CSFB Leveraged Finance Media and Telecom Conference ...library.corporate-ir.net/library/14/148/148542/items/174636/rhd... · CSFB Leveraged Finance Media and Telecom Conference November

CSFB Leveraged FinanceMedia and Telecom Conference

November 18, 2005

CSFB Leveraged FinanceCSFB Leveraged FinanceMedia and Telecom Conference Media and Telecom Conference

November 18, 2005November 18, 2005

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Safe Harbor StatementSafe Harbor StatementCertain statements contained in this presentation regarding RHD's future operating results or performance or 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, the words "believe," "expect," "anticipate," "intend," "should," "will," "planned," "estimated," "potential," "goal," "outlook," and similar expressions, as they relate to RHD or its management, have been used to identify such forward-looking statements. All forward-looking statements reflect only RHD's and Dex's current beliefs and assumptions with respect to future business plans, prospects, decisions and results, and are based on information currently available to RHD and Dex. Accordingly, the statements are subject to significant risks, uncertainties and contingencies which could cause RHD's actual operating results, performance or business plans or prospects to differ materially from those expressed in, or implied by, these statements. Such risks, uncertainties and contingencies include, but are not limited to, statements about the benefits of the merger between RHD and Dex, including future financial and operating results, RHD's plans, objectives, expectations and intentions and other statements that are not historical facts. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: (1) the ability to obtain governmental approvals of the merger on the proposed terms and schedule; (2) the failure of RHD and Dex stockholders to approve the merger; (3) the risk that the businesses will not be integrated successfully; (4) the risk that the cost savings and any revenue synergies from the merger may not be fully realized or may take longer to realize than expected; (5) disruption from the merger making it more difficult to maintain relationships with customers, employees or suppliers; and (6) general economic conditions and consumer sentiment in our markets. Additional factors that could cause RHD's and Dex's results to differ materially from those described in the forward-looking statements are described in detail in the Management's Discussion and Analysis of Financial Condition and Results of Operations in RHD's and Dex's Annual Reports on Form 10-K for the year ended December 31, 2004, as well as RHD's and Dex's other periodic filings with the SEC that are available on the SEC's internet site (http://www.sec.gov).Additional Information and Where to Find ItStockholders are urged to read the joint proxy statement/prospectus regarding the proposed transaction when it becomes available, because it will contain important information. Stockholders will be able to obtain a free copy of the joint proxy statement/prospectus, as well as other filings containing information about RHD and Dex, without charge, at the SEC’s internet site (http://www.sec.gov). Copies of the joint proxy statement/prospectus and the SEC filings that will be incorporated by reference in the joint proxy statement/prospectus can also be obtained, without charge, by directing a request to RHD or Dex.Interests of ParticipantsThe respective directors and executive officers of RHD and Dex and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding RHD’s directors and executive officers is available in its proxy statement filed with the SEC by RHD on March 21, 2005, and information regarding Dex’s directors and executive officers is available in its proxy statement filed with the SEC by Dex on April 20, 2005. Copies of these documents can be obtained, without charge, by directing a request to RHD or Dex. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.

Executive SummaryExecutive Summary

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Publishing Directories in 28 States and 8 of the top 40 MSAsPublishing Directories in 28 States and 8 of the top 40 MSAs

Directories600+

Circulation73 million

Sales Reps1,800+

Chicago

Orlando

Naples/Ft. Myers

Las Vegas

Phoenix

Albuquerque

Seattle

Denver

Salt Lake City

Portland Minneapolis Dex MediaR.H. Donnelley

Company Pro Forma OverviewCompany Pro Forma Overview

4

November 2002:

Closing of Dex East acquisition:Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota

September 2003:

Closing of Dex West acquisition:Arizona, Idaho, Montana, Oregon, Utah, Washington and Wyoming

September 2004:

Closing of SBC acquisition:Illinois and Northwest Indiana

July 2004:

Dex’s IPO

October 2005:

RHD announcement of Dex acquisition

2002 2003 2004 2005 2006

August 2002:

The Carlyle Group and Welsh, Carson, Anderson & Stowe agreed to acquire Dex for $7.05 billion

The Carlyle Group and Welsh, Carson, Anderson & Stowe will collectively own 26%1 of the PF entity

Note: 1) Pro forma ownership calculated on a fully diluted basis

January 2003:

Closing of Sprint acquisition:Washington, Oregon, Nevada, Wyoming, Nebraska, Kansas, Texas, Minnesota, Missouri, Indiana, Tennessee, Ohio, Pennsylvania, New Jersey, Virginia, North Carolina, South Carolina and Florida

Transformational TransactionsTransformational Transactions

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Key Credit ConsiderationsKey Credit Considerations

Stable, consistent operating performance including high recurring revenues

Significant EBITDA conversion to free cash flow

Strong historical and projected debt repayment

Positive industry fundamentals

Leading, incumbent position in attractive markets

No meaningful cash taxes until 2008

Proven management track record

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Purchase price — $12.30 in cash and 0.24154 RHD shares per Dex share — Total of approximately $1.85 billion in cash and 36.3 million RHD shares issued to

existing Dex shareholders — Ownership ~ 47% RHD / ~53% Dex

Management Chairman CEO COO CFO Other management

— George Burnett, Dex — Dave Swanson, RHD — Peter McDonald, RHD — Steve Blondy, RHD — Decided based on “best in breed” philosophy

