united states district court form 2^1?o9 the...

Case 4:09-cv-00387-WRW Document 1 Filed 05/22/2009 of 24d FILED

U.S. DiSTRiCT COURTEASTERN CISTrtiCT ARKANSAS

UNITED STATES DISTRICT COURT FORM 2^1?O9THE EASTERN DISTRICT OF ARKANSAS

JA ^► cJ,, , ,.

WADE L. JONES M //4 Avg sfDP RK

VS. Case No. ^ ' V I ^1^,

SAMUEL D. JONESAND SCOTT W. KLEIN DEFENDANTS

CLASS ACTION COMPLAINT

COMES NOW, the Plaintiff Wade L. Jones ("Plaintiff') and for his class action

complaint against the Defendants, Samuel D. Jones ("Jones"), and Scott W. Klein

("Klein") (collectively "Defendants") states and alleges as follows: m _ `,This case assigned to District

INTRODUCTo Magistrate Judge

"This CEO will take responsibility for his actions and not look for excuses. I'm holding my leaders to the same standard, because ourfuture is in our hands. We'll take credit when it is due and take the blame should it ever be required."

-- Scott W. Klein, Idearc Earnings Teleconference, July 29,2008.

1. It is now time for the Defendants to take responsibility for their

deceptive and misleading statements.

2. This is a securities class action on behalf of all persons who purchased

or otherwise acquired the bonds of Idearc, Inc. ("Idearc") between March 27, 2008,

and March 30, 2009, inclusive (the "Class Period"), against certain of the officers

and/or directors of Idearc for violations of the Securities Exchange Act of 1934

("1934 Act").

3. Idearc is a media company that manages and delivers print, online

and wireless publishing and advertising services on multiple platforms. These

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{ Case 4:09-cv-00387-WRW Document 1 Filed 05/22/2009 of 24

include yellow pages, white pages, online directory and search services, web site

design and hosting services, magazines, direct mail and directory and information

services for wireless subscribers. Idearc is one of the largest publishers of Spanish-

language directories and was the first to introduce an online buying venue for

Spanish speaking people.

4. Idearc is the official publisher of Verizon print directories and

FairPoint print directories.

S. During the Class Period, Defendants issued materially false and

misleading statements regarding Idearc's business and financial results. As a result

of the Defendants' false statements, Idearc's bonds traded at artificially inflated

prices during the Class Period, reaching a Class Period high of $74.250 on April 24,

2008.

6. As the economy turned sour in 2008, Idearc assured its bondholders

on numerous occasions that Idearc would generate enough money to make principal

and interest payments on its bonds.

7. In mid-March of 2008, Idearc announced that it was eliminating its

dividend payments. This revelation caused rumors to spread that Idearc would be

unable to service its debt.

8. Yet on March 27, 2008, at the Credit Suisse 2008 Global Leveraged

Finance Conference in Scottsdale, Arizona, Defendant Jones assured investors that

"he [did] not foresee any near-term liquidity issues." Jones stated further that "[t]he

set of assets that made this business an attractive investment are still there, still

sound and still solid." Defendant Jones' assurances caused the price of Idearc's

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Case 4:09-cv-00387-WRW Document 1 Filed 05/22/2009 of 24

bonds to reach a Class Period high of $74.250 on April 24, 2008, an increase of

$9.625 from the March 26, 2008, price of $64.625. See attached Exhibit B.

9. From April 24, 2008 to July 29, 2008, Idearc's bonds dropped in price

by $25.250 to $49.000. Id.

10. In an effort to stop the decline in price of Idearc's bonds, on July 29,

2008, Defendant Klein made the following statements in an Earnings

Teleconference:

My comments to all of you on these calls will always be direct,straightforward and focused on telling it like it is. This CEO willtake responsibility for his actions and not look for excuses. I'mholding my leaders to the same standard, because our future is inour hands. We'll take credit when it is due and take the blameshould it ever be required.

I will always share openly and honestly with you as I can withoutcompromising any competitive advantage we create.

Our ability to deal with our debt obligations is absolutely secure. We are all committed to proving ourselves worthy of your trust,support and confidence.

11. Also, in the July 29, 2008, Earnings Teleconference Defendant Jones

stated: "As we have discussed before, we foresee no near-term Iiquidity issues

and continue to be confident in our ability and capacity to service our debt."

12. As a result of the Defendants statements the price of Idearc's bonds

rose to $50.75 or a $1.75 increase the very next day on July 30, 2008. Id.

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13. However, the rumors continued that Idearc was unable to service its

debt. As such, the price of Idearc's bonds dropped from a price of $50.75 on July 29,

2008 to $19.125 on October 16, 2008. Id.

14. In response to the decreasing values of Idearc's bonds and the rumor

that Idearc would not be able to service its debt, the Defendants began another

public relations effort to assuage investors concerns. On October 17, 2008,

Defendants Jones and Klein, speaking for themselves and Idearc, were interviewed

for an article by Philipp Schlaeger and Caroline Shalas that appeared in Bloomberg

entitled, "Idearc Can Service Its Debt, Finance Chief Says." See attached Exhibit A

(the "Article")

15. In the interview, Idearc's Chief Executive Officer, Klein said that

Idearc would generate enough cash to service its $9 billion in debt for several

years. (emphasis added). "I'm not losing any sleep over it, and I would hope no

one else would either." Id. (emphasis added.).

16. In the interview, Klein and Idearc's Chief Financial Officer Jones said

and Bloomberg reported that both Klein and Jones said: the Company has no near-

term liquidity issues and doesn't need to access the credit markets. Id. (emphasis

added). Moreover, Defendant Klein stated that Idearc had taken several steps to

conserve cash, including cutting its dividend. "All these things will make us a leaner,

stronger, more successful company. That does not mean that we're going to get

super strong overnight. It will take some time," Klein stated. Id. Defendant Jones

stated and was reported to have stated that the company would generate enough

cash to make principal and interest payments. Id.

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17. Idearc bonds immediately increased in price in response to the

Defendants' statements rising from $19.125 on October 16, 2008, to $21.438 on

October 21, 2008. The daily closing reports of the prices of the bonds during this

time are as follows:

a. October 16, 2008 - $19.125

b. October 17, 2008 - $19.751

c. October 20, 2008 - $20.500

d. October 21, 2008 - $21.438

See attached Exhibit B.

18. While Klein and Jones were telling investors that Idearc had

no near term liquidity issues, Idearc drew down $247 million of its $250

million credit revolver. Buried in an October 30, 2008, 8-K, Idearc revealed:

On October 24, 2008, the Company notified the administrative agentunder its Credit Agreement, dated November 17, 2006, among theCompany and the lenders and agents from time to time party thereto(the " Credit Facility "), to request a $247 million borrowing under itsexisting $250 million revolving credit facility (the " Revolver "). TheCompany made this borrowing under the Revolver to increase its cashposition to preserve its financial flexibility in light of the currentuncertainty in the credit markets. In accordance with the terms of theCredit Facility, the Company intends to use the proceeds from theborrowing for general corporate purposes.

19. However,, neither Defendants, Jones nor Klein, retracted 'their earlier

bullish statements regarding the ability of Idearc to service its debt. Accordingly,

those statements remained "live" and continued to impact the price of Idearc's

bonds and to cause the price of Idearc's bonds to trade at artificially inflated prices.

20. Indeed, on October 30, 2008, Klein and Jones caused Idearc to issue a

press release which stated, inter alia:

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Company Makes Progress on Operational Initiatives; Retains Advisorsto Address Capital Structure.

"Idearc's financial results in the third quarter reflect the significantchallenges our clients are facing as they contend with difficulteconomic conditions across the nation," said Scott W. Klein, chiefexecutive officer of Idearc, Inc. "We remain focused on acceleratingrevenues, reducing expenses and imp roving margins, as well ascreating a high-performance culture. We are acting aggressively andquickly to adjust our organization and market approach to meet thechallenges ahead v. 'us.

"Our Objective is to maximize opportunities to help ensure that Idearchas an approachable capital structure to support our strategicbusiness objective," Klein said. "We intend to look closely at allavailable opportunities to strengthen our balance sheet and improveour risk profile. At the same time, we will continue to manage ourfinancial resources prudently with a focus on maintaining sufficientliquidity and flexibility as we work through the challenging economicenvironment. Fortunately, Idearc continues to generate significantcashflow. (emphasis added).

See attached Exhibit C.

21. After Idearc's October 30, 2008, 8-K which disclosed Idearc's liquidity

issues, Idearc's bonds plummeted from $18.500 on October 29, 2008, to $13.875 on

October 30, 2008. See Exhibit B.

22. However, at the close of trading on October 30, 2008, Bloomberg

published another article entitled, "Idearc Stock, Bonds Fall as Publisher Faces

Delisting." This article reiterated Klein and Jones statements to Bloomberg on

October 17 that "Idearc [could] generate enough cash to service its debt." See

attached Exhibit D.

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23. Again, these statements of Klein and Jones remained "live" and

positively impacting the market price of Idearc's bonds. As a result of the second

publication of these bullish comments by the CEO and CFO of Idearc, the trading

price of Idearc's bonds rose, and closed at $13.875 on October 30, 2008, to $14.00

on October 31, 2008, to $16.50 on November 4, 2008, and to $18.00 on November

5, 2008. See Exhibit B.

THE FRAUD IS REVEALED

24. On March 13, 2009, just 6 months after Klein and Jones' statements in

the Article, and less than a year from the date the Klein told investors Idearc's

ability to service its debt was secure, Idearc issued a press release announcing its

2008 financial results including Ianguage that Idearc would likely file for

bankruptcy. See attached Exhibit E. Idearc's bonds collapsed in value, falling from

$21.438 to $1.980, and are no longer trading with accrued interest.

25. Then, on March 31, 2009, Idearc issued a press release announcing

that it had initiated a voluntary Chapter 11 petition under the United States

Bankruptcy Code. As late as January 30, 2009, Idearc's bonds, because of the

Defendants' repeated assurances that Idearc could and would pay principal and

interest, continued to trade with accrued interest. Normally, if a bond is suspected

of not paying its interest or is at risk of default, the bonds trade without accrued

interest.

26. In a March 31, 2009, press prelease issued via the Business Wire,

Defendant Klein stated:

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Today we take an important step forward as we continue to transformIdearc. Essentially we have a company with good potential beingheld back by a terminally ill balance sheet.

The reorganization process will enable Idearc to quickly finalize andimplement a debt restructuring plan that will strengthen our financialcondition and position us to compete more efficiently in a challengingeconomic environment.

27. F: tnq March 27, 2008, the date Idearc began assuring its investors of

its ability to service its debt to March 15, 2009, the date that Idearc announced that

it would likely file for bankruptcy, the value of Idearc's bond dropped from a high of

$74.250 to $1.980. See Exhibit B.

28. The true facts, which were known by the Defendants but concealed

from the investing public during the Class Period were as follows:

a. Idearc did not have enough sufficient cash flow to service its $9 billion

in debt for several years as less than a week after Idearc made this

statement in October to Bloomberg it borrowed $247 million from its

Credit Facility.

b. The Company had severe liquidity issues, which forced it to draw

$247 million on its revolver.

c. The Company's cash flow was not significant but in fact was

plummeting due to the economic downturn and stiff competition from

online advertising.

d. Idearc was in fact, as Defendant Klein would subsequently admit,

suffering from a "terminally ill balance sheet."

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e. Idearc did not have sufficient cash flow to service its debt, but rather

would "put in place an appropriate capital structure."

29. Significantly, Idearc's bankruptcy filing was voluntary, i.e. Idearc

chose to file bankruptcy. However, Idearc's largest shareholder, Jack Corwin, who

owns in excess of 12 million Idearc shares, has challenged the propriety of and need

for a bankruptcy filing, and indicated in a letter to Idearc's board of Directors that

Idearc has "sufficient cash on hand ($510 billion at year end of 2008) to pay down

enough of its outstanding debt to avoid the need for a bankruptcy, and failure to do

so would be a breach of the Board's fiduciary duty to its shareholders." Additionally,

Idearc has admitted in a March 31, 2009, press release that [p]ursuant to the

proposed [bankruptcy] plan, Idearc does not need nor intend to obtain debtor-in-

possession (DIP) financing during the reorganization, as the Company maintains

substantial cash balances and , continues to generate positive cash flow, and has

reached an agreement on the use of cash collateral." (Emphasis added).

30. "Today we take an important step forward as we continue to

transform Idearc. Essentially we have a company with good potential being held

up by a terminally ill balance sheet," said Defendant Klein. Id. (Emphasis added).

Defendant Klein. further stated in the March 31, announcement that "[o]ne of our

most important priorities is to put in place an appropriate capital structure to

support our strategic business plan and objectives. Id. (Emphasis added).

31. As a result of defendants'_false statements, Idearc's bond prices traded

at inflated levels throughout the Class Period. However, after the above revelations

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seeped into the market, Idearc's bonds were hammered by massive sales, sending

them down more than 98% from its Class Period high.

