Delaware		7375		52-2141938
(State of Incorporation)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

Stephen I. Glover, Esq. Gibson, Dunn & Crutcher LLP 1050 Connecticut Ave., NW Washington, DC 20036 (202) 955-8500		Ronald Cami, Esq. Cravath, Swaine & Moore LLP 825 Eighth Avenue New York, NY 10019 (212) 474-1000

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The information in this preliminary prospectus is not complete and may be changed. The selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and the selling stockholders are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

		Per Share				Total
Public offering price		$				$
Underwriting discounts and commissions		$				$
Proceeds, before expenses, to selling stockholders		$				$

JPMorgan	Credit Suisse First Boston	Banc of America Securities LLC

Bear, Stearns & Co. Inc.		UBS Investment Bank
Jefferies Broadview		ThinkEquity Partners LLC

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		Page
Prospectus Summary			1
Risk Factors			10
Cautionary Note Regarding Forward-Looking Statements			22
Market and Other Data			22
Use of Proceeds			23
Price Range of Common Stock			23
Dividend Policy			23
Capitalization			24
Selected Consolidated Financial Data			25
Management’s Discussion and Analysis of Financial Condition and Results of Operations			28
Business			52
Management			69
Principal and Selling Stockholders			83
Certain Relationships and Related Party Transactions			89
Recapitalization Transactions			92
Description of Capital Stock			93
Potential Claims Related to Our Options			97
Shares Eligible for Future Sale			98
U.S. Federal Income and Estate Tax Consequences to Non-U.S. Holders			100
Underwriting			103
Validity of Shares			107
Experts			107
Where You Can Find More Information			107
Index to the Consolidated Financial Statements			F-1

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	Failures or interruptions of our clearinghouse could materially harm our revenues and impair our ability to conduct our operations.

	•	damage to or failure of our computer software or hardware or our connections and outsourced service arrangements with third parties;
	•	errors in the processing of data by our system;
	•	computer viruses or software defects;
	•	physical or electronic break-ins, sabotage, intentional acts of vandalism and similar events;
	•	increased capacity demands or changes in systems requirements of our customers; or
	•	errors by our employees or third-party service providers.

	•	we may experience damage to our reputation, which may adversely affect our ability to attract or retain customers for our existing services, and may also make it more difficult for us to market our services;
	•	we may be subject to significant damages claims, under our contracts or otherwise, including the requirement to pay substantial penalties related to service level requirements in our contracts;
	•	our operating expenses or capital expenditures may increase as a result of corrective efforts that we must perform;
	•	our customers may postpone or cancel subsequently scheduled work or reduce their use of our services; or
	•	one or more of our significant contracts may be terminated early, or may not be renewed.

	Security breaches could result in an interruption of service or reduced quality of service, which could increase our costs or result in a reduction in the use of our services by our customers.

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	The loss of, or damage to, a data center could interrupt our operations and materially harm our revenues and growth.

	The failure of the third-party software and equipment used by our customers or that we use in our clearinghouse could cause interruptions or failures of our systems.

	Our seven contracts with North American Portability Management, LLC represent in the aggregate a substantial portion of our revenues, are not exclusive and could be terminated or modified in ways unfavorable to us, and we may be unable to renew these contracts at the end of their term.

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	Our contracts with North American Portability Management, LLC contain provisions that may restrict our ability to use data that we administer in our clearinghouse, which may limit our ability to offer services that we currently, or intend to, offer.

	Certain of our other contracts may be terminated or we may be unable to renew these contracts, which may reduce the number of services we can offer and damage our reputation.

	•	North American Numbering Plan Administrator, under which we maintain the authoritative database of telephone numbering resources in North America;
	•	National Pooling Administrator, under which we perform the administrative functions associated with the administration and management of telephone number inventory and allocation of pooled blocks of unassigned telephone numbers;
	•	provider of number portability services in Canada;
	•	operator of the .us registry; and
	•	operator of the .biz registry.

	Failure to comply with neutrality requirements could result in loss of significant contracts.

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	Regulatory and statutory changes that affect us or the communications industry in general may increase our costs or impair our growth.

	•	increase regulatory oversight over the services we provide;
	•	adopt or modify statutes, regulations, policies, procedures or programs that are disadvantageous to the services we provide, or that are inconsistent with our current or future plans, or that require modification of the terms of our existing contracts, including the manner in which we charge for certain of our services. For example, Bellsouth Corporation recently filed a petition with the FCC seeking changes in the way our customers are billed for services provided by us under our contracts with North American Portability Management LLC;
	•	prohibit us from entering into new contracts or extending existing contracts to provide services to the communications industry based on actual or suspected violations of our neutrality requirements, business performance concerns, or other reasons;
	•	adopt or modify statutes, regulations, policies, procedures or programs in a way that could cause changes to our operations or costs or the operations of our customers;
	•	appoint, or cause others to appoint, substitute or add additional parties to perform the services that we currently provide; and
	•	prohibit or restrict the provision or export of new or expanded services under our contracts, or prevent the introduction of other services not under the contracts based upon restrictions within the contracts or in FCC policies.

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	If we do not adapt to rapid technological change in the communications industry, we could lose customers or market share.

	The market for certain of our addressing, interoperability, and infrastructure services is competitive, which could result in fewer customer orders, reduced revenues or margins or loss of market share.

	Our failure to achieve or sustain market acceptance at desired pricing levels could impact our ability to maintain profitability or positive cash flow.

	•	competitors offering our customers services at reduced prices, or bundling and pricing services in a manner that makes it difficult for us to compete. For example, a competing provider of interoperability services might offer its services at lower rates than we do, or a competing domain name registry provider may reduce its prices for domain name registration;
	•	customers with a significant volume of transactions may have enhanced leverage in pricing negotiations with us; and
	•	if our prices are too high, potential customers may find it economically advantageous to handle certain functions internally instead of using us.

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	A decline in the volume of transactions we handle could have a material adverse effect on our results of operations.

	If we are unable to manage our growth, our revenues and profits could be adversely affected.

	We may be unable to complete suitable acquisitions, or we may undertake acquisitions that could increase our costs or liabilities or be disruptive to our business.

	Our potential expansion into international markets may be subject to uncertainties that could increase our costs to comply with regulatory requirements in foreign jurisdictions, disrupt our operations, and require increased focus from our management.

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	Our senior management is important to our customer relationships, and the loss of one or more of our senior managers could have a negative impact on our business.

	We must recruit and retain skilled employees to succeed in our business, and our failure to recruit and retain qualified employees could harm our ability to maintain and grow our business.

	We will continue to incur increased costs as a public company as a result of recently enacted and proposed changes in laws and regulations.

	We may need additional capital in the future and it may not be available on acceptable terms.

	•	not be able to continue to meet customer demand for service quality, availability and competitive pricing;

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	•	be forced to reduce our operations;
	•	not be able to expand or acquire complementary businesses; and
	•	not be able to develop new services or otherwise respond to changing business conditions or competitive pressures.

	Our common stock price may be volatile.

	•	our perceived prospects and the prospects of the telephone and Internet industries in general;
	•	differences between our actual financial and operating results and those expected by investors and analysts;
	•	changes in analysts’ recommendations or projections;
	•	changes in general valuations for communications companies;
	•	adoption or modification of regulations, policies, procedures or programs applicable to our business;
	•	sales of our Class A common stock by our officers, directors or principal stockholders;
	•	sales of our Class A common stock due to a required divestiture under the terms of our certificate of incorporation, see “Description of Capital Stock— Ownership and Transfer Restrictions”; and
	•	changes in general economic or market conditions and broad market fluctuations.

	One of our stockholders holds a significant block of shares in our company and, as a result, may have significant influence over our company.

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	The existence of shares eligible for future sale may cause our stock price to decline.

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	Delaware law and provisions in our certificate of incorporation and bylaws could make a merger, tender offer or proxy contest difficult, and the market price of our Class A common stock may be lower as a result.

	•	authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to thwart a takeover attempt;
	•	prohibit cumulative voting in the election of directors, which would otherwise enable holders of less than a majority of our voting securities to elect some of our directors;
	•	establish a classified board of directors, as a result of which the successors to the directors whose terms have expired will be elected to serve from the time of election and qualification until the third annual meeting following election;
	•	require that directors only be removed from office for cause;
	•	provide that vacancies on the board of directors, including newly-created directorships, may be filled only by a majority vote of directors then in office;
	•	disqualify any individual from serving on our board if such individual’s service as a director would cause us to violate our neutrality requirements;
	•	limit who may call special meetings of stockholders;
	•	prohibit stockholder action by written consent, requiring all actions to be taken at a meeting of the stockholders; and
	•	establish advance notice requirements for nominating candidates for election to the board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.

	In order to comply with our neutrality requirements, our certificate of incorporation contains ownership and transfer restrictions relating to telecommunications service providers and their affiliates, which may inhibit potential acquisition bids that you and other stockholders may consider favorable, and the market price of our Class A common stock may be lower as a result.

	•	if one of our stockholders experiences a change in status or other event that results in the stockholder violating this restriction, or if any transfer of our stock occurs that, if effective, would violate the 5% restriction, we may elect to purchase the excess shares (i.e., the shares that cause the violation of the restriction) or require that the excess shares be sold to a third party whose ownership will not violate the restriction;

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	•	pending a required divestiture of these excess shares, the holder whose beneficial ownership violates the 5% restriction may not vote the shares in excess of the 5% threshold; and
	•	if our board of directors, or its permitted designee, determines that a transfer, attempted transfer or other event violating this restriction has taken place, we must take whatever action we deem advisable to prevent or refuse to give effect to the transfer, including refusal to register the transfer, disregard of any vote of the shares by the prohibited owner, or the institution of proceedings to enjoin the transfer.

	•	discourage industry participants that might have otherwise been interested in acquiring us from making a tender offer or proposing some other form of transaction that could involve a premium price for our shares or otherwise be in the best interests of our stockholders; and
	•	discourage investment in us by other investors who are telecommunications service providers or who may be deemed to be affiliates of a telecommunications service provider.

	•	owns 10% or more of the total outstanding equity of the other party;
	•	has the power to vote 10% or more of the securities having ordinary voting power for the election of the directors or management of the other party; or
	•	has the power to direct or cause the direction of the management and policies of the other party.

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	Holders of our options may have rescission rights against us, and we may be subject to fines and sanctions under federal and state securities laws.

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	•	failures or interruptions of our systems and services;
	•	security or privacy breaches;
	•	loss of, or damage to, a data center;
	•	termination, modification or non-renewal of our contracts to provide telephone number portability and other clearinghouse services;
	•	adverse changes in statutes or regulations affecting the communications industry;
	•	our failure to adapt to rapid technological change in the communications industry;
	•	competition from our customers’ in-house systems or from other providers of addressing, interoperability or infrastructure services;
	•	our failure to achieve or sustain market acceptance at desired pricing levels;
	•	a decline in the volume of transactions we handle;
	•	inability to manage our growth;
	•	economic, political, regulatory and other risks associated with our potential expansion into international markets;
	•	inability to obtain sufficient capital to fund our operations, capital expenditures and expansion; and
	•	loss of members of senior management, or inability to recruit and retain skilled employees.

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		High				Low
Fiscal year ended December 31, 2005
First quarter			N/A				N/A
Second quarter		$	26.67			$	24.50
Third quarter		$	33.02			$	25.35

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	•	on an actual basis;
	•	on an as adjusted basis to reflect the exercise of warrants to purchase 6,361,383 shares of our Class A common stock by selling stockholders in connection with this offering and the payment of offering costs, excluding underwriting discounts and commissions, of approximately $1.25 million as if they occurred on September 30, 2005.

			September 30, 2005
							As
			Actual				adjusted
			(in thousands, except
			share and
			per share data)
Cash, cash equivalents and short-term investments			$	84,279			$	83,453
Long-term debt				5,872				5,872
Stockholders’ equity:
	Class A common stock, par value $0.001; 200,000,000 shares authorized, 58,901,852 shares issued and outstanding, actual; 65,263,235 shares issued and outstanding, as adjusted			59				65
	Class B common stock, par value $0.001; 100,000,000 shares authorized, 1,631,345 shares issued and outstanding, actual and as adjusted			2				2
	Additional paid-in capital			140,781				141,199
	Deferred stock compensation			(1,406	)			(1,406	)
	Retained earnings			9,973				8,723
	Total stockholders’ equity			149,409				148,583
Total capitalization			$	155,281			$	154,455

	•	9,117,211 shares subject to options exercisable as of September 30, 2005, with a weighted average exercise price of $2.17 per share;
	•	4,872,953 shares subject to options outstanding but not exercisable as of September 30, 2005, with a weighted average exercise price of $8.59 per share;
	•	6,107,824 additional shares reserved as of September 30, 2005 for future issuance under our stock-based compensation plans; and
	•	350,000 shares to be issued to an employee on December 18, 2008, provided the employee provides continuous service through the vesting date.

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																								Nine Months
																								Ended
				Year Ended December 31,																				September 30,
				2000				2001				2002				2003				2004				2004				2005
				(in thousands, except per share data)
Consolidated Statements of Operations Data:
Total revenue				$	67,714			$	74,176			$	90,972			$	111,693			$	165,001			$	123,553			$	179,048
Operating expense:
	Cost of revenue (excluding depreciation and amortization shown separately below)				16,781				40,770				36,677				37,846				49,261				35,410				46,154
	Sales and marketing				—				27,362				13,855				14,381				22,743				15,032				21,775
	Research and development				4,477				8,621				6,256				6,678				7,377				5,409				8,540
	General and administrative				33,182				16,372				13,366				11,359				21,144				13,781				22,045
	Depreciation and amortization				1,310				10,857				27,020				16,051				17,285				13,487				11,740
	Restructuring charges (recoveries)				—				8,928				7,332				(1,296	)			(220	)			—				(389	)
	Asset impairment charge				—				—				13,190				—				—				—				—
	Amortization of goodwill				5,566				3,510				—				—				—				—				—
					61,316				116,420				117,696				85,019				117,590				83,119				109,865
Income (loss) from operations					6,398				(42,244	)			(26,724	)			26,674				47,411				40,434				69,183
Other (expense) income:
	Interest expense				(4,866	)			(3,416	)			(6,260	)			(3,119	)			(2,498	)			(1,873	)			(1,715	)
	Interest income				2,137				4,089				1,876				1,299				1,629				1,100				1,756
Income (loss) before income taxes and minority interest					3,669				(41,571	)			(31,108	)			24,854				46,542				39,661				69,224
Provision for (benefit from) income taxes					1,880				1,250				—				836				1,166				(1,504	)			27,653
Income (loss) before minority interest					1,789				(42,821	)			(31,108	)			24,018				45,376				41,165				41,571
Minority interest					—				1,326				1,908				10				—				—				—
Net income (loss)					1,789				(41,495	)			(29,200	)			24,028				45,376				41,165				41,571
Dividends on and accretion of preferred stock					(2,932	)			(4,888	)			(9,102	)			(9,583	)			(9,737	)			(7,568	)			(4,313	)
Net (loss) income attributable to common stockholders				$	(1,143	)		$	(46,383	)		$	(38,302	)		$	14,455			$	35,639			$	33,597			$	37,258
Net (loss) income attributable to common stockholders per common share:
		Basic		$	(0.33	)		$	(12.13	)		$	(9.04	)		$	3.09			$	6.33			$	6.05			$	1.49
		Diluted		$	(0.33	)		$	(12.13	)		$	(9.04	)		$	0.31			$	0.57			$	0.51			$	0.54
Weighted average common shares outstanding:
		Basic			3,464				3,825				4,236				4,680				5,632				5,550				25,016
		Diluted			3,464				3,825				4,236				76,520				80,237				81,245				76,813
Pro forma information (unaudited):
	Pro forma net income attributable to common stockholders																			$	45,376							$	41,571
	Pro forma net income attributable to common stockholders per common share:
		Basic																		$	0.77							$	0.69
		Diluted																		$	0.62							$	0.54
	Pro forma weighted average common shares outstanding:
		Basic																			59,068								59,857
		Diluted																			72,872								76,287

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		As of December 31,																				As of September 30, 2005
		2000				2001				2002				2003				2004				Actual				As Adjusted
		(in thousands)
Consolidated Balance Sheet Data:
Cash, cash equivalents and short-term investments		$	1,495			$	33,663			$	21,347			$	63,987			$	63,929			$	84,279			$	83,453
Working capital			16,905				3,098				3,633				23,630				38,441				74,568				73,742
Goodwill and other intangible assets			48,847				44,087				44,087				54,751				50,703				53,439				53,439
Total assets			117,244				199,067				132,544				190,245				211,454				238,142				237,316
Deferred revenue and customer credits, excluding current portion			—				2,175				2,910				14,840				13,812				16,624				16,624
Long-term debt and capital lease obligations, excluding current portion			50,787				25,234				7,722				5,996				7,964				5,872				5,872
Series A redeemable preferred stock			36,039				—				—				—				—				—				—
Convertible preferred stock, Series B, Series C and Series D			2,202				142,356				151,458				161,041				140,454				—				—
Total stockholders’ (deficit) equity			(1,373	)			(49,265	)			(87,300	)			(68,581	)			(31,858	)			149,409				148,583

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	•	Addressing. We enable CSPs to use critical, shared addressing resources, such as telephone numbers, Internet top-level domain names, and Common Short Codes.
	•	Interoperability. We enable CSPs to exchange and share critical operating data so that communications originating on one provider’s network can be delivered and received on the network of another CSP. We also facilitate order management and work flow processing among CSPs.
	•	Infrastructure and Other. We enable CSPs to more efficiently manage changes in their own networks by centrally managing certain critical data they use to route communications over their own networks.