Board of Directors — RHD to appoint 7 of 13 directors — Carlyle and Welsh, Carson agree to vote for the transaction and will appoint 1

director each

Financing — Fully committed $10.4 billion financing package from JPMorgan — Pro forma leverage of 7.0x at closing

Synergies — $50 million of pre-tax cost synergies by year three

Expect to Close in the First Quarter of 2006Expect to Close in the First Quarter of 2006

Key Transaction TermsKey Transaction Terms

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Acquisition RationaleAcquisition Rationale

Superior scale to drive value creation

Scale increasingly important in online local commercial search environmentEnhanced partnership capabilities and opportunitiesLarger base to spread fixed costs associated with new products and platforms

Complementary operating strengths and markets

Dex’s product innovation and marketing expertiseRHD’s sales execution and operating expertise Common I/T platforms at both companies facilitate integration

Attractive financial characteristics

$50 million in pre-tax cost savings by year threeSignificant annual free cash flow available to deleverAttractive tax attributes with combined value of over $25/share

Transaction Increases Ability to Achieve LongTransaction Increases Ability to Achieve Long--Term GoalsTerm Goals

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Creates The Third Largest U.S. DirectoryPublisherCreates The Third Largest U.S. DirectoryPublisher

Notes: 1) Post disposal of SBC Illinois and Indiana directories to R.H. Donnelley2) Please see appendix for reconciliation of non-GAAP figures to the most comparable GAAP numbers3) Pro forma for the acquisition of TransWestern4) Alltel directory revenue only

$3,759 $3,615

$2,683

$2,019$1,649

$1,298$1,034

$156 $98 $88$0

$1,000

$2,000

$3,000

$4,000

$5,000

SBC VerizonInformationServices

Combined BellSouth Dex Media YellowBook

R.H.Donnelley

Alltel Hearst /White

CBD Media1 3 42 2

$ millions

Source: Company filings and JPMorgan

Industry OverviewIndustry Overview

10

$8.9 $9.2 $9.5 $9.8 $10.2 $10.8 $11.4 $12.1 $13.2 $14.3 $15.0 $15.4 $15.9

$9.3

$15.2

$0

$4

$8

$12

$16

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004Source: Veronis Suhler Stevenson, 2005

Strong Industry FundamentalsStrong Industry Fundamentals

$ billionsU.S. Directories Advertising Revenue

CAGR 4.2%

in billions

14.9 15.2 15.1 15.1 14.8

0

5

10

15

20

2000 2001 2002 2003 2004

Print IYP

Source: Knowledge Networks, Inc., 2004

Annual Yellow Pages References

16.2 16.3 16.3

11

54%

36% 35% 31%24% 21% 16%

0%

20%

40%

60%

Yellow Pages Radio TV Outdoor Newspapers Diversified Magazines

Source: Various company filings and JPMorgan. Based on 2004 results

52%

33%27% 22% 21% 17% 14%

0%

20%

40%

60%

Yellow Pages Radio TV Outdoor Newspapers Diversified Magazines

Source: Various company filings and JPMorgan. Based on 2004 results

EBITDA Margin

EBITDA Minus Capital Expenditure as a Percentage of Revenue

Yellow Pages Offers Superior Margins and Low Capital InvestmentYellow Pages Offers Superior Margins and Low Capital Investment

Attractive Market CharacteristicsAttractive Market Characteristics

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20% 18% 15%12%

9% 8%5% 5% 4% 4%

0%

10%

20%

30%

YellowPages

Direct Mail

Newspapers Online Television Coupons Magazines Radio Catalogs Internet YP

Strong Influence on Purchasers2

Source: 2005 Media Impact Study, conducted by TNSNotes: 1) n=18 marketers who are decreasing other channels; multiple responses allowed

2) Median percent of consumers making purchases who considered various media prior to making a decision to purchase. Online excludes IYP

Essential Medium For AdvertisersEssential Medium For Advertisers

11%17%22%

28%28%33%39%

44%

61%

0%

20%

40%

60%

80%

PrintClassifieds

Yellow PagesTelemarketingTelevisionRadioOther Mkt. &Promo.

NewspapersDirect MailMagazines

% of U.S. Marketers Who Would Cut Spending in Other Media Segments to Fund Increases in Online Advertising1

Source: Forrester Research, May 2005 in Internet Retailer, August 2005; eMarketer calculations, August 2005

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High recurring revenue > 90%Primary advertising vehicle for small and medium-sized businesses− Yellow Pages is typically one of the

last advertising expenses cut− Punitive impact of deciding not to

advertiseOut of directory for a full yearLoss of priority ad placement within headings

Reducing ad size will result in loss of priority status in heading Renewed Revenue From

Existing Accounts ~80%

Growth From Existing Accounts ~12%

New Business Accounts ~8%

Substantial Recurring RevenueSubstantial Recurring Revenue

Stable and Predictable Revenue StreamStable and Predictable Revenue Stream

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Largest Revenue Headings Remain StrongLargest Revenue Headings Remain StrongMedia Influence - “Physicians and Surgeons” Heading1

22%9%

3% 3% 2% 2% 1%4% 1%1%0%

10%20%30%40%50%

YellowPages

Online Newspapers IYP Direct Mail Catalogs Television Magazines Radio Coupons

Note: 1)Types of advertising and information sources seen, read, heard, or used prior to the decision to buy the product or service (percent of purchasers)

