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Executives

Lisa A. Hook - Chief Executive Officer, President, Director and Member of Neutrality Committee

Paul S. Lalljie - Chief Financial Officer, Principal Accounting Officer and Senior Vice President

David Angelicchio -

Analysts

Scott P. Sutherland - Wedbush Securities Inc., Research Division

John F. Bright - Avondale Partners, LLC, Research Division

Steven J. Beckert - Robert W. Baird & Co. Incorporated, Research Division

Sterling P. Auty - JP Morgan Chase & Co, Research Division

Vincent Lin - Goldman Sachs Group Inc., Research Division

NeuStar (NSR) Q3 2011 Earnings Call October 11, 2011 4:50 PM ET

Operator

Good day, ladies and gentlemen, and welcome to the NeuStar Acquires TARGUSinfo and Reports Third Quarter Results 2011 Conference Call. My name is Keisha, and I'll be your operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to hand the conference over to Mr. David Angelicchio, Senior Director of Investor Relations. Please proceed.

David Angelicchio

Thank you. Good afternoon, everyone, and welcome to today's conference call. Joining us today from NeuStar are Lisa Hook, President and Chief Executive Officer; and Paul Lalljie, our Chief Financial Officer.

Our call today will begin with comments from Lisa Hook followed by Paul Lalljie, after which, we will open the line for questions from qualified investors and research analysts.

Before we begin, I'd like to remind everyone that today's discussion contains forward-looking statements based on information as of today, October 11, 2011, and as such, is subject to many risks and uncertainties and may cause actual results to differ materially from those anticipated. Additional information concerning these risks and uncertainties can be found in today's press releases and our annual report on Form 10-K for the year ended December 31, 2010, and our other current periodic reports filed with the U.S. Securities and Exchange Commission. We assume no obligation to update any forward-looking statements.

As you listen to today's call, we will discuss certain non-GAAP financial measures and supplemental key performance metrics by revenue category, headcount at additional expense detail. This information including reconciliations to the most comparable GAAP measures can be found in today's earnings release and under our Investor Relations tab on our website, www.neustar.biz. With that, I'm pleased to introduce NeuStar's President and Chief Executive Officer, Lisa Hook. Lisa?

Lisa A. Hook

Good afternoon, everyone, and thank you very much for joining us. Today, NeuStar announced our third quarter results. We also announced that we have signed a definitive agreement to acquire privately held TARGUSinfo, a leading provider of realtime on-demand information and analytics services for $650 million in cash. In addition, our board has authorized the repurchase of an incremental $250 million of our stock on an accelerated basis. These actions represent a logical step forward in the growth strategy and capital allocation framework we have been refining since late 2010. We're confident that they will create significant value for our shareholders and our customers.

I'll start this afternoon with a few comments on third quarter results, which Paul Lalljie will address in more detail, then discuss the strategic and financial rationale for the TARGUSinfo acquisition and incremental share repurchase.

In the third quarter, we once again delivered strong growth in revenue, earnings and cash flow. Compared to the third quarter of 2010, revenues were up 18% overall to $152.5 million. Earnings per diluted share from continuing operations increased to 21% to $0.51 and EBITDA from continuing operations was up 11% to $68.6 million, a 45% margin. Overall, this is another strong quarter that demonstrates the power of our business model and the strong economics of our business, which gives us the resources and flexibility to move forward with the other actions we announced today.

Let me turn now to a discussion of these actions, the acquisition of TARGUSinfo and the additional share repurchase authorization. In the first several months of my tenure as CEO, we assessed the scale competitive position and economics of all of our businesses and determined our future strategic direction. As part of this effort, we came to a view on organic growth and defined parameters for any future acquisitions. We defined a strict set of acquisition criteria with a focus on low-risk, value-creating transactions in near or adjacent spaces, including accelerating our product roadmaps by opportunistically buying capabilities we otherwise would have built. Having looked at organic growth and acquisitions for the future, we then defined a capital allocation strategy. Today, I will address each one of the above elements of our path going forward.