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	Revenue Recognition

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	Significant Contracts

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	Service Level Standards

	Valuation of Goodwill and Intangible Assets

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	Impairment of Long-Lived Assets

	Accounts Receivable, Revenue Recovery Collections, and Allowance for Doubtful Accounts

	Deferred Income Taxes

	Stock-Based Compensation

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	BizTelOne, Inc.

	NightFire Software, Inc.

	fiducianet, Inc.

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	Three Months Ended September 30, 2004 Compared to Three Months Ended September 30, 2005

			Three Months Ended								Three Months Ended
			September 30,								September 30,
			2004				2005				2004 vs. 2005
			$				$				$ Change				% Change
			(in thousands, except per share data)
Revenue:
	Addressing		$	14,176			$	19,190			$	5,014				35.4	%
	Interoperability			9,314				12,242				2,928				31.4
	Infrastructure and other			21,739				27,528				5,789				26.6
Total revenue				45,229				58,960				13,731				30.4
Operating expense:
	Cost of revenue (excluding depreciation and amortization shown separately below)			12,874				17,124				4,250				33.0
	Sales and marketing			6,050				7,186				1,136				18.8
	Research and development			1,938				3,092				1,154				59.5
	General and administrative			5,310				5,626				316				6.0
	Depreciation and amortization			4,263				4,223				(40	)			(0.9	)
	Restructuring charges			—				17				17				—
				30,435				37,268				6,833				22.5
Income from operations				14,794				21,692				6,898				46.6
Other (expense) income:
	Interest expense			(527	)			(503	)			24				4.6
	Interest income			380				559				179				47.1
Income before income taxes				14,647				21,748				7,101				48.5
Provision for income taxes				5,683				8,691				3,008				52.9
Net income				8,964				13,057				4,093				45.7
Dividends on and accretion of preferred stock				(2,578	)			—				2,578				—
Net income attributable to common stockholders			$	6,386			$	13,057			$	6,671				104.5	%
Net income attributable to common stockholders per common share:
	Basic		$	1.10			$	0.22
	Diluted		$	0.11			$	0.17
Weighted average common shares outstanding:
	Basic			5,804				60,351
	Diluted			83,767				77,462

	Revenue

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	Expense

36

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	Nine Months Ended September 30, 2004 Compared to the Nine Months Ended September 30, 2005

			Nine Months Ended								Nine Months Ended
			September 30,								September 30,
			2004				2005				2004 vs. 2005
			$				$				$ Change				% Change
			(in thousands, except per share data)
Revenue:
	Addressing		$	37,982			$	57,765			$	19,783				52.1	%
	Interoperability			25,403				38,819				13,416				52.8
	Infrastructure and other			60,168				82,464				22,296				37.1
Total revenue:				123,553				179,048				55,495				44.9
Operating expense:
	Cost of revenue (excluding depreciation and amortization shown separately below)			35,410				46,154				10,744				30.3
	Sales and marketing			15,032				21,775				6,743				44.9
	Research and development			5,409				8,540				3,131				57.9
	General and administrative			13,781				22,045				8,264				60.0
	Depreciation and amortization			13,487				11,740				(1,747	)			(13.0	)
	Restructuring recoveries			—				(389	)			(389	)			—
				83,119				109,865				26,746				32.2
Income from operations				40,434				69,183				28,749				71.1
Other (expense) income:
	Interest expense			(1,873	)			(1,715	)			158				8.4
	Interest income			1,100				1,756				656				59.6
Income before income taxes				39,661				69,224				29,563				74.5
(Benefit from) provision for income taxes				(1,504	)			27,653				29,157				(1938.6	)
Net income				41,165				41,571				406				1.0
Dividends on and accretion of preferred stock				(7,568	)			(4,313	)			3,255				43.0
Net income attributable to common stockholders			$	33,597			$	37,258			$	3,661				10.9	%
Net income attributable to common stockholders per common share:
	Basic		$	6.05			$	1.49
	Diluted		$	0.51			$	0.54
Weighted average common shares outstanding:
	Basic			5,550				25,016
	Diluted			81,245				76,813

	Revenue

38

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	Expense

39

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	Year Ended December 31, 2003 Compared to the Year Ended December 31, 2004

				2003				2004				2003 vs. 2004
				$				$				$ Change				% Change
				(in thousands, except per share data)
Revenue:
	Addressing			$	42,905			$	50,792			$	7,887				18.4	%
	Interoperability				16,003				34,228				18,225				113.9	%
	Infrastructure and other				52,785				79,981				27,196				51.5	%
Total revenue					111,693				165,001				53,308				47.7	%
Operating expense:
	Cost of revenue (excludes depreciation and amortization shown separately below)				37,846				49,261				11,415				30.2	%
	Sales and marketing				14,381				22,743				8,362				58.1	%
	Research and development				6,678				7,377				699				10.5	%
	General and administrative				11,359				21,144				9,785				86.1	%
	Depreciation and amortization				16,051				17,285				1,234				7.7	%
	Restructuring recoveries				(1,296	)			(220	)			1,076				83.0	%
					85,019				117,590				32,571				38.3	%
Income from operations					26,674				47,411				20,737				77.7	%
Other (expense) income:
	Interest expense				(3,119	)			(2,498	)			621				(19.9	)%
	Interest income				1,299				1,629				330				25.4	%
Income before income taxes and minority interest					24,854				46,542				21,688				87.3	%
Provision for income taxes					836				1,166				330				39.5	%
Income before minority interest					24,018				45,376				21,358				88.9	%
Minority interest					10				—				(10	)			—
Net income					24,028				45,376				21,348				88.8	%
Dividends on and accretion of preferred stock					(9,583	)			(9,737	)			(154	)			1.6	%
Net income attributable to common stockholders				$	14,445			$	35,639			$	21,194				146.7	%
Net income attributable to common stockholders per common share:
		Basic		$	3.09			$	6.33
		Diluted		$	0.31			$	0.57
Weighted average common shares outstanding:
		Basic			4,680				5,632
		Diluted			76,520				80,237

41

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	Revenue

	Expense

42

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	Year Ended December 31, 2002 Compared to the Year Ended December 31, 2003

43

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				2002				2003				2002 vs. 2003
				$				$				$ Change				% Change
				(in thousands, except per share data)
Revenue:
	Addressing			$	32,333			$	42,905			$	10,572				32.7	%
	Interoperability				20,303				16,003				(4,300	)			(21.2	)%
	Infrastructure and other				38,336				52,785				14,449				37.7	%
Total revenue					90,972				111,693				20,721				22.8	%
Operating expense:
	Cost of revenue (excludes depreciation and amortization shown separately below)				36,677				37,846				1,169				3.2	%
	Sales and marketing				13,855				14,381				526				3.8	%
	Research and development				6,256				6,678				422				6.7	%
	General and administrative				13,366				11,359				(2,007	)			(15.0	)%
	Depreciation and amortization				27,020				16,051				(10,969	)			(40.6	)%
	Restructuring charges (recoveries)				7,332				(1,296	)			(8,628	)			(117.7	)%
	Asset impairment charge				13,190				—				(13,190	)			—
					117,696				85,019				(32,677	)			(27.8	)%
(Loss) income from operations					(26,724	)			26,674				53,398				199.8	%
Other (expense) income:
	Interest expense				(6,260	)			(3,119	)			3,141				(50.2	)%
	Interest income				1,876				1,299				(577	)			(30.8	)%
(Loss) income before income taxes and minority interest					(31,108	)			24,854				55,962				179.9	%
Provision for income taxes					—				836				(836	)			—
(Loss) income before minority interest					(31,108	)			24,018				55,126				177.2	%
Minority interest					1,908				10				(1,898	)			99.5	%
Net (loss) income					(29,200	)			24,028				53,228				182.3	%
Dividends on and accretion of preferred stock					(9,102	)			(9,583	)			(481	)			5.3	%
Net (loss) income attributable to common stockholders				$	(38,302	)		$	14,445			$	52,747				137.7	%
Net (loss) income attributable to common stockholders per common share:
		Basic		$	(9.04	)		$	3.09
		Diluted		$	(9.04	)		$	0.31
Weighted average shares outstanding:
		Basic			4,236				4,680
		Diluted			4,236				76,520

	Revenue

44

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	Expense

45

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	Unaudited Quarterly Results of Operations

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			2003				2004																2005
			Dec. 31				Mar. 31				June 30				Sep. 30				Dec. 31				Mar. 31				June 30				Sep. 30
			(in thousands, except per share date)
Revenue:
Addressing			$	11,618			$	11,960			$	11,846			$	14,176			$	12,810			$	19,721				18,854				19,190
Interoperability				3,723				7,607				8,482				9,314				8,825				13,087				13,490				12,242
Infrastructure and other				16,153				19,147				19,282				21,739				19,813				24,984				29,952				27,528
Total revenue				31,494				38,714				39,610				45,229				41,448				57,792				62,296				58,960
Operating expense:
	Cost of revenue (excludes depreciation and amortization shown separately below)			10,357				10,470				12,066				12,874				13,851				13,263				15,767				17,124
	Sales and marketing			4,221				4,146				4,836				6,050				7,711				7,018				7,571				7,186
	Research and development			2,166				1,731				1,740				1,938				1,968				2,570				2,878				3,092
	General and administrative			3,443				3,393				5,078				5,310				7,363				7,590				8,829				5,626
	Depreciation and amortization			5,169				4,920				4,304				4,263				3,798				3,582				3,935				4,223
	Restructuring charges (recoveries)			886				—				—				—				(220	)			(706	)			300				17
				26,242				24,660				28,024				30,435				34,471				33,317				39,280				37,268
Income from operations				5,252				14,054				11,586				14,794				6,977				24,475				23,016				21,692
Other (expense) income:
	Interest expense			(501	)			(747	)			(599	)			(527	)			(625	)			(626	)			(586	)			(503	)
	Interest income			284				326				394				380				529				475				722				559
Income before income taxes and minority interest				5,035				13,633				11,381				14,647				6,881				24,324				23,152				21,748
Provision for (benefit from) income taxes				138				100				(7,287	)			5,683				2,670				9,693				9,269				8,691
Income before minority interest				4,897				13,533				18,668				8,964				4,211				14,631				13,883				13,057
Minority interest				(77	)			—				—				—				—				—				—				—
Net income				4,820				13,533				18,668				8,964				4,211				14,631				13,883				13,057
Dividends on and accretion of preferred stock				(2,467	)			(2,477	)			(2,513	)			(2,578	)			(2,169	)			(2,143	)			(2,170	)			—
Net income attributable to common stockholders			$	2,353			$	11,056			$	16,155			$	6,386			$	2,042			$	12,488			$	11,713			$	13,057
Net income attributable to common stockholders per common share:
	Basic		$	0.46			$	2.06			$	2.94			$	1.10			$	0.35			$	2.08			$	1.45			$	0.22
	Diluted		$	0.06			$	0.17			$	0.23			$	0.11			$	0.06			$	0.19			$	0.18			$	0.17

			Percentage of Total Revenue
			2003				2004																2005
			Dec. 31				Mar. 31				Jun. 30				Sep. 30				Dec. 31				Mar. 31				June 30				Sep. 30
Revenue				100.0	%			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%
Operating expense:
	Cost of revenue (excludes depreciation and amortization)			32.9				27.0				30.5				28.5				33.4				23.0				25.3				29.1
	Sales and marketing			13.4				10.7				12.2				13.4				18.6				12.1				12.2				12.2
	Research and development			6.9				4.5				4.4				4.3				4.7				4.4				4.6				5.2
	General and administrative			10.9				8.8				12.7				11.7				17.8				13.1				14.2				9.5
	Depreciation and amortization			16.4				12.7				10.9				9.4				9.2				6.2				6.3				7.2
	Restructuring charges (recoveries)			2.8				—				—				—				(0.5	)			(1.2	)			0.5				—
				83.3				63.7				70.7				67.3				83.2				57.6				63.1				63.2
Income from operations				16.7				36.3				29.3				32.7				16.8				42.4				36.9				36.8
Other (expense) income:
	Interest expense			(1.6	)			(1.9	)			(1.5	)			(1.2	)			(1.5	)			(1.1	)			(0.9	)			(0.9	)
	Interest income			0.9				0.9				1.0				0.8				1.3				0.8				1.2				1.0
Income before income taxes and minority interest				16.0				35.3				28.8				32.3				16.6				42.1				37.2				36.9
Provision for (benefit from) income taxes				0.5				0.3				(18.3	)			12.5				6.4				16.8				14.9				14.8
Income before minority interest				15.5				35.0				47.1				19.8				10.2				25.3				22.3				22.1
Minority interest				(0.2	)			—				—				—				—				—				—				—
Net income				15.3				35.0				47.1				19.8				10.2				25.3				22.3				22.1
Dividends on and accretion of preferred stock				(7.8	)			(6.4	)			(6.3	)			(5.7	)			(5.3	)			(3.7	)			(3.5	)			—
Net income attributable to common stockholders				7.5	%			28.6	%			40.8	%			14.1	%			4.9	%			21.6	%			18.8	%			22.1	%

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	Cash flows from operations

	Cash flows from investing

	Cash flows from financing

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						Less than												More than
		Total				1 Year				1-3 Years				4-5 Years				5 Years
		(in thousands)
Capital lease obligations		$	13,085			$	5,812			$	7,273			$	—			$	—
Operating lease obligations			20,546				4,007				6,950				6,774				2,815
Long-term debt			5,994				4,636				1,358				—				—
Accumulated dividend payment obligation on preferred stock			2,095				2,095				—				—				—
Total		$	41,720			$	16,550			$	15,581			$	6,774			$	2,815

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	•	A “modified prospective” method in which compensation cost is recognized beginning with the effective date (a) based on the requirements of SFAS No. 123(R) for all share-based payments granted after the effective date and (b) based on the requirements of SFAS No. 123(R) for all awards granted to employees prior to the effective date of SFAS No. 123(R) that remain unvested on the effective date.
	•	A “modified retrospective” method, which includes the requirements of the modified prospective method described above, but also permits entities to restate based on the amounts previously recognized under SFAS No. 123 for purposes of pro forma disclosures either (a) all prior periods presented or (b) prior interim periods of the year of adoption.

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51

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	•	Addressing. We enable CSPs to use critical, shared addressing resources, such as telephone numbers, Internet top-level domain names, and Common Short Codes.
	•	Interoperability. We enable CSPs to exchange and share critical operating data so that communications originating on one provider’s network can be delivered and received on the network of another CSP. We also facilitate order management and work flow processing among CSPs.
	•	Infrastructure. We enable CSPs to more efficiently manage changes in their own networks by centrally managing certain critical data they use to route communications over their networks.

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	•	Locate end-users. Identify the appropriate destination for a given communication among multiple networks and unique addresses, such as wireline and wireless phone numbers as well as IP and e-mail addresses;
	•	Establish identity. Authenticate that the users of the communications networks are who they represent themselves to be and that they are authorized to use the services being provided;
	•	Connect. Route the communication across disparate networks;
	•	Provide services. Authorize and account for the exchange of communications traffic across multiple networks; and
	•	Process transactions. Capture, process, and clear accounting records for billing and generate settlement data for inter-provider compensation.

	•	Reliable. Our clearinghouse services depend on complex technology that is designed to deliver reliability consistent with telecommunications industry standards. Under our contracts, we have committed to our customers to deliver high quality services across numerous measured and audited service levels, such as system availability, response times for help desk inquiries and billing accuracy, consistent with telecommunications industry standards.
	•	Scalable. Our clearinghouse has processed transaction volumes that have increased at an 87.0% compound annual growth rate since 2002. The modular design of our clearinghouse enables capacity expansion without service interruption, and with incremental investment that provides significant economies of scale.
	•	Neutral. We provide our services in a competitively neutral way to ensure that no one telecommunications service provider, telecommunications industry segment or technology or group of telecommunications customers is favored over any other. Moreover, we have committed not to be a telecommunications service provider in competition with our customers. In fact, we are formally designated by the FCC as neutral.

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	•	Trusted. The data we collect are important and proprietary. Accordingly, we have appropriate procedures and systems to protect the privacy and security of customer data, restrict access to the system and generally protect the integrity of our clearinghouse. Our performance with respect to neutrality, privacy and security is independently audited regularly.