JURISDICTION AND VENUE

32. Jurisdiction is conferred by §27 of the 1934 Act. The claims asserted

herein arise under §§10(b) and 20(a) of the 1934 Act and SEC Rule lOb-5.

33. Venue is proper in this District pursuant to §27 of the 1934 Act as the

Defendants transact business within this District. Many of the false and misleading

statements were made in or issued to this District.

34. Idearc's principal executive offices are located at 2200 W. Airfield,

Dallas, Texas.

PARTIES

35. Plaintiff Wade Jones, at all times relevant owned Idearc bonds styled

"8% Senior Notes Due 2016" CUSIP/ISIN 451663AC2. Plaintiff Jones been injured as

a result of the purchase of said Bond. Plaintiff is a citizen of the state of Kansas.

36. Defendant Jones ("Jones") was, at relevant times, Chief Financial

Officer ("CFO) of Idearc.

37. Defendant Klein ("Klein") was, at relevant times, Chief Executive

Officer ("CEO") of Idearc.

38. Defendants Klein and Jones (the "Individual Defendants"), because of

their positions with the Company, possessed the power and authority to control the

contents of Idearc's quarterly reports, press releases and presentations to securities

analysts, money and portfolio managers and institutional investors, i.e., the market.

They were provided with copies of the Company's reports and press releases

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r'

alleged herein to be misleading prior to or shortly after their issuance and had the

ability and opportunity to prevent their issuance or cause them to be corrected.

Because of their positions with the Company, and their access to material non-

public information available to them but not to the public, the Individual Defendants

knew that the adverse facts specified herein had not been disclosed to and were

being concealed from the public and that the positive representations being made

were then materially false and misleading. The Individual Defendants are liable for

the false statements pleaded herein.

FRADULENT SCHEME AND COURSE OF BUSINESS

39. Defendants are liable for: (i) making false statements; or (ii) failing to

disclose adverse facts known to them about Triad. Defendants' fraudulent scheme

and course of business that operated as a fraud or deceit on purchasers of Idearc's

was a success, as it: (i) deceived the investing public regarding Idearc's liquidity,

prospects and business; (ii) artificially inflated the price of Idearc's bonds; and (iii)

caused the plaintiffs and other members of the Class to purchase Idearc's bonds at

inflated prices.

BACKGROUND

40. Idearc is a media company that manages and delivers print, online

and wireless publishing and advertising services on multiple platforms. These

include yellow pages, white pages, online directory and search services, web site

design and hosting services, magazines, direct mail and directory and information

services for wireless subscribers. Idearc is one of the largest publishers of Spanish-

language directories and was the first to introduce an online buying venue for

11


Spanish speaking people. Idearc is the official publisher of Verizon print directories

and FairPoint print directories.

DEFENDANTS' FALSE AND MISLEADING STATEMENTS ISSUED DURING THECLASS PERIOD

41. From March 24 2008 to March 26 2008 Idearc's bonds droppedi

from $65.250 to $64.625. In an effort to entice investors to invest in Idearc's bonds,

Defendant Jones made it clear at the Credit Suisse 2008 Global Leveraged Finance

Conference in Scottsdale, Arizona that "[Jones] does not foresee any near-term

liquidity issues." Idearc adopted Jones' statement as Idearc issued a press release

reiterating Jones' statement.

42. Jones' statement caused Idearc's bonds to rise from $64.625 on March

26, 2008, to a class period high of $74.250 on April 24, 2008.

43. From April 24, 2008 to July 29, 2008, Idearc's bonds dropped in price

$25.250 to $49.000. In an effort to stop the ultimate plummet into Idearc's

bankruptcy, Defendant Klein stated in an earnings teleconference on July 29, 2008

that "[Idearc's] ability to deal with our debt obligations is absolutely secure. We are

all committed to proving ourselves worthy our your trust, support and confidence."

Moreover, in the same earning teleconference Defendant Jones stated that "[a]s we

have discussed before, we foresee no near-term liquidity issues and continue to be

confident in our ability and capacity to service our debt."

44. Klein and Jones' statements caused Idearc's bonds to rise in price

from $49.00 on July 29, 2008, to $50.750 on July 30, 2008.

45. From July 30 to October 16, 2008, Idearc's bonds dropped from

$50.750 to $19.125. In an effort to forestall this inevitable plummet into Idearc's

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bankruptcy, Idearc's CFO Jones and its CEO Klein issued a statement to Bloomberg's

Philipp Schlaeger and Caroline Salas stating that "[Idearc] will generate enough cash

to service its $9 billion in debt for several years."

46. CEO Klein was directly quoted in the Article as stating that "I'm not

losing any sleep over [the ability of Idearc to pay its debts], and 1 would hope that no

one else would either." By this statement Klein informed investors in Idearc's bonds

that it had no reason to worry about ldearc's ability to pay its bondholders.

47. The Article, also, quoted Klein and Jones as saying that "[Idearc] has

no near-term liquidity issues and doesn't need to access credit markets."

48. Klein and Jones' statements caused the price of Idearc's bonds to rise

from $19.125 on October 16 to $21.438 on October 21, 2008.

49. On October 30, 2008, Idearc issued an 8-K that revealed to investors

that Klein and Jones' statements in the Article were untrue as just four days after the

Article Idearc drew down $247 million of its $250 million revolving credit facility.

50. As a result of the October 30, 2008, 8-K, Idearc's bonds fell $4.623 in

price, from $18.500 on October 29, 2008, to $1-3.875 on October 30, 2008.

51. At the close of business on October 30, 2008, Klein and Jones'

fraudulent statements from the Article were published in another Bloomberg article

by Philipp Schlaeger ("Second Article").

52. The Second Article with the fraudulent statement caused Idearc's

bonds to increase in price from $13.875 on October 30 to $18.000 on November 5,

2008.

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53. At the close of business on November 6, 2008, Moody's downgraded

Idearc's bonds from B1 to B3 with the probability of default rating from 133 to 131.

Moody's based the rating on Idearc's "sudden and potentially extreme tightening of

the [Idearc's] liquidity profile evidenced in the revision to an SGL-4 (weak) liquidity

rating." This rating followed Idearc's announcement that "sales and EBITDA for the

third quarter of 2008 declined by 7% and 26%.

54. Ultimately, Idearc's bonds plummeted from $21.438 on October 21,

2008, to $1.50 on March 20, 2009.

55. On March 15, 2009, ldearc stated in a press release that it would likely

file for bankruptcy. Bankruptcy is not an action that a company generating enough

cash to service its debt takes.

56. The true facts, which were known by the Defendants but concealed

from the investing public during the Class Period were:

a. Idearc did not have enough sufficient cash flow to service its $9 billion

in debt for several years as less than a week after ldearc made this

statement to Bloomberg it borrowed $247 million from its Credit

Facility.

b. The Company had severe liquidity issues, which forced it to draw

$247 million on its revolver.

c. The Company's cash flow was not significant but in fact was

plummeting due to the economic downturn and stiff competition from

online advertising.

14


d. Idearc was in fact, as Defendant Klein would subsequently admit,

suffering from a "terminally ill balance sheet."

e. Idearc did not have sufficient cash flow to service its debt, but rather

would "put in place an appropriate capital structure."

57. As a result of the Defendants' false statements, Idearc's bond prices

traded at inflated levels during the Class Period. However, after the above

revelations seeped into the market, Idearc's bonds were hammered by massive

sales, sending them down more than 98% from the Class Period high.

LOSS CAUSATION/ECONOMIC LOSS

58. By misrepresenting Idearc's financial outlook, the Defendants

presented a misleading picture of Idearc's business and prospects. Thus, instead of

truthfully disclosing during the Class Period that Idearc's business was not as

healthy as represented, Defendants falsely reported Idearc's financial outlook and

its actual business prospects going forward.

59. These claims of profitability and of Idearc's ability to service its debt,

caused and maintained the artificial inflation in the price of Idearc's bonds

throughout the Class Period and until the truth was revealed to the market when

Idearc revealed that it would likely file bankruptcy.

60. Defendants' false and misleading statements had the intended effect

and caused Idearc's bonds to trade at artificially inflated levels throughout the Class

Period, reaching its all time high of $74.250 on April 24, 2008.

61. The truth about Idearc's business operations, finances, business

metrics, and future business and financial prospects began to enter the market with

15


a series of partial disclosures and revelations beginning in March of 2008 which

were accompanied by denials and continuing misrepresentations by Defendants. As

a result, the artificial inflation in Idearc's bond price did not come out of the bonds

all at once, rather the artificial price inflation came out over time, in bits, pieces, and

spurts as the bonds continued to trade at artificially inflated, albeit lower, prices

through March 15, 2009.

62. As a direct result of Defendants' admissions and the public revelations

regarding the truth about Idearc's overstatement of its financial outlook and its

actual business prospects going forward, Idearc's bond price plummeted over 98%,

falling from $74.250 on April 24, 2008 to $1.50 on March 20, 2009.

63. This drop removed the inflation from Idearc's bond price, causing real

economic loss to investors who had purchased the bonds during the Class Period.

CLASS ALLEGATIONS

64. Plaintiff brings this action as a class action pursuant to Rule 23 of the

Federal Rules of Civil Procedure on behalf of all persons who purchased or

otherwise acquired Idearc's bonds during the Class Period (the "Class"). Excluded

from the Class are defendants.

65. The members of the Class are so numerous that joinder of all

members is impracticable. The disposition of their claims in a class action will

provide substantial benefits to the parties and the Court. Idearc has issued over

$2.85 billion in bonds, owned by hundreds if not thousands of persons.

66. There is a well-defined community of interest in the questions of law

and fact involved in this case. Questions of law or fact common to the members of

16


the Class which predominate over questions which may affect individual Class

members include: whether the 1934 Act was violated by defendants; whether

defendants omitted and/or misrepresented material facts; whether defendants'

statements omitted material facts necessary to make the statements made, in light

of the circumstances under which they were made, not misleading; whether

defendants knew or deliberately disregarded that their statements were false and

misleading; whether the price Idearc's bonds was artificially inflated; and the extent

of damage sustained by Class members and the appropriate measure of damages.

67. Plaintiff's claims are typical of those of the Class because plaintiff and

the Class sustained damages from the defendants' wrongful conduct.

68. Plaintiff will adequately protect the interests of the Class and has

retained counsel that is experienced in class action securities litigation. Plaintiff has

no interests which conflict with those of the Class.

69. A class action is superior to other available methods for the fair and

efficient adjudication of this controversy.

COUNT I - VIOLATION OF §10(b) of the 1934 Act and Rule 10b-5 Against allDefendants

70. Plaintiff incorporates the previous paragraphs as if stated word for

word herein.

71. During the Class Period, Defendants disseminated or approved false

statements specified above, which they knew or deliberately disregarded were

misleading in that they contained misrepresentations and failed to disclose material

facts necessary in order to make the statements made, in light of the circumstances

under which they were made, not misleading

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Case 4:09-cv-00387-WRW Document 1 Filed 05/22/2009 of 24q,.

72. Defendants violated §10(b) of the 1934 Act and Rule 10b-5 in that

they; employed devices, scheme and artifices to defraud; made untrue statements of

material facts or omitted to state material facts necessary in order to make the

statements made, in light of the circumstances under which they were made, not

misleading, or engaged in acts, practices and a course of business that operated as a

fraud or deceit upon plaintiffs and others similarly situated in connection with their

purchases of Idearc's bonds during the Class Period.

73. Plaintiff and Class-have suffered damages in that, in reliance on the

integrity of the market, they paid artificially inflated prices for Idearc's bonds.

Plaintiff and the Class would not have purchased Idearc's bonds at they prices they

paid, or at all, if they had been aware that the market prices had been artificially and

falsely inflated by the Defendants' misleading statements.

COUNT II - Violation of §20(a) of the 1934 Act Against All Defendants

74. Plaintiff incorporates the previous paragraphs as if stated word for

word herein

75. The Individual Defendants acted as controlling persons of Idearc

within the meaning of §20(a) of the 1934 Act. By reason of their positions with

Idearc, the Individual Defendants had the power and authority to cause Idearc to

engage in the wrongful conduct complained of herein. Idearc controlled the

Individual Defendants and all of its employees. By reason of such conduct, the

Defendants are liable pursuant to §20(a) of the 1934 Act.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff prays for judgment as follows:

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a) Declaring this action to be a proper class action pursuant to Fed. R. Civ. P. 23;

b) Awarding Plaintiff and the members of the Class damages, including interest;

c) Awarding Plaintiff reasonable costs and attorneys' fees; and

d) Awarding such equitable/injunctive or other relief as the Court may deem

just and proper.

JURY DEMAND

Plaintiff demands a trial by jury.

