Unassociated Document

R.H. DONNELLEY CORPORATION

Schedule 7

STATISTICAL MEASURE

CALCULATION OF ADVERTISING SALES PERCENTAGE CHANGE OVER PRIOR YEAR PERIODS

(unaudited)

R.H. DONNELLEY CORPORATION				Schedule 4
UNAUDITED SELECTED BALANCE SHEET DATA


Amounts in millions
	December 31,		December 31,
	2008		2007
Assets
Cash and cash equivalents	$	131.2	$	46.1
Accounts receivable, net		1,027.0		1,063.5
Deferred directory costs		164.3		183.7
Fixed assets and computer software, net		188.7		187.7
Intangible assets, net (2)		10,009.3		11,170.5
Goodwill (2)		-		3,124.3

Current Liabilities
Deferred directory revenue		1,076.3		1,172.0
Current portion of long-term debt (3)		113.6		177.2

Long-Term Liabilities
Long-term debt (3)		9,508.7		9,998.5


See accompanying Notes to Unaudited Condensed Consolidated Financial Data and Non-GAAP Measures - Schedule 8.

Note: These schedules are preliminary and subject to change pending the Company's filing of its Form 10-K.

R.H. DONNELLEY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS						Schedule 5

Amounts in millions

	Three Months Ended December 31,						Years Ended December 31,
	2008			2007			2008			2007
Operating activities:
Net cash provided by operating activities	$	162.0		$	221.5		$	548.7		$	691.8

Investment activities:
Additions to fixed assets and computer software		(23.3	)		(15.6	)		(70.6	)		(77.4	)
Acquisitions, net of cash received		-			(0.2	)		-			(329.1	)
Equity investment disposition (investment)		-			-			4.3			(2.5	)
Net cash used in investing activities		(23.3	)		(15.8	)		(66.3	)		(409.0	)

Financing activities:
Proceeds from the issuance of debt, net of costs		-			1,145.0			-			1,468.6
Additional borrowings under credit facilities, net of costs		(1.0	)		1,416.8			1,017.2			1,416.8
Credit facilities repayments		(57.0	)		(1,111.8	)		(1,281.7	)		(1,674.1	)
Note repurchases and repayments		(7.4	)		(1,398.9	)		(92.1	)		(1,398.9	)
Revolver repayments		-			(215.3	)		(422.2	)		(781.4	)
Borrowings under the Revolver		-			151.9			398.1			722.6
Proceeds from the issuance of common stock		-			-			-			9.0
Repurchase of common stock		-			(89.6	)		(6.1	)		(89.6	)
Tender, redemption and call premium payments		-			(71.7	)		-			(71.7	)
Debt issuance costs		(0.9	)		-			(10.5	)		-
Decrease in checks not yet presented for payment		(2.0	)		(5.7	)		(0.1	)		(7.6	)
Proceeds from employee stock option exercises		-			0.7			0.1			13.4

Net cash used in financing activities		(68.3	)		(178.6	)		(397.3	)		(392.9	)

Increase (decrease) in cash and cash equivalents		70.4			27.1			85.1			(110.1	)

Cash and cash equivalents, beginning of period		60.8			19.0			46.1			156.2

Cash and cash equivalents, end of period	$	131.2		$	46.1		$	131.2		$	46.1

Supplemental Information:
Non-cash financing activities:
Reduction of debt from debt transactions	$	(20.7	)	$	-		$	(193.5	)	$	-


See accompanying Notes to Unaudited Condensed Consolidated Financial Data and Non-GAAP Measures - Schedule 8.

Note: These schedules are preliminary and subject to change pending the Company's filing of its Form 10-K.

R.H. DONNELLEY CORPORATION				Schedule 6a
RECONCILIATION OF NON-GAAP MEASURES

(unaudited)

Amounts in millions

	Three Months Ended December 31,					Years Ended December 31,
	2008			2007		2008			2007

Reconciliation of operating income (loss) - GAAP to EBITDA and Adjusted EBITDA (4)

Operating income (loss) - GAAP	$	(528.8	)	$	200.4	$	(3,005.7	)	$	905.0
Plus impairment charges (2)		746.6			20.0		3,870.4			20.0
Plus depreciation and amortization (1)		120.0			119.3		483.3			443.1
EBITDA	$	337.8		$	339.7	$	1,348.0		$	1,368.1

Amortized deferred cost uplift on Dex sales contracts as of the merger date		-			1.0		-			28.9

Purchase accounting adjustments related to bad debt expense previously charged
to goodwill related to Qwest directories acquired in the Dex Media transaction		-			-		-			3.3

SFAS No. 123 R non-cash compensation expense		6.1			9.0		29.5			39.0

Restricted stock unit expense related to the Business.com acquisition		0.4			2.4		4.7			3.2

Restructuring costs		15.5			-		34.4			-

Adjusted EBITDA	$	359.8		$	352.1	$	1,416.6		$	1,442.5

	Year Ended
	December 31, 2008
Reconciliation of operating loss - GAAP to adjusted operating income (4)

Operating loss - GAAP	$	(3,005.7	)
Plus: Impairment charges		3,870.4
Adjusted operating income	$	864.7


See accompanying Notes to Unaudited Condensed Consolidated Financial Data and Non-GAAP Measures - Schedule 8.

