Why This Web Site?

We are alarmed at the direction our company is taking.

Idearc Media provides the yellow and white pages in the markets where Verizon is the wireline carrier, and it has a thirty-year agreement with Verizon to be its official directory publisher. With $3.2 billion in revenues and 7,200 employees, Idearc is also trying to break into so-called independent markets – where Verizon is not the incumbent phone company. Finally, Idearc is pursuing an Internet strategy whereby it sells advertising on its Superpages.com web site. Idearc was spun off from Verizon, Inc. in November 2006.

Communications Workers of America (CWA) has over 1,700 members who work at Idearc and a total of 8,000 who work in the yellow pages industry. In addition, at least 60,000 CWA members hold Idearc shares.

As both workers and investors, we fear for our company.

While Idearc constantly touts the importance of its sales force – serving as the interface between the company and its 850,000 advertisers nation-wide – its actions contradict the fine words. About 700 CWA and International Brotherhood of Electrical Workers (IBEW) members in New England and upstate New York have been working without a contract since June 2007. The company declared "impasse" in November and has imposed steep severe take-aways in all benefit programs – for instance, freezing our pension and restricting retiree health care – as well as job security and sales commission plans. This is no way to treat employees who are critical to the company’s future!

Management mistakes have affected share price. Since its shares were floated in November 2006, the Idearc share price has declined by 89% (as of 6/25/2008). Meanwhile, the Dow Jones Industrial Average has remained flat in the same period – including the major gains at the end of 2007 and the sell-off in early 2008 – with a small loss of 4.1% in the same period. The sell-off by Idearc investors has ravaged our members’ savings and pension plans.

Idearc stock has been downgraded by analysts and its debt has been downgraded by ratings agencies. When Verizon spun off Idearc, it saddled the new company with a tremendous debt load. Current management agreed to these debilitating terms: debt service and amortization would account for a whopping 59.5% of revenues for a projected 10 years!

But Idearc revenues are stagnating, as shown by 4^th quarter 2007 filings which actually showed a 1% decline, and the company has projected they will decline in future years. Operating income held steady, but debt service payments increased by a factor of 11!

Declining share prices and downgraded ratings on debt makes it all the more difficult for the company to provide for capital expenditures, buy assets to strengthen the company, refinance our debt on better terms, or adapt to changing market conditions.

This web site is dedicated to Idearc stakeholders who want a strong company.