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55

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	Addressing

56

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	•	Telephone Number Administration. As North American Numbering Plan Administrator, we maintain the authoritative database of telephone numbering resources for North America. We allocate telephone numbers by geographic location and assign telephone numbers to telecommunications service providers. We administer area codes, including area code splits and overlays, and collect and forecast telephone number utilization rates by service providers. As the National Pooling Administrator, we also manage the administration of inventory and allocation of pooled blocks of unassigned telephone numbers by reassigning 1,000-number blocks of assigned but unused telephone numbers to telecommunications service providers requiring additional telephone numbers. We provide these services under fixed-fee annual and cost-plus contracts with the FCC.
	•	Telephone Number Pooling. In addition to the administrative functions associated with our role as the National Pooling Administrator, we also manage the administration of the allocation of pooled blocks of unassigned telephone numbers through our clearinghouse, including the reallocation of pooled blocks of telephone numbers to the consolidated network of consolidating carriers following a merger or other business combination. We are paid on a per transaction basis for this service.
	•	Internet Domain Name Services.

	•	.BIZ and .US Domains. We operate the authoritative registries of Internet domain names for the .biz top level domain through our 90% owned subsidiary NeuLevel, Inc. We also operate the authoritative registry for the .us top level domain. All Internet communications routing to a .biz or .us address must query a copy of our directory to ensure that the communication is routed to the appropriate destination. We are paid on a subscription basis for each name in the registries, which together currently contain over two million registered domain names.
	•	Registry Gateway Services. Through our NeuLevel subsidiary, we are the exclusive provider of wholesale registration services to domain name retailers for the .cn (China) and .tw (Taiwan) Internet domains for all regions outside of the home countries. We are paid on a subscription basis for each name sold through the gateway.

	•	Common Short Codes. We operate the authoritative Common Short Code registry on behalf of the leading wireless providers in the United States. A Common Short Code is a string of five numbers, which serves as the “address” for text messages that are sent from wireless devices to businesses or organizations on a many-to-one basis. Common Short Codes are often used to count votes in promotional marketing efforts, such as votes for the Super Bowl MVP by wireless device, to register for contests, and even to download applications such as ring tones. We are paid on a subscription basis for each code in the registry.

	Interoperability

	•	Wireline and Wireless Number Portability. Our clearinghouse is the master, authoritative directory that allows end-users to change their telephone carrier without changing their telephone numbers. In addition, service providers use this service to change the network identification associated with their end users’ telephone numbers after a merger or consolidation. We have provided this service for wireline local number portability since 1997, and in 2003 we expanded our service to provide

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		portability of telephone numbers between wireless telecommunications service providers and between wireline and wireless telecommunications service providers. We are paid on a per transaction basis for this service.
	•	Order Management Services. We provide centralized clearinghouse services that permit our customers, through a single interface, to exchange essential operating data with multiple CSPs in order to provision services. We are typically paid on a per transaction basis for each order we process. For example:

	•	Local Service Request. For a CSP to establish local service to an end-consumer, it must access the wireline facility to that consumer’s location. Access is obtained through a local service request made to the CSP that controls the physical line to that consumer. Using our centralized clearinghouse, we have developed a series of services to facilitate this and similar types of order management needs, such as orders for high-capacity trunks and switching services.
	•	Customer Account Record Exchange. Our clearinghouse services allow for the exchange of customer account records between competing local service providers and their interexchange carrier trading partners. We are the largest clearinghouse provider for the exchange of customer account records in the communications industry. This record exchange service provides our customers with the information necessary to accurately bill and collect fees for services.

	•	IP Traffic Exchange. We recently launched a suite of interoperability services, including services that enable the exchange of VoIP and streaming media traffic between networks using Session Initiation Protocol technology (a set procedure computers use to regulate, transmit and exchange various types of Internet communications), either carrier-to-carrier or content provider-to-carrier. These services provide functions that are essential to the deployment of VoIP as well as Session Initiation Protocol-based streaming media content services, such as video or music on demand and real-time multimedia conferencing. For example, wireless providers depend on this service to route photographs and other multimedia content between mobile phones. We are paid on a per transaction basis for each record exchanged.
	•	Identity Services eXchange. We recently launched our IP-based identity management clearinghouse services, using the Liberty Alliance standards. These services enable carriers and content providers to exchange identity-related transactions, which are essential for advanced IP-based services, including e-commerce, content and VoIP. Our Identity Services eXchange provides the required revenue business model and security support to enable Session Initiation Protocol-based services, such as VoIP and instant messaging services, and are synergistic with our IP Traffic Exchange services. We are paid on a per transaction basis for each record exchanged.

	Infrastructure and Other

	•	Network Management. Our customers use our clearinghouse to centrally process changes to essential network elements that are used to route telephone calls. We are paid on a per transaction basis for these services. Our network management services are used by our customers for a variety of different purposes, such as to replace and upgrade technologies, to balance network traffic and to reroute traffic on alternative networks in the event of a service disruption.
	•	Connection Services. We provide standard connections for those CSPs that connect directly to our clearinghouse. We are paid an established fee based on the type of connection. CSPs both send and receive data through these connections.

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	•	Service Order Provisioning. We recently launched service order provisioning services that enable CSPs to manage their internal systems through an automated interface to our clearinghouse and other shared industry databases. This service eliminates the need for service providers to build and maintain their own internal service order provisioning system. We are paid on a per transaction basis for these services.
	•	Public Safety and Security Services. Increasingly, CSPs are required to produce voluminous records and conduct clandestine electronic surveillance for public safety and homeland security. In the emerging IP environment, carrier obligations under the Communications Assistance for Law Enforcement Act of 1994, or CALEA, are challenging. Our services provide carriers a single point of contact for all information and surveillance requests. We believe our services are the most efficient, logistically practical and economical way for service providers to manage their obligations under CALEA and other electronic surveillance laws. We are typically paid on a per transaction basis for these services.

	Sales Force and Marketing

	Customer Support

	Operational Capabilities

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	•	companies that develop and sell software solutions to CSPs, such as Amdocs Limited, Evolving Systems, Inc., MetaSolv, Inc. and NetCracker Technology;

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	•	systems integrators such as Accenture Ltd, Electronic Data Systems Corporation, Hewlett-Packard Company, IBM, Oracle Corporation and Perot Systems Corporation, which develop customized solutions for CSPs and in some cases outsource the operation and management of certain back-office systems; and
	•	companies such as CGI Group Inc., Synchronoss Technologies, Inc., Syniverse Technologies, Inc., Telcordia Technologies, Inc. VeriSign, Inc. and Wisor Corporation, which offer communications interoperability services, including inter-CSP order processing and workflow management on an outsourced basis.

	•	our responsiveness to customers’ needs;
	•	our ability to support existing and new industry standards and protocols;
	•	our ability to continue development of technical innovations; and
	•	the quality, reliability, security and price-competitiveness of our services.

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	Telephone Numbering

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	•	not be a telecommunications service provider, which is generally defined by the FCC as an entity that offers telecommunications services to the public at large, and is, therefore, providing telecommunications services on a common carrier basis;
	•	not be an affiliate of a telecommunications service provider, which means, among other things, that we:

	•	must restrict the beneficial ownership of our capital stock by telecommunications service providers or affiliates of a telecommunications service provider, as discussed in “Description of Capital Stock— Ownership and Transfer Restrictions;” and
	•	may not otherwise, directly or indirectly, control, be controlled by, or be under common control with, a telecommunications service provider;

	•	not derive a majority of our revenues from any single telecommunications service provider; and
	•	not be subject to undue influence by parties with a vested interest in the outcome of numbering administration and activities. Notwithstanding our satisfaction of the other neutrality criteria above, the North American Numbering Council or the FCC could determine that we are subject to such undue influence. The North American Numbering Council may conduct an evaluation to determine whether we meet this “undue influence” criterion.

	•	we never, directly or indirectly, show any preference or provide any special consideration to any telecommunications service provider;
	•	we prohibit access by our stockholders to user data and proprietary information of telecommunications service providers served by us (other than access of employee stockholders that is incident to the performance of our numbering administration duties);
	•	our shareholders take steps to ensure that they do not disclose to us any user data or proprietary information of any telecommunications service provider in which they hold an interest, other than the sharing of information in connection with the performance of our numbering administration duties;

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	•	we not share confidential information about our business services and operations with employees of any telecommunications service provider;
	•	we refrain from simultaneously employing, whether full time or part time, any individual who is an employee of a telecommunications service provider and that none of our employees hold any interest, financial or otherwise, in any company that would violate these neutrality standards;
	•	we prohibit any individual who serves in the management of any of our stockholders to be involved directly in our day-to-day operations;
	•	we implement certain requirements regarding the composition of our board of directors;
	•	no member of our board of directors simultaneously serve on the board of directors of a telecommunications service provider; and
	•	we hire an independent party to conduct a quarterly neutrality audit to ensure that we and our stockholders comply with all the provisions of our code of conduct.

	•	we may not issue indebtedness to any entity that is a telecommunications service provider or an affiliate of a telecommunications service provider without prior approval of the FCC;
	•	we may not acquire any equity interest in a telecommunications service provider or an affiliate of a telecommunications service provider without prior approval of the FCC;
	•	we must restrict any telecommunications service provider or affiliate of a telecommunications service provider from acquiring or beneficially owning 5% or more of our outstanding capital stock. See “Description of Capital Stock— Ownership and Transfer Restrictions”;

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	•	we must report to the FCC the names of any telecommunications service providers or telecommunications service provider affiliates that own a 5% or greater interest in our company; and
	•	we must make beneficial ownership records available to our auditors, and must certify upon request that we have no actual knowledge of any ownership of our outstanding capital stock by a telecommunications service provider or telecommunications service provider affiliate other than as previously disclosed.

	Internet Domain Name Registrations

	•	provide equal access to all registrars of domain names;
	•	comply with Internet standards established by the industry;
	•	implement additional policies as they are adopted by the U.S. government or ICANN; and
	•	with respect to the .us registry, establish, operate and ensure appropriate content on a kids.us domain to serve as a haven for material that promotes positive experiences for children and families using the Internet.

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Name		Age				Position
Jeffrey E. Ganek			53			Chairman of the Board of Directors and Chief Executive Officer
Michael Lach			44			President and Chief Operating Officer
Jeffrey Babka			52			Senior Vice President and Chief Financial Officer
Mark D. Foster			47			Senior Vice President and Chief Technology Officer
John Malone			44			Senior Vice President, Sales and Business Development
John B. Spirtos			40			Senior Vice President, Corporate Development and Marketing
Martin K. Lowen			41			Senior Vice President, General Counsel and Secretary
James G. Cullen			63			Director
Henry Geller			81			Director
Dr. Henry Kressel			71			Director
Joseph P. Landy			44			Director
Dr. Kenneth A. Pickar			65			Director
Frank L. Schiff			46			Director

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						Annual
						Compensation								Long-Term Compensation
																		Securities
														Restricted				Underlying
														Stock				Options/				All Other
						Salary(1)				Bonus				Awards				SARs				Compensation
Name and Principal Position		Year				($)				($)				($)				(#)				($)
Jeffrey E. Ganek			2004				299,977				225,000				—				—				10,600	(2)
Chairman of the Board and Chief Executive Officer
Michael Lach			2004				303,535				225,000				2,187,500	(3)			—				8,200	(2)
President and Chief Operating Officer
Jeffrey Babka(4)			2004				188,314				285,000				—				783,999				3,563	(2)
Senior Vice President and Chief Financial Officer
Mark D. Foster			2004				303,338				255,645				—				—				15,665	(5)
Senior Vice President and Chief Technology Officer
John Malone			2004				238,552				240,000				—				—				9,707	(2)
Senior Vice President, Sales and Business Development

(1)	Effective January 1, 2005, Jeffrey E. Ganek’s annual salary is $350,000. Effective July 5, 2005, Michael Lach’s annual salary is $325,000; Jeffrey Babka’s annual salary is $300,000; Mark D. Foster’s annual salary is $315,000; and John Malone’s annual salary is $265,000.
(2)	Consists of matching contributions under NeuStar’s 401(k) plan.
(3)	Consists of phantom stock units granted on July 19, 2004 pursuant to which Mr. Lach is entitled to receive 350,000 shares of our common stock, which are subject to vesting requirements. There was no public market for our common stock on July 19, 2004 or December 31, 2004. Values per share of $6.25 and $8.39, representing contemporaneous determinations of fair market value by our board of directors, have been used to calculate the value of our common stock as of July 19, 2004 and December 31, 2004, respectively, for purposes of this table. Based on this calculation, Mr. Lach held phantom stock units with respect to 350,000 shares with a fair market value of $2,937,500 on December 31, 2004. No dividends or dividend equivalents will accrue or be paid with respect to any outstanding unvested phantom stock units held by Mr. Lach.
(4)	Jeffrey Babka joined NeuStar as our Chief Financial Officer effective April 26, 2004.
(5)	Consists of matching contributions of $8,200 under NeuStar’s 401(k) plan and insurance premiums of $7,465 paid by NeuStar during fiscal year 2004 with respect to term life insurance for the benefit of Mr. Foster.

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		Individual Grants
																		Potential Realizable Value
						Percent of												at Assumed Annual Rates
		Number of				Total												of Stock Price
		Securities				Options												Appreciation for
		Underlying				Granted to				Exercise								Option Term
		Options				Employees				Price				Expiration
Name		Granted				in 2004				($/Share)				Date				5% ($)				10% ($)
Jeffrey E. Ganek			—				—				—				—				—				—
Michael Lach			—				—				—				—				—				—
Jeffrey Babka(1)			783,999	(2)			26.28				6.25				6/22/2014				3,081,584				7,809,338
Mark D. Foster			—				—				—				—				—				—
John Malone			—				—				—				—				—				—

(1)	Jeffrey Babka joined NeuStar as our Chief Financial Officer effective April 26, 2004.
(2)	Consists of non-qualified stock options to acquire 745,603 shares of our common stock and options to acquire 38,396 shares of our common stock that are intended to constitute incentive stock options. Twenty-five percent of the options vested on April 26, 2005, and an additional 2.083% of the options vest on the last day of each succeeding calendar month, so long as Mr. Babka remains employed by NeuStar.

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										Number of Securities
										Underlying Unexercised								Value of Unexercised
										Options								In-the-Money Options
		Shares								at December 31, 2004								at December 31, 2004
		Acquired on				Value
		Exercise				Realized				Exercisable				Unexercisable				Exercisable				Unexercisable
Name		(#)				($)				(#)				(#)				($)				($)
Jeffrey E. Ganek			—				—				989,952				419,999				8,079,464				824,998
Michael Lach			—				—				533,251				592,348				2,190,138				1,682,860
Jeffrey Babka(1)			—				—				—				783,999				—				1,679,998
Mark D. Foster			—				—				957,550				69,999				7,771,878				137,498
John Malone			—				—				335,417				147,581				1,377,606				321,138

(1)	Jeffrey Babka joined NeuStar as our Chief Financial Officer effective April 26, 2004.

75

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76

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	1999 Equity Incentive Plan

77

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	2005 Stock Incentive Plan

78

---

 

79

---

 

80

---

 

81

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82

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	•	each of our directors;
	•	each of our named executive officers;
	•	all of our executive officers and directors as a group;
	•	each person, or group of affiliated persons, known to us to beneficially own more than 5% of any class of our voting stock; and
	•	each selling stockholder.

		Shares Beneficially Owned												Shares Beneficially Owned
		Prior to this Offering												After this Offering(1)
										Shares Being
Name and Address(2)		Number				Percentage				Offered				Number				Percentage
Warburg, Pincus Equity Partners, L.P.(3)			23,190,328	(4)			34.54	%			13,503,134	(5)			9,687,194	(6)			14.43	%
MidOcean Capital Investors, L.P.			4,130,310	(7)			6.79	%			2,356,806				1,773,504	(8)			2.64	%
ABS Capital Partners Entities(9)			1,734,685	(10)			2.85	%			1,010,060	(11)			724,625	(12)			1.08	%
Jeffrey E. Ganek, Chairman and Chief Executive Officer			1,665,239	(13)			2.69	%			—				1,665,239	(14)			2.44	%
Michael Lach, President and Chief Operating Officer			704,695	(15)			1.15	%			—				704,695	(16)			1.04	%
Jeffrey A. Babka, SVP and Chief Financial Officer			240,356	(17)				*			—				240,356	(18)			*
Mark D. Foster, SVP and Chief Technology Officer			1,534,940	(19)			2.49	%			—				1,534,940	(20)			2.25	%
John Malone, SVP— Sales and Business Development			350,019	(21)				*			—				350,019	(22)				*
James G. Cullen, Director			82,723	(23)				*			—				82,723	(24)				*
Henry Geller, Director			82,723	(25)				*			—				82,723	(26)				*
Dr. Henry Kressel, Director			23,273,051	(27)			34.62	%			—				9,769,917	(28)			14.53	%
Joseph P. Landy, Director			23,273,051	(29)			34.62	%			—				9,769,917	(30)			14.53	%
Dr. Kenneth A. Pickar, Director			82,723	(31)				*			—				82,723	(32)				*
Frank L. Schiff, Director			4,130,310	(33)			6.79	%			—				1,773,504	(34)			2.64	%
All directors and executive officers as a group (13 persons)			32,619,026	(35)			45.64	%			—				16,759,086	(36)			23.45	%

	*	Denotes less than 1% ownership.

