NEUSTAR INC - FORM 8-K - EX-99.3 - EXHIBIT 99.3

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8-K - FORM 8-K - NEUSTAR INC	d242208d8k.htm
EX-2.1 - EXHIBIT 2.1 - NEUSTAR INC	d242208dex21.htm
EX-99.4 - EXHIBIT 99.4 - NEUSTAR INC	d242208dex994.htm
EX-99.2 - EXHIBIT 99.2 - NEUSTAR INC	d242208dex992.htm
EX-99.1 - EXHIBIT 99.1 - NEUSTAR INC	d242208dex991.htm

Neustar to Acquire

TARGUSinfo

October 11, 2011

Exhibit 99.3

Forward Looking Statements

These slides and the accompanying oral presentation contain forward-looking statements made pursuant to the safe harbor provision

of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements about the company’s expectations,

beliefs and business results in the future. The company has attempted, whenever possible, to identify these forward-looking

statements using words such as “may,” “will,” “should,” “projects,” “estimates,” “expects,” “plans,” “intends,” “anticipates,” “believes”

and variations of these words and similar expressions. Similarly, statements herein that describe the company’s business strategy,

prospects, opportunities, outlooks, objectives, plans, intentions or goals are also forward-looking statements. The company cannot

assure you that its expectations will be achieved or that any deviations will not be material. Forward-looking statements are subject

to many assumptions, risks and uncertainties that may cause future results to differ materially from those anticipated. Among the

important factors that could cause future events or results to vary from those addressed in the forward-looking statements include

without limitation, risks and uncertainties arising from the possibility that the closing of the transaction may be delayed or may not

occur; difficulties with the integration process or the realization of the benefits of the transaction; the uncertainty of future revenue

and profitability and potential fluctuations in operating results due to such factors as disruptions to the company’s operations or

modifications to or terminations of material contracts; general economic conditions in the regions and industries in which Neustar and

TARGUSinfo operate; and regulatory matters involving antitrust and other issues that could affect the closing of the

transaction. More information about potential factors that could affect the company’s business and financial results is included in its

filings with the Securities and Exchange Commission, including, without limitation, the company’s Annual Report on Form 10-K for

the fiscal year ended December 31, 2010 and subsequent periodic and current reports. All forward-looking statements are based on

information available to the company on the date of this presentation, and the company undertakes no obligation to update any of the

forward-looking statements after the date of this presentation. Statements regarding previously issued guidance speak only as of the

date such guidance was issued and this information is not being updated or confirmed in this presentation.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURE

Neustar reports its results in accordance with generally accepted accounting principles in the United States (GAAP). Throughout this

document, Neustar is providing certain non-GAAP financial measures. Neustar cautions investors that the non-GAAP financial

measures presented are intended to supplement Neustar’s GAAP results and are not a substitute for such results. Additionally, the

non-GAAP financial measures used by Neustar may differ from the non-GAAP financial measures used by other companies.

Today’s Announcement

(1)

As of September 30, 2011

(2)

Excludes discretionary compensation associated with a 2010 TARGUSinfo recapitalization event

Definitive agreement to acquire privately-held TARGUSinfo

•

Leading provider of real time, on-demand information and analytics services

•

Expands recurring and growing revenue base, strong cash flow generation and

enhances strategic position within growing market

–

Latest twelve months

(1)

(LTM) revenue of $149 million, 20% year-over-year growth

LTM adjusted EBITDA margin of 45%

(2)

Cash transaction of $650 million, including repayment of outstanding debt

•

Customary adjustments at closing for cash and working capital

•

Acquisition to be funded with cash on hand and committed credit facility

Transaction expected to be at least $0.20 accretive to Neustar EPS in 2012,

excluding impact of amortization of intangibles and financing fees

Expected to close in fourth quarter of 2011

–

Why TARGUSinfo?

