Dex One: modeFinance Credit Report

If you want to know more, ASKMORE TM

modeFinance’s credit report.

Almost every day millions of peoplearound the world are wondering the realcreditworthiness of the companies withwhich they are in business. Every daythese questions remain unanswered.modeFinance

TM

now aims to answer thesequestions in a simple, complete andimmediate way.

ASKMORETM

is the modeFinanceTM

product which gives the chance toevaluate the credit risk for every companyfrom all around the world.

ASKMORETM plans 3 types of reports:

s-peek Basic Plus

ASKMORETM

Basic:This report includes modeFinance TM

’ sMORE Credit Ratings and MORE CreditLimit to help you in the decision making.It covers all essential information includingfinancial statements of the last three yearsand descriptive information including tradedescription and sector analysis.This report type is ideally suited fordecisions on transactions with each levelof credit risk.

modeFinanceTM HeadquarterBuilding A - AREA Science ParkPadriciano 99 - 34149 Trieste - ItalyPh.: +39 040 375 5337Fax: +39 040 375 [email protected]

askMORETM is a registered mark of modeFinanceTM

DEX ONE CORPORATIONTuesday, 19 March 2013

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D C CC CCC B BB BBB A AA AAA

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D C CC CCC B BB BBB A AA AAAnot

available

non return extremlypathological

pathological highdanger

weak sufficient adequate good very

strongextremely

strong

Company name DEX ONE CORPORATION

Identification number Not available

Country United States of America

ZIP code and city 27513 - CARY

Address 1001, WINSTEAD DRIVE

+1 919 297 1600

www.dexone.com

[email protected]

Legal form Not available

Account Consolidated

Incorporation date 1886

NACE 2 Sector 5819 - Other publishing activities

Listed

Status Active

MORE Credit limit Not eligible for credit on the base of the available informations

31/12/2011 31/12/2010 31/12/2009

Turnover (th e) 1,144,310 741,462 1,528,840

Rating CC B CC

Probability of default 42.00% 3.80% 42.00%

Confidence Level 78% 78% 78%

Solvency ratios

Leverage ratio -351.67 7.54 -1.65

Total asset/Total liabilities 1.00 1.13 0.39

Liquidity ratios

Current Ratio 0.99 0.97 0.81

Quick Ratio 0.99 0.97 0.81

Profitability and economic equili-

brium ratios

Return on investement ROI (%) - - -

Return on equity ROE (%) -5,259.44 1,140.19 -93.27

Asset turnover 0.43 0.22 0.49

Interest paid weight - - -

Gross Profit/Operating revenue 0.81 0.76 0.83

Interest Coverage ratios

EBIT interest coverage ratio - - -

Analysis and trend of financial

strength


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modeFinance TM srlVAT number [email protected]

Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741

Sector Analysis

Company Healthy Balanced Vulnerable Risky

Solvency ratios

Leverage ratio -351.67 0.57 1.87 2.07 -2.63

Total asset/Total liabilities 1.00 2.75 1.53 1.14 0.91

Liquidity ratios

Current Ratio 0.99 2.63 1.42 1.06 0.82

Quick Ratio 0.99 2.07 1.17 0.87 0.61

Profitability and economic equilibrium ratios

Return on investement ROI (%) - 16.82 7.29 0.71 -12.05

Return on equity ROE (%) -5,259.44 19.54 9.98 -11.31 -82.79

Asset turnover 0.43 1.23 1.38 1.35 1.33

Interest paid weight - 0.01 0.14 0.01 -0.18

Gross Profit/Operating revenue 0.81 0.42 0.39 0.34 0.24

Interest Coverage ratios

EBIT interest coverage ratio - 143.80 6.00 0.09 -5.19

Cash Conversion Cycle (days)

Days Sales Of Inventory (DIO) 0 40 26 23 29

Days Sales Outstanding (DSO) 149 62 66 63 73

Days Payable Outstanding (DPO) 0 26 32 39 33

Cash Conversion Cycle (DIO + DSO - DPO) 149 81 58 36 44

Numer of analyzed companies - 80 114 69 21

(Average) Rating CC A BBB B CC

The sector has been chosen according to:

international companies in the sector NACE 2 5819 with financial data of year 2011.