Media Influence - “Book Sellers” Heading1

40%

22%15% 12% 11%

6% 5%

21%

2%4%0%

10%20%30%40%50%

Online Direct Mail Catalogs Magazines Newspapers Coupons Television YellowPages

Radio IYP

Source: 2005 Media Impact Study, TNS

Source: 2005 Media Impact Study, conducted by TNS

Revenues Primarily Driven by Local AdvertisersRevenues Primarily Driven by Local Advertisers

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Average Return on Investment1

Superior Value Proposition For AdvertisersSuperior Value Proposition For Advertisers

$59$44

$30$20

$11 $10 $9

$0

$20

$40

$60

$80

Yellow Pages Online Newspapers Magazines Television Radio DirectMarketing

Primary Advertising Vehicle for SMEs

Source: Local Commerce Monitor Wave 7, 2004; The Kelsey Group/ Constat

% of 2004 SME Local Ad Spend

Source: CRM Associates, Yellow Pages Trends & Opportunities, 2004

40%

17% 15%9%

4% 3%0%

10%

20%

30%

40%

50%

Yellow Pages Online Newspapers Direct Mail Magazines Radio

Note: 1) Data limited to headings that have been available for 2 consecutive years. Online excludes IYP

Company OverviewCompany Overview

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Business Highlights - RHDBusiness Highlights - RHD

Increased revenue from $75 million in 2002 to $1,040 million in 20051 via two transforming acquisitions

Repaid over $800 million of debt since 12/31/022

Established track record of successfully integrating operations and achieving cost synergy targets

Have grown publication sales in Sprint markets from –3% in 2002 to over 4%1 in 2005; implementing changes in SBC market to develop long-term, sustainable growth

Increased stock price by more than 160% since the announcement of the SPA transaction in September 2002

Notes: 1) Based on guidance issued 10/26/05. Please see appendix for reconciliation of non-GAAP figures to the most comparable GAAP numbers2) Includes income tax refunds of $71 million received during 2004

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Business Highlights - DexBusiness Highlights - Dex

Acquired Dex East in November 2002 and Dex West in September 2003

Completed Initial Public Offering in July 2004

Increased stock price by more than 40% since IPO

Repaid over $1,200 million of bank debt1

Implemented long-term growth initiatives, including DexOnline.com and Dex Plus

Note: 1) Excludes debt pay down from the proceeds of 2004 IPO and includes debt pay down of $6 million due to foreign currency adjustments in 2003

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Expand DigitallyExpand Digitally

Core Print Products Internet Agreements Search Engine MarketingIYP New Opportunities

?

Increased Distribution → Increased Usage → Increased RevenueIncreased Distribution → Increased Usage → Increased Revenue

20

21%

26%

28%

30%

34% 34%

32%

14%

22%

25%

22%

18%19%

17%

4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05

DexOnline Yahoo!

Leading IYP/Local Search usage in its markets for 6 consecutive quarters1 driven by:

− Leading user experience2 and

− Proactive user acquisition programs (e.g., SEM, SEO, affiliate programs, contextual marketing)

Twice the reach of SuperPages’ 13% and 40x Yellow Book’s 0.8% in its markets

Greater reach in its markets than the leading portals and search engines combined (e.g., Yahoo!, Google, MSN, AOL)

Notes: 1) Dex Region IYP market share, ComScore 4Q2003-2Q20052) “IYP in the Era of Local Search: Do Today’s Products Measure Up?”, The Kelsey Group, October 27, 2004

Dex Media’s Online LeadershipDex Media’s Online LeadershipDexOnline Usage Growth in Dex’s 14

State Region

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Agreements with Google, Switchboard, and Yahoo! to extend the reach of print ads

Potential aggregate reach greater than 60% of in-region search2

On-going discussions with all major portals and search engines

Yellow Book 1%

Dex Ad Network 63%SuperPages 16%

Other 20%

Google 11%1

Yahoo! 16%1

Switchboard 4%1

DexOnline 32%

Notes: 1) Represents additional distribution opportunities2) Dex Region IYP market share, ComScore 4Q2003-3Q2005

Distribution Agreements

Dex’s Extensive Distribution AgreementsDex’s Extensive Distribution Agreements

Financial UpdateFinancial Update

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2003 2004 2005GRevenue1 $1,631 $1,649 $1,658Y-o-Y growth % 2.6% 1.1% 0.6%3

Adj. EBITDA1 $919 $930 $9404

Margin % 56.3% 56.4% 56.7% CapEx2 $41 $55 $40 Adj. Free Cash Flow2 $340 $485 $521Conversion % 37.0% 52.2% 55.4%

2003 2004 2005GRevenue1 $1,033 $1,034 $1,040Y-o-Y growth % n.a. 0.1% 0.6%

Adj. EBITDA1 $600 $617 $590Margin % 58.1% 59.7% 56.7%

CapEx2 $13 $18 $30 Adj. Free Cash Flow2 $236 $388 $355Conversion % 39.3% 62.9% 60.2%

Notes: 1) Revenue and Adj. EBITDA are adjusted to eliminate effects of purchase accounting and one time charges. They are also pro forma to reflect all acquisitions as if they occurred on 1/1/03. Please see appendix for reconciliation of non-GAAP figures to the most comparable GAAP numbers