Dated: ^j ^Z2-10,

By: --WALDEN LAW FIRM, PLLCRICHARD E. WALDENARK. BAR N0, 20060698201 Cantrell Rd., Suite 315Little Rock, AR 72227Telephone: 501.748.483 2Fax: [email protected]

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5 Equity C N

ass n px;s>r... .._..._.. _

Search _, Options Re{ated ]nfo _ BN Oct 17 2008 16:04:51Idearc Can Service Its Debt Finance Chief Sa s (U•date2) Faoe 1J5

Updates bond, Share prices in ,eighth paragraph.

By Pnilipp Schlaeger and Caroline Salas

Oct. 1 (81 urberg) Idearc Inc., the phone-directorypubli s ler 'Nhose Shares have fallen 9S percent this year. `nu llgenerate enough cash to service its $9 billion in debt forseveral years, chief c ecutive Officer Scott Klein Said.

"I'm not losing any sleep over it. and I would mope that none else should e?trer," Klein sai d. The company has no near-ter:liquidity issues and doesn ' t need to access credit Tar eta.14lein, 51, and Chief Financial Officer Samuel Dee Jones. 15, saidin an interviEw tens L4eek.

Idearc's shares and bonds have plonced this year as

investors speculate that the Callas-baser: company ltii'i default onits dept. Standard R. Poor 's lo.ereu i

ts raLinq t`r;o steps to B -

fro^^: 88 in lure. citing fulling sales and profitarllity. Therating is four levels below investment grade.

To save cast:, V co pang stopped pa y ing its quarter lydividend of 34.25 cents a ;hare in March. in July, Klein

annao-n—ed p'cans to e'il inate 20 rcent Of V-' _ ltiOrKf^.Ce, Dart ofRustralta 61 129M 8600 Brazil 5511 3048 4500 Euro pe 44 20 7330 ?SOO Germany 49 69 9204 1210 Hong Kong 852 2977 6000Japan 01 3 3201 8900 Singapore 65 6212 1000 U.S. 1 212 318 2000 Copyright 2009 Bloomberg Finance L.P.

SN 258902 G360-1131-0 01-Apr-2009 14=S0=11

EXHIBIT


<MENU> to return to headlines. Equity e NSearch a A „ M _:; ' bpikins ^i ^Retated 'fnfo_ _ BN Oct 17 2008 16:04:5

Idearc Can Service Its Debt, Finance Chief Says (Update2) Page 2/5 an effort to reduce total annual expenses by about $160 million.The compare 'had `x,200 e ,p o;ees at the end of 2007

A11 these things wi ll !sake us a leaner, stron ger, goresuccessful company , ', Klein said ''That doesn't mean that regoing to get super strong overni ght. it v,il l take so^ime time.'

Default Chances

This Leek, the cost to protect $10, million. in Idearc bondsfrom default for five years reached s6.45 ^;,i11ion _n it- iail u'usannual payments of $500,000, according to credit-default swapprlc°s froz `NIA Datavision in London. he financial instrilTentsbased on bonds and 'Loans are used to speculate on a coTpary'sability to rspay debt.

Credit-default swap traders have priced in a 92 percentchance of default in five yeais, based on a 15 percent recovery,according to a JPMorgan Chase & Co. model.

'haveCompany's $2.8 billion of 8 percent noes du_ In 2026

have Ia3len to 19..,,-) cents on the do i iar from =r6 deli ± s at- . ':"'ie _.beginning of September, acCCrding to Trvice. the bond report fig,

system of the Financial industry Regulato +'y Ai11 tbc_ j ty. Th e debtAustral fa 61 2 9777 8600 Brazil 5511 3040 4500 Euro pe 44 20 7330 7500 Geis=•any 49 69 9Z04 1210 Hong Kong 852 2977 6000Japan 81 3 3201 8900 Singapore 65 6212 1000 U.S. 1 212 318 2000 Copyright 2009 Bloomberg Finance L.P.

S14 Z56902 G360-1134-0 01-Ror-2009 14:50=12

EXHIBIT A


<MENU> to return to headlines. EquityC N

Search v ^; ... , O t'sons Related Info F BN Oct 17:200. 818:04:51 Idearc Can Service Its Debt, Finance Chief Says (Update2) , cage 33/5yields 47 percent. idearc rose 14 cents to SS ce,,ts at 4 p.m. inPie.; York Stock r-xchânre cc^pos_te trading.

Goldman Sachs 0roup inc. 4~alt's;. Peter Salkowski saidin anOct. 9 research rote that idearc may have to negotiate a cângein its debt c0v--nants. Profit b--fore interest, taxes and non-cashcosts may deciir,4 enough to breech a 7. 7 5 times debt-to-earringsleverage limit in m.-i d-2-W9. Income on that basis t-rill -fall . to$960 million in 2010 1 Salkc:.ski esti,:ates, He has a" neutral/cautious' ''' rating on the stock—

cnoucb Cash

't t hi com pany +' c r', -,learC r-^ 1^, ^5 said î:e O:,,pc^?"^' 1':'s!i ge n e rate enioii^ , a= liito rake principal and interest pay-rrenrs. The comipany had 5127million ir, casb as or Dune 30. its pr incipal payrnents amount to$48 million in 2008, 1123 million it 20 ,09 7 $199 million i:, 2310and $275 million i n 2011, he said.

The publisher spun off from verizon Co1i,,uniicutiors I,_c. t,,;,ears ago : pa i d 5329 m i llicn in interest in the first na if of2008, or about hair its earnings before interest, taxes and Pon-cash costs.AustraIia 61 2 9177 9600 Brazil 5511 3048 4500 Euro pe 44 20 7330 7500 Germany 49 69 9204 1210 Hong Kong 952 2977 6000Japan 81 3 3201 8900 Singapore 65 6212 1000 U.S. 1 212 318 2000 Copyright 2009 Bloomberg Finance L.P.

SN 258902 G360-1134`0 O1- pp r-2009 14 50:12

EXHIBIT A


i

I

<MENU> to return to headlines, EquityCN

'Search F .,

. _..

_' (^pîons `C Related Info_; Ofq Oct 17 2008 96:04:51_ Idearc Can Service Its Debt, Finance Chief Says (Update2) pace 4/5^

Àbout half the households in the U.S. use zhe yellow pagesabout 60 tikes a year,.` eaking them an attractive advertisingmedium for business owners, C O Klein said. Idearc is alsoseeking to increase Internet and direct-rail services ; he said.

Second-quarter net income declined 30 r©rcent to $76%zillion, or e cents a share, from Alva I illion, Oi' 75 cents.Sales dropped 5.7 percent to $759 r,îiiio ► , missin g ana s ystsestimates. Online revenue rose 2,7 noercent.

For the third quarter. analysts p&edict profi t, of 64 cents ashare, the avera ge of five estimates co ipiled ày e Bloomberg , onsales of 5-725.8 Tillion. Earnin gs before interest, taxes;depreciation and amortization are i.stimated at x339.7 ^îllion.

The cC^ Tl^ 1:^ i report earnearnl^ S G ^ t z Qn^ Lev -tbe month,,^ i

For Related Nelws:On media: NI MED <GO>

Top imedia and technology stories: TTOP <GO>

--Editor: Rob Golumii, Jennifer Son^;ag

To contact the reporters on this story:Australia 61 2 9777 0600 Braill 5511 3048 4500 Europe 44 20 7330 7500 Germany 49 64 9204 L210 Hon g Kong 652 2477 6000Japan B1 3 3201 8900 Singapore 65 6212 1D00 U.S. 1 212 316 2000 Copyright 2009 Bloomberg Finance L.P-

SN 258902 G360-1134-0 01-Apr-2009 14 50:13

EXHIBIT A


S

<MENU> to return to headlines. Equity c N

Searcf^ ^ ^_^.(^ Options , Related Info BN act 17 2008 16:04:51 _.- - —idearc Can Service Its Debt, Finance Chief Says ("date2) Pa4e 1;' Philipp Schlaeger in New Yore at =1-212-017-587 = orpschlaeg"[email protected]:

Caroline Salas in New York at =1-212-517-231; [email protected] .

To contact thi= editor responsible for this story:Jennifer Sondag atT1-212-617-2116 or [email protected]

Australia 61 2 9777 6600 Brazil 5511 3049 4500 Euro pe 44 ZO 7330 7500 Germany 49 69 9204 -1210 Hong Kong 652 2977 6000Japan 61 3 3201 8900 Singapore 65 6212 1000 U.S. t 2L2 316 2000 Copyright 2009 Bloomberg Finance L.P.

SN 256902 G360-1134-0 01-Apr-2003 14:50:13

EXHIBIT A

Case 4:09-cv-00387-WRW Document 1-2 Filed 05/22/2009 Page 1 of 40

7 Corp H P

-T- P-AC/C L-0 S E/YRAD E/Y-FM'I D I - A R C' 1 4v'.

HI 74.250 ON 4/24/08

m i 'fill Daily AVE 37.767

Trade LOW 1.500 ON 3/20/09

bkf E "Y 1-'EL-D- DATE - -- P--rice YIELD DATE Price YIELDF

3.625 187.90 F .500 367.98

T T 1 .0 r" 2.000 317.12 T 1.750 323.06

3.333 216.82 W

T 1 i 7 .4 2.063 333.03 T 2.000 311.42 T 1.625 337.12

1.875 361.31 M .,,,!,)3 Ili 1.565 345.93

F 1 0

1.1.500 394.14 F 2 7 2.000 282.61

I T At 1.875 359.45 T .3,/ 19 T

W 2.200 282.05 W 2.090 270.57

i T i 2.000 335.73 T 11'

T'

14

/ 1 61.980 303.23 M 1.504 343.83

1.875 348.69 M

F F. 3.500 185.85 F '20 1.500 342,34

T 2.125 309.09 T T P"

14 2.125 307.67 W 2.200 274.06 W J." 2.000 270.831. 1, 50Q 33S.10

T 3,250 208.49 T T

0 2.500 194.50 j M 1.500 369.73•Mr a ei -z 6600 Bralil - 5611 364 4SOO Eureve 41 20 7330 7500 Germany 99 69 9ZC4 MO Hong Koni - 052 --2977 6000

Pus aI . e - . . - . . . . . - . -... - --.- ., . . . . . . . -

Ja pan 91 3 3201 0900 ,Singapore 65 6212 1000 U.S. 1 212 310 2000 Con4right 2009 Bloomberg Finance L.P.SK 250902 8196-1234-0 20 -nay-2009 22,04:09

EXHIBIT B

• Case 4:09-cv-00387-WRW Document 1-2 Filed 05/22/2009 Page 2 of 40

<HELP> for explanation. Corp H P

-YRAC C L-0 S E/ -r RAD F- Y-VM

61 74.250 ON 4/24/08r

D a i I y AVE 37.767Trade LOW 1.500 ON 3/20/09

' O ' ice YIELD DA . TE Price- "YI"ELb DATE - - - - 0 ff --c- ei .-.Y- I ..

EL. DbAf^ r-

F 2.250 243.17 F 1,1 3.563 159.05 F 1 "1 8.750 77.182

T 2,500 222.90 T t 3.375 165.47 1'14 J.) ! '.- 7.500 86.228

W 2 31

T 3.500 167.73 T 1/,10 3.873 147.20 T h, 8.500 78.608/19

F 3.500 166.87 F .1 / 1 6 4.625 127,95 F I f 9.754 70.694

T T il l ,: ' 6.000 104.44 T I

i 1J 1 % 4.605 133.28 W 6.000 104.25 W 1 0, 1 8.596 77.463

T-

'F 7.250 89.754 T 9.019 74,751

4.500 134.53 N -I ! t,) 8.500 79,675 11

F , F I 9.250 74.815 F 12/ i 8.625 76.679

T 1 4.605 131.50 T 7.625 86.064 T : ,'1 8.000 80.802

1 W 4.300 138.51 W Ill i w 1 / 1 '/

T 4.247 139.23 T 8.500 79.030 T h, 7.400 64.9736 4.248138.88 M 8.750 77.284 M 1 - 7.000 88.307

Ausiralla Gi i 9 777 .3 6 00 Bra z il -55 11' '3040' 4566 &,r PQ 44 26 7 *335 M6 Germany 49 69 9264 1210 Hong Kong 85Z Z977 6000

Jap an 3201 6,900 S I n9apare 65 6212

logoU.S. 1 212 319 2000 Copqr(ght 2009 Rloomberg FInanco L.P.

SN 256902 B196-1134-0 20-May-Z009 2Z:04 09

EXHIBIT B


(HELP> for explana1.iv;i. Corp H P

T FZACfCL0SE/TRADE/YTM ?.

