NEUSTAR INC FORM 8-K (Current report filing) Filed 05/02/13 for the Period Ending 05/02/13 Address 21575 RIDGETOP CIRCLE STERLING, VA 20166 Telephone 571-434-5400 CIK 0001265888 Symbol NSR SIC Code 4899 - Communications Services, Not Elsewhere Classified Industry Communications Services Sector Services Fiscal Year 12/31 http://www.edgar-online.com Copyright 2016, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) May 2, 2013 NeuStar, Inc. (Exact name of registrant as specified in its charter) Delaware 001-32548 52-2141938 (State or other jurisdiction Of incorporation) (Commission File Number) 21575 Ridgetop Circle Sterling, Virginia 20166 (Address of principal executive offices) (Zip Code) (571) 434-5400 (Registrant s telephone number, including area code.) N/A (Former name and former address, if changed since last report.) (IRS Employer Identification No.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition. On May 2, 2013, NeuStar, Inc. (the Company or Neustar ) announced its financial results for the first quarter of 2013. A copy of the press release containing the announcement is included as Exhibit 99.1 to this Current Report and is incorporated herein by reference. Item 7.01. Regulation FD Disclosure. A copy of the supplemental slides, which will be discussed during the Company s earnings call at 4:30 p.m. Eastern Time on Thursday, May 2, 2013, is attached to this Current Report as Exhibit 99.2 and is incorporated herein by reference. Item 8.01. Other Events. On May 2, 2013, the Company announced that its Board of Directors had authorized the purchase of up to $250 million of its Class A common stock through the end of the year. A copy of the press release announcing the share repurchase plan is attached hereto as Exhibit 99.3 and is incorporated by reference herein. Item 9.01. Financial Statements and Exhibits The information in this report on Form 8-K under Items 2.02 and 7.01, including the exhibits attached hereto related to Items 2.02 and 7.01, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act ), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. The following are attached as exhibits to this Current Report on Form 8-K: Exhibit Number Description 99.1 Press Release of Neustar, dated May 2, 2013, announcing first quarter 2013 financial results. 99.2 Slides presented at the May 2, 2013 earnings call. 99.3 Press Release of Neustar, dated May 2, 2013, announcing the share repurchase program.
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: May 2, 2013 NEUSTAR, INC. By: /s/ Paul S Lalljie Name: Paul S Lalljie Title: Chief Financial Officer (Principal Financial and Accounting Officer and Duly Authorized Officer)
Exhibit Number EXHIBIT INDEX Description 99.1 Press Release of Neustar, dated May 2, 2013, announcing first quarter 2013 financial results. 99.2 Slides presented at the May 2, 2013 earnings call. 99.3 Press Release of Neustar, dated May 2, 2013, announcing the share repurchase program.
Exhibit 99.1 Neustar Reports Results for First Quarter 2013 Expects to Purchase an Additional $250 Million of Common Stock in 2013 STERLING, VA, May 2, 2013 Neustar, Inc. (NYSE: NSR), a trusted, neutral provider of real-time information and analysis to the Internet, telecommunications, information services, financial services, retail, media and advertising sectors, today announced results for the quarter ended March 31, 2013 and affirmed its guidance for 2013. The company also announced that it plans to purchase up to $250 million of its Class A common shares beginning May 7, 2013 through December 31, 2013. Results for First Quarter 2013 Compared to First Quarter 2012 Revenue increased 8% to $216.4 million Non-NPAC revenue increased 10% to $107.1 million Net income decreased 1% to $33.8 million, including the impact of a $10.9 million charge for the loss on debt modification and extinguishment Net income per share was flat at $0.50 Non-GAAP Results for First Quarter 2013 Compared to First Quarter 2012 Adjusted net income increased 23% to $54.1 million, representing a 25% margin Adjusted net income per share increased 25% to $0.80 In the first quarter, we made progress on each of our 2013 priorities, said Lisa Hook, Neustar s president and chief executive officer. We submitted our proposal for the NPAC contract in early April, and we remain confident in our ability to provide world class service to the communications industry. In addition, we continued to implement our strategy through targeted investments in our people and platforms, while identifying and executing on significant growth opportunities. Paul Lalljie, Neustar s chief financial officer added, The 25% increase in first quarter adjusted earnings per share demonstrated strong operating leverage and prudent cost management. Our first quarter results and leading indicators provide us with the visibility to affirm our full-year guidance. In addition, we have announced a $250 million share repurchase program that returns significant capital to our shareholders while maintaining our ability to invest in the growth of our business. Discussion of First Quarter Results Consolidated revenue totaled $216.4 million, an 8% increase from $199.6 million in the first quarter of 2012. This $16.8 million increase included growth in all three of our operating segments. In particular: Carrier Services revenue totaled $132.2 million, a 6% increase from $124.4 million in 2012. This increase was primarily due to a $7.5 million increase in NPAC Services revenue; Enterprise Services revenue totaled $44.8 million, a 13% increase from $39.5 million in 2012. This increase was due to higher revenue in both Internet Infrastructure and Registry Services; and Information Services revenue totaled $39.5 million, a 10% increase from $35.7 million in 2012. This increase was primarily due to higher revenue in Verification and Analytics Services.
