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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, DC
    20549
      Form 10-K
   ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007
  Commission File Number: 1-32939
      IDEARC INC.
 (Exact Name of Registrant as
    Specified in Its Charter)
      Delaware

20-5095175(State of
    Incorporation)

(I.R.S. Employer
    Identification Number)2200 West Airfield Drive, P.O. Box 619810
    D/FW Airport, TX(Address of Principal
    Executive Offices)

75261(Zip Code)    Registrants telephone number, including area code:(972) 453-7000
      Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, par value $.01 per share

New York Stock Exchange    Securities registered pursuant to Section 12(g) of the
    Act:
    None
      þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
    Large accelerated filer
    þ

Accelerated filer
    o

Non-accelerated
    filer o

Smaller Reporting
    Company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




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##### 





TABLE OF
    CONTENTS
   
 PageNo.Forward-Looking Statements


iiPART IItem  1

Business


1Item  1A

Risk Factors


14Item  1B

Unresolved Staff Comments


25Item  2

Properties


25Item  3

Legal Proceedings


25Item  4

Submission of Matters to a Vote of Security
    Holders


25PART IIItem  5

Market for Registrants Common Equity,
    Related Stockholder Matters And Issuer Purchases of Equity
    Securities


26Item  6

Selected Financial Data


27Item  7

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


28Item  7A

Quantitative and Qualitative Disclosures About
    Market Risk


42Item  8

Financial Statements and Supplementary Data


43Item  9

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


76Item  9A

Controls and Procedures


76Item  9B

Other Information


78PART IIIItem  10

Directors, Executive Officers and Corporate
    Governance


78Item  11

Executive Compensation


78Item  12

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


78Item  13

Certain Relationships and Related Transactions,
    and Director Independence


78Item  14

Principal Accountant Fees and Services


78PART IVItem  15

Exhibits and Financial Statement Schedules


79First Amendment to the Credit Agreement, dated March 5, 2007Form of Performance Unit AgreementSubsidiariesConsent of Ernst & Young LLPCertification of Frank P. Gatto filed Pursuant to Section 302Certification of Samuel D. Jones filed Pursuant to Section 302Certification Pursuant to 18 U.S.C. Section 1350    tm tm ® ® ® ® ® tm sm sm sm ® tm tm tm tm tm and/or
 i




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FORWARD-LOOKING
    STATEMENTS    
    risks related to our substantial indebtedness;
    risks related to our declining revenue;
    limitations on our operating and strategic flexibility under the
    terms of our debt agreements;
    changes in our competitive position due to competition from
    other yellow pages directories publishers and other traditional
    and new media and our ability to anticipate or respond to
    changes in technology and user preferences;
    declining use of print yellow pages directories;
    access to capital markets and changes in credit ratings;
    changes in the availability and cost of paper and other raw
    materials used to print our directories and our reliance on
    third-party providers for printing and distribution services;
    increased credit risk associated with our reliance on small- and
    medium-sized businesses;
    changes in our operating performance;
    increased demands on our management team as a result of
    operating as an independent company;
    our ability to attract and retain qualified executives;
    our ability to maintain good relations with our unionized
    employees;
    changes in U.S. labor, business, political
    and/or
    economic conditions;
    changes in governmental regulations and policies and actions of
    regulatory bodies;
    risks inherent in our spin-off from our former parent
    corporation, Verizon Communications Inc., which we refer to as
    Verizon, including increased costs and reduced profitability
    associated with operating as an independent company; and
    risks associated with our obligations under agreements entered
    into with Verizon in connection with our spin-off.   ii




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PART I  Item 1.
    Business.  Overview
                Competitive
    Strengths
    
    Leading Market Position.  We are one of the
    largest yellow pages directories publishers in the United States
    as measured by revenues, and we believe that we are one of the
    nations leading online local search providers. We are the
    exclusive official print directory publisher of Verizon Yellow
    Pages in our incumbent 1




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markets and Verizon has granted us the right to use the Verizon
    brand on our print directories in both our incumbent and
    specified expansion markets. We believe our position as the
    official publisher of Verizon print directories in our incumbent
    markets drives consumer awareness and use of our directories. In
    addition, we believe that the Verizon brand and Verizons
    long-term presence as the incumbent local exchange carrier
    position us as a preferred directory for both local advertisers
    and consumers in our incumbent markets and provide us immediate
    credibility as we enter other expansion markets.  
    Strong Cash Flow.  Our business benefits from a
    large revenue base, low capital requirements and strong cash
    flow. The pre-sold nature of directory advertising provides
    revenue and cash flow visibility because advertisers generally
    pay on a monthly basis over the life of a print directory, and
    over the term of Internet advertising, both of which are
    typically one year. The capital expenditure requirements of our
    business are modest and amounted to $46 million,
    $64 million and $78 million in 2007, 2006 and 2005,
    respectively representing less than 2.5% of annual operating
    revenue. As a result, we generate strong cash flow to support
    our balanced capital allocation program to service our debt, pay
    dividends and invest in our business.
    Leading Online Local Search Provider.  We
    believe that we are one of the nations leading online
    local search providers with Superpages.com, Switchboard.com and
    LocalSearch.com. In 2007, Superpages.com had more than
    4.8 billion network searches, which was a 71% increase from
    the prior year. As of December 31, 2007, Superpages.com had
    more than 17 million business listings and tens of millions
    of residential listings in the United States. Superpages.com has
    evolved into a leading online product for traditional and
    non-traditional advertisers because of our focus on delivering
    relevant content, supplying advanced technology and attracting
    increased traffic. Under agreements with several major search
    engines, we place local advertising on the search engines
    websites, providing us with higher traffic volume while
    retaining the customer relationship. We believe that even as
    those search engines develop their own local search
    capabilities, they will continue to find these agreements
    beneficial because our local sales force provides them access to
    local advertising content without having to invest in their own
    local sales force.
    Superior Value Proposition for our
    Advertisers.  We believe directory advertising
    provides our advertisers with a greater value proposition than
    other media because it targets consumers at the key time when
    they are actively seeking information to make a purchase. We
    also believe that our directory advertising generally provides a
    competitive cost per reference. Cost per reference is a measure
    of an advertisers cost per contact generated from
    advertising through our products and services. Further, we
    believe that our directory advertising provides a higher return
    on investment than many other local advertising alternatives,
    including newspapers, television and radio. We offer our
    customers an array of complementary products in which they can
    advertise, including Verizon Yellow Pages, Verizon White Pages,
    Verizon Yellow Pages Companion Directories, Superpages.com,
    Superpages Mobile, Superpages Mobile for BlackBerry,
    Switchboard.com, reFresh reCharge reNew, Solutions At Hand,
    Solutions at Home magazines, Solutions on the Move and Solutions
    Direct direct mail packages, all of which extend our
    customers reach into other media categories.
    Large Locally Based Sales Force.  The majority
    of our sales force is locally based, operating from 58 regional
    offices and consisting of premise sales representatives who
    generally focus on high-revenue customers. We believe the size,
    local presence and local market knowledge of our sales force is
    a competitive advantage that enables us to develop and maintain
    long-standing relationships with our advertisers. Our local
    print customer renewal rates (which exclude the loss of
    customers that did not renew because they are no longer in
    business) have remained above 84% over the past three years and
    exceed 90% for our highest value customers. In addition, we have
    well-established training programs, practices and procedures to
    manage the productivity and effectiveness of our sales force.
    See  Sales and Marketing.
    Product Innovation and Adaptation.  We believe
    we are adept at both developing innovative products and adapting
    quickly to consumer preferences, enabling us to maintain our
    strong position in both the Internet and print directories
    markets. Since the launch of Superpages.com in 1996, we have
    continued to develop Superpages.com to adapt to market demands
    and advances in technology and to effectively compete or
    cooperate with other online information providers. In 2005, we
    introduced Verizon Yellow Pages 2




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
    Diverse and Attractive Markets.  We currently
    publish our directories in more than 310 incumbent markets and
    about 50 expansion markets. We operate in 34 states across
    the United States and in the District of Columbia. We believe
    our markets are attractive for local and national advertisers
    due to the high concentration of well-educated and affluent
    residents and higher consumer spending than the national
    average. We believe we have a degree of protection from regional
    market fluctuations because we have a presence in more than 360
    markets across the U.S., many of which feature highly attractive
    demographics. In 2007, our top ten directories, as measured by
    revenues, accounted for only 11% of our revenues and no single
    directory accounted for more than 2% of our revenues.
    Broad Customer Base.  Our revenues come from
    more than 830,000 customers as of December 31, 2007. We do
    not depend to any significant extent on the sale of advertising
    to a particular industry or to a particular advertiser. The
    renewal rates of our local print customers (which exclude the
    loss of customers that did not renew because they are no longer
    in business) have been over 84% for the past three years and
    over 90% for our highest value customers. In 2007, no single
    customer accounted for more than 0.06% of our revenues, with our
    top ten customers representing less than 0.5% of our revenues.  Business
    Strategy
    