HI 74.250 ON 4/24/08_! ; ;(i j{; Daily AVE 37.767

Trade LOW 1.500 ON 3/20/09DAVE_ Price YIELD DATE Price YIELD DATE Price YIELDJ ,2 ; !. f 7.650 $ .748 F _ I { 8.000 78.002 F 1 i % i 14.000 61.466

'1 ! ', f l ; 7.375 84.821 T 11. '.: 7.650 80.352 T 4 r ' .; i 13.875 61.84010 ! ' ' i' 7.000 87.922 UJ + t./ 1 , ; 7,000 85.352 1. i) .' 18.500 49.134

`• T _:', 8.063 79.191 1" 1.:4 9.125 70.837 T 1()/ .' y 18.250 49.5661 I 10.050 67.815 M 1 !. -.1 11.438 60.726 11 :' 18.750 48.481

1 % F 1 1. r 1 12.250 57.927 F 1 (1/-)4 18.750 48.435T ! 1 8.968 73.224 '1 ! I !.; 12.625 56.711 T 20.000 46.01111 ! 9.250 71.580 W !.1:' 14.250 52.229 !r ! > 20.250 45.526

9.500 70.026 T 1 !,''I :! T ! 21.438 43.433I'1 I 9.000 72.607 1 . 1 :1';li 15.500 57.204 1 . 1 20.500 44.934

!'. F ! 9.000 72.520 F c!' 17.000 53,061 F 19.751 46.213

T I -' ' ; T 1 1: 17.750 51.216 T l { ! :: 19.125 47.341

9.000 72.434 W 9 18.000 50.551 W 10/1 21.000 43,9858.000 78.500 T II 16,500 53.996 T ;+ 11 21.625 42.885

PI 1..,';? 8.500 74.988 1. 1 ! !;' M ;1)!1. 20.0. 00 45.522Rustralln 6! 2 9777 9600 6rncll_ 5511 3949 ' 4S00 Europe 44 20 733.7500 German y 49 69_9204 1210 Bony Kong 85i 2977 6000Japan 01"3'3201 9900 Singapore 65 6212 1600 U.S. 1 212 310 2000 Copyright 2009 Bloomberg flnunce L.P.

SN 258902 M196-IL34-0 ZO-Moy-2009 22-04;09

EXHIBIT B


<IiF--LP> for expl-dnation. Corp HP

-1FP-AC/C LOS E/-FRADE/Y-rM

HI 74.250 ON 4/24/08

Daily AVE 37.767

Trade LOW 1.500 ON 3/20/09

!......DATE Price YIELD DATE Price YIELD DATE Price Y.14,1)....F 1. 0 /.1 : F 37.500 27.023 F. 8/T 19.000 47.321 T 34.000 29,363 T 45.750 22.284W U-, , , 23.375 40.267 W 36.900 27,370 W 46.793 21.796T '1 24.500 38.694 T 37.000 27.256 42.250 23,944

23.000 40.615 M 1 40,000 25.437 M 43-500 23.298

F 1 25.219 37.769 F 43.250 23.679 F 44.100 22.991T 24.000 39.231 T 1.1 44.500 23.044 T !71 ./",).' 42.500 23.775W 26.000 36.818 W 44.938 22.820 W 44.000 23.014

28.000 34.642 T 45.750 22.397 T 1- 42.875 23.53128.000 34.617 M V;48.000 21.370 M 45,000 22.485

F 31.625 31.346 F 45.250 22.607 F 42.750 23,567T 9r 32.000 31.023 T 45.750 22.359 'r 42.375 23,744w 34.000 29.476 U1 46.500 22,002 W 42.375 23.731

► 35.375 28.450 T 44.500 22.901 T 44,600 22.59836.000 23.010 M M '11 43.460 23.135

Au 49 . -691 2 55if ^049 ' 4500 turoc* 44 20 73307560 1210 Hong •Konp 852 2971 6060Japan el 3 3201 asoo Singapore SS 6212 1000 U.S. L 212 318 2000 Copqr •lsht 2009 Bloomberg Finance L.P.

SN 256902 HISS - 1134 - 0 20-MoV-2009 ZZtOI 09

EXHIBIT B


<HELP> fog --explanation. Corp H P

_T RAC / C L-0 S E T RA E/Y-IFM

MI 74.250 ON 4/24/08

I Daily AVE 37,767

LOW 1.500 ON 3/20/09. - ATE P r. I ce DATE

. . .. Price YIELD DA . TE Price

- - .Y . IELD'

40.050 24.893 F 11 ' ! 60.563 16.308 F 62.750 15.49043.713 22.986 T 59.000 16.790 T 62.000 15.70142.875 23.385 W 59.000 16.781 1,1 64.750 14.90641-000 24.309 T S8.250 16.997 1' 1 64.750 14,88539.750 24.972 M 59.500 16,590 11 67.250 14.200

F 41.500 24.019 F 1 60,870 16.158 F 69.250 13.67544.000 22.758 T / 1 0 61.000 16.110 T 19 70.000 13.47950.750 19.820 W 57.750 17.125 W 71.125 13.193

T 49.000 20.492 'T 61.250 16.003 1 ;11A 72.563 12.82758.750 16.946 M 62.000 15.771 1` 1 P', 71.750 13.016

F 59.500 16.698 F F58.500 17.010 T 62.000 15.763 T 72.000 12.94459.375 16,721 W 62.000 15.755 W 72,000 12.93860.000 16.499 T I 63.625 15.275 T 72.250 12.860

i^/21 60.500 16.336. r-I 6.*' J l 63.000 15.425 M 0 "1 72.750 12.734 I

Australia 61 Z 9777 ^^Od5511Braiil i^ 31, $'_4'S00 . E . rope 44 20 7330 7500 1 Germany 4 . 9 . 69 920. 4 1 . Z . 10 . HoAq,, kcn gt a5i 207 fbuo

Japan 81 3 3213L 6900S

Ingapore 65 6212 1000 U.S. 1 212 3]e 2000 -. Copyright 2009 Bloomberg Finance L.P.SN 258902 HI96-1134-0 ZO-Ma 4 -Z009 22z04;10

EXHIBIT B


<HELP> "for explanation. Corp H P

_rRAC/C L-0 S E/ -FRAD E/Y-FM

HI 74.250 ON 4/24/08Daily AVE 37.767

i' Trade LOW 1.500 ON 3/20/09Y.;, _' YIELD ' ' DAT_E - Price YI'' LD i

YIELD 'DATE Price CeDATE rice c

71 -12._968 73.750 12.379 F 71.750 13.634

72.250 12.842 T 73.000 12.547 T 11174.250 13.014

I 71.37S 12.926 U 70.750 13.

72.125 12.866 W 874

71.750 12.933 T i 70.750 13.059 T 71.250 13,727

73,000 12.634 M 70.313 13.159 M r 1 71.500 13.657

F 72,125 12.836 F 69.688 14.260 F '+, 1f 71.250 13,714

72.240 12.802 T 72.500 13.532 T 7 70.125 13.994

72.000 12,854 VI J 72.500 13,525 VJ 1 69.750 14.084T 69.030 13.570 T 68.250 14.608 T 1,.'.1 68.875 14.292

I ll 64.250 15.726 N 4! 1 i 68.750 14.318

72.000 12.836 F 65.000 15.500 F /'1 68.000 14.51170.250 13.254 T 4 66.000 15.207 T 68.250 14,437

W 72.750 12.646 W 0; 65.250 15.413 W 67.750 14.564T 73.960 12.342 T 65.438 15.336 T 1/ 67.938 14.492

119 74.000 12.327 M 68.250 14.550 M 1 68.750 14,270I Z' 9777 6606 dr' a' z I i 5911 'jO 46 7,00 Europe 44 20 ?jjD ' 706 Gorman? 49-69 9204 121U K o'n' g OSZ ' i§i? '6000

Ja pan'2 0013 3201 9900 Sineopore 65 6212 1000 U•S. 1 212'.-316 19 000 CopqrIght 2009 Bloomberg FInance L.P.SM 258902 H196-1134-0 20-tlaq-2009 22 04:10

EXHIBIT B


0'1L"'LP> for explanation. Corp HP

-rRAC/CLOSE,/TRADE/YTML)

HI 74.250 ON 4/24/08

l k^l i!)" ! Daily9, AVE 37.767

Trade LOW 1.500 ON 3/20/09

DATE Pr-ice- YIELD"-'bA!E -hic"e" "Yf ECb DATE Pr "ice YIELD67.SOO 14.595 F 63.000 15.708

66.000 14.998 T 63.625 15.S19

66.750 14.784 14 65.000 15,122

1 66.000 14.969 T 1 64.813 15.152

J 65,250 15.170 M J) 64.000 15.374

F 65.12S 15.198 F 64.500 15.225T66.000 14.947 T 65.500 14.939

64.625 15,332 W 69.000 14.001•

TT65.000 15.203 62.S00 15.762M 65.250 15.126 1-1 60,000 16,506

F

T 63.500 15.617W j-) 63.250 I5.682T 63.313 15.656

61.500 16.161"Ausira`ila 61 2 §777 ' 8600 Sr ' i 551 1 * 3048 4Seb ruro po 44 * 20 733f7500 - Germa ny 496§ 9204 12i0 N ' ng Kong 352 207 5bD0

Japan 81 3 3201 6900 S ingapore 65 6Z12 1000 U.S. i 212 318 2000 Copyright 2009 Woombero Finance L.P.SN 259902 H196-1134-13 20-Mad-Z009 2Z,04:10

EXHIBIT B


Idearc - Current Report :I t/09 2:02 PM

Table of G4n tents

UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORTPursuant to Section 13 or 15([1) of the

Securities Exchange Act of 1934

- _ Date of Report (Date of Earliest Event Reported): -

October 24, 2008

IDEARC INC.(Exact name of registrant as specified in its charter)

Delaware 1-32939 20-5095175(State of Incorporation) (Commission File Number) (I.R.S. Employer

Identification Number)

2200 West Airfield Drive, P.O. Box 619810, DFW Airport, Tex2s,75261(Address of Principal Executive Offices)

(972) 453-7000(Registrant's telephone number, including area code)

Check the appropriate box below ifthe Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant underany ofthe following provisions-

1:1 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

O Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

q Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

q Pre-commencemcni communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

http:!l ir.idearc.comisecfiling.cfm?tilinglD=950134-08-18738 Page 2 of 24

EXHIBIT C


• s Idearc - Current Report 411109 2:02 FM

TABLE OF CONTENTS

Item 2.02 Results of Operations and Financial Condition Item 2.03 Creation of a Direct Financial Obligation or an Obligation. under an Off-13alance Sheet Arrangement of a RegistrantItem 3.01 Notice of Delisting or Failure to Satisfy a Contiiwed Listing Rule or Standard; Transferof ListingItem 5.02 Departure of Directors or Certain Officers; Election QLDirectors; Appointrapent of CertainOfficers; Compensatory Arrangements of Certain Officers. item 7.01 Regulation FD Disclosure Item 9.01 Financial Statements and Exhibits SIGNATURES EXHIBIT INDEXF X-99.1

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EXHIBIT C


Vdkarc - Current Report 411109 2:02 PM

'Table of Ctrntents

Item 2.02 Results of Operations and Financial Condition.

On October 30, 2008, Idearc Inc. (the " Comnanv ") issued a press release announcing its financial results for the three months and

nine months ended September 30. 2008. A copy of the press release is furnished as part of this Current Report on Form 8-K asExhibit 99.1 and is incorporated herein by reference.

The Company's press release and related financial schedules include financial infomration prepared in conformity with accountingprinciples generally accepted in the United States of America (" GAAP ") as well as non-GAAP financial information. The non-GAAPfinancial information includes:

n EBITDA, which is earnings before interest, taxes, depreciation and amortization;

• EBITDA margin, which is EBITDA divided by total operating revenue;

adjusted pro forma consolidated statements of income;

adjusted pro forma EBITDA; and

• adjusted pro forma EBITDA margin.

EBITDA is determined by the Company by adding depreciation and amorri-tion to its operating income. EBITDA margin iscalculated by dividing EBITDA by total operating revenue. Management believes that EBITDA and EBITDA margin are useful toinvestors and other users of its financial information in evaluating the Company's operating performance. EBITDA and EBITDA marginarc used internally to evaluate current operating expense efficiency and operating profitability on a more variable cost basis by excludinginlcrest, tax, depreciation and amortization expenses. In addition, EBITDA is used internally for incentive compensation purposes.

The adjusted pro forma consolidated statements of income represent the Company's consolidated statements of income prepared inaccordance with GAAP as modified to (i) eliminate transition costs associated with its spin-off from Verizon Communications Inc..(ii) eliminate costs associated with a one-time stock-based compensation award granted to most of its employees shortly after the spin-off, and (iii) eliminate restructuring costs associated with a strategic organizational realignment and market exit activities. Descriptionsof the adjustments made to prepare the Company's adjusted pro forma consolidated statements of income are provided in the financialschedules accompanying the press release attached as Exhibit 99.1 to this Report.

