UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number : 001-8610 (SBC Communications Inc.)
001-7155 (R.H. Donnelley Corporation)
A. Full title of the plan and the address of the plan, if different from that of the issuer
named below:
DonTech Profit Participation Plan, 200 East Randolph Drive, Chicago, Illinois 60601
B. Name of issuers of the securities held pursuant to the plan and the address of their
principal executive offices:
SBC Communications Inc., 175 E. Houston Street, San Antonio, TX 78205 and
R.H. Donnelley Corporation, 1001 Winstead Drive, Cary, NC 27513
REQUIRED INFORMATION
Item 4.
Plan Financial Statements and Schedule prepared in accordance with the financial reporting requirements of
ERISA.
DONTECH PROFIT PARTICIPATION PLAN
INDEX TO FORM 11-K
Page(s)
Report of Independent Registered Public Accounting Firm 3
Financial Statements:
Statements of Net Assets Available for Benefits
at December 31, 2003 and 2002 4
Statement of Changes in Net Assets Available for
Benefits for the year ended December 31, 2003 5
Notes to Financial Statements 6-10
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) 11
Other Schedules required by 29CFR Section 2520.103-10 of the Department of Labor Rules and Regulations for
Reporting and Disclosures under ERISA have been omitted because they are not applicable to the DonTech
Profit Participation Plan
Signature 12
Exhibit 23 - Consent of Independent Registered Public Accounting Firm
Report of Independent Registered Public Accounting Firm
To the Participants of the DonTech Profit Participation Plan and the Employee Benefits Committee of the
Board of Directors of DonTech II.
In our opinion, the accompanying statements of net assets available for benefits and the related statement
of changes in net assets available for benefits present fairly, in all material respects, the net assets
available for benefits of the DonTech Profit Participation Plan (the "Plan") at December 31, 2003 and 2002,
and the changes in net assets available for benefits for the year ended December 31, 2003 in conformity
with accounting principles generally accepted in the United States of America. These financial statements
are the responsibility of the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these statements in accordance with
the standards of the Public Company Accounting Oversight Board (United States) and auditing standards
generally accepted in the United States of America. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as
a whole. The supplemental schedule of Assets Held at End of Year is presented for the purpose of
additional analysis and is not a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of
the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects
in relation to the basic financial statements taken as a whole.
PricewaterhouseCoopers LLP
Chicago, IL
June 15, 2004
DONTECH PROFIT PARTICIPATION PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 2003 and 2002
(Dollars in Thousands)
December 31,
2003 2002
Assets:
Investments, at fair value $ 41,949 $ 37,399
Accrued interest 16 15
Cash 159 5
Participant contributions receivable 81 139
Employer contributions receivable 19 48
---------- ----------
Total assets 42,224 37,606
---------- ----------
Net assets available for
benefits $ 42,224 $37,606
========== ==========
The accompanying notes are an integral part of these financial statements.
DONTECH PROFIT PARTICIPATION PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2003
(Dollars in Thousands)
Additions to net assets attributed to:
Investment income:
Interest $ 579
Dividends 444
--------
Total Investment income 1,023
--------
Net appreciation
in fair value of investments 5,066
Contributions:
Participant 2,919
Employer 835
--------
Total Contributions 3,754
--------
Total Additions 9,843
========
Deductions from net assets attributed to:
Net distributions to participants (5,225)
--------
Total Deductions (5,225)
--------
Increase in net assets 4,618
Net assets available for benefits,
at beginning of the year 37,606
--------
Net assets available for benefits
at end of year $42,224
========
The accompanying notes are an integral part of these financial statements.
DONTECH PROFIT PARTICIPATION PLAN
NOTES TO FINANCIAL STATEMENTS
Note 1. Plan Description
Overview
DonTech II (the "Partnership") is a general partnership between Reuben H. Donnelley Inc. ("RHD") and
Ameritech Publishing of Illinois, Inc. ("API/IL"), a unit of SBC Communications Inc. The Partnership does
business under the name DonTech and is hereinafter referred to as "DonTech" or the "Company".
DonTech, as the Plan Administrator, has adopted the DonTech Profit Participation Plan (the "Plan") for the
benefit of its eligible employees. The Plan is a defined contribution plan and is subject to the
provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The Plan was
established to provide a convenient way for eligible employees to save on a regular and long-term basis.