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Sector Analysis - Graphs


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Balance Sheet

BALANCE SHEET (th e) 31/12/2011 31/12/2010 31/12/2009

Accounting practice Local GAAP Local GAAP Local GAAP

Exchange rate USD - EUR 0.7729 0.748 0.6942

Number of months 12 12 12

Total assets 2,674,244 3,357,658 3,122,860

Fixed assets 1,813,616 2,519,818 1,928,417

Intangible fixed assets 1,686,446 2,371,332 1,498,141

Tangible fixed assets 117,123 141,184 109,171

Other fixed assets 10,048 7,302 321,105

Current assets 860,628 837,840 1,194,443

Stocks 0 0 0

Debtors 468,124 507,462 573,223

Other current assets 392,503 330,378 621,219

Cash & cash equivalent 199,350 95,633 462,266

Shareholders funds -7,626 393,385 -4,802,892

Capital 39 37 61,203

Other shareholders funds -7,664 393,348 -4,864,095

Total liabilities 2,681,870 2,964,273 7,925,752

Non current liabilities 1,811,784 2,098,604 6,451,632

Long term debt 1,687,964 1,860,964 1,777,903

Other non-current liabilities 123,819 237,640 4,673,729

Current liabilities 870,086 865,669 1,474,120

Loans 252,183 186,477 689,662

Creditors 0 0 0

Other current liabilities 617,902 679,192 784,458

Total shareh. funds & liab. 2,674,244 3,357,658 3,122,860

NET DEBT (th e) 31/12/2011 31/12/2010 31/12/2009

Short term debts 252,183 186,477 689,662

Long term debt 1,687,964 1,860,964 1,777,903

Cash & cash equivalent 199,350 95,633 462,266

Net debt 1,740,798 1,951,808 2,005,300

31/12/2011 31/12/2010 31/12/2009

Working capital - - -

Net Current Assets -9,458 -27,829 -279,677

31/12/2011 31/12/2010 31/12/2009

Days Sales Of Inventory (DIO) 0 0 0

Days Sales Outstanding (DSO) 149 250 137

Days Payable Outstanding (DPO) 0 0 0

Cash Conversion Cycle (DIO + DSO - DPO) 149 250 137


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Income Statement

INCOME STATEMENT (th e) 31/12/2011 31/12/2010 31/12/2009

Accounting practice Local GAAP Local GAAP Local GAAP

Exchange rate USD - EUR 0.7729 0.748 0.6942

Number of months 12 12 12

Sales 1,144,310 741,462 1,528,840

Revenues growth (%) 54 -52 -

Other revenues +/- variation in inventories and contract in progress + Fixed assets

own construction capitalized0 0 0

Operating revenue / turnover 1,144,310 741,462 1,528,840

Total operating costs 1,476,922 1,661,638 6,247,360

Costs growth (%) -11 -73 -

Service costs - - -

Material costs - - -

Costs of employees - - -

EBITDA 481,109 124,890 776,858

Depreciation 813,721 1,045,066 5,495,379

EBIT -332,612 -920,176 -4,718,521

Financial P/L -164,893 5,627,970 -405,602

Financial revenue -175,278 -201,292 -339,818

Financial expenses -10,385 -5,829,263 65,784

Interest paid - - -

P/L before tax -497,505 4,707,794 -5,124,123

Extr. and other P/L - - -

Extr. and other revenue - - -

Extr. and other expenses - - -

P/L before tax + Extr. and other P/L - - -

Taxation -96,420 222,475 -644,537

P/L for period -401,085 4,485,320 -4,479,586

31/12/2011 31/12/2010 31/12/2009

Costs of Good Sold 221,945 179,639 257,223

Gross Profit 922,366 561,823 1,271,616

Other Operating Expenses 1,254,978 1,481,999 5,990,137

31/12/2011 31/12/2010 31/12/2009

Cash flow 412,636 5,530,386 1,015,793

Added value - - -

31/12/2011 31/12/2010 31/12/2009

Number of employees 2,700 3,200 3,500


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Evolutions and trends


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Qualitative information

Full overview It is a publicly quoted company primarily engaged in providing print, online and mobile yellow pages and search

solutions as well as major search engines. The company was founded as R. H. Donnelley Company in 1886 by

Reuben H. Donnelley. The US - based company has its corporate headquarters located in Cary, North Carolina.