Management believes the presentations of adjusted pro forma operating performance assist readers in better understanding theCompany's results of operations and trends from period to period, consistent with management's evaluation of the Company'sconsolidated results of operations for a variety of internal measures including strategic business planning, capital allocation and incentivecompensation. Management believes that the adjusted pro forma consolidated statements of income are more indicative of futureoperating results than GAAP results of operations because of the non-operational and/or non-recurring nature of the items eliminated. Asa result of these factors, management provides this information externally, along with a reconciliation to their comparable GAAPamounts, so readers have access to the detail and general nature of adjustments made to GAAP results.

Management believes that adjusted pro forma EBITDA and adjusted pro forma EBITDA margin assist readers in better understandingand evaluating the Company's operating performance for the reasons described in the immediately preceding paragraph.

Management provides non-GAAP financial information to enhance the understanding of the Company's GAAP consolidated financialstatements and readers should consider the information in addition to; but not instead of, the Company's financial statements prepared inaccordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies.

2

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EXHIBIT C


!dearc -Current Report 4/1109 2:02 PM

Table or Contents

Item 2.03 Creation of Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of Registrant.

On October 24, 2008, the Company notified the administrative agent under its Credit Agreement, dated November 17, 2006, amongthe Company and the lenders and agents from time to time party thereto (the " Credit Facilit y "), to request a $247 million borrowingunder its existing $250 trillion revolving credit facility (the " Revolver "). The Company made this borrowing under the Revolver toincrease its cash position to preserve its financial flexibility in light of the current uncertainty in the credit markets. In accordance withthe terms of the Credit Facility, the Company intends to use the proceeds from the borrowing for general corporate purposes.

Subsequent to the borrowing described above, the outstanding balance of the Revolver is approximately $249 million. consisting of$247 million in outstanding loans and approximately $2 million in outstanding letters of credit. The remaining undrawn amount of theRevolver after.giving effect to the borrowing described above is approximately $1 million. All amounts outstanding under the Revolvermust be repaid by November 17, 2011.

Borrowings under the Revolver bear interest at a per annum rate equal to, at the Company's option, either (a) the prime rate plus anApplicable Margin, or (b) adjusted LIBOR plus an Applicable Margin. The Applicable Margin ranges from 0.25% to 0.50% for loanswith interest rates determined by reference to the prime rate and 1.25% to 1.50% for loans with interest rates detenn°y reference toadjusted LIBOR, depending on the Company's leverage ratio.

The Company has the right to prepay any amount borrowed under the Credit Facility, in whole or in part, without premium or penalty.Obligations under the Credit Facility are secured by a lien on substantially all of the Company's and its domestic subsidiaries' tangibleand intangible assels, including a pledge of the stock of their respective subsidiaries, as well as a mortgage on certain real property. Anypast-due amounts would bear interest at a rate equal to 2.00% per annum above the applicable interest rate.

The Credit Facility requires the Company to meet minimum financial requirements, including that the Company maintain aconsolidated leverage ratio not to exceed 7.25 to 1.00 as of the last day of each fiscal quarter, and includes covenants that restrict theCompany's and its mss icted subsidiaries' ability to incur additional debt, pay dividends and other distributions, create liens, merge,liquidate or consolidate, make investments and acquisitions, sell assets, enter into sale and leaseback transactions and swap transactions,and enter into agreements with affiliates.

The Credit Facility contains customary events of default, including, without limitation, defaults on payments of the amounts borrowedunder the Credit Facility, defaults on payments of other material indebtedness, breaches of representations and warranties in materialrespects, covenant defaults, certain events of bankruptcy and insolvency, rendering of material judgments, the occurrence of certainCRISA defaults, failure of any guarantee of the amounts borrowed under the Credit Facility to be in full force, invalidity of the liens.wcuring the amounts borrowed under the Credit Facility, change in control of the Company or material breach of certain of theCompany's agreements with Verizon Communications that could have a material adverse effect.

All of the Company's present and future domestic subsidiaries (other than certain insignificant subsidiaries) are guarantors under theCredit Facility unless such subsidiaries are designated as "unrestricted" subsidiaries under the Credit Facility.

3

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EXHIBIT C


' ^Ideare -Current Report 411/09 2:02 PM

Table of Contents

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On October 24, 2008, the Company was notified by the New York Stock Exchange (" NYSE ") that the Company is not incompliance with NYSE's continued listing criteria under Section 802.01C of the NYSE Listed Company Manual because the averageclosing price of the Company's common stock was less s than $1.00 over a consecutive 30 trading-day period. Under applicable NYSErules, the Company generally has six months to return to compliance with this requirement. The Company expects that its common stockwill remain listed on the NYSE during this six-month period.

If the average trading price of the Company's common stock does not sufficiently improve, the Company's Board of Directors andmanagement intend to consider a reverse stock split and other possible alternatives. If the Board decides to seek stockholder approval fora reverse stock split, the Company must do so no later than its 2009 annual meeting of stockholders, which is scheduled currently forMay 2609.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; CompensatoryArrangements of Certain Officers.

As previously reported in the Form 8-K filed on June 2, 2008, the Company entered into an employment agreement with Scott W.Klein in May 2008 in connection with his appointment as Chief Executive Officer of the Company. Under the terms of the agreement, theCompany agreed to provide Mr. Klein with certain benefits related to his relocation from Chicago, Illinois to Dallas, Texas.

On October 29, 2008, the Company's Board of Directors approved an additional relocation benefit for Mr. Klein whereby he willreceive approximately $3.78 million for his Chicago home, which amount represents his approximate cost basis in the home. TheCompany has agreed to assume the risk of loss to the extent the home is sold for less than Mr. Klein's cost basis. The current appraisedvalue of the home is approximately $2.75 million. Additionally, the Company has agreed to pay the expenses associated with selling Mr.Klein's home, including closing costs and fees of a relocation firm,

This additional relocation benefit will result in taxable income to Mr. Klein. The Company has agreed to make an additional paymentto him to offset the resulting tax liability. Assuming the home is sold for appraised value, the amount payable by the Company for thistax benefit would be approximately $650,000. The actual amount payable to Mr. Klein for this tax benefit will depend upon the actualsale price of the home and the closing costs and other fees paid by the Company.

The Board approved this be in light of the deterioration in the housing and credit markets in an effort to eliminate distractionsassociated with Mr. Klein's relocation and to permit Mr. Klein to focus his full attention on his Company responsibilities.

Item 7.01 Regulation FD Disclosure.

See Item 2.02. Results of Operations and Financial Condition.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No. Description

99.1 Ideare Inc. press release, dated October 30, 2008

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• Mearc -Current Report 4/1/09 2:02 PM

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on itsbehalf by the undersi.oned hereunto duly authorized.

1DEARC INC.

By: /s/ Cody W ilbanks Name: Cody WilbanksTitle: Executive Vice President, General

Counsel and Secretary

Date: October 30, 2008

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Table or Content§

EXHIBIT INDEX

Exhibit No- Des ri. ion

99.1 Idearc Inc. press release, dated October 30, 2008

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• Idearc - Current Report 411109 2:02 PM

Exhibit 99.1

d, =e% C_ Ir For Immediate Release

Media Relations Contacts: Mr. Andrew Shane

andrew.shane@ idearc.com972/453.6473

Investor Relations Contact: Mr. Samuel D. (Dee) Jones

[email protected]/453-7364

Idearc announces year to data and third quarter 2009 results

Company makes progress on operational initiatives; Retains advisors to address capital structure

DALLAS — October 30, 2008 — Idearc Inc. (NYSE: IAR) today announced financial results for year-to-date and thirdquarter ended September 30, 2008.

"!dear's financial results in the third quarter reflect the significant challenges our clients are facing as they contend withdifficult economic conditions across the nation," said Scott W. Klein, chief executive officer of Idearc Inc. "We remainfocused on accelerating revenue, reducing expenses and improving margins, as well as creating a high-performanceculture. We are acting aggressively and quickly to adjust our organization and market approach to meet the challengesahead of us."

Financial Summary

Idearc reports financial results on a GAAP basis and on an adjusted pro forma basis to eliminate the impact of transitionand restructuring costs. The adjusted pro forma basis measures are described and are reconciled to the correspondingGAAP measures in the accompanying financial schedules.

On a year-to-date basis, Idearc reported multi-product revenues of $2,264 million, a 5.7 percent decrease compared tothe same period in 2007. Year-to-date Internet revenue was $223 million, a 6.2 percent increase compared to the sameperiod in 2007.

The Company reported third quarter 2008 multi-product revenues of $735 million, a 7.1 percent decrease compared to thesame period in 2007. The Company reported Internet revenue of $75 million in the third quarter, an 8.7 percent increasecompared to the same period in 2007.

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The Company reported year-to-date earnings before interest, taxes, depreciation and amortization (EBITDA) of $956 million, a 12.9 percent decrease compared to the same period In 2007. Reported year-to-date EBITDA margins were42.2 percent, compared to 45.7 percent in the same period in 2007. On an adjusted pro forma basis, year-to-dateEBITDA was $985 million, a 15.7 percent decrease compared to the same period in 2007. Adjusted pro forma EBITDAmargins were 43.5 percent, compared to 48.6 percent in the same period in 2007.

The Company reported third quarter EBITDA of $ 298 million, a 21.6 percent decrease compared to the same period in2007. The Company reported EBITDA margins of 40.5 percent in the third quarter, compared to 48.0 percent in the sameperiod in 2007. On an adjusted pro forma basis, third quarter EBITDA was $302 million, a 24.1 percent decreasecompared to the same period in 2007. Adjusted pro forma EBITDA margins were 41.1 percent in the third quarter 2008,compared to 50.3 percent in the same period in 2007.

The Company reported year-to-date net income of $ 260 million, a 21.0 percent decrease compared to the same period in2007. On an adjusted pro fora basis, year-to-date net income was $279 million, a 25.4 percent decrease versus thesame period in 2007.

The Company reported third quarter net income of $73 million, a decreases - `37.6 percent versus the same period in2007. On an adjusted pro forma basis, third quarter net income was $76 million, a decrease of 40.6 percent versus thesame period in 2007.

Free cash flow for the nine months ended September 30, 2008 was $340 million based on cash from operating activitiesof $377 million, less capital expenditures of $37 million.

Mulli-product advertising sales for the third quarter declined 10.8 percent compared to 2007.

Update on Liquidity and Capital Structure

As of September 30, 2008, Idearc had cash and cash equivalents of $304 million. On October 24, 2008, the Companyinitiated borrowings of $247 million under its existing $250 million revolving credit facility. Idearc intends to use the fundsfrom the revolving credit facility for general corporate purposes.

The Company has retained Merrill Lynch Co. & and Moelis & Company as financial advisors in connection with the reviewof alternatives related to the Company's capital structure. There can be no assurance that the Company will pursuetransactions related to any such alternatives.

"Our objective is to maximize opportunities to help ensure that Idearc has an appropriate capital structure to support ourstrategic business objectives," Klein said. "We intend to look closely at all available opportunities to strengthen our balancesheet and improve our risk profile. At the same time, we will continue to manage our financial resources prudently, with afocus on maintaining sufficient liquidity and flexibility as we work our way through the current challenging economicenvironment. Fortunately, Idearc continues to generate significant cash flow."

New York Stock Exchange Listing

On October 24, 2008, the Company received notice from the New York Stock Exchange ("NYSE'l That it is not incompliance with NYSE continued listing standards because the 30 trading-day average closing price of the Company'scommon stock was less than $1.00 per share. Under applicable NYSE rules, the Company generally has six months toreturn to compliance with this requirement.

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The Company expects that its common stock will remain listed on the NYSE during this six-month period. If the averagetrading price of the company's common stock does not sufficiently improve, the Company's Board of Directors andmanagement intend to consider a reverse stock split and other possible alternatives. If the Board decides to seekstockholder approval for a reverse stock split, the Company must do so no later than its 2009 annual meeting ofstockholders, which is scheduled for May 2009.

Operational Update

During the third quarter, Klein announced his new leadership team and implemented several programs focused on:

• Driving sales productivity;

Simplifying the organization and making it easer to do business with;

• Accelerating Intemet revenue; and

• Creating a better place to work. -

"I am pleased with the progress we are making, although it will take some time before the changes we are implementinghave a significant impact on our financial results," Klein said. "We are re-energizing the company and we are on the roadto redefining who we are. Our objective is 10 address our challenges and introduce new ideas — in some cases, radicalideas — to help position the company as an industry leader in providing outstanding solutions and support to our clients."

Webcast Information

ldearc welcomes investors, media and other interested parties to join Klein, and Samuel D. (Dee) Jones, chief financialofficer, in a discussion via a webcast and teleconference beginning today at 10:00 . a.m. (Eastern) by visiting idearc's Website at http:lhr.ideare.com/presentations.cfm and following the instructions provided. In addition, individuals within theUnited States can access the earnings call by dialing (888) 603-6873. International participants should dial (973) 582-2706. The pass code for the call is: 67869257. in order to ensure a prompt start time, please dial into the call by 9:50a.m. (Eastern). A replay of the teleconference for individuals within the United States will be available at (800) 642-1687,and-international callers can access the replay by calling (706) 645-9291. The replay pass code is 67869257 and will beavailable through November 13.

