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Additional Financial Information | 9 Months Ended
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Sep. 30, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Additional Financial Information | Additional Financial Information Consolidated Statements of Comprehensive Loss General and administrative expense The Company’s general and administrative expense for the three and nine months ended September 30, 2014 includes certain charges and one-time credits to expense. During the three and nine months ended September 30, 2014, the Company recorded a $29 million credit to expense associated with plan amendments that reduced benefits associated with the Company's long-term disability plans. The Company also recorded a $3 million charge to adjust the Los Alamitos property, which is held for sale, to its estimated fair value. During the nine months ended September 30, 2014, the Company recorded a $13 million credit to expense associated with other post-employment benefits ("OPEB"), which eliminated the Company's obligation to provide a subsidy for retiree health care. Additionally, during the nine months ended September 30, 2014, the Company recorded a $10 million credit to expense associated with the settlement of a liability under a publishing agreement and $5 million in credits to expense associated with the reduction of certain operating tax liabilities. 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, 2014 and 2013.
| Three Months Ended September 30, | Nine Months Ended September 30,
| 2014 | 2013 | 2014 | 2013
| (in millions)
Amortization of intangible assets | $ | 147 |  | $ | 226 |  | $ | 440 |  | $ | 477 |
Amortization of capitalized software | 9 |  | 11 |  | 29 |  | 33 |
Depreciation of fixed assets | 5 |  | 5 |  | 14 |  | 14 |
Total depreciation and amortization | $ | 161 |  | $ | 242 |  | $ | 483 |  | $ | 524 |
There was no amortization or depreciation expense related to SuperMedia included in our operating results for the four months ended April 30, 2013, as the merger was effective April 30, 2013. Interest expense, net The Company recorded interest expense, net of $89 million and $269 million for the three and nine months ended September 30, 2014, respectively, compared to $99 million and $221 million for the three and nine months ended September 30, 2013, 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 $24 million and $69 million for the three and nine months ended September 30, 2014, compared to $23 million and $47 million for the three and nine months ended September 30, 2013, respectively. There is no interest expense, net related to SuperMedia included in our operating results for the four months ended April 30, 2013, as the merger with SuperMedia was effective April 30, 2013. Reorganizations items In accordance with ASC 852, reorganization items represent charges that are directly associated with the process of reorganizing the business under Chapter 11 of the Bankruptcy Code. For the three and nine months ended September 30, 2013, the Company recorded less than $1 million and $37 million, respectively, of reorganization items on the consolidated statements of comprehensive (loss). The following table sets forth the details of reorganization items for the three and nine months ended September 30, 2013.
| Three Months Ended September 30, 2013 | Nine Months Ended September 30, 2013
| (in millions)
Write-off of remaining unamortized debt fair value adjustment | $ | — |  | $ | 32 |
Professional fees | — |  | 5 |
Total reorganization items | $ | — |  | $ | 37 |
In conjunction with Dex One's adoption of fresh start accounting, after bankruptcy emergence on February 1, 2010, an adjustment was recorded to reflect Dex One's outstanding debt obligations at their fair value. A total discount of $120 million was recorded and was amortized as an increase to interest expense, until our filing for bankruptcy on March 18, 2013, to effectuate the merger. The write-off of remaining unamortized debt fair value adjustment is associated with Dex One's debt obligations, which were classified as liabilities subject to compromise at March 31, 2013. ASC 852 specifies that when debt classified as liabilities subject to compromise is an allowed claim, and the allowed claim differs from the net carrying amount of the debt, the carrying amount shall be adjusted to the amount of the allowed claim. The gain or loss resulting from this adjustment was recognized as reorganization items. Based on our plan of reorganization and approved first-day motions of the Bankruptcy Court, the allowed debt holder claims equaled the outstanding face value of debt obligations and excluded the unamortized debt fair value adjustment associated with Dex One's debt obligations. Therefore, we recognized the remaining unamortized debt fair value adjustment as a reorganization item during the nine months ended September 30, 2013, which resulted in the adjustment of the carrying amount of Dex One's debt obligations to their face value. Other comprehensive (loss) The following tables set forth the components of the Company's comprehensive (loss) adjustments for pension and other post-employment benefits for the three and nine months ended September 30, 2014 and 2013.