    Strengthen Our Multi-Product Portfolio.  Our
    ability to develop and adapt products to help our advertisers
    reach more consumers in more ways is key to increasing product
    usage and generating revenue. We are continuing to enhance our
    Internet products by focusing on improvements in content,
    technology and traffic. We are continuing to cater to the
    advertising needs of local and national businesses by offering
    print advertising options that fit their needs and budgets. To
    further increase advertisers return on investment, we are
    continuing to implement and refine programs that align each
    advertisers costs with the value of the advertising
    program purchased. In addition, we will introduce and market new
    products that provide our advertisers with additional
    opportunities to reach consumers and further enhance their cost
    per reference.
    Leverage the Verizon brand.  We believe the
    Verizon brand positions us as a preferred directory for both
    local advertisers and consumers in our incumbent markets and
    provides us immediate credibility as we move into expansion
    markets.
    Continue to leverage our large locally based sales
    force.  We are developing multi-product training
    programs for our sales representatives to enhance productivity,
    reinforce our multi-product portfolio and more effectively
    manage our customer relationships. We offer an incentive-based
    compensation plan that we believe increases productivity and
    lowers employee turnover.
    Continue to implement market-specific
    programs.  We intend to continue to implement
    market-specific strategies. For example, in select markets, we
    intend to introduce Internet products first rather than print
    directory options. This approach allows us to penetrate the
    market more quickly and capitalize on the growth of this
    product. As market opportunity dictates, we may follow with a
    print advertising offer. In addition, where appropriate, we
    intend to continue adjusting the geographic reach of specific
    products to reflect changing demographics and shopping patterns,
    adjusting the timing and method of directory distribution and
    expanding our product line to attract new spending from our
    customer base. 3




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
    Targeted acquisitions.  We intend to continue
    growing our business by making acquisitions or entering into
    partnerships and joint ventures. In 2007, we acquired
    Switchboard.com. We believe this acquisition significantly
    increases the scale of Superpages.com and benefits our
    advertisers.  History
      Markets
    Incumbent
    Markets
       4




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Expansion
    Markets
    30-year
  Products
  Overview
    Print
    Directories
      Yellow Pages Directories.
  
    Listing Options. An advertiser may:  
    pay for listings in additional headings;
    pay to have a listing highlighted or printed in bold or
    superbold text, increasing visibility; and/or
    purchase extra lines of text to include information, such as
    hours of operation, a website address or a more detailed
    business description.  
    In-Column Advertising Options.  For greater
    prominence on a page, an advertiser may expand its basic
    alphabetical listing by purchasing advertising space in the
    column in which the listing appears. In-column advertisement
    options include bolding, special fonts, color and special
    features such as logos. The cost of in-column advertising
    depends on the size and type of the advertisement purchased, and
    on the reach and scope of the directory. 5




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
    Display Advertising Options.  A display
    advertisement allows businesses to include a wide range of
    information, illustrations, photographs and logos. Display
    advertisements are usually placed at the front of a heading,
    ordered first by size and then by advertiser seniority. This
    ordering process provides a strong incentive to advertisers to
    increase the size of their advertisements and to renew their
    advertising purchases each year to ensure that their
    advertisements receive priority placement. Display
    advertisements range in size from a quarter column to as large
    as a two page spread. The cost of display advertisements depends
    on the size, type and value of advertisement purchased, and on
    the reach and scope of the directory.
    Specialty Products.  In addition to the
    advertisement options described above, we offer products that
    allow businesses to increase visibility or better target
    specific types of consumers. Our specialty products include:  
    savings cards, color coupons and special offers that enable
    advertisers to deliver promotional offers to consumers;
    advertising space in a variety of specialty guides included in
    our directories that list services by specialization or service
    area, including Golf Guides, Health and Wellness Guides, Dining
    Guides, Women- and Minority-Owned Business Guides and Sports
    Team-Related Guides;
    gatefold sections, cover tip-ons, cover advertising and
    specialty tabs that provide businesses with extra space to
    include more information in their advertisements; and
    a call measurement service, which uses metered telephone numbers
    to provide advertisers with information about the consumer
    responses to an advertisement.  White Pages Directories.
    state-by-state
  Internet
    Products
  Overview.
   6




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e-mail
  Features.
  
    fully searchable content that allows users to search an
    advertisement and provides refined geographic search
    capabilities;
    approximately 17 million business listings, tens of
    millions of residential listings and approximately
    10 million Internet-specific enhanced content;
    fixed-fee advertising that allows advertisers to purchase
    enhancements to their listings or expand their reach to
    additional geographic areas;
    performance-based advertising products, or PBAPs, including
    Superpages Video, that allow advertisers to only pay for calls
    to their businesses or clicks on their Internet advertising
    (plus monthly service fees for some accounts based on
    advertising spend);
    full-service PBAP management to serve the needs of small
    businesses that cannot or do not wish to manage their program
    themselves;
    self-service management options for advertisers with the
    necessary technology resources;
    website hosting services, including
    e-commerce
    options;
    a user generated content feature that enables consumers to rate,
    comment and add photos and blogs to business listings;
    links to business websites; 7




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
    restaurant and hotel reservation options;
    promotional coupons;
    shopping search services that allow consumers to research and
    compare products and services from multiple websites;
    movie listings and show times;
    street and aerial maps;
    driving directions;
    availability on wireless phones through Superpages Mobile for
    BlackBerry;
    availability of Microsoft Windows Live Messenger instant
    messaging network;
    listings of local Wi-Fi hotspots;
    local weather and traffic conditions; and
    photos and blogs of local businesses.  Agreements with search engines and other Internet
    companies.
  Sales and
    Marketing
      
    managing smaller accounts through a specialized low-cost
    mail-out and telemarketing center;
    using new technology to improve the efficiency of our
    telemarketing center;
    equipping sales representatives with selling tools that
    accelerate the sales process;
    managing our data through a single integrated information
    system; and
    enhancing our initial sales training, field coaching and
    mentoring programs. 8




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Local
    Sales Force
        
    Premise Sales Representatives.  Our premise
    sales representatives generally focus on higher revenue
    customers with whom they typically interact on a
    face-to-face
    basis at the customers place of business. Within this
    group, we have specialized sales representatives for major
    accounts.
    Telephone Sales Representatives.  Our telephone
    sales representatives generally focus on medium-sized customers
    with whom they typically interact over the telephone.
    Centralized Sales Representatives.  Our
    centralized sales representatives include both centralized
    account representatives, who generally focus on the smallest
    accounts, and prospector sales representatives, who generally
    focus on potential new customers. These representatives manage
    both mail-out and telephone contact with lower revenue producing
    customers.
    Internet Sales Representatives.  Our Internet
    sales representatives sell advertising on Superpages.com, search
    engine optimization services, website development and related
    products to businesses located outside our traditional sales
    boundaries and to businesses that would not typically advertise
    in the print yellow pages. Internet sales are also made by our
    premise, telephone and centralized sales representatives.        National
    Sales Force
   9




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Customers
        Publishing,
    Production and Distribution
  12-month
  
    Selling.  The sales cycle of a directory varies
    based on the size of the revenue base and can range from a few
    weeks to six months. In the months prior to publication, our
    sales force contacts both existing customers to encourage them
    to renew and increase the size and prominence of their
    advertisements and, to purchase other products in our portfolio,
    and potential customers in an effort to expand our customer
    base. Potential customers include businesses that have operated
    in the area for some time but did not purchase advertising in
    the most recent edition of our directory, as well as new
    businesses and businesses that have recently moved into an area.
    Creation of advertisements.  Upon entering into
    an agreement with a customer, we use our proprietary software to
    create an advertisement in collaboration with the advertiser.
    Pre-press activities.  Sales typically are
    completed 60 to 90 days prior to publication, after which
    time we do not accept additional advertisements. Once a
    directory has closed, we begin pre-press activities. Pre-press
    activities include finalizing artwork, proofing and paginating
    the directories. When the composition of the directory is
    finalized, we transmit the directory files to a third-party
    printer. 10




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
    Printing.  We outsource the printing of our
    directories, using paper we purchase. Substantially all of the
    paper that we use is supplied by several different suppliers.
    Under our current agreements, suppliers are required to provide
    up to 100% of the annual forecasted paper requirements in their
    contracts. Prices under these agreements are negotiated each
    year based on prevailing market rates, market demand, production
    capacity and the total tonnage for each supplier.
    Transportation.  We transport directories from
    printing locations to our distributors by truck and rail on a
    publication-by-publication
    basis using numerous different carriers.
    Distribution.  Our goal is to deliver our
    directories to residences and businesses in the geographical
    areas for which we produce directories. We use several vendors
    to distribute our directories. Depending on the circulation and
    size of the directory, distribution typically ranges from three
    to eight weeks.  Billing
    and Credit Control
  12-month 12-month
    Competition
         11




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Patents,
    Trademarks and Licenses
    Employees
    Website
    Information
  www.idearc.com. Form 10-K, Form 10-Q, Form 8-K www.sec.gov
 12




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Executive
    Officers of the Registrant
    Name

Age


PositionFrank P. Gatto


53


Acting Chief Executive Officer; Executive Vice
    President  OperationsSamuel D. Jones


45


Acting Chief Financial Officer and Treasurer; Senior Vice
    President  Investor RelationsScott B. Laver


52


Executive Vice President  SalesWilliam G. Mundy


58


Executive Vice President, General Counsel and SecretaryMichael D. Pawlowski


47


Executive Vice President  SalesGeorgia R. Scaife


58


Executive Vice President  Human Resources and
    Employee Administration   Frank P. Gatto
  Samuel D. Jones
  Scott B. Laver
  William G. Mundy
  Michael D. Pawlowski
  Georgia R. Scaife
 13