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(1)	Assumes no exercise of the underwriters’ over-allotment option.
(2)	As of November 1, 2005, an aggregate of 13,101,636 shares of our capital stock owned by the Warburg Pincus Entities, MidOcean Capital Investors, L.P. and members and former members of our management were held in a voting trust, the terms and conditions of which are set forth in a voting trust agreement dated September 24, 2004. The voting trust has shared voting power with respect to these shares. The name and address of the trustees of the voting trust are Lynn Etheridge Davis, 1200 South Hayes Street Arlington, VA 22202, and Edward J. Hawie, 191 Peachtree Street, #191 Atlanta, GA 30303. The voting trust will remain in effect unless and until a “Termination Event,” as specified in the voting trust agreement, occurs.
(3)	The stockholders are Warburg, Pincus Equity Partners, L.P., or WPEP; Warburg, Pincus Netherlands Equity Partners I, CV, or WPNEPI; and Warburg, Pincus Netherlands Equity Partners III, CV, or WPNEPIII. WPEP, WPNEPI and WPNEPIII are collectively referred to herein as the Warburg Pincus Entities. Warburg Pincus Partners LLC, a New York limited liability company, or WP Partners LLC, which is a subsidiary of Warburg Pincus & Co., a New York general partnership, or WP, is the sole general partner of the Warburg Pincus Entities. The Warburg Pincus Entities are managed by Warburg Pincus LLC, a New York limited liability company, or WP LLC. Due to the respective relationship among the Warburg Pincus Entities, each of the Warburg Pincus Entities, WP Partners LLC, WP and WP LLC may be deemed to have shared beneficial ownership of these shares, although each entity disclaims beneficial ownership of the shares owned of record by any other entity. The address of each of the Warburg Pincus Entities, WP Partners LLC, WP and WP LLC is 466 Lexington Avenue, New York, New York 10017.
(4)	Consists of (i) 21,914,858 shares (10,560,241 of which are held in the voting trust) held by WPEP (including 6,011,509 shares to be issued upon exercise of a warrant), (ii) 1,159,517 shares (558,747 of which are held in the voting trust) held by WPNEPI (including 318,066 shares to be issued upon exercise of two warrants), and (iii) 115,953 shares (55,877 of which are held in the voting trust) held by WPNEPIII (including 31,808 shares to be issued upon exercise of a warrant). Each of the warrants described above is exercisable at any time prior to December 7, 2009.
(5)	Consists of 12,760,462 shares to be sold by WPEP; 675,156 shares to be sold by WPNEPI; and 67,516 shares to be sold by WPNEPIII.
(6)	Consists of (i) 9,154,396 shares held by WPEP (2,872,994 of which will be held in the voting trust), (ii) 484,361 shares held by WPNEPI (152,011 of which will be held in the voting trust), and (iii) 48,437 shares held by WPNEPIII (15,201 of which will be held in the voting trust).
(7)	Consists of (i) 4,047,587 shares (1,220,546 of which are held in the voting trust) held by MidOcean Capital Investors, L.P., or MCILP, and (ii) 82,723 shares of which Frank L. Schiff, one of our directors and a managing director of entities that indirectly control MCILP, has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan. MidOcean Capital Partners L.P., or MCP, is the general partner of MCILP. MidOcean US Advisor L.P., or US Advisor, manages MCILP and MCP, and other affiliated entities control both MCP and US Advisor. Due to the relationships among MCILP, MCP, US Advisor and the additional affiliated entities, each of these entities may be deemed to have beneficial ownership of these shares, although each entity disclaims beneficial ownership of shares owned of record by any other person or entity. The address for each of MCILP, MCP, US Advisor and the affiliated MidOcean entities is 320 Park Avenue, 17th Floor, New York, New York 10022.
(8)	Consists of (i) 1,690,781 shares held by MCILP, and (ii) 82,723 shares of which Mr. Schiff has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(9)	The “ABS Capital Partners Entities” are ABS Capital Partners IV, L.P.; ABS Capital Partners IV Offshore, L.P.; ABS Capital Partners IV-A, L.P.; and ABS Capital Partners IV Special Offshore, L.P. The address of each of the ABS Capital Partners Entities is 400 East Pratt Street, Baltimore, Maryland 21202.

(10)	Consists of (i) 1,535,015 shares held by ABS Capital Partners IV, L.P., (ii) 51,395 shares held by ABS Capital Partners IV-A, L.P., (iii) 88,163 shares held by ABS Capital Partners IV Offshore, L.P., and (iv) 60,112 shares held by ABS Capital Partners IV Special Offshore, L.P.
(11)	Consists of 893,799 shares to be sold by ABS Capital Partners IV, L.P.; 29,925 shares to be sold by ABS Capital Partners IV-A, L.P.; 51,335 shares to be sold by ABS Capital Partners IV Offshore, L.P.; and 35,001 shares to be sold by ABS Capital Partners IV Special Offshore, L.P.
(12)	Consists of 641,216 shares held by ABS Capital Partners IV, L.P.; 21,470 shares held by ABS Capital Partners IV-A, L.P.; 36,828 shares held by ABS Capital Partners IV Offshore, L.P.; and 25,111 shares owned by ABS Capital Partners IV Special Offshore.
(13)	Includes 173,683 shares held in the voting trust and 1,157,950 shares of which Mr. Ganek has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(14)	Includes 173,683 shares held in the voting trust and 1,157,950 shares of which Mr. Ganek has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(15)	Consists of 704,695 shares of which Mr. Lach has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(16)	Consists of 704,695 shares of which Mr. Lach has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(17)	Consists of 240,356 shares of which Mr. Babka has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(18)	Consists of 240,356 shares of which Mr. Babka has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(19)	Includes 215,787 shares held in the voting trust and 985,548 shares of which Mr. Foster has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.

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(20)	Includes 215,787 shares held in the voting trust and 985,548 shares of which Mr. Foster has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(21)	Consists of 350,019 shares of which Mr. Malone has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(22)	Consists of 350,019 shares of which Mr. Malone has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(23)	Consists of 82,723 shares of which a trust established by Mr. Cullen for the benefit of his children has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(24)	Consists of 82,723 shares of which a trust established by Mr. Cullen for the benefit of his children has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(25)	Consists of 82,723 shares of which Mr. Geller has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(26)	Consists of 82,723 shares of which Mr. Geller has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(27)	Consists of (i) all shares held by the Warburg Pincus Entities, and (ii) 82,723 shares of which Dr. Kressel has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan. Dr. Kressel is a General Partner of WP and a Managing Director and Member of WP LLC. Dr. Kressel disclaims beneficial ownership of all shares owned by the Warburg Pincus Entities. The address of Dr. Kressel is c/o Warburg Pincus, 466 Lexington Avenue, New York, New York 10017.
(28)	Consists of (i) all shares held by the Warburg Pincus Entities, and (ii) 82,723 shares of which Dr. Kressel has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(29)	Consists of (i) all shares held by the Warburg Pincus Entities, and (ii) 82,723 shares of which Mr. Landy has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan. Mr. Landy is a Managing General Partner of WP and the Co-President and a Managing Member of WP LLC. Mr. Landy disclaims beneficial ownership of all shares owned by the Warburg Pincus Entities. The address of Mr. Landy is c/o Warburg Pincus, 466 Lexington Avenue, New York, New York 10017.
(30)	Consists of (i) all shares held by the Warburg Pincus Entities, and (ii) 82,723 shares of which Mr. Landy has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(31)	Consists of 82,723 shares of which Dr. Pickar has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(32)	Consists of 82,723 shares of which Dr. Pickar has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(33)	Consists of (i) 4,047,587 shares held by MCILP, and (ii) 82,723 shares of which Mr. Schiff has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan. Mr. Schiff is a managing director of entities that indirectly control MCILP. Mr. Schiff disclaims beneficial ownership of all such shares except to the extent of his pecuniary interest therein. The address of Mr. Schiff is c/o MidOcean Partners, 320 Park Avenue, 17th Floor, New York, New York 10022.
(34)	Consists of (i) 1,690,781 shares held by MCILP, and (ii) 82,723 shares of which Mr. Schiff has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(35)	Includes 12,784,881 shares held in the voting trust and 10,685,813 shares of which our directors and executive officers have the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan and the Warburg Pincus Entities warrants.
(36)	Includes 3,429,676 shares held in the voting trust and 4,324,430 shares of which our directors and executive officers have the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.

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		Shares Beneficially Owned												Shares Beneficially Owned
		Prior to this Offering												After this Offering(1)
										Shares Being
Name and Address		Number				Percentage				Offered				Number				Percentage
Warburg, Pincus Equity Partners, L.P.			23,190,328	(2)			34.54	%			15,308,488	(3)			7,881,840	(4)			11.69	%
MidOcean Capital Investors, L.P.			4,130,310	(5)			6.79	%			2,671,909				1,458,401	(6)			2.16	%
ABS Capital Partners Entities			1,734,685	(7)			2.85	%			1,145,103	(8)			589,582	(9)				*
Jeffrey E. Ganek, Chairman and Chief Executive Officer			1,665,239	(10)			2.69	%			—				1,665,239	(11)			2.43	%
Michael Lach, President and Chief Operating Officer			704,695	(12)			1.15	%			—				704,695	(13)			1.03	%
Jeffrey A. Babka, SVP and Chief Financial Officer			240,356	(14)				*			—				240,356	(15)				*
Mark D. Foster, SVP and Chief Technology Officer			1,534,940	(16)			2.49	%			—				1,534,940	(17)			2.24	%
John Malone, SVP— Sales and Business Development			350,019	(18)				*			75,000				275,019	(19)				*
John B. Spirtos, SVP— Corporate Development and Marketing			122,499	(20)				*			100,000				22,499	(21)				*
Martin K. Lowen, SVP, General Counsel and Secretary			267,025	(22)				*			100,000				167,025	(23)				*
James G. Cullen, Director			82,723	(24)				*			—				82,723	(25)				*
Henry Geller, Director			82,723	(26)				*			—				82,723	(27)				*
Dr. Henry Kressel, Director			23,273,051	(28)			34.62	%			—				7,964,563	(29)			11.80	%
Joseph P. Landy, Director			23,273,051	(30)			34.62	%			—				7,964,563	(31)			11.80	%
Dr. Kenneth A. Pickar, Director			82,723	(32)				*			—				82,723	(33)				*
Frank L. Schiff, Director			4,130,310	(34)			6.79	%			—				1,458,401	(35)			2.16	%
All directors and executive officers as a group (13 persons)			32,619,026	(36)			45.64	%			275,000				14,363,629	(37)			20.02	%

	*	Denotes less than 1% ownership.

(1)	Assumes full exercise of the underwriters’ over-allotment option.
(2)	Consists of (i) 21,914,858 shares (10,560,241 of which are held in the voting trust) held by WPEP (including 6,011,509 shares to be issued upon exercise of a warrant), (ii) 1,159,517 shares (558,747 of which are held in the voting trust) held by WPNEPI (including 318,066 shares to be issued upon exercise of two warrants), and (iii) 115,953 shares (55,877 of which are held in the voting trust) held by WPNEPIII (including 31,808 shares to be issued upon exercise of a warrant). Each of the warrants described above is exercisable at any time prior to December 7, 2009.
(3)	Consists of 14,466,523 shares to be sold by WPEP; 765,423 shares to be sold by WPNEPI; and 76,542 shares to be sold by WPNEPIII.
(4)	Consists of (i) 7,448,335 shares held by WPEP (1,166,933 of which will be held in the voting trust), (ii) 394,094 shares held by WPNEPI (61,744 of which will be held in the voting trust), and (iii) 39,411 shares held by WPNEPIII (6,175 of which will be held in the voting trust).
(5)	Consists of (i) 4,047,587 shares (1,220,546 of which are held in the voting trust) held by MCILP, and (ii) 82,723 shares of which Frank L. Schiff has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan. Due to the relationships among MCILP, MCP, US Advisor and the additional affiliated entities, each of these entities may be deemed to have beneficial ownership of these shares, although each entity disclaims beneficial ownership of shares owned of record by any other person or entity.
(6)	Consists of (i) 1,375,678 shares held by MCILP, and (ii) 82,723 shares of which Mr. Schiff has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.

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(7)	Consists of (i) 1,535,015 shares held by ABS Capital Partners IV, L.P., (ii) 51,395 shares held by ABS Capital Partners IV-A, L.P., (iii) 88,163 shares held by ABS Capital Partners IV Offshore, L.P., and (iv) 60,112 shares held by ABS Capital Partners IV Special Offshore, L.P.
(8)	Consists of 1,013,299 shares to be sold by ABS Capital Partners IV, L.P.; 33,926 shares to be sold by ABS Capital Partners IV-A, L.P.; 58,198 shares to be sold by ABS Capital Partners IV Offshore, L.P.; and 39,680 shares to be sold by ABS Capital Partners IV Special Offshore, L.P.
(9)	Consists of 521,716 shares held by ABS Capital Partners IV, L.P.; 17,469 shares held by ABS Capital Partners IV-A, L.P.; 29,965 shares held by ABS Capital Partners IV Offshore, L.P.; and 20,432 shares owned by ABS Capital Partners IV Special Offshore.

(10)	Includes 173,683 shares held in the voting trust and 1,157,950 shares of which Mr. Ganek has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(11)	Includes 173,683 shares held in the voting trust and 1,157,950 shares of which Mr. Ganek has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(12)	Consists of 704,695 shares of which Mr. Lach has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(13)	Consists of 704,695 shares of which Mr. Lach has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(14)	Consists of 240,356 shares of which Mr. Babka has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(15)	Consists of 240,356 shares of which Mr. Babka has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(16)	Includes 215,787 shares held in the voting trust and 985,548 shares of which Mr. Foster has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(17)	Includes 215,787 shares held in the voting trust and 985,548 shares of which Mr. Foster has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(18)	Consists of 350,019 shares of which Mr. Malone has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(19)	Consists of 275,019 shares of which Mr. Malone has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(20)	Consists of 122,499 shares of which Mr. Spirtos has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(21)	Consists of 22,499 shares of which Mr. Spirtos has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(22)	Consists of 267,025 shares of which Mr. Lowen has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(23)	Consists of 167,025 shares of which Mr. Lowen has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(24)	Consists of 82,723 shares of which a trust established by Mr. Cullen for the benefit of his children has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(25)	Consists of 82,723 shares of which a trust established by Mr. Cullen for the benefit of his children has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(26)	Consists of 82,723 shares of which Mr. Geller has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(27)	Consists of 82,723 shares of which Mr. Geller has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(28)	Consists of (i) all shares held by the Warburg Pincus Entities, and (ii) 82,723 shares of which Dr. Kressel has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan. Dr. Kressel disclaims beneficial ownership of all shares owned by the Warburg Pincus Entities.
(29)	Consists of (i) all shares held by the Warburg Pincus Entities, and (ii) 82,723 shares of which Dr. Kressel has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(30)	Consists of (i) all shares held by the Warburg Pincus Entities, and (ii) 82,723 shares of which Mr. Landy has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan. Mr. Landy disclaims beneficial ownership of all shares owned by the Warburg Pincus Entities.
(31)	Consists of (i) all shares held by the Warburg Pincus Entities, and (ii) 82,723 shares of which Mr. Landy has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(32)	Consists of 82,723 shares of which Dr. Pickar has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(33)	Consists of 82,723 shares of which Dr. Pickar has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.

87

---

 

(34)	Consists of (i) 4,047,587 shares held by MCILP, and (ii) 82,723 shares of which Mr. Schiff has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan. Mr. Schiff disclaims beneficial ownership of all such shares except to the extent of his pecuniary interest therein.
(35)	Consists of (i) 1,375,678 shares held by MCILP, and (ii) 82,723 shares of which Mr. Schiff has the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.
(36)	Includes 12,784,881 shares held in the voting trust and 10,685,813 shares of which our directors and executive officers have the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan and the Warburg Pincus Entities warrants.
(37)	Includes 1,624,322 shares held in the voting trust and 4,049,430 shares of which our directors and executive officers have the right to acquire beneficial ownership on or before December 31, 2005, pursuant to our 1999 Equity Incentive Plan.

88

---

 

	•	any merger, consolidation or other reorganization of us with or into another corporation;
	•	the issuance of our capital stock or rights to acquire our capital stock;
	•	any acquisition by us of another corporation;
	•	any sale, lease, transfer or other disposition of all or substantially all of our assets;
	•	our liquidation or the adoption by us of a plan to liquidate; and
	•	the incurrence or guarantee by us of indebtedness for borrowed money in excess of $10,000,000.

	•	for as long as the Warburg Pincus Entities collectively beneficially own at least 20% of our outstanding Class A common stock, two individuals designated by Warburg Pincus who are reasonably acceptable to us;
	•	for as long as the Warburg Pincus Entities collectively beneficially own at least 5%, but less than 20%, of our outstanding Class A common stock, one individual designated by Warburg Pincus who is reasonably acceptable to us; and
	•	for as long as MidOcean Capital Investors, L.P. owns at least 2.5% of our outstanding Class A common stock, one individual designated by MidOcean who is reasonably acceptable to us.