Certain statements included in this press release and the hyperlinked materials constitute forward-looking statementswithin the meaning of the Private Securities litigation Reform Act of 1995. These forward-looking statements reflect Idearcmanagement's current views with respect to Idearc's financial performance and future events with respect to its businessand industry in general. Statements regarding Idearc's exploration of alternatives related to its capital structure and effortsto regain compliance with the NYSE continued listing standards are forward-looking statements. Statements that includethe words 'believe," 'Wil," anticipate,"'foresee," and similar expressions identify forward-looking statements. idearccautions you not to place undue reliance on these forward-looking statements. The following important factors could affectfuture results and could cause those results to differ materially from those expressed in the forward-looking statements:(i) risks related to Idearc's substantial indebtedness, including covenant compliance; (ii) risks related to Idearc's decliningprint revenue, including a reduction in customer spending resulting from the current economic downtum; (iii) limitations onIdearc's operating and strategic flexibility under the terms of its debt agreements; (iv) risks associated with a sustainedstock price below $1.00 per share and a market capitalization below $75 million, including decsting from the NYSE;(v) changes in idearc's competitive position due to competition from other yellow pages directories publishers and othertraditional and new media

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o -Idearc - Current Report 4/1/09 2 02 I'M

and its ability to antidpate or respond to changes in technology and user preferences; (vi) declining use of print yellowpages directories; (vii) ldearc's ability to successfully identify and implement cost initiatives, (viii) access to capital marketsand changes In credit ratings; (ixf changes in the availability and cost of paper and other raw materials used to printdirectories and reliance on third-party printers and distributors; (x) increased credit risk associated with reliance on small-and medium-sized businesses, in particular in the current economic environment; (xi) changes in operating performance;(kh) ldearc's ability to attract and retain qualified executives; (xiif) idearc's ability to maintain good relations with itsunionized employees; (xiv) changes in U.S. labor, business, political and/or economic conditions; (xv) changes ingovernmental regulations and policies and actions of regulatory bodies, and (xvi) risks associated with ldearc's obligationsunder agreements entered into with Verizon in connection with the spin-off. For a discussion of these and other risks anduncertainties, see Idearc Inc.'s periodic filings with the Securities and Exchange Commission, which you may view atwww sec.gov, and in particular, Idearc inc. s Annual Report on Form 10-K for the year ended December 31, 2007.

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IDEARC INC.Consolidated Statements of Income

Reported (GAAi)Nine Months Ended September 30, 2008 Compared to Nine Months Ended September 30, 2007

(dollars in millions, except per share amounts)

9 Mos. Ended 9 Mos. EndedUnaudited 9/30108 9/30107 % Chan eOperating RevenuePrint products $ 2,038 $ 2,189 (6.9)Internet 223 210 6.2Other 3 3 —Total Operating Revenue - 2,264 2,402 (5.7)

Operating ExpenseSelling 541 544 (0.6)Cost of sales (exclusive of depreciation and amortization) 461 469 (1.7)General and administrative 306 291 5.2Depreciation and amortization 59 66 (10.6)Total Operating Expense 1,367 1,370 (0.2)

Operating Income 897 1,032 (13.1)Interest expense, net 491 505 (2.8)Income Before Provision for Income Taxes 406 527 (23.0)Provision for income taxes 146 198 (26.3)Net Income $ 260 $ 329 (21.0)

Basic and Diluted Earnings per Common Share ( 1 ) $ 1.78 $ 2.25 (20.9)Basic and diluted weighted-average common shares outstanding (in

millions) 146 146

Dividends Declared per Common Share $ .3425 $ 1.0275

Prior period amounts presented above and in the following schedules have been reclassified to conform to currentperiod presentation.

These schedules are preliminary and subject to change pending the Company's tiling of its Form 10-0.

Note:

( 1 )

Equity based awards granted in 2007 and 2008 had no material impact on the calculation of diluted earnings percommon share.

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IDEARC INC.Consolidated Statements of IncomeReported (GAAP)Three Months Ended September 30, 2008 Compared to Three Months Ended September 30, 2007


3 Mos. Ended 3 Mos. EndedUnaudited 9W/08 _ 9/30107 % ChangeOperating RevenuePrint products $ 659 $ 721 (8.6)Internet 75 69 8.7Other 1 1 —Total Operating Revenue 735 791 (7.1)

Operating ExpenseSelling 176 171 2.9Cost of sales (exclusive of depreciation and amortization) 151 149 1.3Genera) and administrative 110 91 20.9Depreciation and amortization 19 22 (13.6)Total Operating Expense 456 433 5.3

Operating Income 279 358 (22.1)Interest expense, net 162 168 (3.6)

Income Before Provision for Income Taxes 117 190 (38.4)Provision for income taxes 44 73 (39.7)Net Income $ 73 $ 117 (37.6)

Basic and Diluted Earnings per Common Share 0) $ .50 $ .80 (37.5)Basic and diluted weighted-average common shares outstanding (in

millions) 146 146

Dividends Declared per Common Shane $ — $ •3425

Note:(1)

Equity based awards granted in 2007 and 2008 had no material impact on the calculation of diluted eamings percommon share.

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IDEARC INC.Consolidated statements of Income

Adjusted Pro Forma (Nan-GAAP) (1)Nine Months Ended September 30, 2008 Compared to Nine Months Ended September 30, 2007


9 Mos. Ended 9 Naps. EndedUnaudited 9/30M 9130/07 % Chan eOperating RevenuePrint products $ 2,038 $ 2,189 (6.9)Internet 223 210 6.2Other 3 3 —Total Operating Revenue — 2;264 2,402 (5.7)

Operating ExpenseSelling 541 544 (0.6)Cost of sales (exclusive of depreciation and amortization) 461 469 (1.7)General and administrative 277 221 25.3Depreciation and amortization 59 66 (10.6)Total Operating Expense 1,338 1,300 2.9

Operating Income 926 1,102 (16.0)Interest expense, net 491 505 (2.8)Income Before Provision for Income Taxes 435 597 (27.1)Provision for income taxes 156 223 (30.0)Net Income $ 279 $ 374 (25.4)

Basic and Diluted Earnings per Common Share (2) $ 1.91 $ 2.56 (25.4)Basic and diluted weighted-average common shares outstanding (in

millions) 146 146

Notes:

( i ) These consolidated statements of income provide a comparison of the nine months ended September 30, 2008adjusted pro forma results to the nine months ended September 30, 2007 adjusted pro forma results. Thefollowing schedules provide reconciliations from our reported GAAP results to adjusted pro forma non-GAAPresults for the periods shown above.

(2)


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Adjusted Pro Forma (Non-GAAP) (t)Three Months Ended September 30, 2008 Compared to Three Months Ended September 30, 2007


3 Mos. Ended 3 Mos. EndedUnaudited 9/30/08 9!30/07 % Cha seOperating RevenuePrint products $ 659 $ 721 (8.6)Internet 75 69 8.7Other t 1 —Total Operating Revenue 735 791 (7.1)

Operating ExpenseSelling 176 171 2.9Cost of sales (exclusive of depreciation and amortization) 151 149 1.3General and administrative 106 73 45.2Depreciation and amortization 19 22 (13.6)Total Operating Expense 452 415 8.9

Operating Income 283 376 (24.7)Interest expense, net 162 168 (3.6)Income Before Provision for Income Taxes 121 208 (41.8)Provision for income taxes 45 80 (43.8)Net Income $ 76 $ 128 (40.6)

Basic and Diluted Earnings per Common Share ( 2) $ .52 $ .88 (40.9)Basic and diluted weighted-average common shares outstanding (in

millions) 146 146

Notes:

( t )

These consolidated statements of income provide a comparison of the three months ended September 30, 2008adjusted pro forma results to the three months ended September 30, 2007 adjusted pro forma results. Theiollowing schedules provide reconciliations from our reported GAAP results to adjusted pro forma non-GAAPresults for the periods shown above.

(a)


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Reconciliation from Reported (GAAP) to Adjusted Pro Forma (Non-GAAP)Nine Months Ended September 30, 2008


Adjustments

9 Mos. Ended 9 Mos. Ended

9/30108 9130108Adjusted

Reported Stock-Based Separation Restructuring Pro FormaUnaudited (GAAP) Compensation (3 ) Costs (4) Costs (5) (Non-GAAP) Operating RevenuePrint products $ 2,038 $ — $ — — $ 2,038Internet 223 — — — 223Other 3 — _ _ 3 Total Operating Revenue 2,264 — — — 2,264

Operating ExpenseSelling 541 — — — 541Cost of sales (exclusive of

depreciation and amortization) 461 — — — 461General and administrative 306 (4) (14) (11) 277Depreciation and amortization 59 — — — 59 Total Operating Expense 1,367 (4) (14) (11) 1,338

Operating Income 897 4 14 11 926Interest expense, net 491 — — — 491 Income Before Provision for

Income Taxes 406 4 14 11 435Provision for income taxes 146 1 5 4 156 Net Income $ 260 $ 3 $ 9 $ 7 $ 279

Basic and Diluted Earnings perCommon Share $ 1.78 $ .02 $ .06 $ .05 $ 1.91

Operating Income $ 897 $ 4 $ 14 $ 11 $ 926Depreciation and Amortization 59 — — — 59 EBITDA (non -GAAP) (1) $ 956 $ 4 $ 14 $ 11 $ 985

Operating Income margin (2) 39.6% 40.9%Impact of depreciation and

amortization 2.6% 2.6% EBITDA margin (non -GAAP) (1) 42.2% 43.5%

Notes:

(1) EBITDA is a non-GAAP measure that represents earnings before interest, taxes, depreciation, and amortization.EBITDA margin is a non-GAAP measure calculated by dividing EBITDA by total operating revenue.

(2) Operating income margin is calculated by dividing operating income by total operating revenue.(3) Stock-based compensation reflects costs associated with a one-time incentive compensation award granted to

most of the Company's employees in January 2007.

(4) Separation costs reflects costs associated with becoming a stand-alone entity as a result of the spin-off fromVerizon.

(5) Restructuring costs are associated with strategic organizational realignment and market exit activities.

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Idearc -Current Report 411109 2:02 PM


Reconciliation from Reported (GAAP) to Adjusted Pro Forma (Non-GAAP)Three Months Ended September 30, 2008


Adjustments


9/30/08 9130108Adjusted

Reported Restructuring Pro FormaUnaudited (GAAP) hosts (3) (Non-GAAP)Operating RevenuePrint products $ 659 $ — $ 659Internet 75 — 75Other 1 — 1 Total Operating Revenue 735 — 735

Operating ExpenseSelling 176 — 176Cost of sales (exclusive of depreciation and amortization) 151 — 151General and administrative 110 (4) 106Depreciation and amortization 19 — 19 Total Operating Expense 456 (4) 452

Operating Income 279 4 283Interest expense, net 162 — 162 Income Before Provision for Income Taxes 117 4 121Provision for income taxes 44 1 45 Net Income $ 73 $ 3 $ 76

Basic and Diluted Earnings per Common Share $ .50 $ .02 $ .52

Operating Income $ 279 $ 4 $ 283Depreciation and Amortization 19 — 19 EBITDA (non-GAAP) (1) $ 298 $ 4 $ 302

Operating Income margin (2) 37.9% 38.5%Impact of depreciation and amortization 2.6% 2.6% EBITDA margin (non-GAAP) (1 ) 40.5% 41.1%

Notes:

(1) EBITDA is a non-GAAP measure that represents earnings before interest, taxes, depreciation, and amortization.EBITDA margin is a non-GAAP measure calculated by dividing EBITDA by total operating revenue.

(2) Operating income margin is calculated by dividing operating income by total operating revenue.(3) Restructuring costs are associated with strategic organizational realignment and market exit activities.

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Reconciliation from Reported (GAAP) to Adjusted Pro Forma (Non-GAAP)Nine Months Ended September 30, 2007


Adjustments 9 Mos. Ended 9 Mos. Ended

9/30107 9/30107Adjusted

Reported Stock-Based Separation Pro FormaUnaudited GAAP) Compensation (3) Costs (4) (Non-GAAP) Operating Revenue . -Print prods ,» $ 2,189 $ — $ — $ 2,189Internet 210 — — 210Other 3 — — 3 Total Operating Revenue 2,402 — — 2,402

Operating ExpenseSelling 544 — — 544Cost of sales (exclusive of depreciation and

amortization) 469 — — 469General and administrative 291 (21) (49) 221Depreciation and amortization 66 — — 66 Total Operating Expense 1,370 (21) (49) 1,300

Operating Income 1,032 21 49 1,102Interest expense, net 505 — — 505 Income Before Provision for Income Taxes 527 21 49 597Provision for income taxes 198 8 17 223 Net Income $ 329 $ 13 $ 32 $ 374

Basic and Diluted Earnings per CommonShare $ 2.25 $ .09 $ .22 $ 2.56

Operating Income $ 1,032 $ 21 $ 49 $ 1,102Depreciation and Amortization 66 — — 66 EBITDA (non-GAAP) (1 ) $ 1,098 $ 21 $ 49 $ 1,168

Operating Income margin (2) 43.0% 45.9%Impact of depreciation and amortization 2.7% 2.7% EBITDA margin (non-GAAP) (1) 45.7% 48.6%

Notes:(1) EBITDA is a non-GAAP measure that represents earnings before interest, taxes, depreciation, and amortization.

