The Dun & Bradstreet Corporation
Aug 8, 2012

D&B Announces Second Quarter 2012 Results and Increases Share Repurchase Plan to $1 Billion

SHORT HILLS, N.J.--(BUSINESS WIRE)-- D&B (NYSE: DNB), the world's leading source of commercial information and insight on businesses, today reported results for the second quarter ended June 30, 2012.

"Our second quarter results were in line with our expectations and we are on track to meet our full year guidance. Cautious customer spending impacted North America during the first half of the year, while International results were solid. Through better traction from new products and improved execution on our core business, we expect North America's growth trajectory to gradually improve in the back half of the year and accelerate into 2013," stated Sara Mathew, D&B's Chairman and Chief Executive Officer.

Second Quarter 2012 Results

Diluted earnings per share before non-core gains and charges for the quarter ended June 30, 2012 were $1.50, up 11% from $1.35 in the prior year similar period.

On a GAAP basis, diluted earnings per share for the quarter ended June 30, 2012 were $1.20, up 2% from $1.18 in the prior year similar period.

See attached Schedule 3 for a reconciliation of diluted earnings per share before non-core gains and charges to earnings per share on a GAAP basis, as well as the definitions of the non-GAAP financial measures that the Company uses to evaluate the business.

Core revenue for the second quarter of 2012 was $383.9 million, flat before the effect of foreign exchange, compared to the prior year similar period (down 1% after the effect of foreign exchange).

Core revenue results for the second quarter of 2012 reflect the following by solution set:

See attached Schedules 4, 5 and 6 for additional detail.

Total revenue for the second quarter of 2012 was $383.9 million, down 7% before the effect of foreign exchange (down 8% after the effect of foreign exchange) from the prior year similar period. Total revenue for the second quarter of 2011 included the results from businesses that were divested or shut down. Deferred revenue was $575.3 million, down 4% from the prior year similar period.

See attached Schedule 3 for additional detail.

Operating income before non-core gains and charges for the second quarter of 2012 was $114.0 million, up 5% from the prior year similar period, primarily due to the effect of businesses divested in the prior year. On a GAAP basis, operating income was $89.3 million, down 1% from the prior year similar period, primarily due to legal fees and other shut down costs related to matters in our China operations.

See attached Schedule 3 for additional detail.

Net income attributable to D&B before non-core gains and charges for the second quarter of 2012 was $70.5 million, up 5% from the prior year similar period. On a GAAP basis, net income attributable to D&B for the second quarter of 2012 was $56.5 million, down 4% from the prior year similar period.

See attached Schedule 3 for additional detail.

Free cash flow for the first six months of 2012, excluding the impact of legacy tax matters, was $209.4 million, including approximately $23 million related to MaxCV, compared with $187.6 million and $16 million, respectively, in the prior year similar period. The Company defines free cash flow as net cash provided by operating activities less capital expenditures and additions to computer software and other intangibles. On a GAAP basis, net cash provided by operating activities for the first six months of 2012 was $243.6 million, compared with $214.2 million in the prior year similar period.

See attached Schedule 4 for additional detail.

Share repurchases during the second quarter of 2012 under the Company's discretionary repurchase program totaled $200.0 million (approximately 3.0 million shares), while repurchases made to offset the dilutive effect of shares issued under employee benefit plans totaled an additional $4.0 million (approximately 0.06 million shares).

The Company ended the second quarter of 2012 with $118.6 million of cash and cash equivalents and total gross debt of $1,013.6 million.

Second Quarter 2012 Segment Results

North America

Core revenue for the second quarter of 2012 was $279.0 million, down 2% both before and after the effect of foreign exchange, as compared to the prior year similar period.

North America core revenue results for the second quarter of 2012 reflect the following:

See attached Schedules 4, 5 and 6 for additional details.

Total revenue for the second quarter of 2012 was $279.0 million, down 3% both before and after the effect of foreign exchange, as compared to the prior year similar period. Total revenue for the second quarter of 2011 included the results of AllBusiness, Purisma and a small supply management company, that were all divested.