89

---

 

90

---

 

91

---

 

92

---

 

	Class A Common Stock

	Class B Common Stock

93

---

 

94

---

 

	•	owns 10% or more of the total outstanding equity of the other party;
	•	has the power to vote 10% or more of the securities having ordinary voting power for the election of the directors or management of the other party; or
	•	has the power to direct or cause the direction of the management and policies of the other party.

	•	authorize the issuance of “blank check” preferred stock that could be used by our board of directors to thwart a takeover attempt;
	•	prohibit cumulative voting in the election of directors, which would otherwise enable holders of less than a majority of our voting securities to elect some of our directors;
	•	establish a classified board of directors, as a result of which the successors to the directors whose terms have expired will be elected to serve from the time of election and qualification until the third annual meeting following election;
	•	require that directors only be removed from office for cause;
	•	provide that vacancies on the board of directors, including newly-created directorships, may be filled by a majority vote of directors then in office;
	•	disqualify any individual from serving on our board if such individual’s service as a director would cause us to violate our neutrality requirements;
	•	limit who may call special meetings of stockholders;
	•	prohibit stockholder action by written consent, requiring all actions to be taken at a meeting of the stockholders; and
	•	establish advance notice requirements for nominating candidates for election to the board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.

95

---

 

96

---

 

97

---

 

	•	1% of the number of shares of common stock then outstanding, which equaled approximately 671,400 shares of our Class A common stock as of November 1, 2005; or
	•	the average weekly trading volume of our Class A common stock on the New York Stock Exchange during the four calendar weeks before a notice on Form 144 with respect to such sale is filed.

98

---

 

99

---

 

	•	an individual citizen or resident of the United States;
	•	a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, that is created or organized under the laws of the United States, any state thereof or the District of Columbia;
	•	an estate whose income is subject to U.S. federal income taxation regardless of its source; or
	•	a trust (1) if a U.S. court is able to exercise primary supervision over the trust’s administration and one or more U.S. persons have the authority to control all of the trust’s substantial decisions or (2) which has made an election to be treated as a U.S. person.

100

---

 

	•	you are an individual present in the United States for 183 days or more in the year of the sale, exchange or other taxable disposition and certain other requirements are met;
	•	the income or gain is effectively connected with your conduct of a trade or business within the United States and, where a tax treaty applies, is attributable to a permanent establishment; or
	•	we are or have been, at any time within the shorter of the five-year period preceding such disposition or your holding period for our common stock, a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code unless our stock is regularly traded on an established securities market and you held no more than 5% of our outstanding common stock, directly or indirectly, at all times within the shorter of the five-year period preceding such disposition or your holding period for our common stock. We believe that we are not currently, and that we will not become, a United States real property holding corporation.

101

---

 

102

---

 

			Number of
Name			Shares
J.P. Morgan Securities Inc.
Credit Suisse First Boston LLC
Banc of America Securities LLC
Bear, Stearns & Co. Inc.
UBS Securities LLC
Jefferies & Company, Inc.
ThinkEquity Partners LLC
	Total			16,870,000

103

---

 

Per Share

Total

No

Full

No

Full

exercise

exercise

exercise

exercise

Underwriting discounts and commissions to be paid by the selling stockholders

	•	offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of Class A common stock or any securities convertible into or exercisable or exchangeable for shares of Class A common stock, including Class B common stock;
	•	enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Class A common stock or any securities convertible into or exercisable or exchangeable for Class A common stock, including Class B common stock;
	•	file any registration statement with the Securities and Exchange Commission relating to the offering of any shares of Class A common stock or any securities convertible into or exercisable or exchangeable for Class A common stock, including Class B common stock;
	•	in the case of the selling stockholders, make any demand for, or exercise any right with respect to, the registration of any shares of Class A common stock or any security convertible into or exercisable or exchangeable for Class A common stock, including Class B common stock; or
	•	publicly announce any intention to effect any transaction specified above,

	•	the sale of shares to the underwriters;
	•	the issuance by us of shares of Class A common stock upon the exercise of an option or a warrant or the conversion of a security outstanding on the date of this prospectus; provided that the underlying shares of Class A common stock and Class B common stock issued to those parties who enter into lock-up agreements will continue to be subject to the restrictions described in the immediately preceding paragraph;
	•	the issuance by us of shares or options to purchase shares of our common stock to, or the repurchase by us of unvested shares upon termination of service from, an employee, director, consultant or other service provider, pursuant to our stock incentive plans in effect on the date of this prospectus; provided that the shares or options to purchase shares of Class A common stock and Class B common stock issued to directors or executive officers who enter into lock-up agreements will be subject to the restrictions described in the immediately preceding paragraph;

104

---

 

	•	the filing by us of any registration statement with the Securities and Exchange Commission on Form S-8 relating to the offering of securities pursuant to the terms of a plan in effect on the date hereof;
	•	transfers by a person other than us of shares of Class A common stock or any security convertible into Class A common stock as a bona fide gift or for no consideration and transfers by a person other than us by will or intestate, provided that in each case, each recipient of such shares or convertible securities agrees in writing to be subject to the restrictions described in the immediately preceding paragraph and no filing by any party with the Securities and Exchange Commission shall be required or shall be voluntarily made in connection with such transfer;
	•	transfers by a person other than us to any trust, partnership or limited liability company for the direct or indirect benefit of such person and/or the immediate family of such person for estate planning purposes, provided that (i) the trustee of the trust, partnership or limited liability company, as the case may be, agrees in writing to be subject to the restrictions described in the immediately preceding paragraph, (ii) any such transfer shall not involve a disposition for value, and (iii) no filing by any party with the Securities and Exchange Commission shall be required or shall be voluntarily made in connection with such transfer;
	•	a sale that is required by the restrictions on ownership and transfer set forth in our certificate of incorporation, see “Description of Capital Stock— Ownership and Transfer Restrictions”;
	•	the exercise of outstanding options, provided that the underlying shares of Class A common stock and Class B common stock will be subject to the restrictions described in the immediately preceding paragraph upon exercise or conversion;
	•	transfers by a person other than us to an affiliate, provided such affiliate agrees in writing to be subject to the restrictions described in the immediately preceding paragraph and provided no filing by any party with the Securities and Exchange Commission shall be required or shall be voluntarily made in connection with such transfer;
	•	transactions by a person other than us relating to shares of Class A common stock or other securities acquired in open market transactions after the completion of the offering of the shares, so long as no filing by any party with the Securities and Exchange Commission shall be required or shall be voluntarily made in connection with such transaction;
	•	the issuance by us of shares of our Class A common stock in connection with acquisitions of other companies, up to 19.9% of our fully diluted Class A common stock (measured as of the date of the closing of this offering), provided that each recipient of such shares agrees in writing to be subject to the restrictions described in the immediately preceding paragraph;
	•	if the underwriters’ over-allotment option is not exercised, the sale by certain of our executive officers of up to an aggregate of 980,730 shares of our Class A common stock beginning 40 days after the date of this prospectus, provided that to the extent the underwriters’ over-allotment option is exercised in full or in part, the number of shares that may be sold by such executive officers prior to the expiration of the 90-day restricted period will be reduced by the number of shares sold by such executive officers pursuant to the underwriters’ over-allotment option; or
	•	the adoption by one or more of our directors, officers or employees of a 10b5-1 trading plan, which plan may provide for periodic sales of shares of our Class A common stock on the basis of parameters determined at the time such plan is adopted, so long as such sales are otherwise in accordance with the terms of the lock-up agreements, as described above.

105

---

 

106

---

 

107

---

 

Report of Independent Registered Public Accounting Firm			F-2
Consolidated Balance Sheets as of December 31, 2003 and 2004			F-3
Consolidated Statements of Operations for the years ended December 31, 2002, 2003 and 2004			F-5
Consolidated Statements of Stockholders’ Deficit for the years ended December 31, 2002, 2003 and 2004			F-6
Consolidated Statement of Cash Flows for the years ended December 31, 2002, 2003 and 2004			F-7
Notes to Consolidated Financial Statements			F-8
Consolidated Balance Sheets as of December 31, 2004 and September 30, 2005 (unaudited)			F-37
Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2004 and 2005			F-39
Unaudited Consolidated Statements of Cash Flows for the three and nine months ended September 30, 2004 and 2005			F-40
Notes to Unaudited Consolidated Financial Statements			F-41

F-1

---

 

	/s/ Ernst & Young LLP

F-2

---

 

			December 31,
			2003				2004
ASSETS
Current assets:
	Cash and cash equivalents		$	60,232			$	19,019
	Restricted cash			—				4,835
	Short-term investments			3,755				44,910
	Accounts receivable, net of allowance for doubtful accounts of $84 and $468, respectively			23,863				29,171
	Unbilled receivables			1,119				980
	Securitized notes receivable			4,054				3,325
	Notes receivable			922				965
	Prepaid expenses and other current assets			2,223				3,747
	Deferred costs			554				1,570
	Deferred tax asset			—				10,923
Total current assets				96,722				119,445
Restricted cash, long-term				558				835
Property and equipment, net				29,799				36,504
Goodwill				52,176				49,453
Intangibles assets, net				2,575				1,250
Securitized notes receivable, long-term				5,090				1,074
Notes receivable, long-term				236				—
Deferred costs, long-term				2,079				1,932
Other noncurrent assets				1,010				961
Total assets			$	190,245			$	211,454

F-3

---

 

			December 31,
			2003				2004
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
	Accounts payable		$	8,221			$	2,828
	Accrued expenses			15,524				32,630
	Income taxes payable			375				419
	Customer credits			17,000				15,541
	Deferred revenue			11,665				13,972
	Notes payable			12,678				4,636
	Capital lease obligations			5,833				4,813
	Accrued restructuring reserve			1,796				1,330
Total current liabilities				73,092				76,169
Customer credits, long-term				4,000				—
Deferred revenue, long-term				10,840				13,812
Notes payable, long-term				968				1,358
Capital lease obligations, long-term				5,028				6,606
Accrued restructuring reserve, long-term				3,857				3,719
Deferred tax liability				—				1,194
Total liabilities				97,785				102,858
Commitments and contingencies				—				—
Series B Voting Convertible Preferred Stock, $0.01 par value; 4,000,000 shares authorized; 100,000 shares issued and outstanding; liquidation preference of $66 at December 31, 2004				83				66
Series C Voting Convertible Preferred Stock, $0.01 par value; 28,600,000 shares authorized; 28,569,692 shares issued and outstanding; liquidation preference of $85,717 at December 31, 2004				98,410				85,717
Series D Voting Convertible Preferred Stock, $0.01 par value; 10,000,000 shares authorized; 9,098,525 shares issued and outstanding; liquidation preference of $54,817 at December 31, 2004				62,548				54,671
Stockholders’ deficit:
	Common stock, $0.002 par value; 100,000,000 shares authorized; 5,548,862 and 6,159,985 issued and outstanding as of December 31, 2003 and 2004, respectively (see Note 19)			11				12
	Additional paid-in capital			—				—
	Deferred stock compensation			(28	)			(1,733	)
	Treasury stock, at cost, 236,366 shares at December 31, 2004			—				(1,125	)
	Accumulated deficit			(68,564	)			(29,012	)
Total stockholders’ deficit				(68,581	)			(31,858	)
Total liabilities and stockholders’ deficit			$	190,245			$	211,454

F-4

---

 

				Year Ended December 31,
				2002				2003				2004
Revenue:
	Addressing			$	32,333			$	42,905			$	50,792
	Interoperability				20,303				16,003				34,228
	Infrastructure and other				38,336				52,785				79,981
Total revenue					90,972				111,693				165,001
Operating expense:
	Cost of revenue (excluding depreciation and amortization shown separately below)				36,677				37,846				49,261
	Sales and marketing				13,855				14,381				22,743
	Research and development				6,256				6,678				7,377
	General and administrative				13,366				11,359				21,144
	Depreciation and amortization				27,020				16,051				17,285
	Restructuring charges (recoveries)				7,332				(1,296	)			(220	)
	Asset impairment charge				13,190				—				—
					117,696				85,019				117,590
(Loss) income from operations					(26,724	)			26,674				47,411
Other (expense) income:
	Interest expense				(6,260	)			(3,119	)			(2,498	)
	Interest income				1,876				1,299				1,629
(Loss) income before income taxes and minority interest					(31,108	)			24,854				46,542
Provision for income taxes					—				836				1,166
(Loss) income before minority interest					(31,108	)			24,018				45,376
Minority interest					1,908				10				—
Net (loss) income					(29,200	)			24,028				45,376
Dividends on and accretion of preferred stock					(9,102	)			(9,583	)			(9,737	)
Net (loss) income attributable to common stockholders				$	(38,302	)		$	14,445			$	35,639
Net (loss) income attributable to common stockholders per common share:
	Basic			$	(9.04	)		$	3.09			$	6.33
	Diluted			$	(9.04	)		$	0.31			$	0.57
Weighted average common shares outstanding:
	Basic				4,236				4,680				5,632
	Diluted				4,236				76,520				80,237
Pro forma information (unaudited):
	Pro forma net income attributable to common stockholders											$	45,376
	Pro forma net income attributable to common stockholders per common share:
		Basic										$	0.77
		Diluted										$	0.62
	Pro forma weighted average common shares outstanding:
		Basic											59,068
		Diluted											72,872

F-5

---

 

															Common
			Common Stock								Additional				Stock				Deferred												Total
											Paid-In				Subscription				Stock				Treasury				Accumulated				Stockholders’
			Shares				Amount				Capital				Receivable				Compensation				Stock				Deficit				Deficit
Balance at December 31, 2001				4,054			$	8			$	—			$	(155	)		$	(60	)		$	—			$	(49,058	)		$	(49,265	)
	Common stock options exercised			393				1				27				—				—				—				—				28
	Compensation expense associated with options issued to nonemployees			—				—				223				—				—				—				—				223
	Amortization of deferred stock compensation			—				—				—				—				16				—				—				16
	Accretion of preferred stock and related dividends			—				—				(250	)			—				—				—				(8,852	)			(9,102	)
	Net loss			—				—				—				—				—				—				(29,200	)			(29,200	)
Balance at December 31, 2002				4,447				9				—				(155	)			(44	)			—				(87,110	)			(87,300	)
	Shares issued for acquisition of NightFire Software, Inc.			882				2				3,775				—				—				—				—				3,777
	Common stock options exercised			220				—				39				—				—				—				—				39
	Repayment of executive promissory notes			—				—				—				155				—				—				—				155
	Compensation expense associated with options issued to nonemployees			—				—				287				—				—				—				—				287
	Amortization of deferred stock compensation			—				—				—				—				16				—				—				16
	Accretion of preferred stock and related dividends			—				—				(4,101	)			—				—				—				(5,482	)			(9,583	)
	Net income			—				—				—				—				—				—				24,028				24,028
Balance at December 31, 2003				5,549				11				—				—				(28	)			—				(68,564	)			(68,581	)
	Common stock options exercised			611				1				90				—				—				—				—				91
	Deferred stock compensation expense associated with issuance of restricted stock			—				—				2,187				—				(2,187	)			—				—				—
	Repurchase of common stock			—				—				—				—				—				(1,012	)			—				(1,012	)
	Return of common stock originally issued for acquisition of NightFire Software, Inc			—				—				—				—				—				(113	)			—				(113	)
	Compensation expense associated with options issued to nonemployees			—				—				654				—				—				—				—				654
	Compensation expense associated with repurchase of immature shares			—				—				982				—				—				—				—				982
	Accretion of preferred stock and related dividends			—				—				(3,913	)			—				—				—				(5,824	)			(9,737	)
	Amortization of deferred stock compensation			—				—				—				—				482				—				—				482
	Net income			—				—				—				—				—				—				45,376				45,376
Balance at December 31, 2004				6,160			$	12			$	—			$	—			$	(1,733	)		$	(1,125	)		$	(29,012	)		$	(31,858	)

F-6

---

 

			Year Ended December 31,
			2002				2003				2004
Operating activities:
Net (loss) income			$	(29,200	)		$	24,028			$	45,376
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
	Depreciation and amortization			27,020				16,051				17,285
	Stock compensation			239				303				2,118
	Asset impairment charge			13,190				—				—
	Amortization of deferred financing costs			2,071				533				150
	Deferred income taxes			—				—				(6,419	)
	Noncash restructuring charge			2,295				(1,295	)			(220	)
	Provision for doubtful accounts			753				184				960
Changes in operating assets and liabilities, net of acquisitions:
	Accounts receivable			(6,601	)			(10,396	)			(7,697	)
	Unbilled receivables			1,935				4,726				139
	Notes receivable			15,695				2,753				4,938
	Prepaid expenses and other current assets			(207	)			(32	)			(1,524	)
	Deferred costs			—				(2,633	)			(869	)
	Other assets			—				(257	)			(102	)
	Accounts payable and accrued expenses			(14,749	)			8,628				11,119
	Income taxes payable			—				375				44
	Accrued restructuring reserve			4,707				(3,507	)			(386	)
	Customer credits			—				21,000				(5,459	)
	Contract loss reserve			(2,166	)			—				—
	Deferred revenue			5,902				12,426				5,279
	Net cash provided by operating activities			20,884				72,887				64,732
Investing activities:
	Purchases of property and equipment			(2,996	)			(8,186	)			(13,271	)
	Sales (purchases) of investments, net			(5,600	)			1,845				(41,155	)
	Businesses acquired, net of cash acquired			—				(8,089	)			—
	Net cash used in investing activities			(8,596	)			(14,430	)			(54,426	)
Financing activities:
	Issuance (release) of restricted cash			(11	)			493				(5,112	)
	Proceeds from issuance of notes payable			13,241				12,037				2,166
	Principal repayments on notes payable			(33,176	)			(16,104	)			(9,823	)
	Principal repayments on capital lease obligations			(8,613	)			(10,342	)			(7,505	)
	Proceeds from exercise of common stock options			28				39				91
	Payment of preferred stock dividends			—				—				(30,324	)
	Repayment of common stock subscriptions			—				155				—
	Repurchase of common stock			—				—				(1,012	)
	Payment of deferred financing fees			(633	)			(250	)			—
	Net cash used in financing activities			(29,164	)			(13,972	)			(51,519	)
Net (decrease) increase in cash and cash equivalents				(16,876	)			44,485				(41,213	)
Cash and cash equivalents at beginning of year				32,623				15,747				60,232
Cash and cash equivalents at end of year			$	15,747			$	60,232			$	19,019

F-7

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1.	DESCRIPTION OF BUSINESS

	•	Addressing. The Company enables CSPs to use critical, shared addressing resources, such as telephone numbers, several Internet domain names, and Common Short Codes.
	•	Interoperability. The Company enables CSPs to exchange and share critical operating data so that communications originating on one provider’s network can be delivered and received on the network of another CSP. The Company also facilitates order management and work flow processing among CSPs.
	•	Infrastructure and Other. The Company enables CSPs to more efficiently manage changes in their own networks by centrally managing certain critical data they use to route communications over their own networks.