It is a leading marketing solutions company that helps local businesses reach, win and keep ready - to - buy

customers. The company’s highly - skilled, locally based marketing consultants offer a wide range of marketing

products and services that help businesses get found more than one billion times each year by actively shopping

consumers. It offers local businesses personalized marketing consulting services and exposure across a broad

network of local marketing products, including its “official” print, online and mobile yellow pages and search

solutions, such as www. dexknows. com, as well as major search engines. Through access to a vast collection of

highly valuable, proprietary local market intelligence, as well as the personal, hands - on service from approximately

1,500 dedicated marketing consultants, the company helps about 435,000 local businesses create custom - tailored

marketing programs that effectively reach potential customers - wherever, whenever, and however they search. It

delivers a broad range of products and services to help local businesses grow - from identifying target audiences

and developing messaging, to optimizing marketing programs and leveraging appropriate products, such as online

and mobile search solutions, print yellow pages directories, voice based search platforms, and one of the largest

pay - per - click ad networks in the United States.

History Founded as R. H. Donnelley Company by Reuben H. Donnelley.

Primary business line Engaged in providing print, online and mobile yellow pages and search solutions as well as major search engines.

Secondary business line Not available.

Main activity Services.

Secondary activity Not available.

Main products and services Print, online and mobile yellow pages and search solutions, such as www. dexknows. com; and major search

engines.

Size estimate Leading marketing solutions company.

Strategy, organization and policy Not available.

Strategic alliances Not available.

Membership of a network Not available.

Main brand names Not available.

Main domestic country United States of America.

Main foreign countries or regions Not available.

Main production sites Not available.

Main distribution sites Not available.


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Main sales representation sites Not available.

Main customers Not available.

Auditor/Advisor/Bank

name type address

KPMG LLP Auditor -

The Bank of New York Transfer Agent -

Board

name date of birth nationality function

Mr. Jonathan B Bulkeley 14/10/1960 - Independent Director

Mr. Richard L Kuersteiner - - Independent Director

Mr. W. Kirk Liddell - - Independent Director

Mr. Mark A McEachen - - Independent Director

Mr. Alfred Thomas Mockett 31/01/1949 United States President, Chief Executive Officer, Director

Sharehoders (the first twenty shareholders ordered by Direct %)

FRANKLIN RESOURCES, INC. via its funds Rating:

Country ISO code US Operating Revenue (MIL $) 7205.5

NACE Rev. 2, Core code - Total Assets (MIL $) 14751.5

Direct % - Number of Employees 8558

Total % 26.18 Information date 2012/09

Address : Not available

HAYMAN CAPITAL MANAGEMENT LP Rating:

Country ISO code US Operating Revenue (MIL $) -

NACE Rev. 2, Core code - Total Assets (MIL $) -

Direct % 9.95 Number of Employees 0

Total % - Information date 2012/12



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BENNETT JAMES DONALD via its funds Rating:



Direct % - Number of Employees -



RESTRUCTURING CAPITAL ASSOCIATES LP Rating:






MEAD ROBERT E. Rating:



Direct % 8.64 Number of Employees -



PAULSON & CO. INC. via its funds Rating:






BENNETT RESTRUCTURING FUND LP Rating:



Direct % 4.60 Number of Employees 0



ALYESKA INVESTMENT GROUP, L.P. via its funds Rating:






TCS CAPITAL MANAGEMENT LLC via its funds Rating:







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BLACKROCK, INC. via its funds Rating: AA