2) Figures reflect the impact of transactions, to the extent applicable, from the closing date until the end of the period3) Growth rate increases to 1.0% if the following are excluded: (i) the impact of increased deferred revenue related to Dex’s accounting for

bundled arrangements that involve the delivery of Dex Plus and related core directories; (ii) the impact of timing of Qwest’s purchase under the Advertising Commitment Agreement; and (iii) the discontinuation of certain direct marketing products

4) Excludes (i) severance costs related to workforce reductions and (ii) transaction costs incurred in conjunction with Dex Media’s proposed acquisition by RHD. Using R.H. Donnelley’s accounting policies and assumptions, Dex’s current guidance for adjusted EBITDA would be approximately $925 million

R.H. Donnelley Corp.$ millions

Dex Media Inc.$ millions

Financial OverviewFinancial Overview

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$ millions

$243$297 $301

$0

$100

$200

$300

$400

12/31/03 12/31/04 YTD 9/30/05

Total debt repayment at RHD and Dex of over $2.0 billion since 2003

$175

$264

$177

$0

$100

$200

$300

$400

12/31/03 12/31/04 YTD 9/30/05

RHD$ millions

Dex East Dex West$ millions

Strong Track Record Of Debt RepaymentStrong Track Record Of Debt Repayment

$230 $197 $178

$0

$100

$200

$300

$400

12/31/03 12/31/04 YTD 9/30/05

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2006E 2007E 2008E 2009E 2010E 2016E 2017E 2018E 2019E R.H. Donnelley $209 $204 $204 $204 $203 $203 $203 $81 $54 Dex Media 450 450 450 450 450 450 421 183 0 Total $659 $654 $654 $654 $653 $653 $624 $264 $54 Cash tax benefit2 $257 $255 $255 $255 $255 $255 $243 $103 $21

Discount rate 6.0% 8.0%

Potential NPV $2,192 $1,964

Potential per share value3 $30.57 $27.40

Notes: 1) Step-up primarily amortized over 15 years from date of acquisition and is calculated based on the purchase price less the basis in

acquired assets2) Based on a 39.0% tax rate3) Based on combined 2005 guidance of weighted average diluted shares outstanding of 71.7 million4) Over $1.8 billion from the Sprint acquisition (January 2003), over $1.1 billion from the SBC acquisition (September 2004), over $2.7

billion from the Dex East acquisition (November 2002), and over $4.1 billion from Dex West acquisition (September 2003)

RHD Acquisitions and Dex Acquisitions Resulted in Approximately RHD Acquisitions and Dex Acquisitions Resulted in Approximately $3.0 $3.0 Billion and $6.8 Billion, Respectively, of Tax Basis “StepBillion and $6.8 Billion, Respectively, of Tax Basis “Step--Ups”Ups”4

Cash Tax Benefits Available by Year1$ millions

Net Present Value of Available Cash Tax Benefits $ millions

Exceptional Cash Flow: Valuable Tax Benefits Exceptional Cash Flow: Valuable Tax Benefits

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CapitalizationCapitalization$ millions

RHD Dex

9/30/05 Multiple of EBITDA1 9/30/05

Multiple of EBITDA2

Cash $5 0.0x $0 0.0x

Bank Debt 1,882 3.2x 2,088 2.2x

Notes 1,225 2.1x 3,320 3.6x

Net Debt $3,102 5.3x $5,408 5.8x

Convertible Pref. Stock3 324 0.5x -- --

Market Value of Common Equity3 2,182 3.7x 4,196 4.4x

Total Enterprise Value $5,608 9.5x $9,604 10.2x Notes: 1) Based on 2005 guidance for adjusted EBITDA issued 10/26/05 of $590 million. Please see appendix for reconciliation of non-GAAP

figures to the most comparable GAAP numbers2) Based on 2005 guidance for adjusted EBITDA issued on 11/3/05 of $940 million. Please see appendix for reconciliation of non-

GAAP figures to the most comparable GAAP numbers. Using R.H. Donnelley’s accounting policies and assumptions, Dex’s current guidance for adjusted EBITDA would be approximately $925 million

3) Based on market prices as of 11/15/05. RHD’s preferred stock value assumes conversion into 5.2 million common shares at the market price. RHD fully diluted shares outstanding at 9/30/05 was 34.9 million, excluding the preferred shares. DEX fully diluted shares outstanding at 9/30/05 was 155.3 million shares

27

RHD GuidanceRHD Guidance$ millions, except per share amounts and percentages

As Provided

on 6/7/05 Changes in Guidance

Revised as of 10/26/05

Publication Sales Sprint Up 4.0% Up 0.4% Up 4.4% SBC Down 2.0% Down 1.0% Down 3.0%

Adjusted Net Revenue $1,040 -- $1,040 Adjusted EBITDA 580 10 590 Depreciation & Amortization 90 -- 90 Adjusted Operating Income $490 $10 $500

Interest Expense $237 -- $237 Income Tax Expense 99 4 103 Adjusted Net Income 154 6 160

Adjusted Wtd. Avg. Diluted Shares 38.7 -- 38.7 Adjusted EPS $3.99 $0.16 $4.15

Cash Flow From Operations $375 $10 $385 Less: Capital Expenditures (35) 5 (30) Free Cash Flow $340 $15 $355 Please see appendix for reconciliation of non-GAAP figures to the most comparable GAAP numbers

