a change in ownership or effective control of the corporation or in the ownership of a substantial portion of the assets of the corporation” under Section 409A(a)(2)(A)(v) of the Internal Revenue Code (the “Code”). (RSUs that are not settled upon a Change in Control will be settled at the applicable time under (i) or (ii) above.)

RSUs to be settled under (i) and (ii) above will be settled within 60 days after the date or event triggering settlement, except that in case of death settlement will occur within the short-term deferral period permitted under Proposed Treasury Regulation § 1.409A-1(b)(4). RSUs will be settled under (iii) above at the time of the Change in Control.

     (b) Form of Settlement of RSUs. RSUs will be settleable by delivery of one Share for each RSU then being settled, together with Dividend Equivalents, if any, payable in cash under Section 6(a)(i). The Company may determine whether or not to credit fractional RSUs in connection with Dividend Equivalents or adjustments; if fractional RSUs are credited, they will be settled in cash unless otherwise determined by the Company.

     6. Dividend Equivalents.

     (a) Crediting and Payment of Dividend Equivalents. Dividend Equivalents will be credited and paid on the RSUs as follows:

(i)	Ordinary Cash Dividends. If the Company declares and pays a dividend on Shares in the form of an ordinary cash dividend, dividend equivalents will not be immediately credited or paid to the Participant, but the aggregate amount of such dividends that would have been paid or payable had the RSUs to be settled instead been outstanding Shares at each record date occurring since the initial grant or crediting of such RSUs will be paid as an additional cash payment (without interest) at the time of such settlement.
(ii)	Share Dividends and Splits. If the Company declares and pays a dividend on Shares in the form of additional Shares, or there occurs a forward split of Shares, then a number of additional RSUs shall be credited to the Participant as of the payment date for such dividend or forward share split equal to (A) the number of RSUs credited to the Participant as of the record date for such dividend or split multiplied by (B) the number of additional Shares actually paid as a dividend or issued in such split in respect of each then outstanding Share.
(iii)	Other Dividends and Distributions. If the Company declares and pays a dividend or distribution on Shares that is an extraordinary cash dividend or in the form of property other than additional Shares, then a number of additional RSUs shall be credited to the Participant as of the payment date for such dividend or distribution equal to (A) the number of RSUs credited to the Participant as of the record date for such dividend or distribution multiplied by (B) the amount of cash plus the fair market value of any such property paid as a dividend or distribution on each Share at such payment date, divided by (C) the Fair Market Value of a Share at such dividend payment date.

     (b) Adjustments. The number of RSUs credited to Participant’s Account shall be appropriately adjusted, in order to prevent dilution or enlargement of Participant’s rights with respect to RSUs or to reflect any changes in the number of outstanding Shares resulting from any event referred to in Section 12(c) of the 2005 Plan, taking into account any RSUs credited to Participant in connection with such event under Section 6(a) hereof.

     (c) Vesting and Settlement of RSUs Resulting from Dividend Equivalents and Adjustments. RSUs which directly or indirectly result from Dividend Equivalents on or adjustments to an RSU granted hereunder shall be subject to the same vesting terms (risk of forfeiture) as apply to the granted RSU and will be settled at the same time as the granted RSU.

     7. Non-Transferability of RSUs; Additional Forfeiture Conditions.

     (a) Limitations on Transferability. RSUs and the Participant’s rights under this RSU Agreement shall not be pledged, hypothecated or otherwise encumbered or subject to any lien, obligation or liability of the Participant to any party (other than the Company or its subsidiary or affiliate), or assigned or transferred by the Participant, other than by will or the laws of descent and distribution or to a Beneficiary upon the death of the Participant, designated in accordance with Section 12(b) of the 2005 Plan. A Beneficiary, transferee or other person claiming any rights under the 2005 Plan from or through the Participant shall be subject to all terms and

conditions of the 2005 Plan and this RSU Agreement, except as otherwise determined by the Committee, and to any additional terms and conditions deemed necessary or appropriate by the Committee.