First, our strategy. We have a unique non-replicable set of databases that we have created over 12 years to provide network addressing, routing and policy management. The data are provided by our customers, we then collate the information to enable of the authoritative secure completion of voice calls, text messages, Internet queries, et cetera, in realtime on a global basis. Like others in the information and analytics sector, we have developed the ability to analyze data gathered from our customers to provide insights that are critical to their inventory management, their network security and their marketing departments among others. And we have begun to build and provide these services organically.

In addition, we've decided to add to our existing services and skill sets through acquisitions. Our IP geo-location services, for example, rely on a unique, highly reliable database and addresses to support marketing department. The Evolving Systems asset add a unique database and services that expand our Numbering offering to provide an end-to-end workflow solution. And today, we have announced our agreement to acquire TARGUSinfo.

TARGUSinfo was founded in 1993, it is based in Northern Virginia and is the leading provider of on-demand identification, verification, scoring and local search solutions for over 800 customers in a wide range of industries, including cable, telecom, financial services, e-commerce, retail and education. These customers look to TARGUSinfo for accurate, realtime insight to help them better understand and interact with their own customers and prospects and to capitalize on opportunities in fast-growing sectors like lead verification, online display advertising and local search.

So, why TARGUSinfo and why now? The combination of NeuStar and TARGUSinfo creates a leading provider of information and analytics services. Both companies have assets and capabilities that support strong revenue growth, and high margins on a stand-alone basis. We are confident that the whole will be greater than the sum of the parts.

The real power of this transaction will come from the ability to leverage our combined information and predictive analytics capabilities and to enable our customers to capitalize on opportunities in large growing markets like online display advertising, local search and online lead generation. In the aggregate, these 3 markets are currently estimated to exceed $16 billion in annual revenues. The combined company will have the tools to help our customers increase revenues, improve audience targeting, create better consumer experiences, boost conversion rates and raise customer lifetime value.

The acquisition of TARGUSinfo will give NeuStar revenue and customer diversification, while supporting continuing top line growth and high margins. The proportion of our revenues coming from contracts to provide number portability administration services will decrease, and the proportion coming from higher-growth services will increase.

TARGUSinfo has a highly accurate and comprehensive data repository that is constantly updated from over 200 sources. The company has 21 U.S. patents on its innovations. In simple terms, TARGUSinfo helps clients solve problems and answer key questions, such as: Who is on the other end of my transaction? How do I get someone to the correct store location? How do I interact with and sell to them more effectively? Is the information provided by the consumer accurate?

Let me give you a few examples of how realtime, accurate answers to these questions create value for TARGUSinfo's customers. For example, as its volumes grew, Ticketmaster was experiencing increasing customer call volumes and longer wait times. TARGUSinfo provide Ticketmaster with realtime caller contact information, which reduced customer call time by an average of 45 seconds, decreased call center staffing costs and increased conversion rate. Similarly, TARGUSinfo helped weight management company, Jenny Craig, more effectively route incoming calls to the nearest Jenny Craig center or, if after hours, to a designated call center. This solution reduced customer and franchisee complaints about store locator inaccuracy.

TARGUSinfo's query-and-response system delivers these insights nearly 100 billion times a year in realtime at sub-second speed on the web, over the phone or at the point-of-sale. With TARGUSinfo, we are gaining a highly complementary and profitable set of services, a proven track record of innovation and a trusted partner with similar values. We have known the company and the management team for many years, and have tremendous respect for the business they have built. By combining with TARGUSinfo, we will gain significant scale and advance our vision to be a leading provider of decision support based on realtime, accurate information and analytics.

This acquisition, along with our other recent acquisitions meet our strategic criteria. First, TARGUSinfo's business is an address-oriented subscription service, which clearly fits our near adjacency criterion. Second, we expect this transaction to be accretive to EPS in 2012, excluding amortization of intangibles and financing fees. And third, this acquisition should carry low integration and execution risk. TARGUSinfo's senior managers will remain in their current positions. This is a transaction designed to drive growth, and success is not predicated on major organizational change or significant cost reduction, both of which can be disruptive to an organization and its customers.