28

Dex GuidanceDex Guidancein millions, except for percentages

2005 Guidance Revenue $1,658 Revenue Growth 1.0%1

EBITDA, as Adjusted2 $940 Capital Expenditures $40 Adjusted Free Cash Flow $521 Debt Pay Down $460 to $475 Amortization of Intangibles $345 Depreciation & Amortization - Book $30 to $35 Interest Expense $455 Cash Interest Paid $360 to $375 Amortization of Deferred Financing Costs $35 to $40 Accretion of Notes $50 Weighted Average Diluted Common Shares Outstanding 152.5 Notes: 1) Excluding the effects of certain non-cash, timing related items consisting of: (i) the impact of increased deferred revenue related to

Dex’s accounting for bundled arrangement that involve the delivery of Dex Plus and related core directories; (ii) the impact of timing of Qwest’s purchase under Advertising Commitment Agreement; and (iii) the discontinuation of certain direct marketing products

2) Excludes: (i) severance costs related to workforce reductions and (ii) transaction costs incurred in conjunction with Dex Media’s proposed acquisition by RHD. Using R.H. Donnelley’s accounting policies and assumptions, Dex’s current guidance for adjusted EBITDA would be approximately $925 million

Please see appendix for reconciliation of non-GAAP figures to the most comparable GAAP numbers

AppendixAppendix

30

Schedule 1: Index of schedules

Schedule 2: RHD: Reconciliation of publication sales for Sprint-branded directories to net revenue – GAAP for the year ended December 31, 2002

Schedule 3: RHD: Reconciliation of publication sales for Sprint-branded and SBC-branded directories to net revenue – GAAP and adjusted pro forma net revenue for the years ended December 31, 2004 and December 31, 2003

Schedule 4: RHD: Reconciliation of net income – GAAP to adjusted pro forma EBITDA and normalized adjusted pro forma EBITDA for the years ended December 31, 2004 and December 31, 2003

Schedule 5: RHD: Reconciliation of cash flow from operations – GAAP to adjusted free cash flow for the years ended December 31, 2004 and December 31, 2003

Schedule 6: RHD: Reconciliation of guidance for the year ended December 31, 2005

Schedule 7: Dex: Reconciliation of net income to adjusted EBITDA and revenue for the years ended December 31, 2004 and December 31, 2003

Schedule 8: Dex: Reconciliation of cash flow from operations – GAAP to adjusted free cash flow for the years ended December 31, 2004 and December 31, 2003

Schedule 9: Dex: Reconciliation of guidance for the year ended December 31, 2005

Schedule 10: Notes to Schedules

Index of SchedulesIndex of Schedules

31

RHD: Reconciliation Of Pub. Sales To Net Revenue – FY02RHD: Reconciliation Of Pub. Sales To Net Revenue – FY02

Year Ended December 31,2002 (1)

Reconciliation of publication sales for Sprint-branded directories to net revenue Publication sales: Sprint-branded directories 541.7$ Publication sales: Sprint-branded directories - percentage gain over prior year -3.0%Less publication sales for January 2003 directories that were not recognized as revenue due to purchase accountingLess publication sales not recognized as revenue in current periodLess publication sales for Sprint-branded directories not sold by RHD (357.0) Publication sales disclosed in fourth quarter, 2002 earnings release 184.7 Less sales contracts executed in prior periods and reported as calendar sales in prior periods (70.0) Plus sales sold during the period to be reported as publication sales in future periods 72.1 Calendar sales reported in fourth quarter, 2002 earnings release 186.8$ Net directory advertising revenue Net commission revenue on 2002 calendar sales 42.7 Pre-press publishing revenue 31.1 Other revenue 1.6 Net revenue - GAAP 75.4$

(Unaudited)Amounts in millions, except for percentages and per share amounts

See accompanying Notes to Schedules

Schedule 2

32

RHD: Reconciliation Of Pub. Sales To Net Revenue – FY03 & FY04RHD: Reconciliation Of Pub. Sales To Net Revenue – FY03 & FY04(Unaudited)Amounts in millions, except for percentages and per share amounts


Schedule 3 2004 (1),(2) 2003 (1),(2)

Reconciliation of publication sales for Sprint-branded and SBC-brandeddirectories to net revenue and adjusted pro forma net revenue

Publication sales: Sprint-branded directories 567.2$ 552.5$ Publication sales: Sprint-branded directories - percentage change over prior year 2.7%Adjustments for changes in directory publication date(s) (4.3) Publication sales previously disclosed in RHD 2003 Form 10-K 548.2 Publication sales: SBC-branded directories 463.2 473.1 Publication sales: SBC-branded directories - percentage change over prior year -2.1%Adjustments for changes in directory publication date(s) 4.3 Total publication sales 1,030.4 1,025.6 Total publication sales - percentage change over prior year 0.5%Adjustments for changes in directory publication date(s) (4.3) Less pre-acquisition publication sales for Sprint-branded directories not recognized

as revenue in current period due to purchase accounting (102.4) Less pre-acquisition publication sales for SBC-branded directories not recognized

as revenue in current period due to purchase accounting (277.3) (473.1) Less current period publication sales for Sprint-branded directories not recognized as

revenue in current period due to the deferral method of accounting (221.0) (214.2) Less current period publication sales for SBC-branded directories not recognized as

revenue in current period due to the deferral method of accounting (158.4) Plus net revenue reported in the period for publication sales from prior periods 209.3 - Net directory advertising revenue on above publication sales 583.0 231.6 Pre-press publishing revenue 13.0 22.2 Other revenue 7.1 2.6 Net revenue - GAAP 603.1$ 256.4$

