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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

     
þ
  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
    For the quarterly period ended September 30, 2004
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: 333-112694

Dex Media West LLC

(Exact name of registrant as specified in its charter)
     
Delaware   25-1903487
(State or other jurisdiction of
incorporation or organization)		   (IRS Employer
Identification No.)

198 Inverness Drive West

Englewood, Colorado
80112
(Address of principal executive offices)

(303) 784-2900

(Registrant’s telephone number, including area code)

      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 an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).     Yes o          No þ

INDEX

             
Page
Nos.
 PART I: FINANCIAL INFORMATION     2  
   Financial Statements     2  
     Condensed Consolidated Balance Sheets (unaudited) — September 30, 2004 and December 31, 2003     2  
     Condensed Consolidated Statements of Operations (unaudited) — Three Months Ended September 30, 2004, and for the Periods from September 10 to September 30, 2003 and from July 1 to September 9, 2003     3  
     Condensed Consolidated Statements of Operations (unaudited) — Nine Months Ended September 30, 2004, and for the Periods from September 10 to September 30, 2003 and from January 1 to September 9, 2003     4  
     Condensed Consolidated Statements of Cash Flows (unaudited) — Nine Months Ended September 30, 2004, and for the Periods from September 10 to September 30, 2003 and from January 1 to September 9, 2003     5  
     Notes to Condensed Consolidated Financial Statements (unaudited)     6  
   Management’s Discussion and Analysis of Financial Condition and Results of Operations     17  
   Quantitative and Qualitative Disclosures about Market Risk     34  
   Controls and Procedures     34  
 PART II: OTHER INFORMATION     35  
   Legal Proceedings     35  
   Unregistered Sales of Equity Securities and Use of Proceeds     35  
   Defaults upon Senior Securities     35  
   Submission of Matters to a Vote of Security Holders     35  
   Other Information     35  
   Exhibits     35  
 Signature     36  
 Certification of CEO Pursuant to Section 302
 Certification of CFO Pursuant to Section 302
 Certification of CEO Pursuant to Section 906
 Certification of CFO Pursuant to Section 906

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PART I.

FINANCIAL INFORMATION

 
Item 1. Financial Statements

DEX MEDIA WEST LLC

AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF DEX MEDIA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
                     
As of As of
September 30, December 31,
2004 2003
ASSETS
Current assets:
               
 
Cash and cash equivalents
  $ 2,915     $ 4,658  
 
Accounts receivable, net
    62,721       53,114  
 
Deferred directory costs
    167,484       142,293  
 
Current deferred taxes
    3,396       3,876  
 
Other current assets
    6,664       5,461  
     
     
 
   
Total current assets
    243,180       209,402  
Property, plant and equipment, net
    50,492       38,016  
Goodwill
    2,193,401       2,198,586  
Intangible assets, net
    1,727,814       1,901,300  
Deferred income taxes
    15,483       13,778  
Deferred financing costs
    84,810       102,794  
Other assets
    1,785       2,955  
     
     
 
   
Total Assets
  $ 4,316,965     $ 4,466,831  
     
     
 
 
LIABILITIES AND OWNER’S EQUITY
Current liabilities:
               
 
Accounts payable
  $ 18,569     $ 16,694  
 
Amounts due to affiliate
    25,812       28,554  
 
Deferred revenue and customer deposits
    129,869       68,232  
 
Accrued interest payable
    20,001       49,405  
 
Current portion of long-term debt
    77,243       20,178  
 
Other accrued liabilities
    5,222       6,113  
     
     
 
   
Total current liabilities
    276,716       189,176  
Long-term debt
    2,937,557       3,182,822  
Amounts due to affiliate related to post-retirement and other post-employment obligations
    40,337       35,519  
Other liabilities
    211       408  
     
     
 
   
Total Liabilities
    3,254,821       3,407,925  
     
     
 
Commitments and contingencies (Note 9)
               
Accumulated deficit
    (29,665 )     (27,808 )
Owner’s interest
    1,091,809       1,086,714  
     
     
 
   
Total Owner’s Equity
    1,062,144       1,058,906  
     
     
 
   
Total Liabilities and Owner’s Equity
  $ 4,316,965     $ 4,466,831  
     
     
 

See accompanying notes to condensed consolidated financial statements.