The following summary provides an overview of major Plan provisions and is provided for general
informational purposes. Employees who contribute to the Plan ("Participants") or former employees who have
assets in the Plan should refer to the Plan document for more complete information and a full description
of the Plan provisions and qualifications.
Eligibility
Full-time employees of the Company are immediately eligible to participate in the Plan on their date of
hire. Part-time employees who work at least one thousand hours during the consecutive twelve-month period
following employment or in any calendar year thereafter are eligible to participate in the Plan on the
first day of the following January.
Contributions
Contributions are made to the Plan by the Company on behalf of each eligible participant based upon the
participant's elected compensation deferral through payroll deductions. Participants in the Plan authorize
direct payroll deductions of between 1% and 6%, in whole percent increments, of their included
compensation, as defined by the Plan document ("Basic Contributions"). Participants may make additional
contributions ("Investment Contributions") up to a maximum of 10% of included compensation.
Participants' Basic Contributions and Investment Contributions may be made from before-tax earnings, which
has the effect of reducing current taxable earnings for federal income tax purposes, and/or after tax
earnings. In any Plan year, a Participant may contribute up to a maximum of 16% of his or her included
compensation (up to 6% in Basic Contributions and 10% in Investment Contributions) or the maximum allowed
by the Internal Revenue Code, as amended ("IRC"), whichever is less. For the Plan year 2003 the IRC limit
on before tax contributions was $12,000.
The Company makes contributions ("Matching Contributions") equal to a minimum of 50% of aggregate Basic
Contributions. Investment Contributions are not eligible for Matching Contributions. In accordance with the
provisions of the Plan, the Company may contribute an additional percentage of the Participant's aggregate
Basic Contribution if the Company's profit for a Plan year is greater than budgeted profit for that Plan
year. The Company made no such additional profit-sharing matching contributions during the year ended
December 31, 2003.
To comply with certain provisions of the Tax Reform Act of 1986, as amended (the "Act"), the Plan limits
covered compensation for purposes of determining Basic, Investment and Matching Contributions
(collectively, "Contributions") to $200,000 for the plan year ended December 31, 2003. All contributions
are subject to limitations imposed by the IRC and ERISA.
Vesting
Basic, Investment and Matching Contributions are fully vested when made.
Investment Options
The Plan allows Participants to allocate their Contributions to various investment options available under
the Plan. These elections must be made in 1% increments. Participants are able to reallocate their entire
account balances in multiples of 1% among the Plan's investment options.
Payment of Benefits
Upon termination of service with the Company, participants are entitled to a lump sum distribution of the
vested portion of their account balance. Upon retirement or if a participant becomes totally and
permanently disabled or dies, the participant or their beneficiary is entitled to their entire account
balance. Retired and terminated Participants who have an account balance in excess of $5,000 may elect
various forms of deferred distribution.
Withdrawals
The Plan allows withdrawals of after-tax and rollover contributions while an active employee. The Plan also
allows for a "financial hardship" withdrawal for participants under age 59 1/2 years of before-tax
contributions in cases of demonstrated "financial hardship".
Participant Loans
Participants may borrow from their vested account balance a minimum of $500 up to a maximum of $50,000, or
50% of the vested account balance, whichever is less. Loan terms range from 1 to 5 years or up to 10 years
if the proceeds of the loan are used for the purchase of the participant's primary residence. Loans are
secured by the balance in the Participant's account and bear interest at the Prime rate, as quoted in the
Wall Street Journal as of the last day of the month immediately preceding the receipt of the loan
application, plus 2%. Principal and interest payments are payable ratably through direct payroll
deductions. The total number of Participants with outstanding loans at December 31, 2003 and 2002 was 134
and 145, respectively.
Forfeitures
Amounts forfeited by non-vested Participants who terminated during the year were $24,000 for the year ended
December 31, 2003. Forfeited amounts reduce future Company contributions. The forfeitures are related to
Participants who terminated prior to June 1, 2000 (the date the plan was amended to change the vesting of
Matching contributions to be fully vested when made), but did not take a distribution until the 2003 Plan
year.