Creates a leader in information and analytics services

•

Provides value-added decision-making data and analytical tools for customers

•

Leverages patented processes and predictive analytics assets

Strong strategic fit

Creates multiple opportunities for incremental growth

•

Expanded distribution channels

•

Cross-selling / up-selling opportunities

•

Deeper service portfolio for all types of carriers

•

Combination of assets enables broader predictive analytics capabilities

Diversifies revenue while maintaining high margins and continued

growth

•

Combined LTM revenue of $732M and adjusted EBITDA of $327M

Adds experienced management team with a demonstrated record of

innovation

•

Near-adjacency with similar business model and financial profile

•

Low execution/integration risk

TARGUSinfo at a Glance

A leading provider of on-demand identification, verification, scoring, and

local search solutions

•

Access to over 200 sources of data, creating the most reliable, trusted and

comprehensive data repository

•

Processes over 100 billion real-time queries annually

•

Extensive portfolio of patents

Operates in large, growing markets

•

U.S.

online

display

advertising

market

estimated

reach

$12.3

billion

2011

(1)

•

U.S.

online

local

directories

and

market

estimated

$2.6

billion

2010

(2)

•

U.S.

online

lead

generation

market

estimated

$1.3

billion

2010

(3)

Broad, diverse customer base

•

Recurring revenues provide strong visibility

•

Over

800

customers

diversified

customer

segments

–

cable,

telecom,

financial

services, e-commerce, retail, education, and government

•

Strategic

partnerships

–

engines,

networks,

and

clearinghouses

Founded in 1993 and headquartered in Northern Virginia

•

Approximately 460 employees

(1)

Source: eMarketer

(2)

Source: Industry Survey conducted by PricewaterhouseCoopers and sponsored by Interactive Advertising Bureau

(3)

Source: Industry Survey conducted by PricewaterhouseCoopers and sponsored by Interactive Advertising Bureau

Who is TARGUSinfo?

Just Like Neustar…. TARGUSinfo Provides Real Intelligence For Better Business Decisions

On what network does this

phone number terminate?

What is the most

efficient network path?

Is my on-line storefront

performing optimally?

Is my website providing

relevant information?

Who is on the other end

of my transaction?

How do I get someone to the

correct store location?

How do I interact with

customers and sell more

effectively?

Is the information provided

from the consumer accurate?

Who is TARGUSinfo?

Overview of Services

Solutions

LTM

Revenues

(1)

)

Services

Customer Segments

Largest independent provider of Caller ID

•

Cable companies

•

Telecom operators

•

Wireless providers

Link phone number to name and address in real-time

Real-time geographic call routing based on address identifier

Links phone number to name /address for direct mail

•

Call centers

•

Direct response marketers

•

Call centers

•

Direct response marketers

•

Telecom companies

•

Call centers

•

Utilities

Verifies

and

supplements

prospective

leads’

name

and

address

Qualifies and scores online leads

Enables businesses to manage and enhance their online identity

Provides online audience information

•

Marketing companies

•

Education

•

Insurance companies

•

Enhancement to “On-

Demand Verification”

•

Ad agencies

•

Ad networks

•

Publishers

•

Local/national businesses

•

Local search engines

Enhanced Directory Assistance and White Pages listings

•

White pages / yellow pages

providers

•

Marketing companies

Description

Caller Name:

On-Demand

Identification:

On-Demand Location:

Second Approach:

On-Demand Verification:

On-Demand Scoring:

AdAdvisor:

Localeze:

Amacai:

(1)

As of September 30, 2011

Identification

and Location

(64%)

Lead

Verification,

Authentication

and Scoring

(19%)

Directory

Services

(17%)

Neustar and TARGUSinfo Value Proposition

•

2.9B global telephone numbers

•

2.8B global IP addresses

•

5.3M global domain names

•

11,000 customers

•

5,700 carrier customers

•

4,300 global customers

•

1,400 brand marketers

•

Numbering

•

Order management

•

IP services

•

DNS and monitoring

•

Domain name registries

•

Common short codes

•

IP Geolocation

•

200 data sources

•

14M business listings

•

400M household listings

•

800 customers

•

200 distribution channel

partners

•

150+ search engines

•

Major social networks

•

Caller name

•

Enhanced caller ID

•

Directory assistance

•

AdAdvisor

•

Lead Verification

•

Directory Services

Creates

unmatched scale

Enables predictive

analytics

Enhances cross-selling

and up-selling

Expands distribution

channels

Deepens service

portfolio for all types

of carriers

Accelerates

development of

services in large, high

growth markets

Assets

Customers

Carrier

Services

Enterprise

Services

Combined Company Overview

Strong margins, more efficient capital structure

•

Adjusted EBITDA margins of combined entity consistent with Neustar’s historical performance

•

More efficient capital structure, resulting in increased shareholder value

•

Maintains flexibility with leverage capacity

(1)

Reflects the post-close $600M Term Loan, use of cash for this acquisition, and payment of estimated financing and closing costs of

approximately $49.0 million. Cash and investments have not been adjusted to reflect the additional $250M share repurchase program.