EBITDA margin is a non-GAAP measure calculated by dividing EBITDA by total operating revenue.(2) Operating income margin is calculated by dividing operating income by total operating revenue.(3) Stock-based compensation reflects costs associated with a one-time incentive compensation award granted to

most of the Company's employees in January 2007.(4) Separation costs reflects costs associated with becoming a stand-alone entity as a result of the spin-off from

Verizon.

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• Ideart - Current Report 411109 2:02 PM

IDEARC INC.Consolidated Statements of IncomeReconciliation from Reported (GAAP) to Adjusted Pro Forma (Non-GAAP)Three Months Ended September 30, 2007


Adjustmente


9/30/07 9130107Adjusted

Reported Stock Based Separation Pro FormaUnaudited (GAAP) Compensation (3) Costs (4) (Non-GAAP Operating RevenuePrint p'ructs $ 721 $ — $ — $ 721Internet 69 — — 69Other 1 — — 1 Total Operating Revenue 791 — — 791

Operating ExpenseSelling 171 — — 171Cost of sales (exclusive of depreciation and

amortization) 149 - — 149General and administrative 91 (4) (14) 73Depreciation and amortization 22 — — 22 Total Operating Expense 433 (4) (14) 415

Operating Income 358 4 14 376Interest expense, net 168 — — 168 Income Before Provision for Income Taxes 190 4 14 208Provision for income taxes 73 2 5 80 Net Income $ 117 $ 2 $ 9 $ 128

Basic and Diluted Earnings per CommonShare .80 .01 $ .06 $ .88

Operating Income $ 358 $ 4 $ 14 $ 376Depreciation and Amortization 22 — — 22 EBITDA (non-GAAP) (1) $ 380 $ 4 $ 14 $ 398

Operating Income margin (2) 45.2% 47.5%Impact of depreciation and amortization 2.8% 2.8% EBITDA margin (non-GAAP) ( 1 ) 48.0% 50.3%

Notes:

( t )

EBITDA is a non-GAAP measure that represents earnings before interest, taxes, depreciation, and amortization.EBITDA margin is a non-GAAP measure calculated by dividing EBITDA by total operating revenue.

(2) Operating income margin is calculated by dividing operating income by total operating revenue.(3) Stock-based compensation reflects costs associated with a one-time incentive compensation award granted to

most of the Company's employees in January 2007.(4) Separation costs reflects costs associated with becoming a stand-alone entity as a result of the spin-off from

Verizon.

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• Id*arc - Current Report 411109 2:02 PM

IDEARG INC.Consolidated Balance Sheets

Reported (GAAP)As of September 30, 2008 and December 31, 2007

(dollars in millions)

Unaudited 9/30/2008 12131 /2007

AssetsCurrent assets:

Cash and cash equivalents $ 304 $ 48Accounts receivable, net of allowances of $99 and $77 377 423Deferred directory costs 283 312Prepaid expenses and other 4 101'1_. -

~ Total current assets 968 793 Properly, plant and equipment 480 471

Less: accumulated depreciation 376 356

104 115 Goodwill 73 73Intangible assets, net 291 303Pension assets 183 171Non-current deferred tax assets 76 124Debt issuance costs 78 86Other non-current assets 5 2

Total Assets $ 1,778 $ 1,667

Liabilities and Stockholders' Equity (Deficit)Current liabilities:

Accounts payable and accrued liabilities $ 304 $ 272Deferred revenue 166 209Current maturities of long-term debt 104 48Current deferred taxes 30 28Other 26 31

Total current liabilities 630 588 Long-term debt 8,928 9,020Employee benefit obligations 312 327Unrecognized tax benefits 87 109Other liabilities 170 223

Stockholders' equity (deficit):Common stock ($.01 par value; 225 million shares authorized, 147,760,445 and

146,795,971 shares issued and outstanding in 2008 and 2007, respectively) 1 1Additional paid-in capital (deficit) (8,766) (8,776)Retained earnings 571 361Accumulated other comprehensive loss (155) (186)

Total stockholders' equity (deficit) (8,349) (8,600) Total Liabilities and Stockholders' Equity (Deficit) $ 1,778 $ 1,667

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IDEAf4C INC.Consolidated Statements of Cash Flows

Reported (GAAP)Nine Months Ended September 30, 2008 Compared to Nine Months Ended September 30, 2007


9 Months Ended 9 Months EndedUnaudited 913010& 9/30107

Cash Flows from Operating ActivitiesNet Income $ 260 $ 329Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 59 66Employee retirement benefits 1 (4)Deferred income taxes 17 (5)Provislon for uncollectible accounts 147 111Stock-based compensation- 3 34

Changes in current assets and liabilitiesAccounts receivable (101) (193)Deferred directory costs 29 (5)Other current assets 6 1Accounts payable and accrued liabilities (21) 18

Other, net (23) (18) Net cash provided by operating activities 377 334

Cash Flows from Investing ActivitiesCapital expenditures (including capitalized software) (37) (31)Acquisitions — (3)Proceeds from sale of assets 2 26Other, net — 4

Net cash used in investing activities (35) (4)

Cash Flows from Financing ActivitiesRepayment of long-term debt (36) (36)Dividends paid to Idearc stockholders (50) (150) Net cash used in financing activities (86) (186) Increase in cash and cash equivalents 256 144

Cash and cash equivalents, beginning of year 48 172

Cash and cash equivalents, end of period $ 304 $ 316

14

http:!lir.idearc.com/secFiling.cfm?filinglD=950134-08-18738



ldearc - Current Report 411109 2.02 PM

IDEARC INC.Mutlf-Product Advertising Sales


3 Mos. Ended 3 Mos. Ended 3 Mos. Ended 9 Mos. Ended 9 Mos. Ended 9 Mos. EndedUnaudited 9/30/08 9/30107 9130M 9/30M8 9130/07 9/30/06Net Print Products

Sales (1) $ 545 $ 626 $ 654 $ 1,802 $ 2,009 $ 2,073% Change year-

over-year (12.9%) (4.3%) (10.3%) (3.1%)

Net Internet Sales(2) 75 69 60 223 210 167

% Change year-over-year 8.7% 15.0% 6.2% 25.7% ^

Net Multi-ProductAdvertising .sales (3) 620 695 714 2,025 2,219 2,240

% Change year-over-year (10.8%) (2.7%) (8.7`Yo) (0.9%)

Notes:(1) Net print products sales represents the total sales value (less a provision for sales allowances) of directories published

that will be amortized over the life of the directories, which is typically 12 months. Directories from preceding periodshave been aligned to match the publication schedule of 2008 publications, allowing for a meaningful comparison ofcurrent publications to previous publications. Previously reported amounts have been changed to reflect subsequentadjustments.

(2) Net Internet sales represents total revenue for our fixed -fee and performance-based advertising products less aprovision for sales allowances. Fixed -fee advertising includes advertisement placement on our Superpages_comwebsite, and website development and hosting for our advertisers. Revenue from fixed -tee advertisers is recognizedmonthly over the life of the advertising service. Performance-based advertising revenue is earned when consumersconnect with our Superpages .eom advertisers by a 'click° on their Internet advertising or a phone call to their business.Revenue from performance -based advertising is recognized when there is evidence that qualifying transactions haveoccurred.

(3) Net multi-product advertising sales is an operating measure used by the Company to compare advertising sales forcurrent advertising publications and products to sales for previous advertising publications and products. It is importantto distinguish net mull -product advertising sales from total operating revenue, which on our financial statements isrecognized under the deferral and amortization method.

About ldearc Inc.

ldearc Inc. (NYSE: IAR) delivers products on multiple platforms to help consumers find the information they want,wherever they are. Idearc's multi -platform of advertising solutions includes Superpages . com ®, Superpages Mobile SM ,Superpages Mobile SM for BlackBerry ® , Switchboard .com, LocalSearch .com SM , Verizon ® Yellow Pages, Verizon 8White Pages, smaller -sized portable Verizon ® Yellow Pages Companion Directories, FairPoint ® Yellow Pages, FairPoint0 White Pages, FairPoint ® Yellow Pages Companion Directories, ref=resh recharge reNevV TM' magazine, Solutions AtHand TM' magazine, and Solutions on the Move" m and Solutions Direct T"' direct mail packages. For more information, visilwww.ideare.com .

IAR-G

15

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<MENU> to return to headlines. Eq»ityc N

Search ^ v „ ^°t; =. N %_options L Related Inio^ BN Oct 30 2008 '16:41:49dearc Stock Bands Fall as Publisher Faces Delisting (Updatel) page 1/4

(Updates share price in second paragra.pb,)

By Philipp SchlaegerOct, 30 (Bloomberg) -- Idearc Inc., the publisher of phone

directories, plunged it debt and equity rnarkets after drawing

down $247 willion in revolving credit and saying it ,imay bedelisted from the New York Stock Exchange.

Idearc fell 18 cents, or 36 percent, to 32 cents at 4:15p.m. in composite trading. The shares, tihich have declined 9Spercent this year ; face delisting because their average price has

faller, below $1 for at least 30 days, Idearc said today in astatement.

The company bas hired terriil Lynch & Co. and Moelis Co.

to advise or its caoital structure Idearc. which is carrying

almost 59 bill ion in long-term debt. dre.•r down all brat ^_3 ri-M i onfrom, its $250 7l illion revolving credit facilit y Oct. 24, the sameday the NYSE informed it of the passible deli-cting

..1f the average trading pr ice of the company's comTo I stock

does not sufficiently improve, the company's board of directorsand management intend to consider a reverse stack split and at-he--A:!r lio 61 2 9777 0600 Drazil 5511 3040 4500 Europe 44 20 7330 7500 Germany 49 69 9204 1210 Hor;y " Kong 052 2977 6000Japan al 3 3201 0900 Singapore 65 6212 1000 U. 9. 1 Z12 310 2000 Copyright 2009 Bloomberg Flnaace L.P.

SN 25090Z 6360-1134-0 01-Apr-2009 14:59:17

Bloomberg -TERMINAL

EXHIBIT D


4 Equity C N._nfo .ions Reiafed,l _ BN Oct 30 240816:41:49

Idearc Stock, / Bonds Fall as Publisher Faces Delisting (Updatel) Page 2/4 possible alternatives ; " Gallas-based Idearc said in thestatement.

the company's 52.8 billion of 8 percent notes due in 2016fell 4.5 cents to 14 cents on the dollar from 18.5 centsyesterday , according to Trace, the bond reporting system of theFinancial Industry Regulatory authority. The debt yields 6-2percent.

Long-term debt totaled $8.93 billion as of Sept. 30 andinterest expenses in the third quarter fell 3.5 percent to $162Brillion from the }fear-earlier period. Idearc can generate enoughcash to service its debt, Chief Executive 0=ficer Scott Kleinsaid in an interview this month.

Job Cuts

Idearc is more than halfway through cutting 20 percent ofits workforce-as part of a program announced in July to save $160million a year, Chief Financial Officer Samuel D. Jones said on aconference call today. The company 'had 7,200 employees at tiie end

of 2007.

The publisher closed 19 offices in the third quarter and-' Australia 61 2 9777 8600 Brazil 5511 3046 4500 Europe 44 20 7330 7500 Germany 49 69 9204 1210 Hong Zorig 052 2977 6000

Japan 01 3 3201 0900 Singapore 65 6212 1000 U.S. 1 212 310 2000 Copyright 2009 Bloomberg Finance L.P.SN 258902 6360-1134-0 01-Apr-2009 14t59z16

BloombergrERMINAL

EXHIBIT D

Case 4:09-cv-00387-W RW Document 1-2 Filed 05/22/2009 Page 33 of 40

<MENU> to return to headlines. EquityC N

s^fn ....a c s , F:hi'>

ions' ^- Related Info BN Oct 30 20Q816:41:49Idearc Stock Bonds Fall as Publisher Faces Delistin• (U•datel) Pa•e 3/4wants to get dour to 90 by year-end, compared with 122 in June,Jones said.

Idearc is seeking to increase Internet and direct-mail

services to overcome falling sales in its print business, Last-

October, it completed the S22S million purchase ofSwitchboard.com to complement its Superpages.cor directory site,

Third-quarter net income declined 38 percent to $73 million,

or 54 cents a share, from $117 Million, or 30 cents, a yearearlier, the company said today. Revenue slipped 7.= percent to$735 million as clients continued to cove their ads online. printsales fell 8.6 percent to $659 million. Income at the Internetunit climbed 8.7 percent to $7:5 zillion.