Note 2. Investments
Investment Funds
Participants of the Plan can elect to have Contributions credited to their Plan accounts invested in one or
more of the various investment fund options of the Plan.
Trust and Master Trust
Merrill Lynch is the Trustee of the Plan assets, recordkeeper and investment advisor. As of December 31,
2003 and 2002, all cash and investments of the Plan are in the DonTech Profit Participation Plan Trust (the
"Trust").
Note 3. Summary of Significant Accounting Policies
Method of Accounting
The Plan's financial statements are prepared on the accrual basis of accounting in accordance with
accounting principles generally accepted in the United States of America (GAAP).
Investment Valuation and Income Recognition
The fair value of the Plan assets in the Trust is determined based on quoted market prices for shares of
mutual funds and collective trusts, quoted market prices for shares of stock, and contract value, which
approximates fair value, for investment contracts. Participant loans are stated at amortized cost. The
net appreciation or depreciation in the fair value of the investments, as applicable, consists of realized
and unrealized appreciation and depreciation for the specified period. Net unrealized appreciation or
depreciation is determined based on the difference between the average cost of the investments and the
market value as of each valuation date of such investment. Average cost is determined based on the
weighted-average cost of all investments purchased less any dispositions. Dividend income is recorded on
the ex-dividend date. Interest earned on investments is recorded on the accrual basis. Purchases and
sales of securities are recorded on the trade date.
Contributions
Participant contributions represent the amounts withheld each pay period. Company contributions are based
upon amounts required under the provisions of the Plan.
Benefit Payments
Benefits are recorded when paid.
Expenses and Administrative Costs
All expenses and administrative costs are paid by the Company.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of changes in net assets
available for benefits during the reporting period. Actual results could differ from those estimates.
Risks and Uncertainties
The Plan provides for various investment options in a number of funds which invest in stocks, bonds, fixed
income securities, mutual funds, and other investment securities. Certain investment securities are
exposed to risks such as changes in interest rates, fluctuations in market conditions and credit risk. The
level of risk associated with certain investment securities and uncertainty related to changes in value of
these securities could materially affect Participant account balances and amounts reported in the financial
statements and accompanying notes.
Plan Termination
While the Company has not expressed any intent to do so, it may discontinue its contributions or terminate
the Plan at any time, subject to the provisions of ERISA and the IRC. These provisions state that in such
an event, all Participants of the Plan shall be fully vested in the current market value of amounts
credited to their accounts as of the date of termination.
Note 4. Tax Status
The Internal Revenue Service ("IRS") has determined and informed the Company by a letter dated February 17,
2004, that the Plan and related Trust are designed in accordance with applicable sections of the IRC.
Although the Plan has been amended since the effective date of the letter, the Plan Administrator and the
Administrator's legal counsel believe the amendments do not alter the tax status of the Plan and the Plan
is currently being operated in compliance with section 401(a) of the IRC and the related Trust is exempt
from federal income tax under section 501(a) of the IRC.
Note 5. Investments
The investments reflected in the Statement of Net Assets Available for Benefits represents the total assets
in the Trust as of December 31, 2003 and 2002.
The following presents investments that represent 5 percent or more of the Plan's net assets at fair value
(dollars in thousands):
December 31, December 31,
2003 2002
R.H. Donnelley Corporation Common Stock Fund $ 2,399 $ 1,919
SBC Communications Inc. Common Stock Fund 5,636 5,845
DonTech Stable Value Fund 10,034 11,808
Merrill Lynch Equity Index Fund 12,409 9,750
PIMCO Total Return Fund 2,765 2,345
During 2003, the Plan's investments (including gains and losses on investments bought, sold, and held
during the year) appreciated in value as follows: (dollars in thousands)
Mutual Funds $ 1,799
Common Stock 503
Common Collective Trusts 2,764
----------
Total $ 5,066
==========
At December 31, 2003 and 2002, the Plan has entered into benefit responsive investment contracts with
various insurance companies ("Insurers"). The fair value of these contracts is recorded in the DonTech
Stable Value Fund at December 31, 2003 and 2002. The Insurers maintain the contributions in a pooled
account, which is credited with earnings on the underlying assets and charged for Participant withdrawals
and administrative expenses. The contracts are included in the financial statements at contract value
which approximates fair value and there are no reserves against contract value for credit risk of the
contract insurer or other risks at December 31, 2003 and 2002. The average daily interest rate was
approximately 4.28% and 5.35% for the years ended December 31, 2003 and 2002, respectively.