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Item 1A.
    Risk
    Factors.    Risks
    Related to Our Business
  Our
    substantial indebtedness and related debt service obligations
    could have a negative impact on our business.
    
    limit the availability of our cash flow to fund working capital,
    capital expenditures, acquisitions, investments and other
    general corporate purposes;
    limit our flexibility in planning for, or reacting to, changes
    in our business and the industry in which we operate;
    limit our ability to obtain additional financing for working
    capital, capital expenditures, strategic acquisitions,
    investments and other general corporate purposes;
    limit our ability to refinance our indebtedness on terms
    acceptable to us or at all;
    limit our ability to pay cash dividends; and
    make us more vulnerable to economic downturns, increased
    competition and adverse industry conditions, which places us at
    a disadvantage compared to our competitors that have less
    indebtedness.    Our
    revenue has declined and may continue to decline.
    Restrictions
    in our debt agreements limit our operating and strategic
    flexibility.
   14




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
    incur additional debt and issue preferred stock;
    refinance our existing indebtedness;
    create liens;
    redeem
    and/or
    prepay certain debt;
    pay cash dividends, make other distributions or repurchase stock;
    make investments;
    engage in specified asset sales;
    enter into transactions with affiliates;
    enter new lines of business;
    engage in mergers and acquisitions; and
    make capital expenditures.    We
    face widespread competition from other print directory
    publishers and other traditional and new media. This competition
    may reduce our market share or materially adversely affect our
    financial performance.
         15




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Declining
    use of print yellow pages directories is adversely affecting our
    business.
    
    impair our ability to maintain or increase advertising
    prices; and
    cause businesses to reduce or discontinue purchasing advertising
    in our yellow pages directories.    Increased
    competition in local telephone markets could reduce the benefits
    of using the Verizon brand name.
    A
    prolonged economic downturn would adversely affect our
    business.
    If we
    fail to anticipate or respond effectively to changes in
    technology and consumer preferences, our competitive position
    could be harmed.
   16




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Our
    reliance on small- and medium-sized businesses exposes us to
    increased credit risks.
  12-month
  Our
    dependence on third-party providers for printing and
    distribution services could materially affect us.
          Increases
    in the price or decreases in the availability of paper could
    materially affect our costs of operations.
      A
    portion of our indebtedness bears interest at variable rates. If
    interest rates increase, our interest expense will also
    increase.
   17




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Our
    sales of advertising to national accounts are dependent upon
    third parties that we do not control.
    We
    have agreements with several major Internet search engines and
    portals. The termination of one or more of these agreements
    could adversely affect our business.
    Increased
    regulation regarding information technology could lead to
    increased costs.
   18




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A
    significant portion of our employees are union-represented. Our
    business could be adversely affected by the progress and outcome
    of our labor negotiations and by our ability to maintain good
    relations with our unionized employees.
        Loss
    of key personnel or our inability to attract and retain highly
    qualified individuals in the businesses in which we operate
    would materially adversely affect our operations.
    Turnover
    among sales representatives could materially adversely affect
    our business.
    The
    loss of important intellectual property rights could adversely
    affect our results of operations and future
    prospects.
   19




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Our
    reliance on technology could have a material adverse effect on
    our business.
      Legislative
    initiatives directed at limiting or restricting the distribution
    of our print directory products or shifting the costs and
    responsibilities of waste management related to our print
    products could adversely affect our business.
    Legal
    actions could have a material adverse effect on our operating
    results or financial condition.
      Idearc
    Inc. is a holding company and relies on dividends and other
    transfers of funds from its subsidiaries to meet its debt
    service and other obligations.
   20




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Risks
    Related to Our Spin-Off
  Our
    historical financial information may not be indicative of our
    future results.
    
    Our financial information for periods prior to our spin-off
    reflects allocations for services historically provided by
    Verizon. These allocations are and will be different from the
    costs we have and will incur for these services as a stand-alone
    company. In some instances, our costs for these services may be
    higher than the costs Verizon allocated to us historically.
    Our financial information for periods prior to our spin-off does
    not reflect the $9,115 million in debt and related interest
    expense that we incurred in connection with our separation from
    Verizon.
    Our financial information for periods prior to our spin-off does
    not reflect the additional costs associated with being an
    independent, public company, including changes in our cost
    structure, personnel needs, financing and operations of our
    business and from reduced economies of scale.  We
    have a limited history operating as an independent company and
    we may incur increased costs as a result of the spin-off that
    may cause our profitability to decline.
      Limitations
    on our use of the Verizon brand could adversely affect our
    business and profitability.
  30-year
 21




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We
    could be required to indemnify Verizon if the spin-off fails to
    qualify for tax-free treatment as a result of our actions after
    the spin-off.
    The
    terms of our tax sharing agreement with Verizon may reduce our
    strategic and operating flexibility.
    The
    loss of any of our key agreements with Verizon could have a
    material adverse effect on our business.
      Verizons
    regulatory obligation to publish white pages directories in its
    incumbent markets may change over time, which may increase our
    future operating costs.
   22




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Our
    inability to enforce the non-competition agreement with Verizon
    may impair the value of our business.
    
    to the extent it is necessary to protect a legitimate business
    interest of the party seeking enforcement;
    if it does not unreasonably restrain the party against whom
    enforcement is sought; and
    if it is not contrary to the public interest.    Risks
    Related to Our Common Stock
  The
    trading price of our common stock may decline.
    
    our quarterly or annual earnings or those of other companies in
    our industry;
    changes in earnings estimates or recommendations by research
    analysts;
    investor perceptions;
    new laws or regulations or new interpretations of laws or
    regulations applicable to our business;
    changes in accounting standards, policies, guidance,
    interpretations or principles; and
    general economic, industry and market conditions. 23




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Raising
    additional debt or equity capital may adversely affect holders
    of our common stock.
    Our
    debt agreements limit our ability to pay dividends on our common
    stock.
    There
    is no assurance that we will pay dividends.
    Anti-takeover
    provisions in our certificate of incorporation and bylaws, the
    terms of our spin-off from Verizon and certain provisions of
    Delaware law could delay or prevent a change of control that you
    may favor.
    
    limit the right of stockholders to call special meetings of
    stockholders;
    regulate how stockholders may present proposals or nominate
    directors for election at annual meetings of stockholders;
    require unanimous written consent of stockholders to take any
    action without a meeting; and
    authorize our board of directors to issue preferred stock in one
    or more series, without stockholder approval.       24




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##### Table of Contents



Item 1B.
    Unresolved
    Staff Comments.    Item 2.
    Properties.      Location

Square FeetOwnedMartinsburg, WV


191,068Los Alamitos, CA


149,326St. Petersburg, FL


100,000LeasedD/FW Airport, TX


418,824Irving, TX (Executive Drive)


152,121Middleton, MA


128,746Fullerton, CA


112,944   Item 3.
    Legal
    Proceedings.    and/or
  Item 4.
    Submission
    of Matters to a Vote of Security Holders.   25




---



##### Table of Contents



PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities.  Market
    Information and Holders
      Per ShareHigh


Low


Cash Dividend2007Fourth Quarter

$
32.52


$
16.27


$
0.3425Third Quarter

$
38.00


$
29.50


$
0.3425Second Quarter

$
38.00


$
33.61


$
0.3425First Quarter

$
36.18


$
28.00


$
0.34252006Fourth Quarter (Beginning November 20, 2006)

$
29.70


$
26.49


$
   Dividends
        Share
    Repurchases
    Total Number





Total Number of


Maximum Numberof Shares





Shares Purchased as


of Shares That MayPurchased





Part of Publicly


Yet Be PurchasedDuring


Average Price


Announced Plans or


Under the Plans orPeriod

Period


Paid Per Share


Programs


ProgramsOctober 1 - October 31





$








November 1 - November 30


804



18.92







December 1 - December 31


4,401



17.56







Total


5,205



17.77







  26




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##### Table of Contents



Item 6.
    Selected
    Financial Data.      For the Years Ended December 31,2007


2006


2005


2004


2003(In millions, except per share amounts)Operating revenue

$
3,189


$
3,221


$
3,374


$
3,513


$
3,675Operating income(1)


1,343



1,347



1,637



1,600



1,454Income from operations before cumulative effect of accounting
    change(1)(2)


429



787



1,023



973



880Basic and diluted earnings per common share(3)


2.94



5.40



7.01



6.67



6.03Net income (loss)(1)(2)


429



787



1,023



973



(582
)Basic and diluted earnings (loss) per common share(3)


2.94



5.40



7.01



6.67



(3.99
)Cash dividends declared per common share


1.37















   As of December 31,2007


2006


2005


2004


2003(In millions)Total assets(1)

$
1,667


$
1,415


$
1,501


$
1,481


$
1,437Current maturities of long-term debt(4)


48



48











Long-term debt(4)


9,020



9,067











Stockholders equity (deficit)(4)


(8,600
)


(8,754
)


402



396



304     (1)
    