Operating expense totaled $145.6 million, an 8% increase from $135.2 million in the first quarter of 2012. This increase was primarily due to the expansion of the company s operations. In particular, stock-based compensation increased $5.1 million driven by performance-based equity that was granted to a broader employee base. Cash, cash equivalents and investments totaled $378.2 million as of March 31, 2013, compared to $343.9 million as of December 31, 2012. The debt refinancing completed in January 2013 resulted in total debt obligations of $623.8 million as of March 31, 2013, compared to $587.3 million as of December 31, 2012. During the first quarter, the company purchased approximately 551,000 shares of common stock at an average price of $44.38 per share, for a total purchase price of $24.4 million. Business Outlook for 2013 The company affirmed its guidance for revenue and adjusted net income provided on February 5, 2013: Revenue to range from $895 million to $915 million Adjusted net income to range from $220 million to $230 million Adjusted net income per share to range from $3.28 to $3.43 Conference Call As announced on April 18, 2013, Neustar will conduct an investor conference call to discuss the company s results today at 4:30 p.m. (Eastern Time). Prior to the call, investors may access the conference call over the Internet via the Investor Relations tab of the company s website ( www.neustar.biz ). Those listening via the Internet should go to the website 15 minutes early to register, download and install any necessary audio software. The conference call is also accessible via telephone by dialing (888) 437-9315 (international callers dial (719) 325-2223) and entering PIN 5300732. For those who cannot listen to the live broadcast, a replay will be available through 11:59 p.m. (Eastern Time) Thursday, May 9, 2013 by dialing (877) 870-5176 (international callers dial (858) 384-5517) and entering replay PIN 5300732, or by going to the Investor Relations tab of the company s website ( www.neustar.biz ). Neustar will take live questions from securities analysts and institutional portfolio managers; the complete call is open to all other interested parties on a listen-only basis. This press release, the financial tables and other supplemental information are available on the company s website under the Investor Relations tab. This includes reconciliations of certain non-gaap measures to their nearest comparable GAAP measures that may be used periodically by management when discussing the company s financial results with investors and analysts. About Neustar, Inc. Neustar, Inc. (NYSE: NSR) is a trusted, neutral provider of real-time information and analysis to the Internet, telecommunications, information services, financial services, retail, media and advertising sectors. Neustar applies its advanced, secure technologies in location, identification, and evaluation to help its customers promote and protect their businesses. More information is available at www.neustar.biz.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 This press release includes information that constitutes 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, such as its guidance. 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. These potential risks and uncertainties include, among others, general economic conditions in the regions and industries in which the company operates; the uncertainty of future revenue and profitability and potential fluctuations in quarterly operating results due to such factors as disruptions to the company s operations, modifications to or terminations of its material contracts, the financial covenants in the company s secured credit facility and their impact on the company s financial and business operations; the company s indebtedness and the impact that it may have on the company s financial and operating activities and the company s ability to incur additional debt; the variable interest rates borne by the company s indebtedness and the effects of changes in those rates; its ability to successfully identify and complete acquisitions, integrate and support the operations of businesses the company acquires, increasing competition, market acceptance of its existing services, its ability to successfully develop and market new services, the uncertainty of whether new services will achieve market acceptance or result in any revenue, and business, regulatory and statutory changes in the communications industry. More information about risks factors, uncertainties and other 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 most recent Annual Report on Form 10-K and subsequent periodic and current reports. All forward-looking statements are based on information available to the company on the date of this press release, and the company undertakes no obligation to update any of the forward-looking statements after the date of this press release.