Finally, we have refined our thinking around our capital structure. Given our historic strong cash flow, which will only increase as a result of TARGUSinfo's similar profile, we are in a position to continue to pursue top line growth while at the same time, returning capital to shareholders. Moreover, the stability of our combined businesses permits us prudently to leverage our balance sheet, driving value to a more efficient capital structure. So we also announced today that our board authorized the repurchase of up to $250 million of common stock on an accelerated basis, which is in addition to the $300 million stock repurchase we initiated in July 2010.

Having further clarified our strategic direction, we are now positioned to move forward on our capital structure. We are confident that the combination of the TARGUSinfo acquisition and completion of the incremental $250 million in share repurchase will create meaningful value for our shareholders.

By combining TARGUSinfo's assets, capabilities and culture of innovation with NeuStar, we are creating unmatched scale in our space and positioning the company to be a powerful player in large, fast-growing markets. We are maintaining strong growth in profitability and creating a more efficient capital structure, and we are doing this with low integration and execution risks. Overall, this is a compelling value proposition for our shareholders and customers.

With that, I'd like to turn go Paul Lalljie to provide more details on the financials. Paul?

Paul S. Lalljie

Thanks, Lisa, and good afternoon, everyone. I'll begin with the review of third quarter results, and then move on to discussion of the TARGUSinfo transaction and our share repurchase plan.

Our third quarter results demonstrate our continued focus on top line growth with strong profit. And to put this into perspective, let me go through our results for the quarter, comparing them to the third quarter of 2010. Revenue grew 18% to $152.5 million. Net income increased 26% to $37.8 million, while income from continuing operations increased 19% to $37.8 million. Earnings per share grew 31% to $0.51, while earnings from continuing operations per diluted share increased 21% to $0.51. EBITDA from continuing operations increased 11% to $68.6 million, representing a 45% margin.

Just to remind everyone, like last quarter, my comments today will focus on results from continuing operations.

Now for a look at revenue. Carrier Services revenue totaled $114.2 million, an 18% year-over-year increase. This $17.5 million increase was primarily due to a $10.3 million or 12% increase in Numbering Services revenue and a $5.6 million or 122% increase in Order Management Services. Within Numbering Services, the increase is mainly driven by a $10.9 million increase and established fees under our contracts to provide NPAC Services.

Enterprise Services revenue totaled $38.3 million, a 17% year-over-year increase. This $5.6 million increase was due to a $3.2 million or 19% increase in Internet Infrastructure Services revenue and a 2.3% or 15% increase in Registry Services.

Now for a review of costs for the quarter. Operating expenses totaled $94.4 million, an increase of $18.3 million over the third quarter of 2010. The increases in cost of revenue, sales and marketing, and research and development were primarily driven by overall growth in the business requiring higher levels of support, as well as our expansion into new businesses and geographies. In particular, expenses for the 2011 quarter includes costs associated with acquired assets and higher royalty expenses driven by increased common short codes revenue. The increases in general and administrative expenses were driven by advisory and pursuit cost for strategic growth opportunity. Headcount for the quarter totaled 1,034 compared to 974 for the June quarter and 924 for the September 2010 quarter. The increases were primarily due to acquired assets.

Now turning to the balance sheet. Cash, cash equivalents and investments totaled $410.2 million compared to $432.1 million as of June 30, 2011, and compared to $382.4 million as of December 31, 2010. In the third quarter of 2011, we repurchased approximately 941,000 shares for a total of $23.6 million. Capital expenditures for the quarter were approximately $11 million. Accounts and unbilled receivables totaled $88 million at quarter end compared to $81.1 million for the June quarter, and $89.4 million as of December 31, 2010.

Now for a discussion in guidance. For the full year 2011, we expect revenue to range from $595 million to $600 million, representing a 14% to 15% growth year-over-year. EBITDA from continuing operations is expected to range between $257 million and $263 million, while income from continuing operations is expected to range between $132 million and $138 million. On a fully-diluted basis, income from continuing operations per share is expected to range between $1.76 and $1.84.