Country ISO code US Operating Revenue (MIL $) 9337

NACE Rev. 2, Core code - Total Assets (MIL $) 179896




ALLIANZ SE via its funds Rating:

Country ISO code DE Operating Revenue (MIL $) 89665.98





VANGUARD GROUP, INC. THE via its funds Rating:






BRIDGEWAY CAPITAL MANAGEMENT INC via its funds Rating:






MITTLEMAN BROTHERS LLC via its funds Rating:






RENAISSANCE TECHNOLOGIES LLC via its funds Rating:






STATE OF CALIFORNIA via its funds Rating:



Direct % - Number of Employees -




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DEUTSCHE BANK AG via its funds Rating:

Country ISO code DE Operating Revenue (MIL $) 43152.86





ALGERT COLDIRON INVESTORS, LLC via its funds Rating:






PRUDENTIAL FINANCIAL INC via its funds Rating:

Country ISO code US Operating Revenue (MIL $) 15787

NACE Rev. 2, Core code - Total Assets (MIL $) 709298




WELLINGTON MANAGEMENT COMPANY, LLP via its funds Rating:






Subsidiaries (the first twenty subsidiaries ordered by Direct %)

DEX MEDIA EAST LLC Rating:



Direct % MO Number of Employees -


DEX ONE SERVICE, INC. Rating:



Direct % MO Number of Employees 1



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R.H. DONNELLEY INC. Rating:



Direct % MO Number of Employees 1300



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ASKMORE rating guide

General vision A credit rating is an opinion of the general creditworthiness of an obligor (issuer rating), or the creditworthiness of

an obligor in respect of a specific debt security, or other financial obligation (issue rating), based on relevant risk

factors.

The Multi Objective Rating Evaluation (MORE) model is essentially used to assess the level of distress of industrial

companies by using data included in financial statements.

The basic idea of the model is to analyze a set of financial and economic ratios in a predictive corporate bankruptcy

model with the purpose of creating a fundamental credit rating model for each industrial sector. Results of the

model are obtained by applying newly developed numerical methodologies, drawing together financial theory,

data mining and engineering design methodologies. The heart of MORE is a multi dimensional and multi objective

algorithm that produces a classification of each company, by taking into account any attributes (such as sector and

country) characterizing a firm.

The model gives the opportunity to assign a rating to a company even without considering a complete data analysis

and allows to process quality information. It induces a better understanding of a company’s strength and weakness

thanks to sophisticated data mining tools and taking into account the analyst knowledge.

The MORE rating vision is to look at the fundamental economics of the company. The main idea is to evaluate the

rating observing every aspect of the economical and financial behavior of the company: better is the equilibrium

between the different aspects, better will be the final rating.

This is done studying, evaluating and aggregating the most important sections of the financial and economic

behavior of a company such as: profitability, liquidity, solvency, interest coverage and efficiency.


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Rating scale

Rating class Rating macro class Assessment

AAA

Healthy

The company’s capacity to meet its financial commitments is extremely strong. The company shows an excellent

economic and financial flow and fund equilibrium.

AAThe company has very strong creditworthiness. It also has a good capital structure and economic and financial

equilibrium. Difference from AAA is slight.

AThe company has a high solvency. The company is however more susceptible to the adverse effects of changes in

circumstances and economic conditions than companies in higher rated categories.

BBB

Balanced

Capital structure and economic equilibrium are considered adequate. The company’s capacity to meet its financial

commitments could be affected by serious unfavourable events.

BBA company rated BB is more vulnerable than companies rated BBB. Furthermore the company faces major ongoing

uncertainties or exposure to adverse business, financial, or economic conditions.

B

Vulnerable

The company presents vulnerable signals with regards to its fundamentals. Adverse business, financial, or economic

conditions will be likely to impair the company’s capacity or willingness to meet its financial commitments.

CCC

A company rated CCC has a dangerous disequilibrium on the capital structure and on its economic and financial

fundamentals. Adverse market events and an inadequate management could affect with high probability the

company’s solvency.