    During 2007, we changed our accounting method of recognizing
    sales commissions. Sales commissions were previously expensed as
    incurred. Sales commissions are now deferred as part of deferred
    directory costs and the cost is recognized over the life of the
    directory or advertising service, consistent with our policy for
    revenue recognition for such products and services. The change
    did not have an impact on cash flows. All periods presented have
    been adjusted to reflect the effects of the change. See Notes to
    Consolidated Financial Statements in this report for more
    information about the accounting change.(2)
    
    Effective January 1, 2003, we changed our method for
    recognizing revenues and expenses from the publication-date
    method to the amortization method. The publication-date method,
    which we used prior to January 1, 2003, recognizes revenues
    and direct expenses when the directories are published. Under
    the amortization method, which has increasingly become the
    industry standard, revenues and direct expenses (paper, printing
    and initial distribution costs) are recognized over the life of
    the directory, which is usually 12 months. The accounting
    change affected the timing of the recognition of revenues and
    expenses but did not result in any impact on cash flows. The
    cumulative effect of the accounting change resulted in a
    one-time charge of $2,381 million ($1,463 million
    after-tax).(3)
    
    The number of shares issued in connection with the spin-off on
    November 17, 2006, was approximately 146 million. For
    basic and diluted earnings per share calculations, it was
    assumed that approximately 146 million shares were
    outstanding for all periods prior to 2007. No additional shares
    were issued through December 31, 2006. Restricted stock
    awards granted in 2007 had no material impact on the calculation
    of diluted earnings per share.(4)
    
    In connection with our spin-off on November 17, 2006, we
    incurred $9,115 million in long-term debt. See Notes to
    Consolidated Financial Statements and Item 7.
    Managements Discussion and Analysis of Financial Condition
    and Results of Operations in this report for a description
    of the spin-off transactions, including debt borrowings. 27




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##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.      Overview
    Spin-Off
    from Verizon
      Pre-Spin-Off
    Activities
    Spin-Off
    Transaction
   28




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##### Table of Contents



Income
    Statement Impact
      Basis
    of Presentation
         29




---



##### Table of Contents



Operating
    Revenue
        Print Products.
  Internet.
  Other Revenue.
  Operating
    Expense
    Selling.
 30




---



##### Table of Contents



Accounting Changes and Error
    Corrections
  Cost of Sales.
  General and Administrative.
  Depreciation and Amortization.
  Interest
    Expense (Income), Net
    Provision
    for Income Taxes
   31




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##### Table of Contents



Results
    of Operations
  Year
    Ended December 31, 2007 Compared to Year Ended
    December 31, 2006
    2007


2006


Change


%(In millions, except%)Print products

$
2,900


$
2,978


$
(78
)


(2.6
)%Internet


285



230



55



23.9Other


4



13



(9
)


(69.2
)Total operating revenue


3,189



3,221



(32
)


(1.0
)Selling


733



708



25



3.5Cost of sales (exclusive of depreciation and amortization)


617



629



(12
)


(1.9
)General and administrative


408



448



(40
)


(8.9
)Depreciation and amortization


88



89



(1
)


(1.1
)Total operating expense


1,846



1,874



(28
)


(1.5
)Operating income


1,343



1,347



(4
)


(0.3
)Interest expense (income), net


676



60



616



nmIncome before provision for income taxes


667



1,287



(620
)


(48.2
)Provision for income taxes


238



500



(262
)


(52.4
)Net income

$
429


$
787


$
(358
)


(45.5
)%   Operating
    Revenue
    Print Products.
  Internet.
  Other Revenue.
 32




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##### Table of Contents



Operating
    Expense
    Selling.
  Cost of Sales.
  General and Administrative.
  Interest
    Expense (Income), Net
    Provision
    for Income Taxes
    Year
    Ended December 31, 2006 Compared to Year Ended
    December 31, 2005
    2006


2005


Change


%(In millions, except%)Print products

$
2,978


$
3,147


$
(169
)


(5.4
)%Internet


230



197



33



16.8Other


13



30



(17
)


(56.7
)Total operating revenue


3,221



3,374



(153
)


(4.5
)Selling


708



650



58



8.9Cost of sales (exclusive of depreciation and amortization)


629



622



7



1.1General and administrative


448



374



74



19.8Depreciation and amortization


89



91



(2
)


(2.2
)Total operating expense


1,874



1,737



137



7.9Operating income


1,347



1,637



(290
)


(17.7
)Interest expense (income), net


60



(16
)


76



nmIncome before provision for income taxes


1,287



1,653



(366
)


(22.1
)Provision for income taxes


500



630



(130
)


(20.6
)Net income

$
787


$
1,023


$
(236
)


(23.1
)%  33




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##### Table of Contents



Operating
    Revenue
    Print Products.
  Internet.
  Other Revenue.
  Operating
    Expense
    Selling.
  Cost of Sales.
  General and Administrative.
  Interest
    Expense (Income), Net
    Provision
    for Income Taxes
   34




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##### Table of Contents



Liquidity
    and Capital Resources
  Historical
      Year
    Ended December 31, 2007 Compared to Year Ended
    December 31, 2006
    2007


2006


Change(In millions)Cash Flow Provided By (Used In):Operating activities

$
369


$
993


$
(624
)Investing activities


(246
)


(41
)


(205
)Financing activities


(247
)


(780
)


533Increase (Decrease) In Cash and Cash Equivalents

$
(124
)

$
172


$
(296
)            35




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##### Table of Contents



Year
    Ended December 31, 2006 Compared to Year Ended
    December 31, 2005
    2006


2005


Change(In millions)Cash Flows Provided By (Used In):Operating activities

$
993


$
1,239


$
(246
)Investing activities


(41
)


(76
)


35Financing activities


(780
)


(1,163
)


383Increase In Cash and Cash Equivalents

$
172


$



$
172         Senior
    Secured Credit Facilities
       36




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##### Table of Contents



Senior
    Unsecured Notes
      Debt
    Covenants and Maturities
     37




---



##### Table of Contents



Contractual
    Obligations
    Payments Due by PeriodWithin


1-3


3-5


More thanTotal


1 Year


Years


Years


5 Years(In millions)Long-term debt obligations

$
9,068


$
48


$
322


$
626


$
8,072Interest payments on long-term debt obligations(1)


4,836



662



1,308



1,247



1,619Operating lease obligations


100



31



43



20



6Other post-employment benefit obligations


303



23



49



50



181Total

$
14,307


$
764


$
1,722


$
1,943


$
9,878     (1)
    
    Some of our interest obligations are variable based on London
    Interbank Offer Rate (LIBOR). At December 31, 2007, we had
    interest rate hedges in place which resulted in 92% of our
    long-term obligations effectively being fixed rate. See
    Note 8 to our consolidated financial statements included in
    this report for a more detailed description of our fixed debt to
    floating rate debt obligations.  Accounting for Uncertainty in Income Taxes, Accounting
    for Income Taxes
  Critical
    Accounting Policies
    Revenue
    Recognition
    Expense
    Recognition
    Accounting Changes and
 38




---



##### Table of Contents



Error Corrections
  Accounts
    Receivable
    Income
    Taxes
  Adoption
    of FIN 48
  Accounting for
    Uncertainty in Income Taxes, Accounting for Income
    Taxes
        Income
    Taxes
    Accounting for Income Taxes
   39




---



##### Table of Contents



Pension
    and Other Post-Employment Benefits
            Pension


Health Care and Life+1.0%


-1.0%


+1.0%


-1.0%Discount rate

$
(2
)

$
1


$
(1
)

$
2Expected return on assets


(7
)


7







Health care trend rate










2



(2
)   Goodwill
    and Other Intangible Assets
  Goodwill
  Goodwill and
    Other Intangible Assets
 40




---



##### Table of Contents



Intangible
    Assets with Indefinite Lives
    Other
    Intangible Assets
  No. 98-1, Accounting for the Costs of Computer Software Developed
    or Obtained for Internal Use.
  Accounting for the Impairment or Disposal of Long-Lived
    Assets
    Off
    Balance Sheet Arrangements
    Recent
    Accounting Pronouncements
  Fair
    Value Measurements
  Fair Value
    Measurements
  Business
    Combinations
  Business Combinations
 41




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk.           42




---



##### 



Item 8.
    Financial
    Statements and Supplementary Data.   
 PageAudited Consolidated Financial Statements for Idearc Inc.Report of Independent Registered Public
    Accounting Firm


44Consolidated Statements of Income for the years
    ended December 31, 2007, 2006 and 2005


45Consolidated Balance Sheets at December 31,
    2007 and 2006


46Consolidated Statements of Changes in
    Stockholders Equity (Deficit) for the years ended
    December 31, 2007, 2006 and 2005


47Consolidated Statements of Cash Flows for the
    years ended December 31, 2007, 2006 and 2005


48Notes to Consolidated Financial Statements


49   43




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm  The Board of Directors and Stockholders of Idearc Inc.
            