     (b) Additional Forfeiture Conditions. RSUs together with any Shares distributed in settlement of RSUs and any Award Gain (as defined in Section 11(a) of the 2005 Plan) realized in connection with the RSUs are subject to forfeiture under certain circumstances, in accordance with Section 11 of the 2005 Plan.

     8. Employee Representations and Warranties Upon Settlement. As a condition to the settlement of the RSUs, the Company may require Participant to make any representation or warranty to the Company as may be required under any applicable law or regulation, as reasonably determined by the Company.

     9. Change in Control. Upon a Change in Control (as defined in the 2005 Plan but subject to the limitations set forth in this Section 9), the RSUs shall become fully vested and shall be settled in accordance with Section 10 of the 2005 Plan; provided, however, that, for purposes of this RSU Agreement, the transactions contemplated under the Agreement and Plan of Merger entered into as of October 3, 2005, by and among the Company, Dex Media, Inc., and Forward Acquisition Corp., including the merger and any holdings of Shares and changes in the composition of the Board of Directors of the Company resulting from the merger, shall not constitute a Change in Control (under all parts of the definition of “Change in Control”) as defined in Section 10(c) of the 2005 Plan.

     10. No Guarantee of Continued Employment or Other Service. THE PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF RSUs PURSUANT TO SECTION 4 IS EARNED ONLY BY CONTINUING AS AN EMPLOYEE AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE RSUs OR ACQUIRING SHARES IN SETTLEMENT OF THE RSUs HEREUNDER). THE PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS RSU AGREEMENT AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED EMPLOYMENT FOR THE VESTING PERIOD, FOR ANY PERIOD OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH THE PARTICIPANT’S RIGHT TO TERMINATE OR THE COMPANY’S RIGHT TO TERMINATE THE PARTICIPANT AT ANY TIME, WITH OR WITHOUT CAUSE.

     11. Withholding. The Company and any subsidiary or affiliate is authorized to withhold from any payment to the Participant relating to the RSUs, including from a distribution of Shares, or any payroll or other payment to the Participant, amounts of withholding and other taxes due or potentially payable in connection with any transaction involving this RSU, and to take such other action as the Committee may deem advisable to enable the Company and the Participant to satisfy obligations for the payment of withholding taxes and other tax obligations relating to the RSUs. Accordingly, at the time of settlement of RSUs, the Company will withhold from any Shares deliverable in settlement of the RSUs, in accordance with Section 12(d)(i) of the Plan, the number of Shares having a value nearest to, but not exceeding, the amount of income and employment taxes required to be withheld under applicable laws and regulations, and pay the amount of such withholding taxes in cash to the appropriate taxing authorities; provided, however, that the Committee may determine at any time that no Shares will be withheld

hereunder, and provided further that Shares will not be withheld hereunder if and to the extent that the Participant has made arrangements with the Company at least 90 days before the date of settlement of the RSUs to pay withholding taxes in some other way, and such arrangements are satisfactory to the Company. Participant will be responsible for any withholding taxes not satisfied by means of such mandatory withholding and for all taxes in excess of such withholding taxes that may be due upon vesting or settlement of RSUs.

     12. Miscellaneous Provisions.

     (a) Governing Law. The validity, construction and effect of this RSU Agreement shall be determined in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law, and applicable provisions of federal law.

     (b) Entire Agreement. The 2005 Plan and this RSU Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Participant with respect to the subject matter hereof. Any modification of this RSU Agreement must be in writing signed by the Company (oral statements by any person cannot modify this RSU Agreement). Decisions of the Committee with respect to the administration and interpretation of the 2005 Plan and this RSU Agreement shall be final, conclusive and binding on all persons interested therein.

     (c) No Rights as Stockholder Prior to Settlement. Prior to the delivery of the Shares in settlement of the RSUs, Participant shall not have any rights of a stockholder with respect to the RSUs or the Shares potentially deliverable in settlement of this RSU.