33

RHD: Reconciliation Of Pub. Sales To Net Revenue – FY03 & FY04 Cont’dRHD: Reconciliation Of Pub. Sales To Net Revenue – FY03 & FY04 Cont’d

(Unaudited)Amounts in millions, except for percentages and per share amounts


Schedule 3 Cont’d

2004 (1),(2) 2003 (1),(2)

Net revenue - GAAP 603.1$ 256.4$ Plus net revenue from Sprint-branded directories that published prior to the acquisition

plus all January 2003 Sprint-branded directories that would have been recognizedduring the period absent purchase accounting adjustments required under GAAP 1.1 315.9

Net revenue - Adjusted 604.2$ 572.3$ Plus net revenue from SBC-branded directories that published prior to the SBC Directory

Acquisition, plus all September 2004 published directories, which would have been recognized recognized during the period absent purchase accounting required under GAAP 441.5 481.1

Less pre-press publishing revenue that would not have been recorded had the SBC DirectoryAcquisition occurred on January 1, 2003 (11.8) (20.6)

Net revenue - Adjusted pro forma 1,033.9$ 1,032.8$

34

RHD: Reconciliation Of Net Income To EBITDA – FY03 & FY04RHD: Reconciliation Of Net Income To EBITDA – FY03 & FY04(Unaudited)Amounts in millions, except for percentages and per share amounts


Schedule 4

2004 (2) (3) 2003 (2) (3)

Reconciliation of net income - GAAP to adjusted pro forma EBITDA and normalized adjusted pro forma EBITDA

Net (loss) income - GAAP 70.3$ (49.9)$ Plus tax (benefit) provision 45.9 (36.1) Plus interest expense, net 175.5 180.0 Plus depreciation and amortization 66.6 65.8 EBITDA 358.3$ 159.8$

Less other (exepnse) income 0.1 (1.5) Plus net revenue from Sprint-branded directories that published prior to the SPA acquisition,

plus all January 2003 published directories, which would have been recognized during theperiod absent purchase accounting required under GAAP 1.1 315.9

Plus amortized deferred cost uplift on Sprint sales contracts as of the date of the SPA acquisition,net of expenses on Sprint-branded directories that published prior to the acquisition,plus all January 2003 published directories, which would not have been recognizedduring the period absent purchasing accounting required under GAAP 3.6 (63.3)

Less pre-press publishing revenue that would not have been recorded had the SBC DirectoryAcquisition occurred on January 1, 2003 (11.8) (20.6)

Plus net revenue from SBC-branded directories that published prior to the SBC DirectoryAcquisition, plus all September 2004 published directories, which would have been recognizedduring the period absent purchase accounting required under GAAP 441.5 481.1

Less expenses, including amortized deferred cost uplift, from SBC-branded directories thatpublished prior to the SBC Directory Acquisition that would have been recognized during theperiod absent purchase accounting adjustments required under GAAP (98.0) (157.1)

Less partnership income that would not have been recognized during the period assuming theSBC Directory Acquisition occurred on January 1, 2003 (78.0) (114.1)

Net effect of adjustments of GAAP results 258.5$ 440.4$

Adjusted pro forma EBITDA (4) 616.8$ 600.2$

35

RHD: Reconciliation Of Net Income To EBITDA – FY03 & FY04 Cont’dRHD: Reconciliation Of Net Income To EBITDA – FY03 & FY04 Cont’d(Unaudited)Amounts in millions, except for percentages and per share amounts


Schedule 4 Cont’d

2004 (2) (3)

Adjusted pro forma EBITDA (4) 616.8$ Plus headquarters relocation expenses 7.3 Less favorable adjustments to bad debt and claims expense on SBC-branded directories recorded

prior to the SBC Directory Acquisition (12.0) Less incremental compensation expense that would have been realized assuming the company

had adopted SFAS 123 on January 1, 2004 (5.1) Less other adjustments, including additional operating expenses management believes would

have been incurred if RHD had operated the acquired SBC Directory business for the full year (7.0)

Normalized adjusted pro forma EBITDA 600.0$

36

RHD: Reconciliation Of Cash Flow From Operations To Adj. FCF – FY03 & FY04RHD: Reconciliation Of Cash Flow From Operations To Adj. FCF – FY03 & FY04(Unaudited)Amounts in millions, except for percentages and per share amounts


Schedule 5

2004 2003Reconciliation of cash flow from operations - GAAP to adjusted free cash flow

Cash flow from operations - GAAP 406.3$ 248.6$ Less: additions to fixed assets and computer software (18.0) (12.6)

Adjusted free cash flow 388.3$ 236.0$

37

RHD: Reconciliation Of Guidance – FY05RHD: Reconciliation Of Guidance – FY05(Unaudited)Amounts in millions, except for percentages and per share amounts