    44




---



##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Consolidated Statements of Income
  Years Ended December 31,2007


2006


2005(In millions, exceptper share amounts)Operating RevenuePrint products

$
2,900


$
2,978


$
3,147Internet


285



230



197Other


4



13



30Total Operating Revenue


3,189



3,221



3,374Operating ExpenseSelling


733



708



650Cost of sales (exclusive of depreciation and amortization)


617



629



622General and administrative


408



448



374Depreciation and amortization


88



89



91Total Operating Expense


1,846



1,874



1,737Operating Income


1,343



1,347



1,637Interest expense (income), net


676



60



(16
)Income Before Provision for Income Taxes


667



1,287



1,653Provision for income taxes


238



500



630Net Income

$
429


$
787


$
1,023Basic and diluted earnings per common share

$
2.94


$
5.40


$
7.01Basic and diluted shares outstanding


146



146



146    45




---



##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Consolidated Balance Sheets
  At December 31,2007


2006(In millions, exceptshare amounts)ASSETSCurrent assets:Cash and cash equivalents

$
48


$
172Accounts receivable, net of allowances of $77 and $76


423



325Deferred directory costs


312



294Prepaid expenses and other


10



13Total current assets


793



804Property, plant and equipment


471



474Less: accumulated depreciation


356



331115



143Goodwill


73



73Intangible assets, net


303



103Pension assets


171



174Non-current deferred tax assets


124



21Debt issuance costs


86



97Other non-current assets


2



Total assets

$
1,667


$
1,415LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)Current liabilities:Accounts payable and accrued liabilities

$
272


$
412Deferred revenue


209



190Current maturities of long-term debt


48



48Current deferred taxes


28



5Other


31



42Total current liabilities


588



697Long-term debt


9,020



9,067Employee benefit obligations


327



401Unrecognized tax benefits


109



Other liabilities


223



4Stockholders equity (deficit):Common stock ($.01 par value; 225 million shares
    authorized, 146,795,971 and 145,851,862 shares issued and
    outstanding in 2007 and 2006, respectively)


1



1Additional paid-in capital (deficit)


(8,776
)


(8,786
)Retained earnings


361



99Accumulated other comprehensive loss


(186
)


(68
)Total stockholders equity (deficit)


(8,600
)


(8,754
)Total liabilities and stockholders equity (deficit)

$
1,667


$
1,415    46




---



##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Consolidated Statement of Changes in
    Stockholders Equity (Deficit)
  Additional





AccumulatedPaid-in





OtherCommon


Capital


Retained


Comprehensive


ParentsStock(1)


(Deficit)


Earnings


Loss


Equity


Total(In millions)Balance at December 31, 2004(2)

$



$



$
79


$



$
317


$
396Net income










(2
)






1,025



1,023Dividends / returns of capital paid to former parent


















(1,058
)


(1,058
)Other


















41



41Balance at December 31, 2005










77







325



402Net income










22







765



787Dividends / returns of capital paid to former parent


















(652
)


(652
)Pre-spin-off transactions with former parent


















245



245Final distribution to former parent






(1,722
)










(707
)


(2,429
)Issuance of common stock


1



(1
)














Issuance of debt securities






(7,063
)














(7,063
)Adoption of accounting standard 
    SFAS No. 158














(68
)






(68
)Other


















24



24Balance at December 31, 2006


1



(8,786
)


99



(68
)






(8,754
)Net income










429











429Dividends ($1.37 per share)










(200
)










(200
)Issuance of restricted stock awards






10















10Adoption of accounting standard-FIN 48










33











33Adjustments for pension and
    post-employment
    benefits














25







25Unrealized loss on cash flow hedge














(143
)






(143
)Balance at December 31, 2007

$
1


$
(8,776
)

$
361


$
(186
)

$



$
(8,600
)     (1)
    
    The number of shares issued on November 17, 2006, was
    145,851,862. No additional shares were issued through
    December 31, 2006. Shares at December 31, 2007 were
    146,795,971. The entire change in 2007 was due to the equity
    awards granted to certain employees.(2)
    
    During 2007, the Company changed its accounting method of
    recognizing sales commissions. The $79 million recorded in
    retained earnings represents the 2004 and prior years
    cumulative adjustment associated with the change. The cumulative
    impact of the change in accounting method increased
    2006 net income $15 million and decreased
    2005 net income $2 million. See Note 3 to the
    consolidated financial statements for more information.   47




---



##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Consolidated Statements of Cash Flows
  Years Ended December 31,2007


2006


2005(In millions)Cash Flows from Operating ActivitiesNet income

$
429


$
787


$
1,023Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization expense


88



89



91Employee retirement benefits


(5
)


50



48Deferred income taxes


(21
)


(46
)


9Provision for uncollectible accounts


159



140



167Stock based compensation expense


27



56



24Changes in current assets and liabilitiesAccounts receivable


(253
)


(96
)


(121
)Deferred directory costs


(18
)


(3
)


10Other current assets


(2
)


(6
)


Accounts payable and accrued liabilities


(8
)


33



(44
)Other, net


(27
)


(11
)


32Net cash provided by operating activities


369



993



1,239Cash Flows from Investing ActivitiesCapital expenditures (including capitalized software)


(46
)


(64
)


(78
)Acquisitions


(230
)


(16
)


Proceeds from sale of assets


26



20



Other, net


4



19



2Net cash used in investing activities


(246
)


(41
)


(76
)Cash Flows from Financing ActivitiesProceeds from issuance of long-term debt






1,953



Repayment of long-term debt


(47
)






Change in note receivable due from former parent






348



(105
)Dividends paid to Idearc stockholders


(200
)






Dividends / returns of capital paid to former parent






(652
)


(1,058
)Final distribution to former parent






(2,429
)


Net cash used in financing activities


(247
)


(780
)


(1,163
)Increase (decrease) in cash and cash equivalents


(124
)


172



Cash and cash equivalents, beginning of year


172







Cash and cash equivalents, end of year

$
48


$
172


$
    48




---



##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements
  Note 1
    Description
    of Business and Summary of Significant Accounting
    Policies  Description
    of Business
    30-year
      Consolidation
    Use of
    Estimates
      Revenue
    Recognition
     49




---



##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
  Expense
    Recognition
    Accounting Changes and Error
    Corrections
  Barter
    Transactions
    Cash
    and Cash Equivalents
    Accounts
    Receivable
      Concentrations
    of Credit Risk
     50




---



##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
      Deferred
    Directory Costs
    Property,
    Plant, Equipment and Depreciation
    Estimated UsefulLives (In Years)Land improvements and buildings


7-30Leasehold improvements


1-5Computer, data processing, and other equipment


3-7Furniture and fixtures


7Other


3-5     Goodwill
    and Intangible Assets
  Goodwill
  Goodwill and
    Other Intangible Assets
 51




---



##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
  Intangible
    Assets
    Intangible Assets with Indefinite
    Lives. Goodwill and Other
    Intangible Assets
  Internal-use Software. No. 98-1, Accounting for the Costs of Computer Software Developed
    or Obtained for Internal Use.
  Accounting for the Impairment or Disposal of Long-Lived
    Assets
  Debt
    Issuance Costs
    Stock-Based
    Compensation
     52




---



##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
    Income
    Taxes
  Accounting for Income Taxes Accounting for Uncertainty
    in Income Taxes, Accounting for Income
    Taxes
      Pension
    and Other Post-Employment Benefits
        Advertising
    Costs
   53




---



##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
  Earnings
    Per Share
        Years Ended December 31,2007


2006


2005(In millions, exceptper share amounts)Income available to common stockholders

$
429


$
787


$
1,023Weighted-average common shares outstanding


146



146



146Basic and diluted earnings per share

$
2.94


$
5.40


$
7.01   Derivative
    Financial Instruments
    Fair
    Values of Financial Instruments
    At December 312007


2006Carrying





CarryingAmount


Fair Value


Amount


Fair Value(In millions)Total debt

$
9,068


$
8,526


$
9,115


$
9,115Derivative liabilities


220



220







  54




---



##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
  Recent
    Accounting Pronouncements
  Fair
    Value Measurements
  Fair Value
    Measurements
  Business
    Combinations
  Business Combinations
  Note 2
    Spin-Off
    from Verizon      Pre-Spin-Off
    Activities
    Spin-Off
    Transaction
   55




---



##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
    Income
    Statement Impact
      Note 3
    Change in
    Accounting Principle for Recognition of Sales
    Commissions    Accounting Changes and Error
    Corrections
      Years Ended December 31,2006


2005(In millions)Selling expense

$
(24
)

$
4Provision for income taxes


9



(2
)Net Income

$
15


$
(2
)Basic and diluted earnings per share

$
.10


$
(.01
)  56




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##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
  Note 4
    Acquisitions      Note 5
    Additional
    Financial Information    Balance
    Sheet
  Accounts
    Receivable and Allowance for Doubtful Accounts
  At December 31,2007


2006(In millions)Accounts receivableAmounts billed by Idearc

$
498


$
318Amounts billed by Verizon on behalf of Idearc






76Other


2



7500



401Less allowance for doubtful accounts


77



76$
423


$
325   Balance at


AdditionsBeginning of


Charged to





Balance atPeriod


Expense(1)


Deductions(2)


End of Period(In millions)Allowance for doubtful accounts:2007

$
76



188



(187
)

$
772006

$
80



185



(189
)

$
762005

$
135



218



(273
)

$
80     (1)
    
    Includes sales allowance (recorded as contra revenue) and bad
    debt expense.(2)
    
    Amounts written off as sales adjustments and uncollectibles, net
    of recoveries. 57




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##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
   Accounts
    Payable and Accrued Liabilities
  At December 31,2007