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DEX MEDIA WEST LLC

AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF DEX MEDIA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
(Unaudited)
                             
Company Predecessor
Period from Period from
Three Months September 10 July 1
Ended to to
September 30, September 30, September 9,
2004 2003 2003
Revenue
  $ 221,696     $ 14,571     $ 172,739  
Operating Expenses:
                       
 
Cost of revenue
    68,537       4,819       53,909  
 
General and administrative expense
    28,499       5,502       16,613  
 
Bad debt expense
    5,540       1,857       5,439  
 
Termination of annual advisory fees
    10,000       —       —  
 
Depreciation and amortization expense
    5,116       614       3,339  
 
Amortization of intangibles
    57,829       14,068       —  
     
     
     
 
   
Total operating expenses
    175,521       26,860       79,300  
     
     
     
 
   
Operating income (loss)
    46,175       (12,289 )     93,439  
Other (income) expense:
                       
 
Interest income
    (249 )     (102 )     (980 )
 
Interest expense
    54,439       16,580       48,476  
 
Other expense
    17       —       —  
     
     
     
 
(Loss) income before taxes
    (8,032 )     (28,767 )     45,943  
   
Income tax (benefit) provision
    (3,189 )     (11,190 )     17,336  
     
     
     
 
   
Net (loss) income
  $ (4,843 )   $ (17,577 )   $ 28,607  
     
     
     
 

See accompanying notes to condensed consolidated financial statements.

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DEX MEDIA WEST LLC

AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF DEX MEDIA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
(Unaudited)
                               
Company Predecessor
Period from Period from
Nine Months September 10 January 1
Ended to to
September 30, September 30, September 9,
2004 2003 2003
Revenue
  $ 645,979     $ 14,571     $ 630,160  
Operating Expenses:
                       
 
Cost of revenue
    198,272       4,819       193,282  
 
General and administrative expense
    74,958       5,502       55,175  
 
Bad debt expense
    17,367       1,857       19,066  
 
Termination of annual advisory fees
    10,000       —       —  
 
Depreciation and amortization expense
    13,200       614       8,153  
 
Amortization of intangibles
    173,486       14,068       —  
     
     
     
 
     
Total operating expenses
    487,283       26,860       275,676  
     
     
     
 
     
Operating income (loss)
    158,696       (12,289 )     354,484  
Other (income) expense:
                       
   
Interest income
    (577 )     (102 )     (2,336 )
   
Interest expense
    162,338       16,580       113,627  
   
Other expense
    17       —       —  
     
     
     
 
(Loss) income before taxes
    (3,082 )     (28,767 )     243,193  
   
Income tax (benefit) provision
    (1,225 )     (11,190 )     91,441  
     
     
     
 
   
Net (loss) income
  $ (1,857 )   $ (17,577 )   $ 151,752  
     
     
     
 

See accompanying notes to condensed consolidated financial statements.

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DEX MEDIA WEST LLC

AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF DEX MEDIA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
                               
Company Predecessor
Period from Period from
Nine Months September 10 January 1
Ended to to
September 30, September 30, September 9,
2004 2003 2003
Operating activities:
                       
 
Net (loss) income
  $ (1,857 )   $ (17,577 )   $ 151,752  
Adjustments to net income:
                       
 
Bad debt expense
    17,367       1,857       19,066  
 
Depreciation and amortization expense
    13,200       614       8,153  
 
Amortization of intangibles
    173,486       14,068       —  
 
Amortization of deferred financing costs
    19,835       1,123       46,219  
 
Stock option
    443       —       —  
 
Loss on disposition of investment
    9       —       —  
 
Deferred tax benefit
    (1,225 )     (11,190 )     (1,570 )
 
Contributions from Qwest in lieu of income taxes
    —       —       79,412  
 
Changes in operating assets and liabilities:
                       
   
Accounts receivable
    (26,974 )     18,275       1,554  
   
Deferred directory costs
    (25,190 )     (17,606 )     3,577  
   
Other current assets
    (1,203 )     (1,087 )     (11,075 )
   
Other long-term assets
    1,161       2,947       —  
   
Accounts payable and other liabilities
    3,069       4,208       9,472  
   
Accrued interest
    (29,404 )     14,428       6,680  
   
Deferred revenue and customer deposits
    61,638       46,284       (20,835 )
   
Amounts due to affiliates
    (2,742 )     5,166       —  
   
Amounts due to affiliates related to post-retirement and other post-employment obligations
    4,818       372       —  
   
Employee benefit plan obligations and other long-term liabilities
    (197 )     (383 )     6,362  
     
     
     
 
     
Cash provided by operating activities
    206,234       61,499       298,767  
     
     
     
 
Investing activities:
                       
   
Acquisition of Dex West
    5,185       (4,290,104 )     —  
   
Payment of acquisition costs
    —       (54,391 )     —  
   
Expenditures for property, plant and equipment
    (5,125 )     (1,533 )     (11,446 )
   
Capitalized software development costs
    (20,551 )     (360 )     (4,404 )
     
     
     
 
     
Cash used for investing activities
    (20,491 )     (4,346,388 )     (15,850 )
     
     
     
 
Financing activities:
                       
 
Proceeds from borrowings on revolving credit facility
    23,000       —       —  
 
Repayments of borrowings on revolving credit facility
    (23,000 )     —       —  
 
Proceeds from issuance of long-term debt
    —       3,378,000       —  
 
Repayments on long-term debt
    (188,200 )     (80,000 )     (750,000 )
 
Payment of financing costs
    (1,851 )     (108,737 )     —  
 
Contribution from parent
    20,052       1,122,000