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Additional Financial Information | 9 Months Ended
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Sep. 30, 2013
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Additional Financial Information | Additional Financial Information Consolidated Statements of Comprehensive Income (Loss) Depreciation and amortization The following tables set forth the components of the Company's depreciation and amortization expense for the three and nine months ended September 30, 2013, and 2012.
| Three Months Ended September 30, | Nine Months Ended September 30,
| 2013 | 2012 | 2013 | 2012
| (in millions)
Amortization of intangible assets | $ | 226 |  | $ | 87 |  | $ | 477 |  | $ | 262 |
Amortization of capitalized software | 11 |  | 13 |  | 33 |  | 39 |
Depreciation of fixed assets | 5 |  | 4 |  | 14 |  | 12 |
Total depreciation and amortization | $ | 242 |  | $ | 104 |  | $ | 524 |  | $ | 313 |
Severance During the three and nine months ended September 30, 2013, the Company recorded severance expense of $9 million and $28 million, respectively which was included as part of merger integration costs. During the three and nine months ended September 30, 2012, the Company recorded severance expense of $1 million and $5 million, respectively. Severance costs are recorded as part of general and administrative expense on the Company's consolidated statements of comprehensive income (loss). Interest expense, net The Company recorded interest expense, net of $99 million and $221 million for the three and nine months ended September 30, 2013, compared to $47 million and $152 million for the three and nine months ended September 30, 2012, respectively. Interest expense, net consists primarily of interest expense associated with our debt obligations, non-cash interest expense associated with the amortization of debt discount, non-cash interest expense associated with payment-in-kind interest related to our senior subordinated notes, and non-cash interest expense associated with the amortization of deferred financing cost, offset by interest income. Non-cash interest expense was $23 million and $47 million for the three and nine months ended September 30, 2013, compared to $9 million and $32 million for the three and nine months ended September 30, 2012, respectively. As a result of our merger with SuperMedia effective April 30, 2013, the May 1, 2013 through September 30, 2013 interest expense, net of SuperMedia of $96 million (including $28 million of non-cash interest expense related to the amortization of debt discount) has been included in our interest expense, net for the nine months ended September 30, 2013. For the three months ended September 30, 2013 interest expense, net recorded by SuperMedia of $58 million (including $17 million of non-cash interest expense related to the amortization of debt discount) has been included in our interest expense, net. Other comprehensive income (loss) The following tables set forth the components of the Company's comprehensive income (loss) adjustments for pension and other post-employment benefits for the three and nine months ended September 30, 2013, and 2012.
| Three Months Ended September 30,
| 2013 | 2012
| Gross | Taxes | Net | Gross | Taxes | Net
| (in millions)
Net (loss) |  |  | $ | (132 | ) |  |  | $ | (13 | )
Adjustments for pension and other post-employment benefits: |  |  |  |  |  |
Accumulated actuarial losses of benefit plans | $ | (7 | ) | $ | 3 |  | (4 | ) | $ | — |  | $ | — |  | — |
Reclassifications included in net (loss): |  |  |  |  |  |
Amortization of actuarial losses | 1 |  | (1 | ) | — |  | — |  | — |  | — |
Total reclassifications included in net (loss) | 1 |  | (1 | ) | — |  | — |  | — |  | — |
Adjustments for pension and other post-employment benefits | $ | (6 | ) | $ | 2 |  | (4 | ) | $ | — |  | $ | — |  | — |
Total comprehensive (loss) |  |  | $ | (136 | ) |  |  | $ | (13 | )
| Nine Months Ended September 30,
| 2013 | 2012
| Gross | Taxes | Net | Gross | Taxes | Net
| (in millions)
Net income (loss) |  |  | $ | (259 | ) |  |  | $ | 98 |
Adjustments for pension and other post-employment benefits: |  |  |  |  |  |
Accumulated actuarial losses of benefit plans | $ | (18 | ) | $ | 7 |  | (11 | ) | $ | (2 | ) | $ | 1 |  | (1 | )
Reclassifications included in net income (loss): |  |  |  |  |  |
Amortization of actuarial losses | 2 |  | (1 | ) | 1 |  | — |  | — |  | — |
Settlement losses | — |  | — |  | — |  | 2 |  | (1 | ) | 1 |
Total reclassifications included in net income (loss) | 2 |  | (1 | ) | 1 |  | 2 |  | (1 | ) | 1 |
Adjustments for pension and other post-employment benefits | $ | (16 | ) | $ | 6 |  | (10 | ) | $ | — |  | $ | — |  | — |
Total comprehensive income (loss) |  |  | $ | (269 | ) |  |  | $ | 98 |
The following table sets forth the balance of the Company's accumulated other comprehensive (loss). All balances in accumulated other comprehensive (loss) are related to pension and other post-employment benefits.