2006(In millions)Accounts payable and accrued liabilitiesAccounts payable

$
38


$
38Accrued expenses


73



86Accrued vacation pay


24



24Accrued salaries and wages


80



75Accrued taxes


26



143Accrued interest


31



46$
272


$
412   Cash
    Flow
  Years Ended December 31,2007


2006


2005(In millions)Cash paid (received)Income taxes, net of amounts refunded

$
248


$
433


$
480Interest, net


676



10



(15
)   Comprehensive
    Income
    Years Ended December 31,2007


2006


2005(In millions)Net income

$
429


$
787


$
1,023Other comprehensive income, net of tax:Adjustments for pension and post-employment benefits


25







Unrealized loss on cash flow hedges


(143
)






Other comprehensive (loss)


(118
)






Total comprehensive income

$
311


$
787


$
1,023    58




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##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
  Note 6
    Property,
    Plant and Equipment    At December 31,2007


2006(In millions)Land, land improvements and buildings

$
53


$
71Leasehold improvements


62



61Computer, data processing, and other equipment


283



269Furniture and fixtures


59



57Other


14



16471



474Less accumulated depreciation


356



331Total

$
115


$
143     Note 7
    Goodwill
    and Intangible Assets  Goodwill
    At December 31,2007


2006(In millions)Beginning balance

$
73


$
70Acquisitions






20Goodwill reclassifications and other






(17
)Ending Balance

$
73


$
73   Intangible
    Assets
    At December 31,2007


2006(In millions)Internal use software:Gross carrying amount

$
294


$
272Less accumulated amortization


213



169Total internal use software


81



103Other intangible assets:Switchboard.com domain name


217



Other intangibles


5



Subtotal other intangible assets


222



Total intangible assets, net

$
303


$
103  59




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##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
      Note 8
    Long-Term
    Debt    At December 31,Interest Rates

Maturities

2007


2006(In millions)Senior secured credit facilities:Revolving credit facility

LIBOR + 1.50%

2011

$



$
Tranche A facility

LIBOR + 1.50%

2009-2013


1,515



1,515Tranche B facility

LIBOR + 2.00%

2006-2014


4,703



4,750Total senior secured credit facilities






6,218



6,265Senior unsecured notes

8.0%

2016


2,850



2,850Total long-term debt, including current maturities






9,068



9,115Less current maturities of long-term debt






(48
)


(48
)Long-term debt





$
9,020


$
9,067   Senior
    Secured Credit Facilities
     60




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##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
          Senior
    Unsecured Notes
      Debt
    Covenants and Maturities
   61




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##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
      Note 9
    Leasing
    Arrangements      OperatingLeases(In millions)Years:2007

$
312008


252009


182010


112011


9Thereafter


6Total minimum rental commitments

$
100   Note 10
    Stockholders
    Equity (Deficit)  Common
    Stock
       62




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##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
  Additional
    Paid-in Capital (Deficit)
    (In millions)Additional paid-in capital (deficit) at December 31, 2005


Final distribution to former parent

$
(1,722
)Issuance of common stock


(1
)Issuance of debt securities


(7,063
)Additional paid-in capital (deficit) at December 31, 2006


(8,786
)Issuance of restricted stock awards


10Additional paid-in capital (deficit) at December 31, 2007

$
(8,776
)       Note 11
    Pension
    and Other Post-Employment Benefit Costs  Current
    Plans
         63




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##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
    Adoption
    of SFAS No. 158
  Employers
    Accounting for Defined Benefit Pension and Other Post Retirement
    Plans.
    Spin-off
    Transaction
    Employers Accounting for
    Pensions, Employers Accounting for Settlements and
    Curtailments of Defined Benefit Pension Plans and for
    Termination Benefits Employers Accounting for
    Postretirement Benefits Other than Pensions
 64




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##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
  Benefit
    Costs
    Pension


Health Care and LifeYears Ended December 31,


Years Ended December 31,2007


2006


2005


2007


2006


2005(In millions)Net periodic benefit cost (income)

$
(16
)

$
13


$
19


$
21


$
34


$
29Income deferral plan charge






7















Settlement loss (gain)


(9
)


















Curtailment loss (gain)






(4
)


11











(11
)Net periodic benefit cost (income)

$
(25
)

$
16


$
30


$
21


$
34


$
18           Health CarePension


and Life(In millions, except %)Change in benefit obligation:At January 1, 2007

$
594


$
392Service cost


7



3Interest cost


35



18Actuarial loss, net


25



2Benefits paid


(106
)


(28
)Plan Amendments






(84
)Benefit obligations at December 31, 2007

$
555


$
303Change in plan assets:At January 1, 2007

$
761


$
Actual return on plan assets


61



Company contributions


2



Benefits paid


(106
)


Plan assets at December 31, 2007

$
718


$
Funded status at December 31, 2007 (plan assets less
    benefit obligations)

$
163


$
(303
) 65




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##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
  Health CarePension


and Life(In millions, except %)Amounts recognized in consolidated balance sheets:Noncurrent assets

$
171


$
Current liabilities






(22
)Noncurrent liabilities


(8
)


(281
)Net asset (liability) at end of year

$
163


$
(303
)Amounts recognized in accumulated other comprehensive loss at
    December 31, 2007 (pre-tax):Actuarial (gain) loss, net

$
(9
)

$
105Prior service cost


16



(39
)$
7


$
66Weighted-average assumptions to determine benefit
    obligations, at December 31, 2007:Discount rate


6.25
%


6.10
%Rate of compensation increase


4.00
%


4.00
%Initial trend rate






10.00
%Ultimate trend rate






5.00
%Year attained






2011Components of net periodic benefit cost for 2007:Service cost

$
7


$
3Interest cost


35



18Expected return on assets


(59
)


Actuarial loss, net


1



5Prior service cost






(5
)Settlement (gain), net


(9
)


Net periodic benefit cost (income)

$
(25
)

$
21Estimated amounts to be amortized from accumulated other
    comprehensive loss during 2008:Actuarial loss

$



$
5Prior service cost


1



(5
)Total amount to be amortized

$
1


$
Weighted-average assumptions used for determining benefit
    cost for 2007:Discount rate


6.00
%


6.00
%Expected return on plan assets


8.00
%


N/ARate of compensation increase


4.00
%


4.00
%Initial trend rate






10.00
%Ultimate trend rate






5.00
%Year attained






2011 66




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##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
  Health CarePension


and Life(In millions, except %)Expected benefit payments (including Medicare Part D
    Subsidy):2008

$
28


$
232009


29



242010


29



252011


42



252012


43



252013 to 2017


217



126           Pension
    Plan Assets
    Asset Category

PercentageEquity securities


50
%Debt securities


50
%Total


100
%   10-year
  Health
    Care Trend Impact  One Percentage
    Point:
    Increase


Decrease(In millions)Effect on total service and interest cost for 2007

$
2


$
(2
)Effect on December 31, 2007, post-employment benefit


20



(16
)  67




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##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
  Note 12
    Employee
    Benefits  Savings
    Plans
    Severance
    Benefits
  Employers
    Accounting for Postemployment Benefits.
    Beginning of


Charged toYear

Year


Expense


Payments


Other


End of Year(In millions)2007

$
8



10



(10
)





$
82006

$
16



4



(12
)





$
82005

$
18



4



(5
)


(1
)

$
16   Note 13
    Stock-Based
    Compensation      Restricted
    Stock
       68




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##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
      Weighted AverageNumber of Restricted


Grant-Date FairStock Awards


Value(In thousands)Nonvested restricted stock at beginning of period





$
Granted


1,029



29.59Dividend equivalent units


47



n/aVested


(19
)


29.32Forfeitures


(81
)


29.32Nonvested restricted stock at end of period


976


$
29.60   Restricted
    Stock Units
        WeightedAverageRestricted


FairStock Units


Value(In thousands)Nonvested RSUs at beginning of period





$
Granted


608



17.56Dividend equivalents


29



17.56Payments


(24
)


31.22Forfeitures


(88
)


n/aNonvested RSUs at end of period


525


$
17.56  69




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##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
  Performance
    Units
  Share-Based Payment
          WeightedAveragePerformance


FairUnits


Value(In thousands)Outstanding performance units at beginning of period





$
Granted


574



17.56Dividend equivalents


28



17.56Payments






Forfeitures


(25
)


17.56Outstanding performance units at end of period


577


$
17.56        70




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##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
  Note 14
    Income
    Taxes  Accounting for Income Taxes Accounting for Uncertainty
    in Income Taxes, Accounting for Income
    Taxes
    Years Ended December 31,2007


2006


2005(In millions)CurrentFederal

$
241


$
449


$
536State and local


18



97



85259



546



621DeferredFederal


(15
)


(37
)


7State and local


(6
)


(9
)


2(21
)


(46
)


9Total provision for income taxes

$
238


$
500


$
630     Years Ended December 31,2007


2006


2005Statutory federal income tax rate


35.0
%


35.0
%


35.0
%Permanent differences, net


(1.8
)


(0.5
)


(0.3
)State and local income tax, net of federal tax benefits


3.3



4.5



3.4Tax benefits recognized for uncertain tax positions


(2.0
)






Other, net


1.2



(0.1
)


Effective income tax rate


35.7
%


38.9
%


38.1
%  71




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##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
    At December 31,2007