Note: These schedules are preliminary and subject to change pending the Company's filing of its Form 10-K.

R.H. DONNELLEY CORPORATION							Schedule 6b
RECONCILIATION OF NON-GAAP MEASURES (cont'd)
(unaudited)

Amounts in millions

	Three Months Ended December 31,				Years Ended December 31,
	2008		2007		2008		2007

Reconciliation of cash flow from operations - GAAP to adjusted free cash flow

Cash flow from operations - GAAP	$	162.0	$	221.5	$	548.7	$	691.8
Add: Cash restructuring payments		11.5		-		27.0		-
Add: Cash restricted stock unit payments related to the Business.com acquisition		0.6		1.6		5.1		2.4
Adjusted cash flow from operations		174.1		223.1		580.8		694.2
Less: Additions to fixed assets and computer software - GAAP		23.3		15.6		70.6		77.4
Adjusted free cash flow	$	150.8	$	207.5	$	510.2	$	616.8

	Three Months Ended December 31,				Years Ended December 31,
	2008		2007		2008			2007

Reconciliation of interest expense - GAAP to adjusted interest expense (5)

Interest expense - GAAP (1)	$	205.1	$	202.9	$	835.5		$	804.6
Plus: Amortization of fair value adjustment due to purchase accounting		4.6		6.7		17.6			29.9
Less: One-time expense related to ineffective interest rate swaps as a result of the refinancings completed during the second quarter of 2008		-		-		(21.0	)		-
Adjusted interest expense	$	209.7	$	209.6	$	832.1		$	834.5

	As of			As of
	December 31, 2008			December 31, 2007

Reconciliation of debt - GAAP to net debt and net debt - excluding fair value adjustment (5) (6)

Debt - GAAP	$	9,622.3		$	10,175.7
Less: Cash and cash equivalents		(131.2	)		(46.1	)
Net debt		9,491.1			10,129.6

Less: Fair value adjustment due to purchase accounting		(86.2	)		(103.8	)
Net debt - excluding fair value adjustment	$	9,404.9		$	10,025.8

See accompanying Notes to Unaudited Condensed Consolidated Financial Data and Non-GAAP Measures - Schedule 8.

Note: These schedules are preliminary and subject to change pending the Company's filing of its Form 10-K.

Amounts in millions, except percentages
	Year Ended			Three Months Ended
	December 31			December 31			September 30			June 30			March 31


2008 Advertising sales (7)	$	2,518.4		$	618.4		$	503.6		$	678.4		$	718.0

2007 Advertising sales disclosed in 2007 Form 10-K and Forms 10-Q		2,718.2			700.3			541.6			729.0			747.3

Pro forma adjustments related to Business.com Acquisition		27.5			-			-			14.2			13.3

Adjustments primarily related to changes in publication dates		-			0.1			7.7			(1.2	)		(6.6	)

2007 Pro forma advertising sales	$	2,745.7		$	700.4		$	549.3		$	742.0		$	754.0

Pro forma advertising sales percentage change over prior year periods		(8.3	%)		(11.7	%)		(8.3	%)		(8.6	%)		(4.8	%)

See accompanying Notes to Unaudited Condensed Consolidated Financial Data and Non-GAAP Measures - Schedule 8.

Note: These schedules are preliminary and subject to change pending the Company's filing of its Form 10-K.

R.H. DONNELLEY CORPORATION				Schedule 8
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL DATA AND NON-GAAP MEASURES

1)	Our advertising revenues are earned primarily from the sale of advertising in yellow pages directories that we publish. Revenue from the sale of such advertising is deferred when a directory is published, net of estimated sales claims, and recognized ratably over the life of a directory, which is typically 12 months. Advertising revenues also include revenues for Internet-based advertising products, including our proprietary local search site, dexknows.com, and our Dex Search Network. Revenues with respect to our Internet-based advertising products that are sold with print advertising are initially deferred until the service is delivered or fulfilled and recognized ratably over the life of the contract. Revenues with respect to Internet-based services that are not sold with print advertising are recognized as delivered or fulfilled.