CapEx for 2011 is expected to range between $45 million and $50 million. Our annual effective tax rate is anticipated to be 39%. Our fully diluted weighted average shares outstanding is expected to be approximately $75 million for the year. To summarize our results for this quarter, our results reflect continued focus on top line growth with strong margin.

Now let me turn our discussion to TARGUSinfo acquisition and share repurchase. The acquisition of TARGUSinfo is an all-cash transaction. Specifically, we will pay $650 million, which will include the repayment of approximately $165 million of TARGUSinfo's outstanding debt. We anticipate this transaction will be at least $0.20 accretive to earnings per share in 2012, excluding the impact of amortization of intangibles and financing fees. The transaction is expected to close in the fourth quarter subject to the usual closing conditions, including Hart-Scott-Rodino approval.

The $650 million of enterprise value that we're paying equates to a multiple of 9.6x TARGUSinfo's adjusted EBITDA over the last 12 months. To put this into perspective, over the last 12 months ended September 30, 2011, TARGUSinfo produced revenues of $149 million and EBITDA of $67 million, adjusted for expenses associated with a 2010 recapitalization event.

Over the last 5 years, TARGUSinfo has delivered revenue growth at a compounded annual growth rate of 11% and average adjusted EBITDA margins of 40%. Over the past 12 months, TARGUSinfo's revenues grew 20% on a year-over-year basis. With both companies having recorded very healthy double-digit compounded annual growth rate, and adjusted EBITDA margins over the last 5 years as well as over the past 12 months, the financial profile of the combined entities is expected to be very strong. Looking at the company on a combined basis over the last 12 months ended September 30, 2011, revenues were $732 million and adjusted EBITDA was $327 million, excluding expenses associated with the 2010 TARGUSinfo recapitalization event. That equates to an adjusted EBITDA margin of 45%.

We plan to fund this acquisition with a combination of cash and debt. We have received a financing commitment of $600 million in senior secured Term B facility and a $100 million senior secured revolving credit facility. Let me point out that financing is not a condition to close the acquisition. As I'm sure you saw in addition to the acquisition today, we announced that we intend to repurchase $250 million of our outstanding Class A common shares. This is in addition to the $300 million share repurchase program that we announced in 2010.

One of our goals has been to address our capital structure to ensure that we have a balance sheet that is both efficient and flexible. We are confident that the acquisition of TARGUSinfo and the $250 million in share repurchase will contribute to NeuStar maintaining a highly efficient capital structure that prudently uses leverage to drive growth.

Going forward, our objectives remain the same, continue to generate double-digit organic revenue growth and high margins, engage in disciplined capital allocation that includes acquisitions when they meet our established criteria and return capital to shareholders. We believe this is the best approach to create value for NeuStar's shareholders over the long term.

With that, we'll open the line to questions. Operator?

Question-and-Answer Session

Operator

[Operator Instructions] Your first question comes from the line of Sterling Auty with JP Morgan.

Sterling P. Auty - JP Morgan Chase & Co, Research Division

Let's start with 2 question on Targus. The first one would be, can you give us a little bit more color in terms of a revenue breakdown? How much of what they were doing was caller name versus some of the lead generation and local search and other items that they have?

Paul S. Lalljie

So generally the caller name revenue represents about 50% of the total revenue. The other portion of revenue is categorized as lead verification and scoring, and that's about 20%. They also have a directory services business, which is about another 20%. So that's 90% and then some smaller items making up 10%.

Sterling P. Auty - JP Morgan Chase & Co, Research Division

Okay. And looking at how you plan on integrating company to larger acquisitions for you guys, how do you plan to integrate the 2 companies and management teams, et cetera? How are you going to run it post the deal?