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

F-8

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F-9

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		Year Ended December 31,
		2002				2003				2004
		(in thousands)
Fixed assets acquired through capital leases		$	889			$	7,433			$	8,054
Fixed assets acquired through notes payable			—				1,154				1,359
Cash paid for interest			4,313				1,673				1,693
Cash paid for income taxes			2				836				7,291
Accounts payable incurred to purchase fixed assets			—				1,539				125
Business acquired with common shares (Note 3)			—				3,777				(113	)
Dividends to preferred stockholders			8,853				9,334				9,488

F-10

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F-11

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Computer hardware		3-5 years
Equipment		5 years
Furniture and fixtures		5-7 years
Leasehold improvements		Lesser of related lease term or useful life

		Years				Method
Acquired technologies			4				Straight-line
Customer lists			3				Accelerated

F-12

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	Addressing

F-13

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	Interoperability

	Infrastructure and Other

	Significant Contracts

F-14

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	Service Level Standards

F-15

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			Year Ended December 31,
			2002				2003				2004
			(in thousands, except per share data)
Pro forma net (loss) income attributable to common stockholders:
	As reported		$	(38,302	)		$	14,445			$	35,639
	Add: stock-based compensation expense included in reported net (loss) income attributable to common stockholders			239				303				2,118
	Deduct: Total stock-based compensation expense determined under fair value-based method for all awards			(2,334	)			(3,366	)			(7,240	)
Pro forma net (loss) income attributable to common stockholders			$	(40,397	)		$	11,382			$	30,517
Net (loss) income attributable to common stockholders per share:
Basic—as reported			$	(9.04	)		$	3.09			$	6.33
Basic—pro forma			$	(9.54	)		$	2.43			$	5.42
Diluted—as reported			$	(9.04	)		$	0.31			$	0.57
Diluted—pro forma			$	(9.54	)		$	0.15			$	0.38

F-16

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		Year Ended December 31,
		2002				2003				2004
Expected life			5  years				5  years				5  years
Expected volatility			77.84%				71.43%				67.14%
Average risk-free interest rate			3.80%				3.08%				3.43%
Dividend yield			0.00%				0.00%				0.00%

			Year Ended December 31,
			2002				2003				2004
Historical:
Numerator:
	Net (loss) income		$	(29,200	)		$	24,028			$	45,376
	Dividends on and accretion of convertible preferred stock			(9,102	)			(9,583	)			(9,737	)
	Net (loss) income attributable to common stockholders		$	(38,302	)		$	14,445			$	35,639
Pro forma (unaudited):
	Numerator:
	Net (loss) income attributable to common stockholders										$	35,639
	Dividends on and accretion of convertible preferred stock											9,737
	Pro forma net (loss) income attributable to common stockholders										$	45,376

F-17

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				Year Ended December 31,
				2002				2003				2004
Historical:
Denominator:
	Weighted average common shares outstanding—basic				4,236				4,680				5,632
	Dilutive effect of:
		Stock options for the purchase of common stock			—				6,820				7,515
		Conversion of preferred stock and accrued dividends payable into common stock			—				58,755				60,801
		Warrants for the purchase of common stock			—				6,265				6,289
	Weighted average common shares outstanding—diluted				4,236				76,520				80,237
Pro Forma (unaudited):
Denominator:
	Weighted average common shares outstanding—basic												5,632
	Assumed conversion of preferred stock into common stock												53,436
	Pro forma weighted average common shares outstanding—basic												59,068
	Dilutive effect of:
		Stock options for the purchase of common stock											7,515
		Warrants for the purchase of common stock											6,289
	Pro forma weighted average common shares outstanding—diluted												72,872

F-18

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	•	A “modified prospective” method in which compensation cost is recognized beginning with the effective date (a) based on the requirements of SFAS 123(R) for all share-based payments granted after the effective date and (b) based on the requirements of SFAS 123(R) for all awards granted to employees prior to the effective date of SFAS 123(R) that remain unvested on the effective date.
	•	A “prospective” method which includes the requirements of the modified prospective method described above, but also permits entities to restate based on the amounts previously recognized under SFAS 123(R) for purposes of pro forma disclosures either (a) all prior periods presented or (b) prior interim periods of the year of adoption.

3.	ACQUISITIONS

F-19

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4.	SECURITIZED NOTES RECEIVABLE

5.	DEFERRED FINANCING COSTS

F-20

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6.	PROPERTY and EQUIPMENT

		December 31,
		2003				2004
Computer hardware		$	28,572			$	26,245
Equipment			280				312
Furniture and fixtures			2,754				2,176
Leasehold improvements			10,062				11,852
Construction in-progress			4,533				3,002
Capitalized software			21,278				25,099
			67,479				68,686
Accumulated depreciation and amortization			(37,680	)			(32,182	)
Property and equipment, net		$	29,799			$	36,504

F-21

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7.	GOODWILL and INTANGIBLE ASSETS

			December 31,
			2003				2004
Goodwill			$	52,176			$	49,453
Other intangible assets:
	Customer lists			996				996
	Acquired technology			2,208				2,208
Total other intangible assets				3,204				3,204
Accumulated amortization				(629	)			(1,954	)
Other intangible assets, net			$	2,575			$	1,250

8.	ACCRUED EXPENSES

		December 31,
		2003				2004
Accrued wages			6,884				15,656
RRC fee reserve			4,423				4,289
Other			4,217				12,685
Total accrued expenses		$	15,524			$	32,630

F-22

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9.	NOTES PAYABLE

		December 31,
		2003				2004
Promissory note payable to vendor; principal and interest payable quarterly at 6.4% per annum with a maturity date of July 1, 2004; secured by the equipment financed		$	291			$	—
Promissory note payable to vendor; principal and interest payable quarterly at 1.73% per annum with a maturity date of April 1, 2006; secured by the equipment financed			1,513				767
Promissory note payable to vendor; principal and interest payable quarterly at 2.88% per annum with a maturity date of April 1, 2006; secured by the equipment financed			91				41
Promissory note payable to predecessor; principal and interest payable quarterly at prime rate plus 1% per annum with a maturity date of August 13, 2004;			2,949				—
Promissory note payable to vendor; principal and interest payable quarterly at 3.87% per annum with a maturity date of April 1, 2006; secured by the equipment financed			—				146
Promissory note payable to vendor; principal and interest payable quarterly at 2.08% per annum with a maturity date of April 1, 2007; secured by the equipment financed			—				1,443
Credit Agreement with a bank, bearing interest at the one-month LIBOR rate plus 2.00% (4.40% at December 31, 2004), with monthly paydown corresponding with the cash collection of securitized notes receivable (see Note 4), with a maturity date of February 1, 2007			8,802				3,597
			13,646				5,994
Less: current portion			(12,678	)			(4,636	)
Notes payable, long-term		$	968			$	1,358

F-23

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2005		$	4,636
2006			1,031
2007			327
Total			5,994
Less: current portion			(4,636	)
Notes payable, long-term		$	1,358

F-24

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10.	COMMITMENTS and CONTINGENCIES

2005		$	5,812
2006			5,424
2007			1,849
Total minimum lease payments			13,085
Less: amounts representing interest			(1,666	)
Present value of minimum lease payments			11,419
Less: current portion			(4,813	)
Capital lease obligation, long-term		$	6,606

		December 31,
		2003				2004
Equipment and hardware		$	24,185			$	14,922
Furniture and fixtures			2,511				1,918
			26,696				16,840
Less: accumulated amortization			(16,625	)			(4,982	)
		$	10,071			$	11,858

		Operating
2005		$	4,194
2006			3,929
2007			3,946
2008			3,841
2009			3,915
Thereafter			3,638
		$	23,463

F-25

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11.	RESTRUCTURING CHARGES

F-26

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		Year Ended December 31,
		2002				2003				2004
Workforce reduction		$	1,680			$	—			$	—
Excess facilities			4,079				—				—
Change in estimates and assumptions			(1,284	)			(1,296	)			(220	)
Write-down of property and equipment, as related to facility closures			2,338				—				—
Other charges			519				—				—
		$	7,332			$	(1,296	)		$	(220	)

12.	LEGAL PROCEEDINGS

F-27

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13.	INCOME TAXES

			Year Ended December 31,
			2002				2003				2004
Current:
	Federal		$	—			$	401			$	5,609
	State			—				435				1,976
Total current				—				836				7,585
Deferred:
	Federal			—				—				(5,429	)
	State			—				—				(990	)
Total deferred				—				—				(6,419	)
Total provision for income taxes			$	—			$	836			$	1,166

F-28

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			December 31,
			2003				2004
Deferred tax assets:
	NOL carryforwards		$	8,212			$	—
	Restructuring accrual			2,199				1,964
	Deferred revenue			5,522				4,939
	Accrued compensation			2,323				5,792
	Start-up costs			2,794				1,742
	Asset impairment charges			2,565				—
	Stock-based compensation expense			201				602
	Other reserves			276				1,173
	Other			359				495
Total deferred tax assets				24,451				16,707
Deferred tax liabilities:
	Unbilled receivables			(455	)			(482	)
	Depreciation and amortization			(2,421	)			(4,883	)
	Identifiable intangibles			(327	)			(236	)
	Deferred expenses			(1,024	)			(1,362	)
	Other			(15	)			(15	)
Total deferred tax liabilities				(4,242	)			(6,978	)
Net deferred tax asset				20,209				9,729
Valuation allowance				(20,209	)			—
Net deferred asset			$	—			$	9,729

		Year ended December 31,
		2002				2003				2004
Tax at statutory rate			35.0	%			35.0	%			35.0	%
State taxes			4.3				5.7				5.1
AMT Credit/ Tax			0.0				1.6				(1.0	)
Other			2.2				0.0				0.1
Change in valuation allowance			(41.5	)			(39.0	)			(36.7	)
Effective tax rate			0.0	%			3.3	%			2.5	%

F-29

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14.	CONVERTIBLE PREFERRED STOCK

F-30

---

 

F-31

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15.	STOCKHOLDERS’ DEFICIT—Common Stock and Warrants

Series B (100,000 shares outstanding)			700,000
Series C (28,569,692 shares outstanding)			39,997,565
Series D (9,098,525 shares outstanding)			12,737,932
Common stock options			15,541,607
Common stock warrants			6,361,383
Total shares of authorized common stock reserved for future issuance			75,338,487

16.	STOCK OPTION PLANS

F-32

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							Weighted-
							Average
			Shares				Exercise Price
Outstanding at December 31, 2001				8,163,147			$	0.11
	Options granted			3,128,918				3.72
	Options exercised			(392,682	)			0.07
	Options forfeited			(1,537,523	)			1.62
Outstanding at December 31, 2002				9,361,860				1.06
	Options granted			4,016,446				5.26
	Options exercised			(220,060	)			0.18
	Options forfeited			(455,978	)			2.00
Outstanding at December 31, 2003				12,702,268				2.37
	Options granted			2,983,173				6.69
	Options exercised			(611,118	)			0.15
	Options forfeited			(712,681	)			3.91
Outstanding at December 31, 2004				14,361,642				3.29
Exercisable at December 31, 2004				8,547,241				1.47
Exercisable at December 31, 2003				7,456,761				0.92
Exercisable at December 31, 2002				5,009,607				0.47

				Options Outstanding												Options Exercisable
												Weighted-
								Weighted-				Average								Weighted-
				Number of				Average				Remaining				Number of				Average
Range of				Options				Exercise				Contractual Life				Options				Exercise
Exercise Price				Outstanding				Price				(in years)				Exercisable				Price
	$0.07 – $0.54				5,774,510			$	0.10				5.41				5,683,234			$	0.09
	$3.18				724,589				3.18				6.97				624,949				3.18
	$4.29 – $4.64				3,469,227				4.42				8.05				2,147,548				4.38
	$6.25 – $6.43				3,779,697				6.32				9.24				80,297				6.25
	$8.39				613,619				8.39				9.88				11,213				8.39
					14,361,642				3.29				7.33				8,547,241				1.47

F-33

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17.	EMPLOYEE BENEFIT PLANS

18.	RELATED PARTY TRANSACTIONS

F-34

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19.	SUBSEQUENT EVENT

20.	QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

			Quarter Ended
			Mar. 31,				Jun. 30,				Sep. 30,				Dec. 31,
			2003				2003				2003				2003
			(in thousands, except per share data)
Summary consolidated statements of operations:
	Total revenue		$	25,871			$	26,310			$	28,018			$	31,494	(1)
	Income from operations			6,531				5,669				9,222				5,252
	Net income			5,455				5,158				8,595				4,820
	Net income attributable to common stockholders			3,142				2,787				6,163				2,353
	Net income attributable to common stockholders per common share—basic		$	0.71			$	0.62			$	1.34			$	0.46
	Net income attributable to common stockholders per common share—diluted		$	0.07			$	0.06			$	0.11			$	0.06

F-35

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			Quarter Ended
			Mar. 31,				Jun. 30,				Sep. 30,				Dec. 31,
			2004				2004				2004				2004
			(in thousands, except per share data)
Summary consolidated statements of operations:
	Total revenue		$	38,714			$	39,610			$	45,229			$	41,448	(1)
	Income from operations			14,054				11,586				14,794				6,977
	Net income			13,533				18,668				8,964				4,211
	Net income attributable to common stockholders			11,056				16,155				6,386				2,042
	Net income attributable to common stockholders per common share—basic		$	2.06			$	2.94			$	1.10			$	0.35
	Net income attributable to common stockholders per common share—diluted		$	0.17			$	0.23			$	0.11			$	0.06

(1)	Revenue for the quarters ended December 31, 2003 and 2004 reflects contractual pricing discounts based on pre-established annual aggregate transaction volume targets under our contracts with North American Portability Management, LLC, which had a $6.0 million impact and $11.9 million impact respectively.