	During the year ended December 31, 2007, we recorded a loss on debt transactions of $26.3 million resulting from the refinancing transactions conducted during the fourth quarter of 2007. In our Current Report on Form 8-K filed on February 28, 2008, these charges were included in interest expense on the unaudited condensed consolidated statements of operations. In order to conform to the current period’s presentation, these amounts have been reclassified to gain (loss) on debt transactions, net, on the unaudited condensed consolidated statements of operations. During the year ended December 31, 2007, we recorded an intangible asset impairment charge of $20.0 million associated with the tradenames acquired in the Embarq Acquisition. In our Current Report on Form 8-K filed on February 28, 2008, these charges were included in depreciation and amortization on the unaudited condensed consolidated statements of operations. In order to conform to the current period’s presentation, these amounts have been reclassified to impairment charges on the unaudited condensed consolidated statements of operations.

2)	As a result of the decline in the trading value of our debt and equity securities and the decline in our operating results, we recognized non-cash goodwill impairment charges totaling $3.1 billion for the year ended December 31, 2008. As a result of these impairment charges, we have no recorded goodwill at December 31, 2008. Given the ongoing credit and liquidity crisis and the significant negative impact on financial markets, as well as the overall economy, and the recent suspension of trading of our common stock on the New York Stock Exchange ("NYSE"), we performed impairment tests of our definite-lived intangible assets and other long-lived assets in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, as of December 31, 2008. As a result of these tests, the Company recognized a non-cash intangible asset impairment charge of $744.0 million during the fourth quarter of 2008 associated with the local and national customer relationships acquired in the Dex Media Merger, AT&T Directory Acquisition and Embarq Acquisition. In addition, as a result of the Company’s decision to discontinue the use of tradenames and technology acquired in the Local Launch Acquisition, we recognized a non-cash impairment charge of $2.2 million during the fourth quarter of 2008, for a total impairment charge related to our intangible assets of $746.2 million during the year ended December 31, 2008. During the year ended December 31, 2008, we retired certain computer software fixed assets, which resulted in an impairment charge of $0.4 million.

3)	During the fourth quarter of 2008, we repaid $9.8 million of Term Loan D-1 and $45.9 million of Term Loan D-2 under the RHDI credit facility by making voluntary prepayments of $35.5 million, including fees, at a discount to par. As a result, we recognized a gain of $20.0 million during the year ended December 31, 2008, consisting of the difference between the face amount of the Term Loans repaid and the voluntary prepayments made, offset by the write-off of unamortized deferred financing costs of $0.2 million. During September and October 2008, we repurchased $187.0 million ($181.4 million accreted value, as applicable) of our senior notes and senior discount notes (collectively referred to as the “Notes”) for a purchase price of $92.1 million. As a result of these repurchases, we recognized a gain of $86.0 million, consisting of the difference between the accreted value (in the case of the senior discount notes) or par value, as applicable, and purchase price of the Notes, offset by the write-off of unamortized deferred financing costs of $3.3 million. On June 25, 2008, RHD completed an exchange of its senior notes and senior discount notes for new senior notes ("Debt Exchanges"). Please refer to our Current Report on Form 8-K filed on June 25, 2008 for additional information. The Debt Exchanges have been accounted for as an extinguishment of debt, resulting in a gain of approximately $161.3 million, representing the difference between the accreted value or par value, as applicable, of the former senior notes and senior discount notes and the new senior notes of $172.8 million, offset by the write-off of unamortized deferred financing costs of $11.5 million associated with the former senior notes and senior discount notes. During the second quarter of 2008, we recognized a charge of $2.2 million for the write-off of unamortized deferred financing costs associated with the refinancing of the former Dex Media West credit facility and portions of the amended RHDI Credit Facility, which have been accounted for as extinguishments of debt. As a result of these financing activities, we recorded a net gain of $33.6 million and $265.2 million during the three months and year ended December 31, 2008, respectively. During the fourth quarter of 2007, we recorded a loss on debt transactions of $26.3 million resulting from tender, redemption and call premium payments of $71.7 million and the write-off of unamortized deferred financing costs of $16.8 million, offset by accelerated amortization of the fair value adjustment to Dex Media's debt of $62.2 million (see Note 5 below) resulting from the refinancing transactions conducted during the fourth quarter of 2007.