Lisa A. Hook

So we are going to integrate the G&A functions immediately and that's finance, legal, HR, corporate communications, so that we're presenting as one single NeuStar. The business operations and technology group will remain together as a third business group. As you know, we've got Carrier Services and Enterprise Services. This will be the third business group in our team. And we're thrilled that the management team is saying George Moore, the founder CEO will remain with the company through a transition to make sure that we're not losing the momentum of the company. Thereafter, Dennis Ainge, who has been with the company since it began 15, 17 years ago, will then be the lead of the organization, with the rest of the folks remaining with us. We've already started to plan cross-selling, up-selling our new products. So we think that we've got an integration plan that is well underway in terms of development. We're really excited to get this closed and get going.

Sterling P. Auty - JP Morgan Chase & Co, Research Division

All right. Last question, I'll get back in the queue. For those of us that looked at the caller name business of like a Syniverse or VeriSign back in the day or AT&T, it was never really that sexy of a business for those companies in terms of how they were approaching the business. And it always felt like it was squarely kind of a mid-single digit type of grower for a number of those entities. What makes the business at TARGUSinfo different?

Lisa A. Hook

Well, given that we are in the business of addressing, routing and policy management, I would tell you first, that sexy is in the eyes of the beholder. And so we like these kinds of businesses. We think that this company has developed a superior database over a number of years. They have a great customer list. We think that there is growth opportunity here, both in terms of going to companies that are currently doing it in-house and looking to outsource, as well as grabbing market share from a couple of competitors that are in the market. Very stable subscription base, strong cash flows, so it's exactly the kind of business we like.

Operator

Your next question comes from the line of John Bright with Avondale Partners.

John F. Bright - Avondale Partners, LLC, Research Division

Can you hear me?

Lisa A. Hook

John?

[Technical Difficulty]

John F. Bright - Avondale Partners, LLC, Research Division

Let's -- for a start, on the acquisition, talk about, Lisa, if you will, where the overlap exists, maybe if there's any customer concentration?

Lisa A. Hook

So the overlap exists in the cable industry. We both sell services to the cable, to all of the usual suspects in the cable industry, if you will. We have certain customers in common in the marketing and advertising industries where they are providing lead verification, authentication, scoring, and we're providing common short codes, and now bar codes. But as well, we think that there, again, is significant opportunity where there isn't overlap to cross-sell services.

Operator

Your next question will come from the line of Scott Sutherland with Wedbush Securities.

Scott P. Sutherland - Wedbush Securities Inc., Research Division

First of all, complement on a couple of other questions, we've seen other acquisitions is based where there is some channel comp were created by a CNAM acquisition, Calling Name acquisition. When you look through your respective services and customer base, do you see any sort of channel conflict or friction caused by this acquisition?

Paul S. Lalljie

Scott, no, I don't think we see any conflicts there from a channel perspective. We do share a lot of customer commonality. Lisa mentioned the cable providers. Some of the carriers, we do have relationships there, so does TARGUSinfo. From a product perspective, we do believe that combined, we have a more complete distribution channel to the market. So I don't necessarily see a conflict there at all from our perspective.

Lisa A. Hook

And if you're talking about channel conflict in the sense of resellers, we -- both companies have direct relationships with their customers.

Scott P. Sutherland - Wedbush Securities Inc., Research Division

Okay. When you look at their growth in a different category of question, you grew 11% in the last 5 years, 20% in the last year. What caused an acceleration in the growth of Targus, and should we expect that to continue? It sounds like you expect them to grow faster than the core NPAC business.

Paul S. Lalljie

So there are a few things. I mean, I think the business started out with Page 7 of the deal that we have on our website today. It speaks to identification and location, which starts with the foundation of caller name, and then adding several other linkages using customer data to the telephone number and the caller ID database that they have. But if you go down to lead verification, some of the online services that they have there, those have been growing faster than the core business, and those are very, what we would describe as high-growth markets that they're entering into. And as a result, we see a lot of match in terms of some of the growth areas that we are looking at when we think of our intelligent cloud offering and some of the things that we're doing in mobile. We believe that there is a tremendous overlap there from our perspective in terms of a common vision and product growth. And that's where they have been seeing some of their growth. We expect that growth to continue. I would like to look at this more from a combined perspective rather than an acquired-asset perspective. On a combined basis, we do expect double-digit growth from the organization going forward.