Note 6. Related Party Transactions
Shares of the Merrill Lynch Equity Index Fund, the Merrill Lynch Fundamental Growth Fund, the Merrill Lynch
Global Small Cap Fund and the Merrill Lynch Retirement Preservation Trust (in which the DonTech Stable
Value Fund is 100% invested) are managed by the Trustee and therefore, these transactions qualify as
party-in-interest transactions. Fees paid by the Company for the investment management services were
nominal for the year ended December 31, 2003.
Note 7. Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of the net assets available for benefits per the financial statements at
December 31, 2003 and 2002 to Form 5500 (dollars in thousands):
2003 2002
Net Assets available for benefits $ 42,224 $ 37,606
per the financial statements
Amounts allocated to withdrawing participants (154) (169)
--------- ---------
Net Assets available for benefits per Form 5500 $ 42,070 $ 37,437
========= =========
The following is a reconciliation of the benefits paid to participants per the financial statements for the
year ended December 31, 2003 to Form 5500 (dollars in thousands):
Benefits paid to participants $ 5,225
per the financial statements
Add: Amounts allocated to withdrawing participants 154
at December 31, 2003
Less: Amounts allocated to withdrawing participants (169)
at December 31, 2002 ---------
Benefits paid to participants per Form 5500 $ 5,210
=========
Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit claims that have
been processed and approved for payment prior to December 31, 2003 but not yet paid as of that date.
DONTECH PROFIT PARTICIPATION PLAN
EIN 36-4190375, PLAN NO. 002
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2003
Description of Current
Issuer/borrower/lender Investment Value
- ---------------------------------------------------- ------------------------------ --------------
( in Thousands)
*R.H. Donnelley Corp New Common Stock $ 2,399
*SBC Communications Inc Common Stock 5,636
*ML Equity Index Trust 1 Common/Collective Trusts 11,766
*ML Equity Index Trust 1 GM Common/Collective Trusts 643
*DonTech Stable Value Fund Pooled Separate A/C (GICS) 9,819
*DonTech Stable Value Fund GM Pooled Separate A/C (GICS) 215
Lord Abbott Mid Cap Value CL P Mutual Funds 378
*ML Fundamental Growth FD CL A Mutual Funds 853
Van Kampen American Value FD Mutual Funds 1,387
Van Kampen American Value A GM Mutual Funds 495
Van Kampen Emerg GR FD CL A Mutual Funds 1,016
PIMCO Total Return Fund CL A Mutual Funds 1,736
PIMCO Total Return Fund CL A GM Mutual Funds 1,029
Fidelity Adv Small Cap Fd CL T Mutual Funds 537
*ML Global Small Cap Fund CL A Mutual Funds 318
Oppen Quest Bal Val CL A Mutual Funds 631
AIM Basic Value FD CL A Mutual Funds 322
ING Pilgrim INTL Value CL A Mutual Funds 1,234
ING Pilgrim INTL Value CL A - GM Mutual Funds 381
* Loan Fund Participant Loans, at rates 1,154
ranging from 6.0% to 11.5%
--------------
Total $ 41,949
==============
* Party-in Interest
DONTECH PROFIT PARTICIPATION PLAN
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the DonTech II general partnership
(the administrator of the DonTech Profit Participation Plan) has duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
DonTech Profit Participation Plan
BY: /s/ Robert A. Gross
----------------------------
Robert A. Gross
Vice President - Finance &
Chief Financial Officer
Date: June 23, 2004
EXHIBIT INDEX
Exhibits identified below, Exhibit 23 is filed herein.
Exhibit
Number
23 Consent of Independent Accountants
EXHIBIT 23
Form 11-K for 2003
File No. l-8610
File No. l-7155
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in (i) the Registration Statements on
Forms S-8 (No. 333-88667 and 333-101433) of SBC Communications Inc., and (ii) the Registration
Statement on Form S-8 (No. 333-27144) of R.H. Donnelley Corporation of our report dated June 15,
2004, relating to the financial statements of the DonTech Profit Participation Plan, which appears
in this Form 11-K.
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
June 23, 2004