4)	EBITDA and Adjusted EBITDA are not measurements of operating performance computed in accordance with GAAP and should not be considered as a substitute for operating income prepared in conformity with GAAP. In addition, EBITDA may not be comparable to similarly titled measures of other companies. Adjusted EBITDA is determined by adjusting EBITDA for items such as (i) impairment charges, (ii) stock-based compensation in accordance with SFAS No. 123 (R), Share-Based Payment, (iii) cost uplift related to the Dex Media Merger, which is defined 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, (iv) restricted stock unit expense related to the Business.com Acquisition, (v) restructuring costs, and for 2007, (vi) recoveries and other purchase accounting adjustments related to bad debt expense previously charged to goodwill related to Qwest directories acquired in the Dex Media transaction.Adjusted net income represents net loss - GAAP adjusted for all impairment charges recorded during the three months and year ended December 31, 2008.

5)	As a result of purchase accounting, RHD was required to adjust the carrying value of Dex Media’s debt at January 31, 2006 to its fair value. Adjusted interest expense eliminates the interest benefit resulting from the amortization of the fair value adjustment to Dex Media's debt. As a result of the amendment of the RHDI Credit Facility and the refinancing of the former Dex Media West credit facility on June 6, 2008, the existing interest rate swaps associated with these two debt arrangements are no longer highly effective in offsetting changes in cash flows. Accordingly, these interest rate swaps became ineffective on June 6, 2008 and cash flow hedge accounting treatment under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, is no longer permitted. Interest expense for the year ended December 31, 2008 includes a non-cash charge of $21.0 million resulting from the reclass of amounts previously charged to accumulated other comprehensive loss related to these interest rate swaps. Adjusted interest expense eliminates this one time charge to interest expense.

6)	Net debt represents total debt less cash and cash equivalents on the respective date. Net debt – excluding fair value adjustments represents net debt adjusted to remove the remaining fair value purchase accounting adjustment of Dex Media’s debt noted in footnote 5 above. The unamortized fair value adjustment at December 31, 2008 is $86.2 million.

7)	Advertising sales is a statistical measure and consists of sales of advertising in print directories distributed during the period and Internet-based products and services with respect to which such advertising first appeared publicly during the period. It is important to distinguish advertising sales from net revenue, which is recognized under the deferral and amortization method. 2007 pro forma advertising sales assumes the Business.com Acquisition occurred on January 1, 2007.

Note: These schedules are preliminary and subject to change pending the Company's filing of its Form 10-K.

	news release


	Contacts:

	Investors – James M. Gruskin
	800/497-6329

	Media – Tyler D. Gronbach
	919/297-1541

R.H. DONNELLEY CORPORATION			Schedule 1
INDEX OF SCHEDULES


	Schedule 1:	Index of Schedules

	Schedule 2:	Unaudited Condensed Consolidated Statements of Pre-Tax Loss for the three months ended December 31, 2008 and 2007

	Schedule 3:	Unaudited Condensed Consolidated Statements of Pre-Tax Income (Loss) for the years ended December 31, 2008 and 2007

	Schedule 4:	Unaudited Selected Balance Sheet Data at December 31, 2008 and 2007

	Schedule 5:	Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended December 31, 2008 and 2007 and years ended December 31, 2008 and 2007

	Schedule 6:	Reconciliation of Non-GAAP Measures

	Schedule 7:	Statistical Measure - Advertising Sales

	Schedule 8:	Notes to Unaudited Condensed Consolidated Financial Data and Non-GAAP Measures

Amounts in millions

	Three Months Ended December 31,

	2008			2007
Net revenue (1)	$	630.4		$	680.8
Expenses (1)		292.6			341.1
Depreciation and amortization		120.0			119.3
Impairment charges (1) (2)		746.6			20.0
Operating income (loss)		(528.8	)		200.4
Non-operating income		-			1.8
Interest expense, net (1)		(205.1	)		(202.9	)
Gain (loss) on debt transactions, net (1) (3)		33.6			(26.3	)
Pre-tax loss	$	(700.3	)	$	(27.0	)

Amounts in millions

	Years Ended December 31,

	2008			2007
Net revenue (1)	$	2,616.8		$	2,680.3
Expenses (1)		1,268.8			1,312.2
Depreciation and amortization		483.3			443.1
Impairment charges (1) (2)		3,870.4			20.0
Operating income (loss)		(3,005.7	)		905.0
Non-operating income		-			1.8
Interest expense, net (1)		(835.5	)		(804.6	)
Gain (loss) on debt transactions, net (1) (3)		265.2			(26.3	)
Pre-tax income (loss)	$	(3,576.0	)	$	75.9


R.H. DONNELLEY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF PRE-TAX LOSS

			Schedule 2

R.H. DONNELLEY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF PRE-TAX INCOME (LOSS)

			Schedule 3