NEUSTAR, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Three Months Ended March 31, 2012 2013 (unaudited) Revenue: Carrier Services $ 124,373 $ 132,171 Enterprise Services 39,485 44,779 Information Services 35,724 39,466 Total revenue 199,582 216,416 Operating expense: Cost of revenue (excluding depreciation and amortization shown separately below) 44,898 49,297 Sales and marketing 38,353 42,260 Research and development 7,724 7,484 General and administrative 20,993 21,882 Depreciation and amortization 22,706 24,665 Restructuring charges 522 2 135,196 145,590 Income from operations 64,386 70,826 Other (expense) income: Interest and other expense (8,193) (17,562) Interest and other income 229 141 Income before income taxes 56,422 53,405 Provision for income taxes 22,460 19,641 Net income $ 33,962 $ 33,764 Net income per share: Basic $ 0.51 $ 0.51 Diluted $ 0.50 $ 0.50 Weighted average common shares outstanding: Basic 67,205 66,184 Diluted 68,478 67,614
NEUSTAR, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) December 31, March 31, 2012 2013 (audited) (unaudited) ASSETS Current assets: Cash and cash equivalents $ 340,255 $ 376,675 Restricted cash 2,543 2,549 Short-term investments 3,666 1,564 Accounts receivable, net 131,805 144,319 Unbilled receivables 6,372 6,612 Notes receivable 2,740 2,619 Prepaid expenses and other current assets 17,707 20,344 Deferred costs 7,379 7,291 Income taxes receivable 6,596 Deferred tax assets 6,693 8,497 Total current assets 525,756 570,470 Property and equipment, net 118,513 113,723 Goodwill 572,178 572,178 Intangible assets, net 288,487 276,115 Notes receivable, long-term 1,008 406 Deferred costs, long-term 702 600 Other assets, long-term 20,080 26,979 Total assets $ 1,526,724 $ 1,560,471 LIABILITIES AND STOCKHOLDERS EQUITY Current liabilities: Accounts payable $ 9,269 $ 2,926 Accrued expenses 85,424 59,767 Income taxes payable 6,167 Deferred revenue 49,070 48,387 Notes payable 8,125 7,971 Capital lease obligations 1,686 1,105 Other liabilities 3,856 2,844 Total current liabilities 157,430 129,167 Deferred revenue, long-term 9,922 10,061 Notes payable, long-term 576,688 614,271 Capital lease obligations, long-term 817 422 Deferred tax liabilities, long-term 114,130 117,487 Other liabilities, long-term 21,129 21,592 Total liabilities 880,116 893,000 Stockholders equity: Common stock 86 87 Additional paid-in capital 532,743 550,709 Treasury stock (604,042) (634,879) Accumulated other comprehensive loss (767) (798) Retained earnings 718,588 752,352 Total stockholders equity 646,608 667,471 Total liabilities and stockholders equity $ 1,526,724 $ 1,560,471
Reconciliation of Non-GAAP Financial Measures In this press release and in other public statements, Neustar presents certain non-gaap financial measures. These non-gaap financial measures have limitations and may not be comparable with similar non-gaap financial measures used by other companies and should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Set forth below are reconciliations of the non-gaap financial measures from the most directly comparable GAAP financial measure. These reconciliations should be carefully evaluated. Prior disclosures of non-gaap figures may not exclude the same items and as such should not be used for comparison purposes. Reconciliation of Net Income to Adjusted Net Income The following is a reconciliation of net income to adjusted net income for the three months ended March 31, 2012 and 2013 and the year ending December 31, 2013. Management believes that this measure enhances investors understanding of the company s financial performance and the comparability of the company s operating results to prior periods, as well as against the performance of other companies. Three Months Ended March 31, Year Ending December 31, 2012 2013 (in thousands, except per share data) (unaudited) 2013 (1) Revenue $ 199,582 $ 216,416 $ 905,000 Net income $ 33,962 $ 33,764 $ 162,500 Add: Stock-based compensation 3,901 8,957 42,000 Add: Amortization of acquired intangible assets 12,572 12,372 49,000 Add: Loss on debt modification