| Gross | Taxes | Net
| (in millions)
Accumulated other comprehensive (loss) - December 31, 2012 | $ | (47 | ) | $ | 3 |  | $ | (44 | )
Adjustments for pension and other post-employment benefits, net of amortization | (16 | ) | 6 |  | (10 | )
Accumulated other comprehensive (loss) - September 30, 2013 | $ | (63 | ) | $ | 9 |  | $ | (54 | )
Balance Sheet Assets held for sale The Company entered into an agreement to sell its land and building in Los Alamitos, CA, for $21 million, subject to due diligence by the purchaser. The sale is anticipated to close within the next twelve months. As such, the Company has reflected these assets as assets held for sale on the Company's consolidated balance sheet as of September 30, 2013. Accounts payable and accrued liabilities The following table sets forth additional financial information related to the Company's accounts payable and accrued liabilities at September 30, 2013 and December 31, 2012.
| At September 30, 2013 |  | At December 31, 2012
| (in millions)
Accounts payable | $ | 23 |  | $ | 14 |
Accrued salaries and wages | 71 |  | 32 |
Accrued taxes | 21 |  | 5 |
Accrued expenses | 43 |  | 37 |
Customer refunds, advance payments and other | 19 |  | 7 |
Total accounts payable and accrued liabilities | $ | 177 |  | $ | 95 |
The 2013 amounts include accounts payable and accrued liabilities associated with the acquisition of SuperMedia. For additional information on the acquisition of SuperMedia, see Note 2. Fair Value of Financial Instruments The Company's financial assets or liabilities required to be measured at fair value on a recurring basis include cash and cash equivalents held in money market funds. The Company's money market funds of $81 million and $3 million as of September 30, 2013 and December 31, 2012, respectively, have been recorded at fair value using Level 2 inputs. The Company had $10 million and $2 million held in certificates of deposit (“CD's”) at September 30, 2013 and December 31, 2012, respectively, that serve as collateral against letters of credit held with our insurance carriers. These CD's are valued using Level 2 inputs. The fair value of the Company's money market funds and CD's classified as Level 2 are determined based on observable market data. The fair value of accounts receivable and accounts payable approximate their carrying amounts due to their short-term nature. The fair value of our senior secured credit facilities debt instruments are determined using Level 2 inputs based on the observable market data of a private exchange. The fair value of our senior subordinated notes are determined using Level 1 inputs. The following table sets forth the carrying amount and fair value of the Company's total debt obligations at September 30, 2013 and at December 31, 2012.
| At September 30, 2013 | At December 31, 2012
| Carrying Amount | Fair Value | Carrying Amount | Fair Value
| (in millions)
Senior secured credit facilities |  |  |  |
SuperMedia Inc. | $ | 1,023 |  | $ | 1,049 |  | $ | — |  | $ | — |
R.H. Donnelly Inc. | 708 |  | 515 |  | 776 |  | 528 |
Dex Media East, Inc. | 455 |  | 345 |  | 516 |  | 360 |
Dex Media West, Inc. | 429 |  | 357 |  | 498 |  | 369 |
Senior subordinated notes | 236 |  | 155 |  | 220 |  | 73 |
Total debt obligations | $ | 2,851 |  | $ | 2,421 |  | $ | 2,010 |  | $ | 1,330 |
With the merger and the adoption of acquisition accounting, the SuperMedia senior secured credit facility was recorded at its fair value on April 30, 2013 of $1,082 million, from its face value of $1,442 million, resulting in a debt fair value adjustment of $360 million. For additional information on our outstanding debt obligations, see Note 8.

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