Scott P. Sutherland - Wedbush Securities Inc., Research Division

Okay. My last question for you guys is I'm looking at your annual guidance. I mean, it's still assuming a sequential downtick for Q4. Your business model has a lot of recurring revenue in visibility, but I do know you record on a GAAP basis. Is that, just M&A, the one-time acquisition cost in your guidance assuming that GAAP number or is there anything else in the guidance we should be aware of?

Paul S. Lalljie

So a few things, our third quarter revenue of $152 million did include some what I will describe as some one-time revenues there. In particular, statement-of-work type revenue, one in the NeuStar media area and one in the -- excuse me, the telephone number area, the local number portability business. In addition to that, we also included the numbering asset acquired from Evolving Systems. And as we brought that over and did some of the purchase price adjustment, we believe that we maybe in a position -- we were in a position to recognize a little bit more revenue on the first shot versus on an ongoing basis. So when you put those 2 things together, that accounts for the top line range that you have there, our $595 million to -- $597 million to $600 million, $595 with the midpoint being $597.5 million. On the EBITDA side of things, remember we do have deal costs in our numbers for this acquisition. We are going to have some financing cost, which we did accrue as part of the transaction here. So those are captured in those numbers. Our numbers for the full year does not include any TARGUSinfo numbers. It is simply NeuStar as an entity. When we close the transaction, we will then update numbers for what we expect from TARGUSinfo on a stub period or pro rata period, if you will.

Operator

Your next question comes from the line of Julio Quinteros with Goldman Sachs.

Vincent Lin - Goldman Sachs Group Inc., Research Division

It's Vince, sitting for Julio. So I guess, first on TARGUSinfo, the 11% CAGR that you cited, was it a purely organic number or were there some acquisitions? And then secondly, since some of the services are tied to things like display advertising and maybe lead generation in terms of marketing efforts, can you maybe talk about if there's any cyclicality to that business?

Lisa A. Hook

So first of all, the growth has been organic. They have been very, very focused on creating additional services on top of their initial caller ID set of databases. On the newer services, which sit underneath lead generation, we have not seen much cyclicality. As you know that online display advertising continues to decline, online advertising of all types continue to -- I'm sorry, to increase, not to decline.

Vincent Lin - Goldman Sachs Group Inc., Research Division

Got it. And then, maybe just real quickly in terms of Internet Infrastructure Services, it looks like on a year-over-year basis the growth rate moderated a little bit versus the first half this year and then, sort of you have a flattish trajectory sequentially versus the first half. Just wondering if you can provide some color in terms of the outlook for that business going forward? Can we expect the kind of 18%, 19% kind of growth rate is sustained into the next couple of quarters?

Paul S. Lalljie

Julio, this is Paul here. So -- I mean, if I think back to the first quarter, first quarter, we are about $17 million, $17.5 million; second quarter, about $20 million; third quarter, about $21 million. The growth rate was about 19%, 20%. For the third quarter, I don't recall, off the top of my head, the growth rate for the first and second quarters. But generally, we expect this type of revenue run rate from this business. And this business is driven by adding new services and to sell more to customers. Some of the indicators that we look at had to do with the number of queries and customers that we add in the quarter, and we continue to see uptick in queries. The key indicators in this business looks good for us. So probably as the size of business grows and become larger, we shouldn't expect growth rates almost 30%. I think the 20s -- high-teens are probably more realistic for this business.

Operator

[Operator Instructions] Your next question comes from the line of the Steven Beckert with Robert W. Baird.

Steven J. Beckert - Robert W. Baird & Co. Incorporated, Research Division

First of all, I was wondering if you could give us just a little more clarity around the timeframe for the accelerated buyback? Is that something you plan to complete by the end of 2012?