| Three Months Ended September 30,
| 2014 |  | 2013
| Gross | Taxes | Net |  | Gross | Taxes | Net
| (in millions)
Net (loss) |  |  | $ | (59 | ) |  |  |  | $ | (135 | )
Adjustments for pension and other post-employment benefits: |  |  |  |  |  |  |
Accumulated actuarial gains (losses) of benefit plans | $ | 7 |  | $ | (2 | ) | 5 |  |  | $ | (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 | $ | 7 |  | $ | (2 | ) | 5 |  |  | $ | (6 | ) | $ | 2 |  | (4 | )
Total comprehensive (loss) |  |  | $ | (54 | ) |  |  |  | $ | (139 | )
| Nine Months Ended September 30,
| 2014 |  | 2013
| Gross | Taxes | Net |  | Gross | Taxes | Net
| (in millions)
Net (loss) |  |  | $ | (226 | ) |  |  |  | $ | (263 | )
Adjustments for pension and other post-employment benefits: |  |  |  |  |  |  |
Accumulated actuarial gains (losses) of benefit plans | $ | 26 |  | $ | (9 | ) | 17 |  |  | $ | (18 | ) | $ | 7 |  | (11 | )
Reclassifications included in net (loss): |  |  |  |  |  |  | — |
Amortization of actuarial losses | — |  | — |  | — |  |  | 2 |  | (1 | ) | 1 |
Settlement losses | 1 |  | (1 | ) | — |  |  | — |  | — |  | — |
Plan amendments | (13 | ) | 5 |  | (8 | ) |  | — |  | — |  | — |
Total reclassifications included in net (loss) | (12 | ) | 4 |  | (8 | ) |  | 2 |  | (1 | ) | 1 |
Adjustments for pension and other post-employment benefits | $ | 14 |  | $ | (5 | ) | 9 |  |  | $ | (16 | ) | $ | 6 |  | (10 | )
Total comprehensive (loss) |  |  | $ | (217 | ) |  |  |  | $ | (273 | )
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, 2013 | $ | (31 | ) | $ | (3 | ) | $ | (34 | )
Adjustments for pension and other post-employment benefits, net of amortization | 14 |  | (5 | ) | 9 |
Accumulated other comprehensive (loss) - September 30, 2014 | $ | (17 | ) | $ | (8 | ) | $ | (25 | )
Balance Sheet Assets held for sale The Company owns land and a building in Los Alamitos, CA, which has an estimated fair value of $12 million. The Company is actively pursuing a buyer for the property. As such, these assets have been reported as assets held for sale on the Company's consolidated balance sheets. During the three months ended September 30, 2014, the Company recorded a $3 million charge to adjust the property to its estimated fair value. The charge was recorded to general and administrative expense in the Company's consolidated statement of comprehensive income (loss). 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, 2014 and December 31, 2013.
| At September 30, 2014 | At December 31, 2013
| (in millions)
Accounts payable | $ | 13 |  | $ | 20 |
Accrued salaries and wages | 51 |  | 49 |
Accrued taxes | 16 |  | 21 |
Accrued expenses | 36 |  | 56 |
Customer refunds, advance payments and other | 17 |  | 20 |
Total accounts payable and accrued liabilities | $ | 133 |  | $ | 166 |
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 of $41 million as of September 30, 2014 and December 31, 2013. These money market funds have been recorded at fair value using Level 2 inputs. The Company also had $11 million and $9 million held in certificates of deposit and mutual funds as of September 30, 2014 and December 31, 2013, respectively, that serve as collateral against letters of credit held primarily with our insurance carriers. These certificates of deposit and mutual funds are classified as prepaid expenses and other on the Company's consolidated balance sheets and are valued using Level 2 inputs. The assets held for sale of $12 million as of September 30, 2014 and $16 million as of December 31, 2013 have been recorded at fair value using Level 3 inputs. The fair value of accounts receivable and accounts payable approximate their carrying amounts due to their short-term nature. The fair values of debt instruments are determined based on the observable market data of a private exchange. The following table sets forth the carrying amount and fair value using Level 2 inputs of the Company’s debt obligations at September 30, 2014 and December 31, 2013.
| At September 30, 2014 | At December 31, 2013
| Carrying Amount | Fair Value | Carrying Amount | Fair Value
| (in millions)
Senior secured credit facilities |  |  |  |
SuperMedia Inc. | $ | 857 |  | $ | 884 |  | $ | 935 |  | $ | 912 |
R.H. Donnelly Inc. | 621 |  | 456 |  | 685 |  | 414 |
Dex Media East, Inc. | 366 |  | 315 |  | 426 |  | 289 |
Dex Media West, Inc. | 347 |  | 317 |  | 393 |  | 307 |
Senior subordinated notes | 252 |  | 161 |  | 236 |  | 123 |
Total debt obligations | $ | 2,443 |  | $ | 2,133 |  | $ | 2,675 |  | $ | 2,045 |
The Company detected an immaterial mathematical error in its calculation of the estimated fair value for the debt obligations of its SuperMedia Inc. subsidiary as disclosed in Dex Media’s 2013 Annual Report on Form 10-K and the first quarter 2014 report on Form 10-Q. The correct estimated debt fair values for SuperMedia Inc. were $912 million at December 31, 2013 ($697 million previously reported) and $897 million at March 31, 2014 ($695 million previously reported). The table above reflects the corrected estimated fair value amounts at December 31, 2013. The par value of SuperMedia's debt obligation at September 30, 2014 was $1,079 million. For additional information on our outstanding debt obligations, see Note 7 - Long-Term Debt.

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