     (d) Unfunded Award. The grant of the RSUs and any provision for distribution of Shares in settlement of Participant’s Account hereunder shall be by means of bookkeeping entries on the books of the Company and shall not create in Participant any right to, or claim against any, specific assets of the Company, nor result in the creation of any trust or escrow account for Participant. With respect to Participant’s entitlement to any distribution hereunder, Participant shall be a general creditor of the Company.

     (e) Compliance with Code Section 409A. To the extent that that RSUs (or a portion thereof) constitute 409A Awards, settlement of such RSUs may not be accelerated in the discretion of the Company (except to the extent permitted under Proposed Treasury Regulation § 1.409A-3(h)(1) and (2)). Other provisions of this RSU Agreement notwithstanding, under U.S. federal income tax laws and Treasury Regulations (including proposed regulations) as presently in effect or hereafter implemented, (i) if the timing of any distribution in settlement of RSUs would result in Participant’s constructive receipt of income relating to the RSUs prior to such distribution, the date of distribution will be the earliest date after the specified date of distribution that distribution can be effected without resulting in such constructive receipt; (ii) in furtherance of (i), any distribution of RSUs deemed to be 409A Awards the timing of which is tied to a termination of employment will occur not earlier until six months after separation from service if the Participant is a “Specified Employee” within the meaning of Code Section 409A(a)(2)(B)(i), if the Participant otherwise would be subject to constructive receipt of income relating to the RSUs prior to such distribution; and (iii) any rights of Participant or retained authority of the Company with respect to RSUs hereunder shall be automatically modified and limited to the extent necessary so that Participant will not be deemed to be in constructive receipt

of income relating to the RSUs prior to the distribution and so that Participant shall not be subject to any penalty under Section 409A.

     IN WITNESS WHEREOF, the Company has caused this RSU Agreement to be duly executed by its duly authorized officers and the Participant has executed this RSU Agreement, each on Annex A, as of the Grant Date.

ANNEX A

<<First>> << Middle>> << Last>>
<<Address 1>>
<<Address 2>>
<<Address 3>>
<<City>>, <<State>> <<ZIP>>

Soc. Sec./Tax ID No.: <<SSN>>

Grant Date: xx/xx/2006

Number of RSUs Granted: <<RSUs>>

Vesting Schedule: [100% on the third anniversary of the Grant Date] [Three equal annual installments on the first three anniversaries of the Grant Date.]

Number of Shares Vesting	Vest Date
<<Shares>>	<<Date>>

R.H. Donnelley Corporation
By:	/s/ Amy W. Clark
	Name: Amy W. Clark
	Title: Assistant Vice President — Compensation
ACCEPTED AND AGREED TO:
<<First>> <<Middle>> <<Last>>
Electronic Signature

EX-31.1 6 g01454exv31w1.htm EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, David C. Swanson, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of R.H. Donnelley 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(s) 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 or 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(s) 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 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: May 10, 2006	By:	/s/ David C. Swanson
		David C. Swanson
		Chairman and Chief Executive Officer

EX-31.2 7 g01454exv31w2.htm EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Steven M. Blondy, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of R.H. Donnelley 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(s) 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 or 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(s) 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 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: May 10, 2006	By:	/s/ Steven M. Blondy
		Steven M. Blondy
		Executive Vice President and Chief Financial Officer

EX-32.1 8 g01454exv32w1.htm 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 R.H. Donnelley Corporation for the period ended March 31, 2006 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 R.H. Donnelley Corporation as of the dates and for the periods expressed in the Report.

/s/ David C. Swanson   David C. Swanson
Chairman and Chief Executive Officer
May 10, 2006 /s/ Steven M. Blondy   Steven M. Blondy
EVP and Chief Financial Officer
May 10, 2006

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.