Paul S. Lalljie

Steven, that's -- we definitely would like to get this completed as soon as possible. As you know, with a material acquisition like this in order for us to do an accelerated buyback, we're going to have disclosure requirements around financials that we have to file on a pro forma basis and things like that. So that would require some effort on our part. As we get closer towards closing, and as we satisfy closing conditions, we believe that we'll be in a position to announce an accelerated program. The 2 programs either tender offer or some sort of accelerated program, we'll definitely try to get that down before 12/31. That is our intention. Lisa is keen on doing that, and my instructions, "Work as hard as possible to execute on that."

Steven J. Beckert - Robert W. Baird & Co. Incorporated, Research Division

Okay, that makes sense. And I was wondering if you could provide a little bit color around the acquisition process? Who approached who? How long it took to close the deal? And if any other parties were involved?

Lisa A. Hook

So I called George Moore, for whom I have a huge amount of respect and asked him if he's interested in having breakfast. And we got to know each other and talk about personal values and company values. And over the course of, frankly, several months determined that this was the right fit and the right time for both companies. So it was a rare principle-to-principle deal.

Operator

Your next question is a follow-up from the line of Sterling Auty with JP Morgan

Sterling P. Auty - JP Morgan Chase & Co, Research Division

When you look at the share repurchase, so the $250 million you hope to get done by year end. But I've had a couple of people ask me, where does that leave the existing $300 million? Do you anticipate getting all this done in short order or is the priority due to $250 million you've accelerated and then be more tactical with the remaining $300 million?

Paul S. Lalljie

So Sterling, I think we -- our intention is to continue with that $300 million on the path that we're on. I think last quarter presented a good opportunity. We bought back $25 million probably mainly because of the volatility in the marketplace. I don't know what their run rate is going to be on a steady state, but we will continue with that going into 2012 and 2013. At the same time, it's our goal to buy back the $250 million as soon as possible.

Sterling P. Auty - JP Morgan Chase & Co, Research Division

All right. So if you have $650 million to pay for the acquisition, $250 million in accelerated share repurchase, you're bringing on the debt, kind of roll it all together for us? And post-close of the deal, what should the cash balance, ballpark-ish, be for NeuStar?

Paul S. Lalljie

So a couple of things, we -- $650 million is the purchase price. We're borrowing $600 million in Term B. We don't need to draw on a revolver. We have about $410 million in the books, so that's about $1 billion right there. By the time we get the deal closed, we should account -- accumulate to probably another $25 million, $30 million. So anywhere between $125 million and $150 million, probably, is what we're going to be left with there.

Sterling P. Auty - JP Morgan Chase & Co, Research Division

And is that -- what's the level that you're not comfortable going below?

Paul S. Lalljie

Probably $75 million. But at the end of the day, Lisa likes to have cash, so I would probably try to be closer to $100 million or $125 million at all times, so that I have a happy boss and a happy life.

Sterling P. Auty - JP Morgan Chase & Co, Research Division

And last question from my side, given you made some of the remarks about looking at some of the metrics excluding amortization, are you going to move to more of a non-GAAP EPS in terms of guidance? How are you going look at the metrics and present the metrics to us going forward?

Paul S. Lalljie

It is our ambition to provide metrics that allows investors to have as much clarity into our performance as possible. I think a lot of people still depend on EBITDA, so I think we'd like continue to provide EBITDA. But I think we'll want to provide an adjusted EPS number along the way, backing out the amortization of intangibles in particular. We may even consider backing out SBC so that we can provide investors 2 flavors, and they have a choice on which one they can use to measure performance. And we'll comment on both of them in an earnings call.

Operator

There are no further questions in queue. I would now like to hand the conference back over to Lisa Hook for any closing remarks.

Lisa A. Hook

So thank you very much for joining us. We are very excited about this opportunity. We are -- feel an incredible responsibility to carry forward the success of the company that George Moore has built and to welcome the employees of TARGUSinfo into the fold. So we can hardly wait to get this thing closed and get on with it, while Paul focuses on the accelerated buyback. And we'll talk to you all soon. Thanks very much.

Operator

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect your line.

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