|U.S. FEDERAL INCOME TAX INFORMATION FOR THE DUN & BRADSTREET CORPORATION SHAREHOLDERS
July 8, 1998Dear Dun & Bradstreet Corporation Shareholder:
U.S. Federal Income Tax Information
Old D&B (RHD) obtained a ruling from the Internal Revenue Service ("IRS") stating that Old D&B (RHD) shareholders will incur no U.S. federal income tax liability due to the distribution of DNB stock. However, the IRS requires that each taxpayer who received this tax-free distribution attach to their U.S. federal income tax return for the tax period including June 30, 1998 (the "Distribution Date"), a statement containing the details of the transaction. To assist you in complying with this requirement, a shareholder statement is enclosed which you can complete and attach to your U.S. federal income tax return for the period including June 30, 1998. For those shareholders who are calendar year taxpayers, the enclosed statement should be attached to your U.S. federal income tax return for 1998.
U.S. Federal Income Tax Basis
To allocate the tax basis in the Old D&B (RHD) shares you held on the Record Date you will need:
You received one share of DNB stock for every share of Old D&B (RHD) you owned on the Record Date. U.S. federal income tax law requires that you allocate the tax basis of the Old D&B (RHD) shares you owned on the Record Date between (i) those shares and (ii) the DNB shares received in the distribution. This allocation depends on the ratio of the fair market values of the Old D&B (RHD) and DNB shares on the Distribution Date.
The enclosed tax basis worksheet explains this calculation and includes a sample allocation of tax basis between Old D&B (RHD) and DNB shares. The percentages of tax basis to be allocated to shares of Old D&B (RHD) and DNB are based on the average of the high and low sale prices per share for the Distribution Date. Based on such prices, 8.86% of your pre-distribution tax basis should be allocated to your Old D&B (RHD) shares and 91.14% should be allocated to your DNB shares. If your Old D&B (RHD) shares were acquired at different times in separate lots, it would be appropriate to apportion your stock basis by applying these percentages to your basis for each lot.
The information regarding the U.S federal income tax consequences of the spin-off presented in this letter is for general reference only and does not purport to cover all U.S. federal income tax consequences that may apply to all categories of shareholders. All shareholders should consult their own tax advisors regarding the particular federal, foreign, state and local tax consequences of the spin-off to them.
THE DUN & BRADSTREET CORPORATION
U.S. FEDERAL INCOME TAX BASIS WORKSHEET
ATTACH TO YOUR U.S. FEDERAL INCOME TAX RETURN
Â© 2000 Dun & Bradstreet, Inc. and Direct Report Corporation