2006(In millions)Deferred income tax assets:Employee benefits

$
109


$
123Uncollectible accounts receivable


29



29Contingent liabilities


13



46Interest rate swap agreements


77



Unrecognized tax benefits


43



Gross deferred income tax assets


271



198Deferred income tax liabilities:Depreciation


40



46Deferred directory costs


52



48Debt issuance costs


27



33Deferred commission costs


56



55Gross deferred income tax liabilities


175



182Net deferred income tax assets

$
96


$
16Amounts included in consolidated balance sheets:Current deferred tax (liabilities)

$
(28
)

$
(5
)Non-current deferred tax assets


124



21$
96


$
16      72




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##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
   Accounting for
    Uncertainty in Income Taxes, Accounting for Income
    Taxes
  (In millions)Unrecognized tax benefits at January 1, 2007

$
108Gross increases  tax positions in prior period


19Gross decreases  tax positions in prior period


(12
)Gross increases  current period tax positions


2Lapse of statute of limitations


(8
)Unrecognized tax benefits at December 31, 2007

$
109            73




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##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
  Note 15
    Segment
    Information    Note 16
    Transactions
    with Verizon    Financial
    Statement Transactions
    Years Ended December 31,2007


2006


2005(In millions)Dividends paid and returns of capital

$



$
652


$
1,058Net transactions with former parent related to spin






2,429



Operating expenses


30



105



100Interest expense (income), net






(24
)


(14
)          74




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##### Table of Contents



Idearc
    Inc. and Subsidiaries
  Notes to Consolidated Financial Statements 
    (continued)
  Note 17
    Contingencies  Litigation
    and/or
    Note 18
    Quarterly
    Financial Information (Unaudited)  Operating


Operating


Net


Earnings perQuarter Ended

Revenue


Income


Income


Share(1)(In millions, except per share amounts)2007March 31

$
806


$
332


$
103


$
.70June 30


805



342



109



.75September 30


791



358



117



.80December 31


787



311



100



.682006March 31

$
813


$
361


$
225


$
1.54June 30


802



337



210



1.44September 30


805



373



245



1.68December 31(2)


801



276



107



.73     (1)
    
    The number of shares of Idearc common stock issued in connection
    with the spin-off on November 17, 2006, was approximately
    146 million. For basic and diluted earning per share
    calculations it was assumed that approximately 146 million
    shares were outstanding for all periods presented. No additional
    shares were issued through December 31, 2006. Restricted
    stock awards granted in 2007 caused an immaterial increase in
    the number of dilutive shares with no material impact to the
    calculation of diluted earnings per common share. Earnings per
    share is computed independently for each quarter and the sum of
    the quarters may not equal the annual amount.(2)
    
    The quarter ended December 31, 2006, includes a
    $39 million ($24 million after-tax) charge associated
    with Verizon stock-based compensation awards, $28 million
    ($25 million after-tax) of transition costs and
    $86 million ($53 million after-tax) of interest
    expense recorded since November 17, 2006. 75




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure.    Item 9A.
    Controls
    and Procedures.  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15(e) 15d-15(e)
  Changes
    in Internal Control Over Financial Reporting
  Rules 13a-15(f) 15d-15(f)
  Managements
    Annual Report on Internal Control Over Financial
    Reporting
  Rules 13a-15(f) 15d-15(f)
     76




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
  The Board of Directors and Stockholders of Idearc Inc.
              
    77




---



##### Table of Contents



Item 9B.
    Other
    Information.   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance.        www.idearc.com
      Item 11.
    Executive
    Compensation.    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence.    Item 14.
    Principal
    Accountant Fees and Services.   78




---



##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules.    PageFinancial Statements:Report of Independent Registered Public Accounting Firm


44Consolidated Statements of Income


45Consolidated Balance Sheets


46Consolidated Statement of Changes in Stockholders Equity
    (Deficit)


47Consolidated Statements of Cash Flows


48Notes to Consolidated Financial Statements


49   Financial
    Statement Schedules:
    Exhibits:2
.1

Asset Purchase Agreement, dated September 15, 2007, between
    the Registrant and Infospace, Inc. (incorporated by reference to
    Exhibit 2.1 to the Registrants Current Report on
    Form 8-K,
    filed September 18, 2007)3
.1

Amended and Restated Certificate of Incorporation of the
    Registrant (incorporated by reference to Exhibit 3.1 to the
    Registrants Registration Statement on Form 10,
    Amendment No. 5
    (File No. 001-32939),
    filed October 30, 2006)3
.2

Amended and Restated Bylaws of the Registrant (incorporated by
    reference to Exhibit 3.2 to the Registrants Current
    Report on
    Form 8-K,
    filed February 21, 2008)4
.1

Indenture, dated November 17, 2006, between the Registrant
    and U.S. Bank National Association, as trustee (incorporated by
    reference to Exhibit 4.1 to the Registrants Current
    Report on
    Form 8-K,
    filed November 21, 2006)10
.1

Transition Services Agreement, dated November 17, 2006,
    between Verizon Information Technologies LLC and Idearc Media
    Corp. (incorporated by reference to Exhibit 10.1 to the
    Registrants Current Report on
    Form 8-K,
    filed November 21, 2006)10
.2

Publishing Agreement, dated November 17, 2006, among
    Verizon Communications Inc., Verizon Services Corp. and Idearc
    Media Corp. (incorporated by reference to Exhibit 10.2 to
    the Registrants Current Report on
    Form 8-K,
    filed November 21, 2006)10
.3

Non-Competition Agreement, dated November 17, 2006, between
    Verizon Communications Inc. and Idearc Media Corp. (incorporated
    by reference to Exhibit 10.3 to the Registrants
    Current Report on
    Form 8-K,
    filed November 21, 2006)10
.4

Branding Agreement, dated November 17, 2006, between
    Verizon Licensing Company and Idearc Media Corp. (incorporated
    by reference to Exhibit 10.4 to the Registrants
    Current Report on
    Form 8-K,
    filed November 21, 2006)10
.5

Listings License Agreement, dated November 17, 2006,
    between specified Verizon telephone operating companies and
    Idearc Media Corp. (incorporated by reference to
    Exhibit 10.5 to the Registrants Current Report on
    Form 8-K,
    filed November 21, 2006)10
.6

Billing Services Agreement, dated November 17, 2006,
    between Verizon Services Corp. and Idearc Media Corp.
    (incorporated by reference to Exhibit 10.6 to the
    Registrants Current Report on
    Form 8-K,
    filed November 21, 2006)10
.7

Intellectual Property Agreement, dated November 17, 2006,
    between Verizon Services Corp. and Idearc Media Corp.
    (incorporated by reference to Exhibit 10.7 to the
    Registrants Current Report on
    Form 8-K/A,
    filed November 22, 2006) 79




---



##### Table of Contents



Exhibits:10
.8

Employee Matters Agreement, dated November 17, 2006,
    between Verizon Communications Inc. and the Registrant
    (incorporated by reference to Exhibit 10.8 to the
    Registrants Current Report on
    Form 8-K,
    filed November 21, 2006)10
.9

Tax Sharing Agreement, dated November 17, 2006, between
    Verizon Communications Inc. and the Registrant (incorporated by
    reference to Exhibit 10.9 to the Registrants Current
    Report on
    Form 8-K,
    filed November 21, 2006)10
.10

Credit Agreement, dated November 17, 2006 (the Credit
    Agreement), among the Registrant, JPMorgan Chase Bank,
    N.A., J.P. Morgan Securities Inc., Bear Stearns &
    Co., Inc., Bear Stearns Corporate Lending Inc., Banc of America,
    N.A., Barclays Bank PLC, and Citigroup USA, Inc. (incorporated
    by reference to Exhibit 10.11 to the Registrants
    Current Report on
    Form 8-K,
    filed November 21, 2006)10
.10.1

First Amendment to the Credit Agreement, dated March 5,
    2007, among the Registrant, the lenders from time to time party
    thereto and JPMorgan Chase Bank, N.A.10
.11

Registration Rights Agreement, dated November 17, 2006,
    among the Registrant, specified guarantors, J.P. Morgan
    Securities Inc. and Bear, Stearns & Co. Inc.
    (incorporated by reference to Exhibit 4.2 to the
    Registrants Current Report on
    Form 8-K,
    filed November 21, 2006)10
.12*

2002 Employment Agreement of Katherine J. Harless (incorporated
    by reference to Exhibit 10.11 to the Registrants
    Registration Statement on Form 10, Amendment No. 3
    (File
    No. 001-32939),
    filed October 20, 2006)10
.13*

Idearc Inc. Long Term Incentive Plan (incorporated by reference
    to Exhibit 10.10 to the Registrants Current Report on
    Form 8-K,
    filed November 21, 2006)10
.14*

Form of Executive Restricted Stock Agreement for the Idearc Inc.
    Long Term Incentive Plan (incorporated by reference to
    Exhibit 10.1 to the Registrants Current Report on
    Form 8-K,
    filed January 16, 2007)10
.15*

Form of Director and Officer Indemnification Agreement
    (incorporated by reference to Exhibit 10.12 to the
    Registrants Registration Statement on Form 10,
    Amendment No. 4 (File
    No. 001-32939),
    filed October 27, 2006)10
.16*