F-36

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			December 31,				September 30,
			2004				2005
							(unaudited)
ASSETS
Current assets:
	Cash and cash equivalents		$	19,019			$	16,029
	Restricted cash			4,835				1,365
	Short-term investments			44,910				68,250
	Accounts receivable, net of allowance for doubtful accounts of $468 and $557, respectively			29,171				26,408
	Unbilled receivables			980				5,212
	Securitized notes receivable			3,325				1,704
	Notes receivable			965				437
	Prepaid expenses and other current assets			3,747				5,660
	Deferred costs			1,570				2,648
	Deferred tax asset			10,923				10,398
Total current assets				119,445				138,111
Restricted cash, long-term				835				—
Property and equipment, net				36,504				41,253
Goodwill				49,453				50,566
Intangible assets, net				1,250				2,873
Securitized notes receivable, long-term				1,074				—
Deferred costs, long-term				1,932				4,599
Other noncurrent assets				961				740
Total assets			$	211,454			$	238,142

F-37

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			December 31,				September 30,
			2004				2005
							(unaudited)
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
	Accounts payable		$	2,828			$	2,143
	Accrued expenses			32,630				29,445
	Income taxes payable			419				313
	Customer credits			15,541				3,635
	Deferred revenue			13,972				18,511
	Notes payable			4,636				2,015
	Capital lease obligations			4,813				5,417
	Accrued restructuring reserve			1,330				699
Total current liabilities				76,169				62,178
Deferred revenue, long-term				13,812				16,624
Notes payable, long-term				1,358				1,320
Capital lease obligations, long-term				6,606				4,552
Accrued restructuring reserve, long-term				3,719				2,654
Deferred tax liability				1,194				1,405
Total liabilities				102,858				88,733
Commitments and contingencies				—				—
Series B Voting Convertible Preferred Stock, $0.01 par value; 4,000 shares authorized; 100 shares issued and outstanding at December 31, 2004; no shares authorized, issued or outstanding at September 30, 2005				66				—
Series C Voting Convertible Preferred Stock, $0.01 par value; 28,600 shares authorized; 28,570 shares issued and outstanding at December 31, 2004; no shares authorized, issued or outstanding at September 30, 2005				85,717				—
Series D Voting Convertible Preferred Stock, $0.01 par value; 10,000 shares authorized; 9,099 shares issued and outstanding at December 31, 2004; no shares authorized, issued or outstanding at September 30, 2005				54,671				—
Stockholders’ (deficit) equity:
	Class A common stock, par value $0.001; no shares authorized, issued and outstanding at December 31, 2004; 200,000 shares authorized, 58,902 shares issued and outstanding at September 30, 2005			—				59
	Class B common stock, par value $0.001; 100,000 shares authorized; 6,160 and 1,631 shares issued and outstanding at December 31, 2004 and September 30, 2005, respectively			6				2
	Additional paid-in capital			—				140,781
	Deferred stock compensation			(1,733	)			(1,406	)
	Treasury stock, at cost, 236 and no shares at December 31, 2004 and September 30, 2005, respectively			(1,125	)			—
	(Accumulated deficit) retained earnings			(29,006	)			9,973
Total stockholders’ (deficit) equity				(31,858	)			149,409
Total liabilities and stockholders’ (deficit) equity			$	211,454			$	238,142

F-38

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			Three Months Ended								Nine Months Ended
			September 30,								September 30,
			2004				2005				2004				2005
Revenue:
	Addressing		$	14,176			$	19,190			$	37,982			$	57,765
	Interoperability			9,314				12,242				25,403				38,819
	Infrastructure and other			21,739				27,528				60,168				82,464
Total revenue				45,229				58,960				123,553				179,048
Operating expense:
	Cost of revenue (excluding depreciation and amortization shown separately below)			12,874				17,124				35,410				46,154
	Sales and marketing			6,050				7,186				15,032				21,775
	Research and development			1,938				3,092				5,409				8,540
	General and administrative			5,310				5,626				13,781				22,045
	Depreciation and amortization			4,263				4,223				13,487				11,740
	Restructuring charges (recoveries)			—				17				—				(389	)
				30,435				37,268				83,119				109,865
Income from operations				14,794				21,692				40,434				69,183
Other (expense) income:
	Interest expense			(527	)			(503	)			(1,873	)			(1,715	)
	Interest income			380				559				1,100				1,756
Income before income taxes				14,647				21,748				39,661				69,224
Provision for (benefit from) income taxes				5,683				8,691				(1,504	)			27,653
Net income				8,964				13,057				41,165				41,571
Dividends on and accretion of preferred stock				(2,578	)			—				(7,568	)			(4,313	)
Net income attributable to common stockholders			$	6,386			$	13,057			$	33,597			$	37,258
Net income attributable to common
stockholders per common share:
	Basic		$	1.10			$	0.22			$	6.05			$	1.49
	Diluted		$	0.11			$	0.17			$	0.51			$	0.54
Weighted average common shares outstanding:
	Basic			5,804				60,351				5,550				25,016
	Diluted			83,767				77,462				81,245				76,813
Pro forma information (unaudited):
Pro forma net income attributable to common stockholders															$	41,571
	Pro forma net income attributable to common stockholders per common share:
Basic															$	0.69
Diluted															$	0.54
	Pro forma weighted average common shares outstanding:
Basic																59,857
Diluted																76,287

F-39

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				Nine Months Ended
				September 30,
				2004				2005
Operating activities:
Net income				$	41,165			$	41,571
Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			13,487				11,740
		Stock-based compensation			1,897				2,541
		Amortization of deferred financing costs			122				49
		Deferred income taxes			(9,610	)			(263	)
		Noncash restructuring benefit			—				(389	)
		Provision for doubtful accounts			809				551
Changes in operating assets and liabilities, net of acquisitions:
		Accounts receivable			(829	)			606
		Unbilled receivables			(874	)			(4,232	)
		Notes and securitized notes receivable			3,630				3,224
		Prepaid expenses and other current assets			(3,001	)			(1,535	)
		Deferred costs			(523	)			(3,746	)
		Other assets			1,115				539
		Accounts payable and accrued expenses			2,959				(2,494	)
		Income taxes payable			4,757				(106	)
		Accrued restructuring reserve			(262	)			(1,306	)
		Customer credits			(13,500	)			(11,906	)
		Deferred revenue			3,677				7,076
	Net cash provided by operating activities				45,019				41,920
Investing activities:
		Purchases of property and equipment			(9,228	)			(11,169	)
		Purchases of investments, net			(36,655	)			(23,340	)
		Business acquired, net of cash			—				(2,164	)
	Net cash used in investing activities				(45,883	)			(36,673	)
Financing activities:
		(Issuance) release of restricted cash			(8,066	)			4,304
		Principal repayments on notes payable			(7,684	)			(4,322	)
		Principal repayments on capital lease obligations			(6,006	)			(4,526	)
		Proceeds from exercise of common stock options			82				2,571
		Repurchase of common stock			(1,012	)			—
		Payment of preferred stock dividends			—				(6,264	)
	Net cash used in financing activities				(22,686	)			(8,237	)
Net decrease in cash and cash equivalents					(23,550	)			(2,990	)
Cash and cash equivalents at beginning of period					60,232				19,019
Cash and cash equivalents at end of period				$	36,682			$	16,029

F-40

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1.	DESCRIPTION OF BUSINESS AND ORGANIZATION

	•	Addressing. The Company enables CSPs to use critical, shared addressing resources, such as telephone numbers, several Internet domain names, and Common Short Codes.
	•	Interoperability. The Company enables CSPs to exchange and share critical operating data so that communications originating on one provider’s network can be delivered and received on the network of another CSP. The Company also facilitates order management and work flow processing among CSPs.
	•	Infrastructure and Other. The Company enables CSPs to more efficiently manage changes in their own networks by centrally managing certain critical data they use to route communications over their own networks.

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

F-41

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F-42

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F-43

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F-44

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			Three Months Ended								Nine Months Ended
			September 30,								September 30,
			2004				2005				2004				2005
Pro forma net income attributable to common stockholders:
	As reported		$	8,964			$	13,057			$	41,165			$	41,571
	Add: stock-based compensation expense included in reported net income attributable to common stockholders			312				66				1,146				1,535
	Deduct: total stock-based compensation expense determined under fair value-based method for all awards			(1,238	)			(1,223	)			(3,138	)			(5,038	)
Pro forma net income attributable to common stockholders			$	8,038			$	11,900			$	39,173			$	38,068
Net income attributable to common stockholders per common share:
Basic — as reported			$	1.10			$	0.22			$	6.05			$	1.49
Basic — pro forma			$	0.94			$	0.20			$	5.69			$	1.35
Diluted — as reported			$	0.11			$	0.17			$	0.51			$	0.54
Diluted — pro forma			$	0.10			$	0.15			$	0.48			$	0.50

F-45

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										Nine Months
		Three Months Ended								Ended
		September 30,								September 30,
		2004				2005				2004				2005
Dividend yield			0.0	%			0.0	%			0.0	%			0.0	%
Expected volatility			67.14	%			55.13	%			67.14	%			62.25	%
Average risk-free interest rate			3.43	%			3.94	%			3.43	%			3.90	%
Expected term			5.0				5.0				5.0				5.0

			Three Months Ended,								Nine Months Ended,
			September 30,								September 30,
			2004				2005				2004				2005
Historical:
Numerator:
	Net income		$	8,964			$	13,057			$	41,165			$	41,571
	Dividends on and accretion of convertible preferred stock			(2,578	)			—				(7,568	)			(4,313	)
	Net income attributable to common stockholders		$	6,386			$	13,057			$	33,597			$	37,258
Pro forma (unaudited):
Numerator:
	Net income attributable to common stockholders														$	37,258
	Dividends on and accretion of convertible preferred stock															4,313
	Net income														$	41,571

F-46

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			Three Months Ended,								Nine Months Ended,
			September 30,								September 30,
			2004				2005				2004				2005
Historical:
Denominator:
Weighted average common shares out-standing — basic				5,804				60,351				5,550				25,016
Dilutive effect of:
	Stock options for the purchase of common stock			7,426				10,765				7,051				10,094
	Conversion of preferred stock and accrued dividends payable into common stock			64,241								62,361				35,367
	Warrants for the purchase of common stock			6,296				6,346				6,283				6,336
Weighted average common shares out-standing — diluted				83,767				77,462				81,245				76,813
Pro Forma (unaudited):
Denominator:
Weighted average common shares outstanding — basic																25,016
Assumed conversion of preferred stock into common stock																34,841
Pro forma weighted average common shares outstanding — basic																59,857
Dilutive effect of:
	Stock options for the purchase of common stock															10,094
	Warrants for the purchase of common stock															6,336
Pro forma weighted average common shares outstanding — diluted																76,287

F-47

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	•	A “modified prospective” method in which compensation cost is recognized beginning with the effective date (a) based on the requirements of SFAS No. 123(R) for all share-based payments granted after the effective date and (b) based on the requirements of SFAS No. 123(R) for all awards granted to employees prior to the effective date of SFAS No. 123(R) that remain unvested on the effective date.
	•	A “modified retrospective” method, which includes the requirements of the modified prospective method described above, but also permits entities to restate based on the amounts previously recognized under SFAS No. 123 for purposes of pro forma disclosures either (a) all prior periods presented or (b) prior interim periods of the year of adoption.

F-48

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3.	ACQUISITION

4.	GOODWILL and INTANGIBLE ASSETS

			December 31,				September 30,
			2004				2005
							(unaudited)
Goodwill			$	49,453			$	50,566
Other intangible assets:
	Customer lists			996				3,566
	Acquired technology			2,208				2,208
Total other intangibles				3,204				5,774
Accumulated amortization				(1,954	)			(2,901	)
Other intangible assets, net			$	1,250			$	2,873

F-49

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F-50

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Item 13.	Other Expenses of Issuance and Distribution

Expenses		Amount
Securities and Exchange Commission registration fee			69,623
Printing expenses			600,000
Accounting fees and expenses			125,000
Legal fees and expenses			350,000
NASD filing fee			59,650
Transfer agent’s fees and expenses			5,000
Miscellaneous			40,727
Total			1,250,000

Item 14.	Indemnification of Directors and Officers

II-1

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Item 15.	Recent Sales of Unregistered Securities

II-2

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Item 16.	Exhibits and Financial Statement Schedules

Exhibit
No.				Description of Exhibit
	1	.1		Underwriting Agreement. p
	3	.1		Restated Certificate of Incorporation. ¥
	3	.2		Amended and Restated Bylaws. ¥
	4	.1		Specimen Class A Common Stock Certificate. ¥
	4	.2		Specimen Class B Common Stock Certificate. ¥
	4	.3		Stockholders Agreement, dated June 28, 2005, by and among NeuStar, Inc. and the stockholders named therein. ^
	4	.4		Registration Rights Agreement, dated as of June 5, 2001, by and among NeuStar, Inc. and the stockholders named therein. #
	4	.5		Form of Warrants dated December 7, 1999. <
	4	.6		Joint Venture Formation Agreement dated April 27, 2001, by and between NeuStar, Inc. and Melbourne IT Limited. #
	5	.1		Opinion of Gibson, Dunn & Crutcher LLP. p
	9	.1		Amended and Restated Trust Agreement dated September 24, 2004, by and among NeuStar, Inc., the stockholders named therein and the trustees named therein. ¥
	10	.1		Contractor services agreement entered into the 7th day of November 1997 by and between NeuStar, Inc. and North American Portability Management, LLC. **^
	10	.2		Amended and restated contractor services agreement made and entered into as of June 1, 2003, by and between Canadian LNP Consortium Inc. and NeuStar, Inc. **$
	10	.2.1		Amendment to amended and restated contractor services agreement by and between Canadian LNP Consortium Inc. and NeuStar, Inc. **^
	10	.3		National Thousands-Block Pooling Administration agreement awarded to NeuStar, Inc. by the Federal Communications Commission, effective June 14, 2001. $
	10	.3.1		Amendment to National Thousands-Block Pooling Administration agreement awarded to NeuStar, Inc. by the Federal Communications Commission. ^
	10	.3.2		Amendment to National Thousands-Block Pooling Administration agreement awarded to NeuStar, Inc. by the Federal Communications Commission. &
	10	.3.3		Amendment to National Thousands-Block Pooling Administration agreement awarded to NeuStar, Inc. by the Federal Communications Commission.<

II-3

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Exhibit
No.				Description of Exhibit
	10	.4		North American Numbering Plan Administrator agreement awarded to NeuStar, Inc. by the Federal Communications Commission, effective July 9, 2003. ¥
	10	.4.1		Amendment to North American Numbering Plan Administrator agreement awarded to NeuStar, Inc. by the Federal Communications Commission. &
	10	.5		.us Top-Level Domain Registry Management and Coordination agreement awarded to NeuStar, Inc. by the National Institute of Standards and Technology on behalf of the Department of Commerce on October 26, 2001. ¥
	10	.5.1		Amendment to .us Top-Level Domain Registry Management and Coordination agreement awarded to NeuStar, Inc. by the National Institute of Standards and Technology on behalf of the Department of Commerce.<
	10	.5.2		Amendment to .us Top-Level Domain Registry Management and Coordination agreement awarded to NeuStar, Inc. by the National Institute of Standards and Technology on behalf of the Department of Commerce.<
	10	.6		Registry Agreement by and between the Internet Corporation for Assigned Names and Numbers and NeuLevel, Inc., dated as of May 11, 2001. #
	10	.7		Common Short Code License Agreement made and entered into October 17, 2003, by and between the Cellular Telecommunications and Internet Association and NeuStar, Inc. **¥
	10	.8		NeuStar, Inc. 1999 Equity Incentive Plan (the “1999 Plan”). †‡
	10	.9		NeuStar, Inc. 2005 Stock Incentive Plan (the “2005 Plan”). †‡
	10	.10		Incentive Stock Option Agreement under the 1999 Plan, made as of April 10, 2000, by and between NeuStar, Inc. and Jeffrey Ganek. †#
	10	.11		Incentive Stock Option Agreement under the 1999 Plan, made as of April 10, 2000, by and between NeuStar, Inc. and Mark Foster. †#
	10	.12		Incentive Stock Option Agreement under the 1999 Plan, made as of March 26, 2002, by and between NeuStar, Inc. and Michael Lach, as amended as of June 22, 2004. †#
	10	.13		Nonqualified Stock Option Agreement under the 1999 Plan, made as of March 26, 2002, by and between NeuStar, Inc. and Michael Lach, as amended as of June 22, 2004. †#
	10	.14		Incentive Stock Option Agreement under the 1999 Plan, made as of June 6, 2002, by and between NeuStar, Inc. and Jeffrey Ganek. †#
	10	.15		Incentive Stock Option Agreement under the 1999 Plan, made as of June 6, 2002, by and between NeuStar, Inc. and Mark Foster. †#
	10	.16		Nonqualified Stock Option Agreement under the 1999 Plan, made as of June 6, 2002, by and between NeuStar, Inc. and Jeffrey Ganek. †#
	10	.17		Nonqualified Stock Option Agreement under the 1999 Plan, made as of June 6, 2002, by and between NeuStar, Inc. and Mark Foster. †#
	10	.18		Incentive Stock Option Agreement under the 1999 Plan, made as of January 16, 2003, by and between NeuStar, Inc. and John Malone, as amended as of December 18, 2003 and as of June 22, 2004. †#
	10	.19		Nonqualified Stock Option Agreement under the 1999 Plan, made as of January 16, 2003, by and between NeuStar, Inc. and John Malone, as amended as of December 18, 2003 and as of June 22, 2004. †#
	10	.20		Incentive Stock Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and Jeffrey Ganek, as amended as of June 22, 2004. †#
	10	.21		Incentive Stock Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and Michael Lach, as amended as of June 22, 2004. †#

II-4

---

 

