R.H. Donnelley 1998 Annual Report

Notes to Consolidated Financial Statements

3. Non-Recurring Items

Post-Distribution Adjustments
The asset and liability amounts allocated to the Company by Old D&B pursuant to the Distribution Agreement were based on preliminary estimates and subject to revision based on final determinations of amounts. Accordingly, adjustments have been made to reflect approximately $13.6 million of additional deferred tax liabilities and to decrease benefit liabilities originally assumed by approximately $8.1 million. These adjustments have been reflected as an adjustment to equity and did not have any impact on the Consolidated Statements of Operations.

Sale of Businesses
The 1997 operating results include a pretax gain of $9,412 related to the sale of its Proprietary-East business ("P-East"). In connection with the sale of the P-East business, the Company maintained a continuing obligation to provide publishing services through the year 2002 to the acquirer. This obligation has been adequately provided for in the financial statements.

The 1996 results reflect a pre-tax charge of $28,500 incurred as a result of the sale of the Proprietary-West business ("P-West").

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