(2)

Consists of capital leases of $6M.

(3)

Reflects post-close debt position (including $600M Term Loan and undrawn Revolving Credit Facility) plus a portion of existing cash.

LTM September 30, 2011 Metrics

Neustar

TARGUSinfo

Combined

LTM Revenue (millions)

$583

$149

$732

LTM Adjusted EBITDA (millions)

$260

$67

$327

% Adjusted EBITDA Margin

45%

Cash and investments (millions)

$410

$23

$311

(1)

Total Debt (millions)

(2)

$165

$606

(3)

Total Debt / LTM Adjusted EBITDA

0.0x

2.4x

1.9x

Net Debt / LTM Adjusted EBITDA

2.1x

0.9x

(3)

Combined Company Overview

Enhanced Scale and Strong Growth

Neustar

TARGUSinfo

Combined Company

Neustar Carrier Services

Neustar Enterprise Services

TARGUSinfo

(2)

(1)

Adjusted for a legal contingency favorably resolved in 2008

(2)

Adjusted for discretionary compensation associated with a 2010 recapitalization event

(2)

YoY:

20%

YoY:

28%

YoY:

15%

YoY:

12%

YoY:

13%

(1)

200

400

600

800

2006

2007

2008

2009

2010

LTM

100

150

200

2006

2007

2008

2009

2010

LTM

200

400

600

800

2006

2007

2008

2009

2010

LTM

100

200

300

400

2006

2007

2008

2009

2010

LTM

100

2006

2007

2008

2009

2010

LTM

100

200

300

400

2006

2007

2008

2009

2010

LTM

Takeaways

Compelling Strategic and Financial Benefits

Immediately accretive on

a Non-GAAP basis

Maintains strong revenue growth

and high margins

Recurring revenues

Enhanced scale and diversification

More efficient capital structure

Creates a leading information

and analytics services provider

New services in large high

growth markets

Cross-selling and up-selling

opportunities

Expanded distribution

Track record of innovation

Minimal execution risk

Strategic Benefits

Financial Benefits

Appendix

Non-GAAP Reconciliation

Reconciliation to adjusted EBITDA from continuing operations

(1)

The amounts expressed in this column are derived from Neustar’s audited consolidated financial statements for the year ended December 31, 2010. Results related to Neustar’s Converged

Messaging Services business for prior periods have been reclassified to discontinued operations.

(2)

The amounts expressed in this column are derived from Targus Information Corporation’s audited consolidated financial statements for the year ended December 31, 2010.

(3)

The amounts expressed in this column do not reflect pro forma purchase accounting adjustments required to present the acquisition as of the beginning of each respective period.

(4)

Includes management transition costs of $6.0 million for restructuring and severance costs.

(5)

EBITDA margin is a measure of EBITDA from continuing operations as a percentage of total revenue.

Year Ended December 31, 2010

Last Twelve Months Ended September 30, 2011

Neustar

(1)

TARGUSinfo

(2)

Combined

Company

(3)

Neustar

TARGUSinfo

Combined

Company

(3)

(dollars in thousands)

(unaudited)

Revenue

$ 520,866

$ 130,431

$ 651,297

$ 583,137

$ 149,302

$ 732,439

Income from continuing operations

$ 124,028

$ 24,569

$ 148,597

$ 136,212

$ 26,452

$ 162,664

Add:

Depreciation and amortization

32,861

4,039

36,900

38,054

3,894

41,948

Add:

Other expense (income)

(587)

(118)

(705)

(230)

10,527

10,297

Add:

Provision for income taxes, continuing

operations

82,282

15,120

97,402

85,772

15,846

101,618

EBITDA from continuing operations

238,584

43,610

282,194

259,808

56,719

316,527

Add:

Discretionary compensation

---

10,747

---

10,747

Adjusted EBITDA from continuing operations

$ 238,584

(4)

$ 54,357

$ 292,941

$ 259,808

(4)

$ 67,466

$ 327,274

Adjusted EBITDA margin

(5)

46%

42%

45%

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