Exhibit
No.				Description of Exhibit
	10	.22		Incentive Stock Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and Mark Foster, as amended as of June 22, 2004. †#
	10	.23		Incentive Stock Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and John Malone, as amended as of June 22, 2004 and May 20, 2005. †‡
	10	.24		Nonqualified Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and Jeffrey Ganek, as amended as of June 22, 2004. †#
	10	.25		Nonqualified Stock Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and Michael Lach, as amended as of June 22, 2004. †#
	10	.26		Nonqualified Stock Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and Mark Foster, as amended as of June 22, 2004. †#
	10	.27		Nonqualified Stock Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and John Malone, as amended as of June 22, 2004 and May 20, 2005. †‡
	10	.28		Incentive Stock Option Agreement under the 1999 Plan, made as of June 22, 2004, by and between NeuStar, Inc. and Jeffrey Babka, as amended as of May 20, 2005. †‡
	10	.29		Nonqualified Stock Option Agreement under the 1999 Plan, made as of June 22, 2004, by and between NeuStar, Inc. and Jeffrey Babka, as amended as of May 20, 2005. †‡
	10	.30		Phantom Stock Unit Agreement under the 1999 Plan, made as of July 19, 2004, by and between NeuStar, Inc. and Michael R. Lach. †#
	10	.31		Nonqualified Stock Option Agreement under the 1999 Plan, made as of April 10, 2000, by and between NeuStar, Inc. and Henry Geller. †#
	10	.32		Nonqualified Stock Option Agreement under the 1999 Plan, made as of April 10, 2000, by and between NeuStar, Inc. and Henry Kressel. †#
	10	.33		Nonqualified Stock Option Agreement under the 1999 Plan, made as of April 10, 2000, by and between NeuStar, Inc. and Joe Landy. †#
	10	.34		Nonqualified Stock Option Agreement under the 1999 Plan, made as of April 10, 2000, by and between NeuStar, Inc. and Ken Pickar. †#
	10	.35		Nonqualified Stock Option Agreement under the 1999 Plan, made as of February 14, 2005, by and between NeuStar, Inc. and Jim Cullen. †#
	10	.36		Nonqualified Stock Option Agreement under the 1999 Plan, made as of February 14, 2005, by and between NeuStar, Inc. and Frank Schiff. †#
	10	.37		Loudoun Tech Center Office Lease by and between Merritt-LT1, LLC, Landlord, and NeuStar, Inc., Tenant. +
	10	.38		Credit Agreement, dated as of August 14, 2002, among NeuStar, Inc., Bank of America, N.A., and other lenders. ^
	10	.38.1		Amendment to Credit Agreement among NeuStar, Inc., Bank of America, N.A., and other lenders. ^
	10	.39		Credit Agreement, dated as of October 1, 2003, between NeuStar Funding LLC and Bank of America, N.A. +
	10	.40		NeuStar, Inc. Annual Performance Incentive Plan. †‡
	10	.41		NeuStar, Inc. 2005 Key Employee Severance Pay Plan. †‡
	10	.42		Executive Relocation Policy. †‡
	10	.43		Employment Continuation Agreement, made as of April 8, 2004, by and between NeuStar, Inc. and Jeffrey Ganek. †‡
	10	.44		Employment Continuation Agreement, made as of April 8, 2004, by and between NeuStar, Inc. and Mark Foster. †‡
	10	.45		Form of Restricted Stock Agreement under the 2005 Plan.†‡

II-5

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Exhibit
No.				Description of Exhibit
	10	.46		Form of Nonqualified Stock Option Agreement under the 2005 Plan. †‡
	10	.47		Form of Incentive Stock Option Agreement under the 2005 Plan. †‡
	10	.48		Summary of relocation arrangement with Jeffrey A. Babka. †‡
	10	.49		Form of Indemnification Agreement. ¢
	21	.1		Subsidiaries of NeuStar, Inc. >
	23	.1		Consent of Ernst & Young LLP. %
	23	.2		Consent of Gibson, Dunn & Crutcher LLP (included in its opinion filed as Exhibit 5.1). p
	24	.1		Power of Attorney (included on the signature page herewith).

†	Compensation arrangement.

**	Confidential treatment has been requested for portions of this document. The omitted portions of this document have been filed with the Securities and Exchange Commission.

#	Previously filed as an exhibit to our registration statement on Form S-1 filed April 8, 2005 (Amendment No. 1), File No. 333-123635.
+	Previously filed as an exhibit to our registration statement on Form S-1 filed May 11, 2005 (Amendment No. 2), File No. 333-123635.
‡	Previously filed as an exhibit to our registration statement on Form S-1 filed May 27, 2005 (Amendment No. 3), File No. 333-123635.
@	Previously filed as an exhibit to our registration statement on Form S-1 filed June 9, 2005 (Amendment No. 4), File No. 333-123635.
¢	Previously filed as an exhibit to our registration statement on Form S-1 filed June 10, 2005 (Amendment No. 5), File No. 333-123635.
$	Previously filed as an exhibit to our registration statement on Form S-1 filed June 28, 2005 (Amendment No. 6), File No. 333-123635.
¥	Previously filed as an exhibit to our registration statement on Form S-1 filed June 28, 2005 (Amendment No. 7), File No. 333-123635.

^	Previously filed as an exhibit to our quarterly report on Form 10-Q filed August 15, 2005, File No. 001-32548.

&	Previously filed as an exhibit to our current report on Form 8-K filed September 15, 2005, File No. 001-32548.

<	Previously filed as an exhibit to our quarterly report on Form 10-Q filed November 14, 2005, File No. 001-32548.

>	Previously filed as an exhibit to our registration statement on Form S-1 filed November 15, 2005, File No. 333-129700.

	Schedule II— Valuation and Qualifying Accounts

II-6

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Item 17.	Undertakings

	(i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
	(ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
	(iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

II-7

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	NEUSTAR, INC.

	By:	/s/ Jeffrey E. Ganek

	Jeffrey E. Ganek
	Chairman of the Board of Directors
	and Chief Executive Officer

Signature				Title
/s/ Jeffrey E. Ganek   Jeffrey E. Ganek				Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer)
*   Jeffrey A. Babka				Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
*   James G. Cullen				Director
*   Henry Geller				Director
*   Dr. Henry Kressel				Director
*   Joseph P. Landy				Director
*   Dr. Kenneth A. Pickar				Director
*   Frank L. Schiff				Director
*By:		/s/ Martin K. Lowen   Martin K. Lowen Attorney in Fact

II-8

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	/s/ Ernst & Young LLP

S-1

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			As of December 31,
			2002				2003				2004
			(in thousands)
Allowance for Doubtful Accounts
	Beginning Balance		$	—			$	66			$	84
	Additions			753				184				960
	Reductions(1)			(687	)			(166	)			(576	)
	Ending Balance		$	66			$	84			$	468
Deferred Tax Asset Valuation Allowance
	Beginning Balance		$	18,209			$	30,270			$	20,209
	Additions			12,061				—				—
	Reductions			—				(10,061	)			(20,209	)
	Ending Balance		$	30,270			$	20,209			$	—

S-2

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Exhibit
No.				Description of Exhibit
	1.1			Underwriting Agreement. p
	3.1			Restated Certificate of Incorporation. ¥
	3.2			Amended and Restated Bylaws. ¥
	4.1			Specimen Class A Common Stock Certificate. ¥
	4.2			Specimen Class B Common Stock Certificate. ¥
	4.3			Stockholders Agreement, dated June 28, 2005, by and among NeuStar, Inc. and the stockholders named therein. ^
	4.4			Registration Rights Agreement, dated as of June 5, 2001, by and among NeuStar, Inc. and the stockholders named therein. #
	4.5			Form of Warrants dated December 7, 1999. <
	4.6			Joint Venture Formation Agreement dated April 27, 2001, by and between NeuStar, Inc. and Melbourne IT Limited. #
	5.1			Opinion of Gibson, Dunn & Crutcher LLP. p
	9.1			Amended and Restated Trust Agreement dated September 24, 2004, by and among NeuStar, Inc., the stockholders named therein and the trustees named therein. ¥
	10.1			Contractor services agreement entered into the 7th day of November 1997 by and between NeuStar, Inc. and North American Portability Management, LLC. **^
	10.2			Amended and restated contractor services agreement made and entered into as of June 1, 2003, by and between Canadian LNP Consortium Inc. and NeuStar, Inc. **$
	10.2.1			Amendment to amended and restated contractor services agreement by and between Canadian LNP Consortium Inc. and NeuStar, Inc. **^
	10.3			National Thousands-Block Pooling Administration agreement awarded to NeuStar, Inc. by the Federal Communications Commission, effective June 14, 2001. $
	10.3.1			Amendment to National Thousands-Block Pooling Administration agreement awarded to NeuStar, Inc. by the Federal Communications Commission.^
	10.3.2			Amendment to National Thousands-Block Pooling Administration agreement awarded to NeuStar, Inc. by the Federal Communications Commission. &
	10.3.3			Amendment to National Thousands-Block Pooling Administration agreement awarded to NeuStar, Inc. by the Federal Communications Commission.<
	10.4			North American Numbering Plan Administrator agreement awarded to NeuStar, Inc. by the Federal Communications Commission, effective July 9, 2003. ¥
	10.4.1			Amendment to North American Numbering Plan Administrator agreement awarded to NeuStar, Inc. by the Federal Communications Commission. &
	10.5			.us Top-Level Domain Registry Management and Coordination agreement awarded to NeuStar, Inc. by the National Institute of Standards and Technology on behalf of the Department of Commerce on October 26, 2001. ¥
	10.5.1			Amendment to .us Top-Level Domain Registry Management and Coordination agreement awarded to NeuStar, Inc. by the National Institute of Standards and Technology on behalf of the Department of Commerce.<
	10.5.2			Amendment to .us Top-Level Domain Registry Management and Coordination agreement awarded to NeuStar, Inc. by the National Institute of Standards and Technology on behalf of the Department of Commerce.<
	10.6			Registry Agreement by and between the Internet Corporation for Assigned Names and Numbers and NeuLevel, Inc., dated as of May 11, 2001. #

---

 

Exhibit
No.				Description of Exhibit
	10.7			Common Short Code License Agreement made and entered into October 17, 2003, by and between the Cellular Telecommunications and Internet Association and NeuStar, Inc. **¥
	10.8			NeuStar, Inc. 1999 Equity Incentive Plan (the “1999 Plan”). †‡
	10.9			NeuStar, Inc. 2005 Stock Incentive Plan (the “2005 Plan”). †‡
	10.10			Incentive Stock Option Agreement under the 1999 Plan, made as of April 10, 2000, by and between NeuStar, Inc. and Jeffrey Ganek. †#
	10.11			Incentive Stock Option Agreement under the 1999 Plan, made as of April 10, 2000, by and between NeuStar, Inc. and Mark Foster. †#
	10.12			Incentive Stock Option Agreement under the 1999 Plan, made as of March 26, 2002, by and between NeuStar, Inc. and Michael Lach, as amended as of June 22, 2004. †#
	10.13			Nonqualified Stock Option Agreement under the 1999 Plan, made as of March 26, 2002, by and between NeuStar, Inc. and Michael Lach, as amended as of June 22, 2004. †#
	10.14			Incentive Stock Option Agreement under the 1999 Plan, made as of June 6, 2002, by and between NeuStar, Inc. and Jeffrey Ganek. †#
	10.15			Incentive Stock Option Agreement under the 1999 Plan, made as of June 6, 2002, by and between NeuStar, Inc. and Mark Foster. †#
	10.16			Nonqualified Stock Option Agreement under the 1999 Plan, made as of June 6, 2002, by and between NeuStar, Inc. and Jeffrey Ganek. †#
	10.17			Nonqualified Stock Option Agreement under the 1999 Plan, made as of June 6, 2002, by and between NeuStar, Inc. and Mark Foster. †#
	10.18			Incentive Stock Option Agreement under the 1999 Plan, made as of January 16, 2003, by and between NeuStar, Inc. and John Malone, as amended as of December 18, 2003 and as of June 22, 2004. †#
	10.19			Nonqualified Stock Option Agreement under the 1999 Plan, made as of January 16, 2003, by and between NeuStar, Inc. and John Malone, as amended as of December 18, 2003 and as of June 22, 2004. †#
	10.20			Incentive Stock Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and Jeffrey Ganek, as amended as of June 22, 2004. †#
	10.21			Incentive Stock Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and Michael Lach, as amended as of June 22, 2004. †#
	10.22			Incentive Stock Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and Mark Foster, as amended as of June 22, 2004. †#
	10.23			Incentive Stock Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and John Malone, as amended as of June 22, 2004 and May 20, 2005. †‡
	10.24			Nonqualified Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and Jeffrey Ganek, as amended as of June 22, 2004. †#
	10.25			Nonqualified Stock Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and Michael Lach, as amended as of June 22, 2004. †#
	10.26			Nonqualified Stock Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and Mark Foster, as amended as of June 22, 2004. †#
	10.27			Nonqualified Stock Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and John Malone, as amended as of June 22, 2004 and May 20, 2005. †‡
	10.28			Incentive Stock Option Agreement under the 1999 Plan, made as of June 22, 2004, by and between NeuStar, Inc. and Jeffrey Babka, as amended as of May 20, 2005.†‡

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Exhibit
No.				Description of Exhibit
	10.29			Nonqualified Stock Option Agreement under the 1999 Plan, made as of June 22, 2004, by and between NeuStar, Inc. and Jeffrey Babka, as amended as of May 20, 2005. †‡
	10.30			Phantom Stock Unit Agreement under the 1999 Plan, made as of July 19, 2004, by and between NeuStar, Inc. and Michael R. Lach. †#
	10.31			Nonqualified Stock Option Agreement under the 1999 Plan, made as of April 10, 2000, by and between NeuStar, Inc. and Henry Geller. †#
	10.32			Nonqualified Stock Option Agreement under the 1999 Plan, made as of April 10, 2000, by and between NeuStar, Inc. and Henry Kressel. †#
	10.33			Nonqualified Stock Option Agreement under the 1999 Plan, made as of April 10, 2000, by and between NeuStar, Inc. and Joe Landy. †#
	10.34			Nonqualified Stock Option Agreement under the 1999 Plan, made as of April 10, 2000, by and between NeuStar, Inc. and Ken Pickar. †#
	10.35			Nonqualified Stock Option Agreement under the 1999 Plan, made as of February 14, 2005, by and between NeuStar, Inc. and Jim Cullen. †#
	10.36			Nonqualified Stock Option Agreement under the 1999 Plan, made as of February 14, 2005, by and between NeuStar, Inc. and Frank Schiff. †#
	10.37			Loudoun Tech Center Office Lease by and between Merritt-LT1, LLC, Landlord, and NeuStar, Inc., Tenant. +
	10.38			Credit Agreement, dated as of August 14, 2002, among NeuStar, Inc., Bank of America, N.A., and other lenders. +
	10.38.1			Amendment to Credit Agreement among NeuStar, Inc., Bank of America, N.A., and other lenders.^
	10.39			Credit Agreement, dated as of October 1, 2003, between NeuStar Funding LLC and Bank of America, N.A. +
	10.40			NeuStar, Inc. Annual Performance Incentive Plan. †‡
	10.41			NeuStar, Inc. 2005 Key Employee Severance Pay Plan. †‡
	10.42			Executive Relocation Policy. †‡
	10.43			Employment Continuation Agreement, made as of April 8, 2004, by and between NeuStar, Inc. and Jeffrey Ganek. †‡
	10.44			Employment Continuation Agreement, made as of April 8, 2004, by and between NeuStar, Inc. and Mark Foster. †‡
	10.45			Form of Restricted Stock Agreement under the 2005 Plan. †‡
	10.46			Form of Nonqualified Stock Option Agreement under the 2005 Plan. †‡
	10.47			Form of Incentive Stock Option Agreement under the 2005 Plan. †‡
	10.48			Summary of relocation arrangement with Jeffrey A. Babka. †‡
	10.49			Form of Indemnification Agreement. ¢
	21.1			Subsidiaries of NeuStar, Inc. >
	23.1			Consent of Ernst & Young LLP. %
	23.2			Consent of Gibson, Dunn & Crutcher LLP (included in its opinion filed as Exhibit 5.1). p
	24.1			Power of Attorney (included on the signature page herewith).

†		Compensation arrangement.
**		Confidential treatment has been requested for portions of this document. The omitted portions of this document have been filed with the Securities and Exchange Commission.
#		Previously filed as an exhibit to our registration statement on Form S-1 filed April 8, 2005 (Amendment No. 1), File No. 333-123635.
+		Previously filed as an exhibit to our registration statement on Form S-1 filed May 11, 2005 (Amendment No. 2), File No. 333-123635.

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‡		Previously filed as an exhibit to our registration statement on Form S-1 filed May 27, 2005 (Amendment No. 3), File No. 333-123635.
@		Previously filed as an exhibit to our registration statement on Form S-1 filed June 9, 2005 (Amendment No. 4), File No. 333-123635.
¢		Previously filed as an exhibit to our registration statement on Form S-1 filed June 10, 2005 (Amendment No. 5), File No. 333-123635.
$		Previously filed as an exhibit to our registration statement on Form S-1 filed June 28, 2005 (Amendment No. 6), File No. 333-123635.
¥		Previously filed as an exhibit to our registration statement on Form S-1 filed June 28, 2005 (Amendment No. 7), File No. 333-123635.
^		Previously filed as an exhibit to our quarterly report on Form 10-Q filed August 15, 2005, File No. 001-32548.
&		Previously filed as an exhibit to our current report on Form 8-K filed September 15, 2005, File No. 001-32548.
<		Previously filed as an exhibit to our quarterly report on Form 10-Q filed November 14, 2005, File No. 001-32548.
>		Previously filed as an exhibit to our registration statement on Form S-1 filed November 15, 2005, File No. 333-129700.
p		To be filed by amendment.
%		Filed herewith.