-----END PRIVACY-ENHANCED MESSAGE-----

EX-10.19

Exhibit 10.19

R.H. DONNELLEY CORPORATION

RESTRICTED STOCK UNITS AGREEMENT

     RESTRICTED STOCK UNITS AGREEMENT (this “RSU Agreement”) made as of the date specified on Annex A attached hereto (the “Grant Date”), between R.H. Donnelley Corporation, a Delaware corporation (the “Company”), and the undersigned individual (“you” or “Participant”), pursuant to the R.H. Donnelley Corporation 2005 Stock Award and Incentive Plan (as may be amended from time to time, the “2005 Plan”), a copy of which you may access electronically on the RHD Intranet under “Human Resources.” Unless otherwise defined herein, the terms defined in the 2005 Plan shall have the same defined meanings in this RSU Agreement.

     In consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the validity and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereunder, agree as follows:

     1. Grant of Restricted Stock Units. The Company hereby grants to the Participant an award of Restricted Stock Units (“RSUs”) in the number specified on Annex A. Each RSU represents a forfeitable right to receive one share of the Company’s Common Stock, par value $1.00 per share (a “Share”), at a specified future date, if the terms and conditions of the 2005 Plan and this RSU Agreement have been met. RSUs are granted under Section 6(e) of the 2005 Plan, are in all respects limited and conditioned as hereinafter provided, and are subject to the terms and conditions of the 2005 Plan, which terms and conditions are and automatically shall be incorporated herein by reference and made a part hereof and shall control in the event of any conflict with any terms of this RSU Agreement. RSUs are Non-409A Awards as specified in the 2005 Plan, except that RSUs as to which the Participant would qualify for Retirement in a year before the stated vesting date specified in Section 3 shall be deemed 409A Awards as specified in the 2005 Plan.

     2. Account for Employee. The Company shall maintain a bookkeeping account for Participant (the “Account”) reflecting the number of RSUs then credited to Participant hereunder as a result of the grant of RSUs and any crediting of additional RSUs to Participant pursuant to payments equivalent to dividends paid on Shares under Section 6 hereof (“Dividend Equivalents”).

     3. Vesting of RSUs. The RSUs will become vested at the stated vesting date(s) as specified on Annex A. For purposes of this RSU Agreement, “vested” and “vesting” means that the RSUs will not be forfeited upon a voluntary Termination (as defined below) of employment by the Participant, and will be subject to settlement in accordance with Section 5. RSUs remain subject to forfeiture, however, as provided under Section 7(b). Vesting may occur at times earlier than the applicable stated vesting date(s) under this Section 3, as provided under Sections 4 and 9.

     4. Termination of Employment.

     (a) Termination by Death, Disability or Retirement. If the Participant’s employment Terminates (as defined below) by reason of death, Disability (as defined below) or Retirement (as defined below), the RSUs shall immediately become vested.

     (b) Effect of Other Termination. Unless otherwise determined by the Committee, if the Participant’s employment Terminates for any reason, other than death, Disability or Retirement, RSUs not yet vested at the date of such Termination shall be forfeited.

     (c) Definitions. The term “Disability” shall have the meaning defined for such term in the long-term disability plan of the Company, as in effect at the Grant Date, and the term “Retirement” shall mean Participant’s Termination after attaining (i) age 55 years with 10 years of service with the Company or any of its subsidiaries or affiliates or (ii) age 65 years without regard to years of such service. “Termination” (and “Terminates” and similar terms) means Participant’s “separation from service” from the Company and its subsidiaries and affiliates within the meaning of Proposed Treasury Regulation § 1.409A-1(h) and any successor regulation.

     (d) Effect of Forfeiture. Once RSUs are forfeited (including under Section 7(b)), no subsequent event will result in vesting or settlement of the forfeited RSUs.