and extinguishment (2) 10,886 11,000 Less: Adjustment for provision for income taxes (3) (6,557) (11,848) (39,500) Adjusted net income $ 43,878 $ 54,131 $ 225,000 Adjusted net income margin (4) 22 % 25 % 25 % Adjusted net income per diluted share $ 0.64 $ 0.80 $ 3.36 Weighted average shares outstanding - diluted 68,478 67,614 67,000 (1) The amounts expressed in this column are current estimates of the results for the full year as of the date of this press release. This reconciliation is based on the midpoint of the revenue guidance. (2) Amount represents loss on debt modification and extinguishment related to the refinancing of the company s 2011 credit facility. (3) Adjustment reflects the estimated tax effect of adjustments for stock-based compensation expense, amortization of acquired intangible assets and loss on debt modification and extinguishment based on the effective tax rate for the applicable period. (4) Adjusted net income margin is a measure of adjusted net income as a percentage of revenue.
Reconciliation of Net Income to Adjusted EBITDA The following is a reconciliation of net income to adjusted EBITDA for the three months ended March 31, 2012 and 2013. Management believes that the inclusion of adjusted EBITDA is appropriate to provide additional information to debt holders about its operating performance and its ability to satisfy certain debt obligations. Three Months Ended March 31, 2012 2013 (in thousands, unaudited) Net income $ 33,962 $ 33,764 Add: Provision for income taxes 22,460 19,641 Add: Interest expense 8,613 6,565 Add: Depreciation and amortization 22,706 24,665 Add: Non-cash other (income) and expense, net (1) (420) 111 Add: Stock-based compensation 3,901 8,957 Add: Restructuring charges 522 2 Add: Other adjustments (2) 10,975 Less: Interest income (229) (141) Adjusted EBITDA $ 91,515 $ 104,539 (1) Amounts represent (gain) loss on foreign currency transactions, realized gains on available-for-sale investments and (gain) loss on asset disposals. (2) Amount represents the loss on debt modification and extinguishment related to the refinancing of the company s 2011 credit facility and certain non-capitalized charges incurred in connection with the company s financing activities. Contacts Investor Relations Contact Dave Angelicchio (571) 434-3443 InvestorRelations@neustar.biz Media Contact Kim Hart (202) 533-2934 Kim.Hart@neustar.biz
Exhibit 99.2 Neustar, Inc. Supplemental Information Earnings Report May 2, 2013
Revenue by Segment Segment Revenue ($ in 000s) 2012 Quarter Ended, Full-Year 2013 Qtr Ended, Mar 31, Jun 30, Sep 30, Dec 31, 2012 Mar 31, Carrier Services Numbering Services 110,489 110,896 111,726 111,504 444,615 118,140 Order Management Services 10,910 10,541 10,104 9,997 41,552 9,802 IP Services 2,974 4,910 3,372 4,662 15,918 4,229 Total Carrier Services revenue 124,373 126,347 125,202 126,163 502,085 132,171 Enterprise Services Internet Infrastructure Services (IIS) 21,723 22,455 22,856 23,737 90,771 23,797 Registry Services 17,762 19,634 20,774 21,499 79,669 20,982 Total Enterprise Services revenue 39,485 42,089 43,630 45,236 170,440 44,779 Information Services Identification Services 22,719 22,957 24,212 23,314 93,202 22,696 Verification & Analytics Services 8,236 9,821 13,078 14,322 45,457 11,361 Local Search & Licensed Data Services 4,769 5,248 5,050 5,137 20,204 5,409 Total Information Services revenue 35,724 38,026 42,340 42,773 158,863 39,466 Total consolidated revenue 199,582 206,462 211,172 214,172 831,388 216,416 Carrier Services: Numbering Services We operate and maintain authoritative databases for telephone number resources utilized by our carrier customers and manage the telephone number lifecycle. The services utilizing these databases are: NPAC Services in the United States and Canada, International LNP Services and Number Administration. Order Management Services Our Order Management Services (OMS) permit carrier customers, through a single interface, to exchange essential operating data with multiple carriers in order to provision and manage services. IP Services We