Verizon to spinoff print, online yellow pages biz

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NEW YORK -- Verizon Communications Inc. said Wednesday its board has approved a spinoff of the telephone company's print and online yellow pages business to stockholders as a new public company named Idearc Inc.

Though the directories business is highly profitable, Verizon has decided to focus on its fast growing cellular unit and rewiring its traditional phone network with fiber-optic lines that can deliver cable TV and far faster Internet connections.

One share of Idearc, pronounced EYE-dee-ark, will be distributed as a dividend for every 20 shares of Verizon stock held by an investor at the close of business on Nov. 1. The distribution is scheduled to occur Nov. 17 and is expected to qualify as a tax-free transaction for shareholders. A proportional, taxable cash distribution will be paid to investors with fewer than 20 shares or holdings not divisible by 20.

Verizon also reiterated that, as previously announced, management expects to recommend to the board that Verizon's quarterly dividend of 40.5 cents per share be maintained despite the directories spin-off.

The company expects that a "when issued" public market for Idearc common stock will begin on or about Nov. 2 on the New York Stock Exchange under the symbol "IAR wi." Following the spin-off, Idearc common stock will trade under the symbol "IAR."

A spun-off directories business would be based in Dallas, employ about 7,100 people. As of the end of 2005, Verizon Information Services provided sales, publishing and other services for 1,750 directory books, including 1,200 Verizon-branded publications with a circulation of 121 million copies.

Though it is a low-growth business, phone book publishers took in revenues of $14.7 billion last year, some generating profit margins in the 45 percent to 50 percent range, according to the Kelsey Group.

Verizon shares rose 23 cents to $36.82 in morning trading on the New York Stock Exchange.
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