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Idearc amending the original Plan of Reorganization

On Monday August 31st the company filed papers with the bankruptcy court amending its original Plan of Reorganization and the related Disclosure Statement filed in May. Nothing in the documents indicate that the company has any plans to change its approach regarding the treatment of active or retired union represented individuals.
Language was inserted into the plan to reflect the fact that all union contracts, with the exception of Local 1301, have been assumed. A new section was added outlining the company’s stance on the pension plans. It states that the company does not intend to terminate the plans and plans to continue to sponsor the plans. As of December 31, 2008 the management plan was over funded by over 30% and the union plan was over funded by 20%. It goes on to state that nothing will discharge, release or relieve the company from its liability with
respect to the pension plan.

The most significant changes to the plan revolve around the level and repayment criteria of the New Term Loans, i.e., the new loans Idearc will take out as it emerges from bankruptcy to replace the pre-
bankruptcy loans. The aggregate principal amount of the loans has been reduced from $3 billion to $2.75 billion, interest rates were lowered from 12% to 11%, and certain mandatory annual minimum payments were
eliminated.

The company presented an overview of the plan to the banks Steering Committee on August 27th and the Unsecured Creditors Committee on September 2nd. The bankruptcy court will hold a hearing on the matter
on September 9rth. The company is hoping to have the plan approved at a Confirmation Hearing and emerge from bankruptcy sometime in the fourth quarter of this year.