CC

Risky

The company shows signals of high vulnerability. In the event of adverse market and economic conditions, the

company’s strong disequilibrium could increase.

CThe company shows considerable pathological situations. The company’s capacity to meet its financial

commitments is very low.

D The company has not any longer the capacity to meet its financial commitments.


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Fundamental Credit Rating Ratios

Analysis area Ratio Assessment

Solvency ratios

Leverage ratioThis measures the level of total liabilities of the company in comparison

with equity.

Assets to debtThis indicates company’s solvency. The company shows a level of deficit

when the value of this ratio is under one unit.

Financial ratios Fixed Assets coverage ratioThis is calculated only for holdings. It measures the capital structure i.e.

whether a company covers the fixed assets with long term capital.

Liquidity ratios

Current ratioThis measures whether a company has sufficient short-term assets to cover

its short-term liabilities.

Quick ratioThis compares current liabilities only to those assets that can be readily

turned into cash.

Profitability and economic ratios

Return on Investement(ROI)This measures the profitability of company investments without regard to

the way the investment is financed.

Return on Equity(ROE) This measures the profitability of the equity.

Asset turnover

This indicates the investments turnover with regards to sales. The level

assumed from the ratio depends on the sector in which the company

operates.

Profit margin This indicates the profitability of sales.

Interest coverage ratio Interest Paid coverage

This indicate the ability of the company to cover interest expenses through

the economic margins (Gross profit and EBIT) and through the cash flow

from operating activities.


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MORE Credit Limit, Probability of default and Confidence Level

MORE Credit Limit MORE Credit limit is the estimation of the amount of maximum credit that is possible to assign on a commercial

relationship with the analyzed company with an outlook of one year.

modeFinance used the following values associated with the company analyzed while computing the credit limit:

• Size;

• Years in Business;

• Average number of suppliers;

• Liquidity of the company and the comparison with its sector;

• The funds dedicated to be paid to suppliers;

• The likelihood that a company may pay its debts in the next 12 months (MORE Ratings).

The credit limit in this report is merely a suggested value of commercial credit limit calculated on the basis of annual

public data. This value should be reviewed by paying attention to the Confidence Level value and by using other

information such as other business information, news... etc; and private information such as the relationship with

client, history of payments, guarantees and the knowledge of the sector.

Probability of default e Confidence

Level

In addition to the MORE Rating, modeFinance also estimates the probability of default and provides a level of

confidence. The probability of default is the degree of certainty (in quantitative terms) that the company will go

into default.

As the probability of default is strongly affected by the economic climate that the company is operating in,

companies in the same MORE class will not necessarily have the same probability of default.

The MORE model can produce a MORE rating even if there is missing data by using an associated confidence level:

Confidence =

∑Available Information∑

Total Information

The level of confidence does not indicate financial confidence in the company. It is a reflection of the variations in

availability of financial data across Europe due to filing regulations and suggests the degree of financial detail the

MORE rating is able to take into account for each company.

For companies with fully populated records a confidence level of 100% would be applied: companies where no

financial data is provided, 0%. This puts the MORE rating in a context for the user and aids interpretation.


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Notes and disclaimer

NOTES modeFinance has based the present analysis on the company available financial statements, coming from one or

more of the following sources: local providers, Commercial Register (Companies House), websites, modeFinance’s

database etc.

DISCLAIMER All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any

form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of

the publisher modeFinance. The facts of this report are believed to be correct at the time of publication but cannot

be guaranteed. Please note that the findings, conclusions and recommendations that modeFinance delivers will

be based on information gathered in good faith from both primary and secondary sources, whose accuracy we

are not always in a position to guarantee. As such modeFinance can accept no liability whatever for actions taken

based on any information that may subsequently prove to be incorrect.

Contacts

Company modeFinance

Products MORE rating

Where AREA Science Park

34149 Trieste, via Padriciano 99 - ITALY

Info [email protected]

web www.modefinance.com

Phone +39 040 3755337

Documents

Dex One: modeFinance Credit Report