provide scalable IP services to carriers which allow them to manage access for the routing of IP communications. Enterprise Services: Internet Infrastructure Services We provide a suite of domain name systems (DNS) services to our enterprise customers built on a global directory platform. These services include Managed DNS, Monitoring and Load Testing, and IP Geolocation. Registry Services We operate the authoritative registries for certain Internet domain names and operate the authoritative U.S. Common Short Code (CSC) registry on behalf of wireless carriers in the United States. These services include the registry services for.biz,.us,.co,.tel and.travel domain names, as well as the registry for U.S. Common Short Codes. Information Services: Identification Services Our real-time identification services include the provision of caller-name and related information to telephony providers, delivery of identity and other attribute data for use in call centers or in remarketing efforts, and geographic-based solutions for intelligent call routing, Web-based location lookup, and site planning. Verification & Analytics Services We provide verification services that allow clients to validate customer-provided information, enhance sales leads and assign quality ratings to maximize a prospect s reachability. Our broad-based analytic capabilities also utilize real-time predictive scoring to determine which prospects are most likely to purchase, become a high-value customer or respond to a particular marketing campaign. We also provide an intelligent, privacy-friendly mechanism for delivering targeted, real-time advertising on the Internet. Local Search & Licensed Data Services We provide an online listing identity management solution that provides the essential tools to verify, enhance and manage the identity of local listings across the Web. We also maintain an expansive data repository that provides a more current alternative to Directory Listing and White Page compilations. 2
Key Performance Metrics Metrics 2012 Quarter Ended, Full-Year Revenue category Mar 31, Jun 30, Sep 30, Dec 31, 2012 Mar 31, Carrier Services NPAC Services transactions (in thousands) 113,243 125,479 138,297 130,732 507,751 127,877 Functionality enhancements NPAC SOWs (in thousands) $ $ $ $ $ $ Enterprise Services Functionality enhancements SOWs (in thousands) $ 42 $ 1,104 $ 1,893 $ 1,659 $ 4,698 $ 741 IIS queries (in billions) 982 986 1,051 1,116 4,135 1,082 IIS new customers 253 222 237 246 958 52 IIS upgrades 381 367 309 321 1,378 616 Registry - domain names under management (in thousands) 5,736 5,787 5,821 5,842 5,842 5,931 CSC - codes under management 4,667 4,681 4,895 4,963 4,963 4,866 3 2013 Qtr Ended,
Expense by Type by Quarter and as a Percentage of Revenue ($ in 000s) 2012 Quarter Ended, Full-Year 2013 Qtr Ended Mar 31, Jun 30, Sep 30, Dec 31, 2012 Mar 31, Revenue 199,582 206,462 211,172 214,172 831,388 216,416 Expense by type: Cost of revenue (excl. depreciation & amortization) 44,898 46,127 46,339 48,601 185,965 49,297 % of Revenue 22 % 22 % 22 % 23 % 22 % 23 % Sales and marketing 38,353 41,073 38,040 46,263 163,729 42,260 % of Revenue 19 % 20 % 18 % 22 % 20 % 20 % Research and development 7,724 8,096 7,663 6,311 29,794 7,484 % of Revenue 4 % 4 % 4 % 3 % 4 % 3 % General and administrative 20,993 20,091 20,915 19,798 81,797 21,882 % of Revenue 11 % 10 % 10 % 9 % 10 % 10 % Depreciation and amortization 22,706 22,713 23,622 23,914 92,955 24,665 % of Revenue 11 % 11 % 11 % 11 % 11 % 11 % Restructuring charges (recoveries) 522 2 (32) (3) 489 2 % of Revenue 0 % 0 % 0 % 0 % 0 % 0 % Total operating expense 135,196 138,102 136,547 144,884 554,729 145,590 4