Schedule 6

Outlook Revised

As provided on Changes in Full Year 200506/07/2005 Guidance Outlook

Reconciliation of publication sales outlook to net revenue -GAAP outlook andnet revenue -adjusted outlookPublication sales outlookPublication sales -Sprint-branded directories 590.0$ 3.0$ 593.0$ Publication sales -Sprint-branded directories - percentage gain over 2004 4.0% 0.4% 4.4% Publication sales -SBC-branded directories 453.9 (21.6) 432.3 Publication sales -SBC-branded directories - percentage gain over 2004 (2.0%) (1.0%) (3.0%) Total publication sales outlook 1,043.9$ (18.6)$ 1,025.3$ Publication sales -percentage gain over 2004 1.3% (0.2%) 1.1% Less current period publication sales for Sprint-branded directories not recognized as revenue in current period (225.4) 3.8 (221.6) Plus net revenue reported in the period for Sprint-branded publication sales from prior periods 217.3 3.9 221.2 Less current period pre-acquisition publication sales for SBC-branded directories not recognized as revenue in current period (238.0) 6.5 (231.5) Plus net revenue reported in the period for SBC-branded publication sales from prior periods 156.5 4.4 160.9 Net revenue -GAAP outlook 954.3$ -$ 954.3$ Plus pro forma net revenue that would have been reported assuming the SBC transaction had occurred on January 1, 2003 85.7 - 85.7 Net revenue - Adjusted outlook 1,040.0$ -$ 1,040.0$

38

RHD: Reconciliation Of Guidance – FY05 Cont’dRHD: Reconciliation Of Guidance – FY05 Cont’d(Unaudited)Amounts in millions, except for percentages and per share amounts


Schedule 6 Cont’d

Outlook Revised


Reconciliation of adjusted operating income outlook to operating income - GAAPoutlookAdjusted operating income outlook 490.0$ 10.0$ 500.0$ Less revenue from SBC-branded directories that published prior to the acquisition plus all September 2004 SBC-branded directories that would have been recognized during the period absent purchase accounting adjustments required under GAAP (86.0) - (86.0) Plus expenses from SBC-branded directories that would have been recognized during the period absent purchase accounting adjustments (51.0) - (51.0) Operating income - GAAP outlook 353.0$ 10.0$ 363.0$

39



Schedule 6 Cont’d

Outlook Revised


Reconciliation of adjusted EBITDA outlook and adjusted operating income outlook to adjusted net income outlook and net income - GAAP outlookAdjusted EBITDA outlook 580.0$ 10.0$ 590.0$ Less expected depreciation and amortization (90.0) - (90.0) Adjusted operating income outlook 490.0$ 10.0$ 500.0$ Less expected tax provision (98.7) (3.9) (102.6) Less expected interest expense, net (237.0) - (237.0) Adjusted net income outlook 154.3$ 6.1$ 160.4$

Less revenue from SBC-branded directories that published prior to the acquisition plus all September 2004 SBC-branded directories that would have been recognized during the period absent purchase accounting adjustments required under GAAP (86.0) - (86.0) Plus expenses from SBC-branded directories that would have been recognized during the period absent purchase accounting adjustments (51.0) - (51.0) Plus net tax reduction resulting from the exclusion of the SBC revenue and expenses due to purchase accounting 53.4 (1.0) 52.4 Net income - GAAP outlook 70.7$ 5.1$ 75.8$

40



Outlook Revised


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

Cash flow from operations outlook - GAAP 375.0$ 10.0$ 385.0$

Less: additions to fixed assets and computer software (35.0) 5.0 (30.0) Adjusted free cash flow outlook 340.0$ 15.0$ 355.0$

Outlook Revised


Reconciliation of expected diluted shares outstanding - GAAP to expected adjusted diluted shares outstanding

Expected diluted shares outstanding - GAAP 33.7$ -$ 33.7$ Additional diluted shares outstanding assuming the preferred stock is converted to common stock at the beginning of the period 5.0 - 5.0 Expected adjusted diluted shares outstanding 38.7$ -$ 38.7$

Schedule 6 Cont’d

41



Outlook Revised

As provided on Changes in Full Year06/07/2005 Guidance 2005 Outlook

Reconciliation of diluted earnings per share - GAAP outlook to diluted earnings per share - adjusted outlook

Diluted earnings per share - GAAP outlook (2.36)$ 0.18$ (2.18)$ Effect of converting preferred stock to common stock at the beginning of the period 4.21 - 4.21 Impact of SBC transaction, including adjustments to eliminate purchase accounting 2.14 (0.02) 2.12 Diluted earnings per share - adjusted outlook 3.99$ 0.16$ 4.15$

Schedule 6 Cont’d

42

Dex: Reconciliation Of Net Income to EBITDA & Revenue – FY03 & FY04Dex: Reconciliation Of Net Income to EBITDA & Revenue – FY03 & FY04(Unaudited)Amounts in millions, except for percentages and per share amounts


Schedule 7

2004 2003(5),(6)

Net income (loss) ($50.8) $76.7 Income tax provision (benefit) (31.4) 43.7 Interest expense - net 504.0 387.5 Depreciation & amortization 30.8 23.5 Amortization of intangibles 412.4 290.1 EBITDA $865.0 $821.5 Effects of purchase accounting: Revenue $46.8 $118.2 Cost of revenue (10.5) (32.6)

$901.3 $907.1 Other adjustments: Ticking fees $12.0 Advisory fees(7) $22.0 Accrued severance costs(8) 6.8 EBITDA, as adjusted $930.1 $919.1

Revenue $1,602.1 $1,512.9 Effects of purchase accounting $46.8 $118.2

$1,648.9 $1,631.1

YearEnded Dec.31,

EBITDA, adjusted to exclude the effects of purchase accounting

Revenue, adjusted to exclude the effects of purchase accounting

43

Dex: Reconciliation Of Operating Cash Flow to Adj. FCF – FY03 & FY04Dex: Reconciliation Of Operating Cash Flow to Adj. FCF – FY03 & FY04(Unaudited)Amounts in millions, except for percentages and per share amounts