(Idearc held a conference call toda y to discuss results. For

the Webcast, visit http://it.idearc ,com/presentations.cfm.li

For Related News:

Publisbing: NI PUB BN <GO>

Technology and Iledia: TTOP <GO>Idearc earnings: IAR US <Equity> TCNI ERN BN <GO>

Australia 61 2 9777 8600 Bra M 5511 3040 4500 Europe 44 20 7330 7500 Germany 49 69 9204 1210 Hong Kong 8SZ 2977 6000Japan el 3 3201 6900 Singapore 65 6212 1000 U.S. 1 Z12 318 2000 Copyright 2009 Bloomberg Finance L.P.

SN 2S0902 6360-1134-0 01'11 pr-2009 14z5907

BloombergTERMINAL

EXHIBIT D


r

<MENU> to return to headlines. Equity C N

Search= r# k Options elated I 6N Oct 30 2008 16:41:49R Info _

Idearc Stock, Bonds Fall as Publisher Faces Delistin• (U•datel) pane 4I4--Editors: Andrew Dunn, Anthon y Palazzo

To contact the reporter on this story:Philipp Schlaeger in New York at +1-212-617-5874 [email protected]

To contact the editor responsible for this story:Jennifer Sondag at =1-212-617-2716 or [email protected]

Rustralla 6l Z 9777 8600 Brazil 5511 3048 4500 Euro pe 44 20 7330 7500 Germany 49 69 9204 1z-77 Hong Kong 852 2977 6000Japan 81 3 3201 8900 Singapore 65 6212 1000 U.S. 1 212 318 2000 Copyright 2009 Bloomberg Finance L.P.

SN 258902 6360-1134-0 01-Flpr -2009 14:59,17

BloombergTERMINAL

EXHIBIT D

Case 4:09-cv-00387-WRW Document 1-2 Filed 05/22/2009 Page 35 of 40~ ^ a

i "Idearc Initiates Voluntary Chapter 11 Proceeding To implement Debt Restructuring 4115109 1:56 FM

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R _ddit March 31,200910:38 AM Eastern Daylihn. T me

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Googildearc Initiates Voluntary Chapter 11 Proceeding To

Yahoo Implement Debt Restructuring'^Q.,r Permalink

Reaches Agreement in Principle with Agent Bank and Secured Lenders'Steering Committee to Provide for a Suitable Level of Bank Debt uponEmergence

Business Operations Continuing as Usual

DALLAS--(BUSINESS WERE)--ldearc Inc. (OTC: IDAR) announced that theCompany and its domestic subsidiaries today filed voluntary petitions forreorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S.Bankruptcy Court for the Northern District of Texas, Dallas Division. ldearc alsoannounced that it has reached an agreement in principle with the agent bankand a steering group of its secured lenders on certain critical elements of a planof reorganization. The Company expects to be able to file a plan ofreorganization in approximately 30 days, and if implemented as proposed, thisplan will enable ldearc to significantly reduce its outstanding debt to a moresuitable level upon emergence from the legal proceedings.

Pursuant to the proposed plan, ldearc does not need nor intend to obtain debtor-in-possession (DIP) financing during the reorganization, as the Companymaintains substantial cash balances and continues to generate positive cashflow, and has reached an agreement on use of cash collateral.

ldearc expects to operate business as usual throughout its restructuring process,with no interruption in the solutions and services it provides to hundreds ofthousands of clients around the nation.

"Today we take an ,important step forward as we continue to transform ldearc.Essentially we have a company with good potential being held back by aterminally ill balance sheet," said Scott W. Klein, chief executive officer of ldearcInc. 'We are not only open for business and serving our clients as usual, we arealso continuing our focus on transforming ldearc for the future based on a boldstrategy, including all of the new programs launched earlier this month.

"The reorganization process will enable ldearc to quickly finalize and implement adebt restructuring plan that will strengthen our financial condition and position usto compete more effectively in a challenging and rapidly evolving economicenvironment," Klein said.

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EXHIBIT E


4 Idearc Initiates Voluntary Chapter 11 Proceeding To Implement Debt Restructuring 4115109 1:56 PM

"One of our most important priorities Is to put in place an appropriate capitalstructure to support our strategic business plans and objectives. A new capitalstructure that can give all of our partners the confidence they need in us to bethere for them in the years ahead provides us with the greatest chance forsuccess."

Under the agreement in principle with the agent bank and steering committee,the Company's total debt will be reduced from approximately $9 billion today to apro forma level of $3 billion of secured bank debt, with a 12 percent interest rateand a six-year term. Mandatory amortization will be $60 million for each of thefirst two years following confirmation and $40 million per year thereafter. TheCompany will retain 32.5 percent of surplus cash flow, with the balance to bepaid as additional amortization on the bank debt. At emergence from Chapter 11,the Company will have a cash balance of $150 million. Other terms of the planare still to be negotiated, and it is anticipated that the remainder of theCompany's bank debt and bo as will be converted to equity.

Also, the agent bank and steering committee have agreed with the Company tocontinue to fund operations from all but $250 million of ldearc's more than $600million cash collateral balance. The remaining $250 million of cash collateral willbe paid to the secured lenders as adequate protection, subject to bankruptcycourt approval of the Company's motion to use the cash collateral.

Idearc has also filed a variety of other customary first day motions with thebankruptcy court to enable it to continue to conduct business as usual while itcompletes its reorganization. These include motions providing for employees tocontinue to receive compensation and benefits as usual and to maintaincustomer programs and guarantees. Idearc expects to file a motion with thebankruptcy court shortly seeking to assume executory contracts related to its 30-year publishing agreement and 30-year branding agreement with VerizonCommunications, Inc.

Idearc's legal advisor for the restructuring is Fulbright & Jaworski LLP and itsfinancial advisor is Moelis & Company.

More information about Idearc's restructuring is available atwww.idearo.com/restructuring . Idearc clients can call (800) 555-4833 for moreinformation. Information for vendors is available at (866) 967-0760 or by sendingan email to [email protected] .

Idearc to continue operational plans to transform the company

Idearc is in the process of implementing an innovative new strategy designed todrive consumer usage of its products and increase client loyalty. Amongnumerous other initiatives, earlier this month Idearc announced theSuperGuarantee sm program, a national consumer guarantee initiative designedto increase spending in local economies by lowering the risk associated withhiring contractors, plumbers, auto body repair shops and thousands of othereligible service provider category-based businesses.

"These are challenging times for small and medium businesses" Klein said."Since joining Idearc in June 2008, my team and I have strategically andtenaciously developed new programs and product enhancements, and createdmore efficient ways of doing business that will forever change how we serve ourconsumers and clients.

"We have a unique opportunity to not only help our clients survive the currenteconomic environment; we can actually help them grow. In effect we have

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Idearc Initiates Voluntary Chapter 11 Proceeding To Implement Debt Restructuring 4115/09 1:56 PM

declared our own war on the recession and are proving it with our actions — notwords."

Certain statements included in this press release and the hyperlinked materialsconstitute forward-looking statements within the meaning of the PrivateSecurities Litigation Reform Act of 1995. These forward-looking statementsreflect ldearc management's current views with respect to Idearc's financialperformance and future events with respect to its business and industry ingeneral. Statements regarding ldearo's exploration of altematives related to itscapital structure are forward-looking statements. Statements that include thewords "believe," "will,° `anticipate," `foresee,'° and similar expressions identifyforward-looking statements. ldearc cautions you not to place undue reliance onthese forward-looking statements. The following Important factors could affectfuture results and could cause those results to differ materially from thoseexpressed in the forward-looking statements. (i) risk the bankruptcy filing and therelated cases disrupt ctz t plans and operations, (ii) risks that ldearc'sbusiness could suffer from the loss of key customers, suppliers or personnelduring the pendency of the bankruptcy cases, (iii) risks that ldearc's plan ofreorganization fails to obtain the requisite approval from the claim holders entitledto vote on the plan; (iv) risks that ldearc will be able to maintain sufficientliquidity for the pendency of the bankruptcy cases, (v) risk that the bankruptcycourt rejects ldearc's plan of reorganization, (vi) limitations on ldearc's operatingand strategic flexibility during the pendency of the bankruptcy cases; (vii) risksrelated to a long and protracted restructuring, (viii) risks related to Idearc'sdeclining print revenue, including a reduction in customer spending resulting fromthe current economic downturn; (i'x) changes in ldearo's competitive position dueto competition from other yellow pages directories publishers and other traditionaland new media and its ability to anticipate or respond to changes in technologyand user preferences;(x) declining use of print yellow pages directories; (xi)changes in the availability and cost of paper and other raw materials used toprint directories and reliance on third-party printers and distributors; (xii)increased credit risk associated with reliance on small- and medium-sizedbusinesses, in particular in the current economic environment; (xxiii) changes inoperating performance, (xiv) ldearc's ability to attract and retain qualifiedexecutives; (xv) Idearc's ability to maintain good relations with its unionizedemployees; (xvi) changes in U.S. labor, business, political and/or economicconditions, (xvii} changes in governmental regulations and policies and actions ofregulatory bodies; and (xviii) risks associated with !dear's obligations underagreements entered into with Verizon in connection with the spin-off For adiscussion of these and other risks and uncertainties, see ldearc Inc.'s periodicfilings with the Securities and Exchange Commission, which you may view atwww.sec.gov, and in particular, ldearc Inc.'s Annual Report on Form 10-K.

About ldearc Inc.

ldearc Inc. (OTC:IDAR) delivers products on multiple platforms to help consumersfind the,. nfo ination thgy want, wherever they are. IdeaWs multi-platform ofadvertising solutions includes, but is not limited to, ldearc®, ldearc Media®, theldearc logo, the ldearc Media logo, Verizon® Yellow Pages, VerizonV WhitePages, Verizon® Yellow Pages Companion Directories, FairPoint® Yellow Pages,FairPointO Yellow Pages Companion Directories, Superpages®,Supemages.comO, Switchboard®, Switch board.com T11 , LocalSearch.comSMSuperpages Mobile sm , Superpages Direct Tm , Superpages Direct ExclusiveMailerT"', SuperGuarantee N9 , and SuverTradeExchange.corn . For moreinformation, visit www.ideare.com .

I DAR-G

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EXHIBIT E


Oearc Initiates Voluntary Chapter 11 Proceeding To Implement Debt Restructuring 4/15/09 1:56 PM

ContactsMedia Relations Contacts:Andrew Shane, 972-453-6473andrew.shanee.idearc.com orInvestor Relations Contact:Ryan Gaddy, 972-453-8724rvan.aaddyO_idearc.00m

Permalink: http:/hvww-businmwire.corrdnews/google/20090331006136ten

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EXHIBIT E


a4

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PLAINTIFF'S CERTIFICATION

Wade Jones ("Plaintiff') declares under penalty of perjury, as to claims

asserted under the federal securities laws, that:

1. Plaintiff has viewed the complaint and authorized the commencement

of an action on Plaintiffs behalf.

2. Plaintiff did not purchase the security that is the subject of this action

at the direction of plaintiffs counsel or in order to participate in this private action.

3. Plaintiff is willing to serve as a representative party on behalf of the

class, including providing testimony at deposition and trial, if necessary.

4. Plaintiffs transactions in Idearc's "8% Senior Notes Due 2016"

CUSIP/ISIN 451663AC2 during the Class Period on behalf of himself and/or his

spouse, specified in the Complaint are as follows:

Date Number of Bonds S : • . PricePurchased

<.^ •̂ y^ry ,- •s.o "^ ..}'Y.' È •̂.]y t̂1 <..Sy ,:•T i ;:S,,i:: i`•' 9 aî^10 :.i;=a.;:.j; ; t

1/23/09 4.400 {

1/28/09 4.551

1/28/09 4: Qp

1/29/09 4.000 i

2/2/09 36 4.200 i. s.y. ^p; ., t.'_iie : y. , a. _ •r •,'i! '. :, tt..e%

;.i:: 'i.4a'c.ft^• {i•: ^w t%'3^^(Y

-u, ,. .. ::yi44q :it, . l.^': % i^^ < Y . : ji! .^'J ..5.: .,:E t'•i' .... q> l..., t::l:i2/9/09 3.792 ?

^:i ::> • ._i:[';i? -t+i i'.t •''•: .<tii?` •. t:,' . t;t.["i•i^t•4^t:`°L â=`?iî'tt''i!'+'^,tY:::;?i "ir^^`^.ì,i•ìri, .

S. During the three years prior to the date of this Certificate, Plaintiff

has not sought to serve or served as a representative party for a class in an action

filed under the federal securities lass.


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expect such reaso-nable uos, i and cxpense :; 'iadudi.;g lubt vvage!i) direc%F relafingA

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