     5. Settlement.

     (a) Time of Settlement of RSUs. RSUs, if not previously settled or forfeited, will be settled promptly at the earliest of the following times:

(i)	The stated vesting date of the RSUs applicable under Section 3. (This applies both to RSUs that become vested at the stated vesting date and RSUs that became vested earlier upon the Participant’s Retirement).
(ii)	In the event of Participant’s death or the Participant’s Termination due to Disability, at the time of such event.
(iii)	In the event of a Change in Control, at the time of such Change in Control, except that such settlement will apply to RSUs as to which the Participant has qualified for Retirement or would qualify for Retirement before the stated vesting date only if the Change in Control constitutes “a change in ownership or effective control of the corporation or in the ownership of a substantial portion of the assets of the corporation” under Section 409A(a)(2)(A)(v) of the Internal Revenue Code (the “Code”). (RSUs that are not settled upon a Change in Control will be settled at the applicable time under (i) or (ii) above.)

RSUs to be settled under (i) and (ii) above will be settled within 60 days after the date or event triggering settlement, except that in case of death settlement will occur within the short-term deferral period permitted under Proposed Treasury Regulation § 1.409A-1(b)(4). RSUs will be settled under (iii) above at the time of the Change in Control.

     (b) Form of Settlement of RSUs. RSUs will be settleable by delivery of one Share for each RSU then being settled, together with Dividend Equivalents, if any, payable in cash under Section 6(a)(i). The Company may determine whether or not to credit fractional RSUs in connection with Dividend Equivalents or adjustments; if fractional RSUs are credited, they will be settled in cash unless otherwise determined by the Company.

     6. Dividend Equivalents.

     (a) Crediting and Payment of Dividend Equivalents. Dividend Equivalents will be credited and paid on the RSUs as follows:

(i)	Ordinary Cash Dividends. If the Company declares and pays a dividend on Shares in the form of an ordinary cash dividend, dividend equivalents will not be immediately credited or paid to the Participant, but the aggregate amount of such dividends that would have been paid or payable had the RSUs to be settled instead been outstanding Shares at each record date occurring since the initial grant or crediting of such RSUs will be paid as an additional cash payment (without interest) at the time of such settlement.
(ii)	Share Dividends and Splits. If the Company declares and pays a dividend on Shares in the form of additional Shares, or there occurs a forward split of Shares, then a number of additional RSUs shall be credited to the Participant as of the payment date for such dividend or forward share split equal to (A) the number of RSUs credited to the Participant as of the record date for such dividend or split multiplied by (B) the number of additional Shares actually paid as a dividend or issued in such split in respect of each then outstanding Share.
(iii)	Other Dividends and Distributions. If the Company declares and pays a dividend or distribution on Shares that is an extraordinary cash dividend or in the form of property other than additional Shares, then a number of additional RSUs shall be credited to the Participant as of the payment date for such dividend or distribution equal to (A) the number of RSUs credited to the Participant as of the record date for such dividend or distribution multiplied by (B) the amount of cash plus the fair market value of any such property paid as a dividend or distribution on each Share at such payment date, divided by (C) the Fair Market Value of a Share at such dividend payment date.

     (b) Adjustments. The number of RSUs credited to Participant’s Account shall be appropriately adjusted, in order to prevent dilution or enlargement of Participant’s rights with respect to RSUs or to reflect any changes in the number of outstanding Shares resulting from any event referred to in Section 12(c) of the 2005 Plan, taking into account any RSUs credited to Participant in connection with such event under Section 6(a) hereof.

     (c) Vesting and Settlement of RSUs Resulting from Dividend Equivalents and Adjustments. RSUs which directly or indirectly result from Dividend Equivalents on or adjustments to an RSU granted hereunder shall be subject to the same vesting terms (risk of forfeiture) as apply to the granted RSU and will be settled at the same time as the granted RSU.