Schedule 8

2004 2003Cash provided by operating activities $491.4 $380.0 Capital expenditures (54.6) (40.5)Free cash flow $436.8 $339.5Adjustments: 48.6 --Adjusted free cash flow 485.4 339.5

YearEnded Dec. 31,

44

Dex: Reconciliation Of Guidance – FY05Dex: Reconciliation Of Guidance – FY05(Unaudited)Amounts in millions, except for percentages and per share amounts


Schedule 9

Full Year 2005Guidance

Net income $55.0 Interest, Taxes, Depreciation & Amortization 866.0EBITDA $921.0

Other adjustments: Accrued severance costs $8.0 Merger costs 11.0EBITDA, as adjusted $940.0

Full Year2005 Guidance

Cash provided by operating activities $552.0 Capital expenditures (40.0)Free cash flow $512.0Adjustments:

Severance paid related to workforce reduction $9.0Adjusted free cash flow $521.0

45

Notes To SchedulesNotes To Schedules

1) Publishing revenue is recognized using the deferral and amortization method of accounting. Under this method, when a directory is published, the publication sales value is deferred and amortized into the income statement ratably over the life of the directory, which is typically 12 months. Publication sales represent the billable value of advertising sales in directories that published during the period. If events occur during the current period that affect the comparability of sales to the prior year period, such changes in directory publication dates, then prior year sales are adjusted to conform to the current period presentation and to maintain comparability.

2) As a result of the SPA Acquisition and SBC Directory Acquisition and the related financings and associated purchase accounting, 2004 and 2003 results reported in accordance with GAAP are not comparable, nor do they reflect the Company’s underlying operational or financial performance. Additionally, these considerations with respect to the SBC Directory Acquisition will also affect the comparability of our 2004 and 2005 reported GAAP results. Accordingly, management is presenting adjusted pro forma information that, among other things, eliminates the purchase accounting effects of each acquisition and assumes the SBC directory Acquisition and related financing occurred on January 1, 2003. Management believes that the presentation of this adjusted pro forma 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. While management believes the adjusted pro forma results reasonably represent results as if the businesses had been combined for the full years 2003 and 2004, because of the differences in the application of accounting policies and practices between the Company and the acquired entities, management does not believe these adjusted pro forma amounts are strictly comparable, nor are they necessarily indicative of results for future periods. The pro forma results assume that the appropriate pro rata portion of the revenues and direct costs of directories acquired in connection with the SPA Acquisition and SBC Directory Acquisition that published prior to the respective acquisition, plus directories that published during the month of each acquisition, were recognized during the period pursuant to the deferral and amortization method. As a result of purchase accounting, these pre-acquisition revenues and expenses are not included in reported GAAP results. For the periods prior to the SBC Directory Acquisition, pro forma interest expense assumes that the transaction occurred at the beginning of the periods presented and is based on the incremental debt actually incurred at the time of the acquisition and the interest rate in effect at the time of the acquisition with no assumption of additional debt repayments. 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 each of the SPA Acquisition and SBC Directory 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.” This “cost uplift” with respect to each transaction has also been removed in the adjusted pro forma results.

3) EBITDA represents earnings before interest, taxes, depreciation and amortization. Adjusted pro forma EBITDA represents adjusted pro forma earnings before interest, taxes, depreciation and amortization. EBITDA and Adjusted pro forma EBITDA are not measurements of operating performance computed in accordance with GAAP and should not be considered as a substitute for operating income or net income prepared in conformity with GAAP. In addition, EBITDA may not be comparable to similarly titled measures of other companies.

Schedule 10

46

Notes To Schedules Cont’dNotes To Schedules Cont’d

4) EBITDA represents earnings before interest, taxes, depreciation and amortization. Adjusted pro forma EBITDA represents adjusted pro forma earnings before interest, taxes, depreciation and amortization. EBITDA and Adjusted pro forma EBITDA are not measurements of operating performance computed in accordance with GAAP and should not be considered as a substitute for operating income or net income prepared in conformity with GAAP. In addition, EBITDA may not be comparable to similarly titled measures of other companies.

5) This presentation reflects the aggregation of Dex Media results and the operations of Dex West prior to its acquisition on September 9, 2003 ("Combined"). The presentation of Combined results for the year ended December 31, 2003, is not in accordance with GAAP. We have presented the Combined results because (i) we believe that such financial information is important to an investor's understanding of Dex Media's future operations due to the Dex West acquisition and (ii) Dex Media and Dex West were under common management for all periods presented.

6) The Combined 2003 results are not comparable to the consolidated 2004 results due to interest costs on Qwest indebtedness prior to the Dex West acquisition on September 9, 2003. In addition, in connection with the acquisition of Dex West, we acquired intangible assets subject to amortization and incurred significant indebtedness.

7) Advisory fees include the $2.0 million paid to Dex Media's equity sponsors prior to the IPO and a lump sum payment of $20.0 million paid in conjunction with the IPO to terminate the annual advisory fees payable under the management consulting agreements. These amounts were included in general and administrative expense for the full year 2004.

8) Accrued severance costs primarily relate to the previously announced planned workforce reduction as a result of the operational efficiencies gained through the Amdocs rollout and reorganization of the marketing and sales organizations.

Schedule 10 Cont’d

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