Expense Details Other Details and Headcount Stock-based compensation by type ($ in 000s) 2013 Qtr 2012 Quarter Ended, Full-Year Ended, Mar 31, Jun 30, Sep 30, Dec 31, 2012 Mar 31, Cost of revenue 555 1,158 1,461 1,369 4,543 1,905 Sales and marketing 1,736 3,004 3,734 3,251 11,725 3,259 Research and development 359 561 589 492 2,001 550 General and administrative 1,251 2,326 3,253 2,959 9,789 3,243 Total stock-based compensation expense 3,901 7,049 9,037 8,071 28,058 8,957 Amortization of intangibles ($ in 000s) 12,572 12,571 12,569 12,569 50,281 12,372 Headcount by type 2013 Qtr 2012 Quarter Ended, Full-Year Ended, Mar 31, Jun 30, Sep 30, Dec 31, 2012 Mar 31, Cost of revenue 659 674 673 671 671 687 Sales and marketing 461 470 470 493 493 505 Research and development 141 158 154 143 143 135 General and administrative 228 230 232 236 236 240 Total headcount 1,489 1,532 1,529 1,543 1,543 1,567 5
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE Neustar reports its results in accordance with generally accepted accounting principles in the United States (GAAP). In this section, Neustar is also providing certain non-gaap financial measures and reconciliations from the most directly comparable GAAP measure. These non-gaap financial measures have limitations and may not be comparable with similar non-gaap financial measures used by other companies and should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. These reconciliations should be carefully evaluated. Prior disclosures of non-gaap figures may not exclude the same items and as such should not be used for comparison purposes. Management believes that these measures enhance investors understanding of the company s financial performance and the comparability of the company s operating results to prior periods, as well as against the performance of other companies.
Reconciliation of Segment Contribution ($ in 000s) 2012 Quarter Ended, Full-Year 2013 Qtr Ended, Mar 31, Jun 30, Sep 30, Dec 31, 2012 Mar 31, Segment contribution Carrier Services 108,446 110,438 109,359 109,970 438,213 114,394 Enterprise Services 16,731 18,866 20,314 17,555 73,466 20,903 Information Services 18,014 16,991 24,064 18,222 77,291 17,768 Total segment contribution 143,191 146,295 153,737 145,747 588,970 153,065 Indirect operating expense: Cost of revenue (excl. depreciation and amortization) 24,269 24,741 24,989 24,778 98,777 25,161 Sales and marketing 5,730 6,635 6,050 5,217 23,632 6,835 Research and development 4,860 4,431 4,270 3,083 16,644 4,284 General and administrative 20,718 19,413 20,213 19,470 79,814 21,292 Depreciation and amortization 22,706 22,713 23,622 23,914 92,955 24,665 Restructuring charges (recoveries) 522 2 (32) (3) 489 2 Consolidated income from operations 64,386 68,360 74,625 69,288 276,659 70,826 7
Adjusted Net Income from Continuing Operations ($ in 000s, except per share amounts) Qtr Ended Quarter Ended 2012, Full-Year 2013, Mar 31, Jun 30, Sep 30, Dec 31, 2012 Mar 31, Net Income 33,962 38,592 45,753 37,780 156,087 33,764 Add: Stock-based compensation 3,901 7,049 9,037 8,071 28,058 8,957 Add: Amortization of acquired intangible assets 12,572 12,571 12,569 12,569 50,281 12,372 Add: Loss on debt modification and extinguishment (1) 10,886 Less: Adjustment for provision for income taxes (2) (6,557) (7,014) (6,684) (7,722) (28,040) (11,848) Adjusted net income 43,878 51,198 60,675 50,698 206,386 54,131 Adjusted net income margin (3) 22 % 25 % 29 % 24 % 25 % 25 % Adjusted net income per diluted share $ 0.64 $ 0.75 $ 0.90 $ 0.75 $ 3.04 $ 0.80 Weighted average diluted common shares outstanding 68,478 67,887 67,623 67,762 67,956 67,614 (1) Amount represents loss on debt modification and extinguishment related to the refinancing of the company s 2011 credit facility. (2) Adjustment reflects the estimated tax effect of adjustments for stock-based compensation expense, loss on debt modification and extinguishment and amortization of acquired intangible assets based on the effective tax rate for the applicable period. (3) Adjusted net income margin is a measure of adjusted net income as a percentage of revenue. 8