Summary of Executive Compensation Program, including a
    description of the 2007 short term incentive plan (incorporated
    by reference to Exhibit 10.16 to the Registrants
    Registration Statement on
    Form S-4
    (File
    No. 333-142012),
    filed April 10, 2007)10
.17*

Form of Director Restricted Stock Agreement for One-Time Award
    under the Idearc Inc. Long Term Incentive Plan (incorporated by
    reference to Exhibit 10.17 to the Registrants
    Registration Statement on
    Form S-4
    (File
    No. 333-142012),
    filed April 10, 2007)10
.18*

Form of Director Restricted Stock Agreement for Annual Awards
    under the Idearc Inc. Long Term Incentive Plan (incorporated by
    reference to Exhibit 10.18 to the Registrants
    Registration Statement on
    Form S-4
    (File
    No. 333-142012),
    filed April 10, 2007)10
.19*

Idearc Inc. Executive Transition Plan (incorporated by reference
    to Exhibit 10.1 to the Registrants Current Report on
    Form 8-K,
    filed April 9, 2007)10
.20*

Form of Performance Unit Agreement under the Idearc Inc. Long
    Term Incentive Plan21
.1

Subsidiaries of the Registrant23
.1

Consent of Ernst & Young LLP31
.1

Certification of Frank P. Gatto filed pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200231
.2

Certification of Samuel D. Jones filed pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200232
.1

Certification of Frank P. Gatto and Samuel D. Jones filed
    pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002     *
    
    Management contract, compensatory plan or arrangement 80




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##### Table of Contents



SIGNATURES
      By:
    /s/  FRANK P.
    GATTO  Frank P. Gatto
     /s/  FRANK P.
    GATTOFrank P.
    Gatto

Acting Chief Executive Officer 
    (Principal Executive Officer)/s/  SAMUEL
    D. JONESSamuel
    D. Jones

Acting Chief Financial Officer and Treasurer
    (Principal Financial and Accounting Officer)/s/  JERRY
    V. ELLIOTTJerry
    V. Elliott

Director/s/  KATHERINE
    J. HARLESSKatherine
    J. Harless

Director/s/  JONATHAN
    F. MILLERJonathan
    F. Miller

Director/s/  DONALD
    B. REEDDonald
    B. Reed

Director/s/  STEPHEN
    L. ROBERTSONStephen
    L. Robertson

Director/s/  THOMAS
    S. ROGERSThomas
    S. Rogers

Director/s/  PAUL
    E. WEAVERPaul
    E. Weaver

Director  81




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##### Table of Contents



EXHIBIT INDEX
  Exhibits:2
.1

Asset Purchase Agreement, dated September 15, 2007, between
    the Registrant and Infospace, Inc. (incorporated by reference to
    Exhibit 2.1 to the Registrants Current Report on
    Form 8-K,
    filed September 18, 2007)3
.1

Amended and Restated Certificate of Incorporation of the
    Registrant (incorporated by reference to Exhibit 3.1 to the
    Registrants Registration Statement on Form 10,
    Amendment No. 5 (File
    No. 001-32939),
    filed October 30, 2006)3
.2

Amended and Restated Bylaws of the Registrant (incorporated by
    reference to Exhibit 3.2 to the Registrants Current
    Report on
    Form 8-K,
    filed February 21, 2008)4
.1

Indenture, dated November 17, 2006, between the Registrant
    and U.S. Bank National Association, as trustee (incorporated by
    reference to Exhibit 4.1 to the Registrants Current
    Report on
    Form 8-K,
    filed November 21, 2006)10
.1

Transition Services Agreement, dated November 17, 2006,
    between Verizon Information Technologies LLC and Idearc Media
    Corp. (incorporated by reference to Exhibit 10.1 to the
    Registrants Current Report on
    Form 8-K,
    filed November 21, 2006)10
.2

Publishing Agreement, dated November 17, 2006, among
    Verizon Communications Inc., Verizon Services Corp. and Idearc
    Media Corp. (incorporated by reference to Exhibit 10.2 to
    the Registrants Current Report on
    Form 8-K,
    filed November 21, 2006)10
.3

Non-Competition Agreement, dated November 17, 2006, between
    Verizon Communications Inc. and Idearc Media Corp. (incorporated
    by reference to Exhibit 10.3 to the Registrants
    Current Report on
    Form 8-K,
    filed November 21, 2006)10
.4

Branding Agreement, dated November 17, 2006, between
    Verizon Licensing Company and Idearc Media Corp. (incorporated
    by reference to Exhibit 10.4 to the Registrants
    Current Report on
    Form 8-K,
    filed November 21, 2006)10
.5

Listings License Agreement, dated November 17, 2006,
    between specified Verizon telephone operating companies and
    Idearc Media Corp. (incorporated by reference to
    Exhibit 10.5 to the Registrants Current Report on
    Form 8-K,
    filed November 21, 2006)10
.6

Billing Services Agreement, dated November 17, 2006,
    between Verizon Services Corp. and Idearc Media Corp.
    (incorporated by reference to Exhibit 10.6 to the
    Registrants Current Report on
    Form 8-K,
    filed November 21, 2006)10
.7

Intellectual Property Agreement, dated November 17, 2006,
    between Verizon Services Corp. and Idearc Media Corp.
    (incorporated by reference to Exhibit 10.7 to the
    Registrants Current Report on
    Form 8-K/A,
    filed November 22, 2006)10
.8

Employee Matters Agreement, dated November 17, 2006,
    between Verizon Communications Inc. and the Registrant
    (incorporated by reference to Exhibit 10.8 to the
    Registrants Current Report on
    Form 8-K,
    filed November 21, 2006)10
.9

Tax Sharing Agreement, dated November 17, 2006, between
    Verizon Communications Inc. and the Registrant (incorporated by
    reference to Exhibit 10.9 to the Registrants Current
    Report on
    Form 8-K,
    filed November 21, 2006)10
.10

Credit Agreement, dated November 17, 2006, among the
    Registrant, JPMorgan Chase Bank, N.A., J.P. Morgan
    Securities Inc., Bear Stearns & Co., Inc., Bear
    Stearns Corporate Lending Inc., Banc of America, N.A., Barclays
    Bank PLC, and Citigroup USA, Inc. (incorporated by reference to
    Exhibit 10.11 to the Registrants Current Report on
    Form 8-K,
    filed November 21, 2006)10
.10.1

First Amendment to the Credit Agreement, dated March 5,
    2007, among the Registrant, the lenders from time to time party
    thereto and JPMorgan Chase Bank, N.A.10
.11

Registration Rights Agreement, dated November 17, 2006,
    among the Registrant, specified guarantors, J.P. Morgan
    Securities Inc. and Bear, Stearns & Co. Inc.
    (incorporated by reference to Exhibit 4.2 to the
    Registrants Current Report on
    Form 8-K,
    filed November 21, 2006)10
.12*

2002 Employment Agreement of Katherine J. Harless (incorporated
    by reference to Exhibit 10.11 to the Registrants
    Registration Statement on Form 10, Amendment No. 3
    (File
    No. 001-32939),
    filed October 20, 2006) 82




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##### Table of Contents



Exhibits:10
.13*

Idearc Inc. Long Term Incentive Plan (incorporated by reference
    to Exhibit 10.10 to the Registrants Current Report on
    Form 8-K,
    filed November 21, 2006)10
.14*

Form of Executive Restricted Stock Agreement for the Idearc Inc.
    Long Term Incentive Plan (incorporated by reference to
    Exhibit 10.1 to the Registrants Current Report on
    Form 8-K,
    filed January 16, 2007)10
.15*

Form of Director and Officer Indemnification Agreement
    (incorporated by reference to Exhibit 10.12 to the
    Registrants Registration Statement on Form 10,
    Amendment No. 4 (File
    No. 001-32939),
    filed October 27, 2006)10
.16*

Summary of Executive Compensation Program, including a
    description of the 2007 short term incentive plan (incorporated
    by reference to Exhibit 10.16 to the Registrants
    Registration Statement on
    Form S-4
    (File
    No. 333-142012),
    filed April 10, 2007)10
.17*

Form of Director Restricted Stock Agreement for One-Time Award
    under the Idearc Inc. Long Term Incentive Plan (incorporated by
    reference to Exhibit 10.17 to the Registrants
    Registration Statement on
    Form S-4
    (File
    No. 333-142012),
    filed April 10, 2007)10
.18*

Form of Director Restricted Stock Agreement for Annual Awards
    under the Idearc Inc. Long Term Incentive Plan (incorporated by
    reference to Exhibit 10.18 to the Registrants
    Registration Statement on
    Form S-4
    (File
    No. 333-142012),
    filed April 10, 2007)10
.19*

Idearc Inc. Executive Transition Plan (incorporated by reference
    to Exhibit 10.1 to the Registrants Current Report on
    Form 8-K,
    filed April 9, 2007)10
.20*

Form of Performance Unit Agreement under the Idearc Inc. Long
    Term Incentive Plan21
.1

Subsidiaries of the Registrant23
.1

Consent of Ernst & Young LLP31
.1

Certification of Frank P. Gatto filed pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200231
.2

Certification of Samuel D. Jones filed pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200232
.1

Certification of Frank P. Gatto and Samuel D. Jones filed
    pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002     *
    
    Management contract, compensatory plan or arrangement 83