     7. Non-Transferability of RSUs; Additional Forfeiture Conditions.

     (a) Limitations on Transferability. RSUs and the Participant’s rights under this RSU Agreement shall not be pledged, hypothecated or otherwise encumbered or subject to any lien, obligation or liability of the Participant to any party (other than the Company or its subsidiary or affiliate), or assigned or transferred by the Participant, other than by will or the laws of descent and distribution or to a Beneficiary upon the death of the Participant, designated in accordance with Section 12(b) of the 2005 Plan. A Beneficiary, transferee or other person claiming any rights under the 2005 Plan from or through the Participant shall be subject to all terms and

conditions of the 2005 Plan and this RSU Agreement, except as otherwise determined by the Committee, and to any additional terms and conditions deemed necessary or appropriate by the Committee.

     (b) Additional Forfeiture Conditions. RSUs together with any Shares distributed in settlement of RSUs and any Award Gain (as defined in Section 11(a) of the 2005 Plan) realized in connection with the RSUs are subject to forfeiture under certain circumstances, in accordance with Section 11 of the 2005 Plan.

     8. Employee Representations and Warranties Upon Settlement. As a condition to the settlement of the RSUs, the Company may require Participant to make any representation or warranty to the Company as may be required under any applicable law or regulation, as reasonably determined by the Company.

     9. Change in Control. Upon a Change in Control (as defined in the 2005 Plan but subject to the limitations set forth in this Section 9), the RSUs shall become fully vested and shall be settled in accordance with Section 10 of the 2005 Plan; provided, however, that, for purposes of this RSU Agreement, the transactions contemplated under the Agreement and Plan of Merger entered into as of October 3, 2005, by and among the Company, Dex Media, Inc., and Forward Acquisition Corp., including the merger and any holdings of Shares and changes in the composition of the Board of Directors of the Company resulting from the merger, shall not constitute a Change in Control (under all parts of the definition of “Change in Control”) as defined in Section 10(c) of the 2005 Plan.

     10. No Guarantee of Continued Employment or Other Service. THE PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF RSUs PURSUANT TO SECTION 4 IS EARNED ONLY BY CONTINUING AS AN EMPLOYEE AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE RSUs OR ACQUIRING SHARES IN SETTLEMENT OF THE RSUs HEREUNDER). THE PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS RSU AGREEMENT AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED EMPLOYMENT FOR THE VESTING PERIOD, FOR ANY PERIOD OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH THE PARTICIPANT’S RIGHT TO TERMINATE OR THE COMPANY’S RIGHT TO TERMINATE THE PARTICIPANT AT ANY TIME, WITH OR WITHOUT CAUSE.

     11. Withholding. The Company and any subsidiary or affiliate is authorized to withhold from any payment to the Participant relating to the RSUs, including from a distribution of Shares, or any payroll or other payment to the Participant, amounts of withholding and other taxes due or potentially payable in connection with any transaction involving this RSU, and to take such other action as the Committee may deem advisable to enable the Company and the Participant to satisfy obligations for the payment of withholding taxes and other tax obligations relating to the RSUs. Accordingly, at the time of settlement of RSUs, the Company will withhold from any Shares deliverable in settlement of the RSUs, in accordance with Section 12(d)(i) of the Plan, the number of Shares having a value nearest to, but not exceeding, the amount of income and employment taxes required to be withheld under applicable laws and regulations, and pay the amount of such withholding taxes in cash to the appropriate taxing authorities; provided, however, that the Committee may determine at any time that no Shares will be withheld

hereunder, and provided further that Shares will not be withheld hereunder if and to the extent that the Participant has made arrangements with the Company at least 90 days before the date of settlement of the RSUs to pay withholding taxes in some other way, and such arrangements are satisfactory to the Company. Participant will be responsible for any withholding taxes not satisfied by means of such mandatory withholding and for all taxes in excess of such withholding taxes that may be due upon vesting or settlement of RSUs.

     12. Miscellaneous Provisions.

     (a) Governing Law. The validity, construction and effect of this RSU Agreement shall be determined in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law, and applicable provisions of federal law.

     (b) Entire Agreement. The 2005 Plan and this RSU Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Participant with respect to the subject matter hereof. Any modification of this RSU Agreement must be in writing signed by the Company (oral statements by any person cannot modify this RSU Agreement). Decisions of the Committee with respect to the administration and interpretation of the 2005 Plan and this RSU Agreement shall be final, conclusive and binding on all persons interested therein.