Adjusted EBITDA ($ in 000s) Qtr Ended Quarter Ended 2012, Full-Year 2013, Mar 31, Jun 30, Sep 30, Dec 31, 2012 Mar 31, Net Income 33,962 38,592 45,753 37,780 156,087 33,764 Add: Provision for income taxes 22,460 21,474 20,495 22,584 87,013 19,641 Add: Interest expense 8,613 8,254 8,622 8,711 34,200 6,565 Add: Depreciation and amortization 22,706 22,713 23,622 23,914 92,955 24,665 Add: Non-cash other (income) and expense, net (1) (420) 150 (105) 330 (45) 111 Add: Stock-based compensation 3,901 7,049 9,037 8,071 28,058 8,957 Add: Restructuring charges (recoveries) 522 2 (32) (3) 489 2 Add: Other adjustments (2) 10,975 Less: Interest income (229) (110) (140) (117) (596) (141) Adjusted EBITDA 91,515 98,124 107,252 101,270 398,161 104,539 (1) Amounts represent loss on foreign currency transactions, realized gains on available-for-sale investments and loss on asset disposals. (2) Amount represents the loss on debt modification and extinguishment related to the refinancing of the company s 2011 credit facility and certain non-capitalized charges incurred in connection with the company s financing activities. 9
Exhibit 99.3 Neustar Launches $250 Million Share Repurchase Program STERLING, VA, May 2, 2013 Neustar, Inc. (NYSE: NSR) announced that its Board of Directors has authorized a share repurchase program for up to $250 million of its Class A common shares beginning May 7, 2013 through December 31, 2013. Purchases completed under the stock trading plan will be in accordance with guidelines specified under Rule 10b5-1 and Rule 10b-18 of the Securities and Exchange Act of 1934. Concurrent with this authorization, the company has terminated its current share repurchase program which has remaining $51.7 million. Prior to the termination, the Company repurchased $248.3 million of its common stock at an average purchase price of $31.07, plus commissions. About Neustar, Inc. Neustar, Inc. (NYSE: NSR) is a trusted, neutral provider of real-time information and analysis to the Internet, telecommunications, information services, financial services, retail, media and advertising sectors. Neustar applies its advanced, secure technologies in location, identification, and evaluation to help its customers promote and protect their businesses. More information is available at www.neustar.biz. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 This press release includes information that constitutes 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, such as the duration of the repurchase program. The company has attempted, whenever possible, to identify these forwardlooking 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. These potential risks and uncertainties include, among others, general economic conditions in the regions and industries in which the company operates; the uncertainty of future revenue and profitability and potential fluctuations in quarterly operating results due to such factors as disruptions to the company s operations, modifications to or terminations of its material contracts, the financial covenants in the company s secured credit facility and their impact on the company s financial and business operations; the company s indebtedness and the impact that it may have on the company s financial and operating activities and the company s ability to incur additional debt; the variable interest rates borne by the company s indebtedness and the effects of changes in those rates; its ability to successfully identify and complete acquisitions, integrate and support the operations of businesses the company acquires, increasing competition, market acceptance of its existing services, its ability to successfully develop and market new services, the uncertainty of whether
new services will achieve market acceptance or result in any revenue, and business, regulatory and statutory changes in the communications industry. More information about risks factors, uncertainties and other 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 most recent Annual Report on Form 10-K and subsequent periodic and current reports. All forward-looking statements are based on information available to the company on the date of this press release, and the company undertakes no obligation to update any of the forward-looking statements after the date of this press release. Contacts Investor Relations Contact Dave Angelicchio (571) 434-3443 InvestorRelations@neustar.biz Media Contact Kim Hart (202) 533-2934 Kim.Hart@neustar.biz