     (c) No Rights as Stockholder Prior to Settlement. Prior to the delivery of the Shares in settlement of the RSUs, Participant shall not have any rights of a stockholder with respect to the RSUs or the Shares potentially deliverable in settlement of this RSU.

     (d) Unfunded Award. The grant of the RSUs and any provision for distribution of Shares in settlement of Participant’s Account hereunder shall be by means of bookkeeping entries on the books of the Company and shall not create in Participant any right to, or claim against any, specific assets of the Company, nor result in the creation of any trust or escrow account for Participant. With respect to Participant’s entitlement to any distribution hereunder, Participant shall be a general creditor of the Company.

     (e) Compliance with Code Section 409A. To the extent that that RSUs (or a portion thereof) constitute 409A Awards, settlement of such RSUs may not be accelerated in the discretion of the Company (except to the extent permitted under Proposed Treasury Regulation § 1.409A-3(h)(1) and (2)). Other provisions of this RSU Agreement notwithstanding, under U.S. federal income tax laws and Treasury Regulations (including proposed regulations) as presently in effect or hereafter implemented, (i) if the timing of any distribution in settlement of RSUs would result in Participant’s constructive receipt of income relating to the RSUs prior to such distribution, the date of distribution will be the earliest date after the specified date of distribution that distribution can be effected without resulting in such constructive receipt; (ii) in furtherance of (i), any distribution of RSUs deemed to be 409A Awards the timing of which is tied to a termination of employment will occur not earlier until six months after separation from service if the Participant is a “Specified Employee” within the meaning of Code Section 409A(a)(2)(B)(i), if the Participant otherwise would be subject to constructive receipt of income relating to the RSUs prior to such distribution; and (iii) any rights of Participant or retained authority of the Company with respect to RSUs hereunder shall be automatically modified and limited to the extent necessary so that Participant will not be deemed to be in constructive receipt

of income relating to the RSUs prior to the distribution and so that Participant shall not be subject to any penalty under Section 409A.

     IN WITNESS WHEREOF, the Company has caused this RSU Agreement to be duly executed by its duly authorized officers and the Participant has executed this RSU Agreement, each on Annex A, as of the Grant Date.

ANNEX A

<<First>> << Middle>> << Last>>
<<Address 1>>
<<Address 2>>
<<Address 3>>
<<City>>, <<State>> <<ZIP>>

Soc. Sec./Tax ID No.: <<SSN>>

Grant Date: xx/xx/2006

Number of RSUs Granted: <<RSUs>>

Vesting Schedule: [100% on the third anniversary of the Grant Date] [Three equal annual installments on the first three anniversaries of the Grant Date.]

Number of Shares Vesting	Vest Date
<<Shares>>	<<Date>>

R.H. Donnelley Corporation
By:	/s/ Amy W. Clark
	Name: Amy W. Clark
	Title: Assistant Vice President — Compensation
ACCEPTED AND AGREED TO:
<<First>> <<Middle>> <<Last>>
Electronic Signature

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, David C. Swanson, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of R.H. Donnelley 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(s) 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 or 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(s) 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 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: May 10, 2006	By:	/s/ David C. Swanson
		David C. Swanson
		Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Steven M. Blondy, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of R.H. Donnelley 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(s) 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 or 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(s) 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 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: May 10, 2006	By:	/s/ Steven M. Blondy
		Steven M. Blondy
		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 R.H. Donnelley Corporation for the period ended March 31, 2006 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 R.H. Donnelley Corporation as of the dates and for the periods expressed in the Report.

/s/ David C. Swanson   David C. Swanson
Chairman and Chief Executive Officer
May 10, 2006 /s/ Steven M. Blondy   Steven M. Blondy
EVP and Chief Financial Officer
May 10, 2006

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.