Operating income for the second quarter of 2012 was $103.2 million, down 2% from the prior year similar period, primarily due to lower total revenue and increased costs associated with investments and marketing efforts.

Asia Pacific

Core revenue for the second quarter of 2012 was $46.6 million, up 12% before the effect of foreign exchange (up 10% after the effect of foreign exchange), as compared to the prior year similar period.

Asia Pacific core revenue results for the second quarter of 2012 reflect the following:

Total revenue for the second quarter of 2012 was $46.6 million, down 33% before the effect of foreign exchange (down 32% after the effect of foreign exchange), as compared to the prior year similar period. Total revenue for the second quarter of 2011 included the results from our market research business in China and the domestic portion of our Japanese operations that were divested, as well as our operations in Roadway China that were shut down.

See attached Schedules 4, 5 and 6 for additional detail.

Operating income before non-core gains and charges for the second quarter of 2012 was $6.1 million, down 20% from the prior year similar period, primarily due to lower total revenue.

On a GAAP basis, operating income was $5.6 million, down 26% from the prior year similar period.

See attached Schedule 3 for additional detail.

Europe & Other International Markets

Core and total revenue for the second quarter of 2012 was $58.3 million, up 2% before the effect of foreign exchange (down 3% after the effect of foreign exchange), as compared to the prior year similar period.

Europe & Other International Markets core and total revenue results for the second quarter of 2012 reflect the following:

See attached Schedules 4, 5 and 6 for additional detail.

Operating income for the second quarter of 2012 was $14.6 million, up 49% from the prior year similar period, primarily related to savings from our reengineering efforts, partially offset by a decrease in revenue.

MaxCV

In February 2010, D&B announced a Strategic Technology Investment program aimed at strengthening its leading position in commercial data and improving its current technology platform to meet the emerging needs of customers. We refer to this program as "MaxCV."

In the second quarter of 2012, the Company incurred $10.5 million of total pre-tax expenses (or $0.15 per diluted share) on MaxCV, which is included in the Non-Core Gains and Charges noted below, and $8.8 million of capital expenditures and additions to computer software and other intangibles related to MaxCV.

For the full year 2012, the Company anticipates spending approximately $60 million on MaxCV.

See attached Schedule 3 for additional detail.

Increases Share Repurchase Program to $1 Billion

The Company announced today that its Board of Directors has authorized an increase of $500 million to its existing share repurchase program bringing the total authorization to $1 billion.

As of today, there is $770 million available under the increased authorized program.

Non-Core Gains and Charges

During the second quarters of 2012 and 2011, the Company recorded:

See attached Schedule 3 for additional explanations and details of these charges.

D&B's restructuring charges may be viewed as recurring as they are part of its Financial Flexibility initiatives. In addition to reporting GAAP results, the Company reports results before restructuring charges and other non-core gains and charges because they do not reflect the Company's underlying business performance and they may have a disproportionate positive or negative impact on the results of its ongoing business operations. For additional information, see the section titled "Use of Non-GAAP Financial Measures" below.

Full Year 2012 Guidance

D&B today reaffirmed its financial guidance for the full year 2012:

The impact of MaxCV has been excluded from our operating income and diluted EPS guidance and included in our free cash flow guidance.

D&B does not provide guidance on a GAAP basis because D&B is unable to predict, with reasonable certainty, the future movement of foreign exchange rates or the future impact of non-core gains and charges, such as restructuring charges and legacy tax matters, which are a component of the most comparable financial measures calculated in accordance with GAAP. Non-core gains and charges are uncertain and will depend on several factors, including industry conditions, and could be material to D&B's results computed in accordance with GAAP.

D&B Declares Quarterly Dividend

D&B announced today that its Board of Directors has declared a quarterly cash dividend of $0.38 per share. This quarterly cash dividend is payable on September 18, 2012, to shareholders of record at the close of business on August 31, 2012.

Use of Non-GAAP Financial Measures

D&B reports non-GAAP financial measures in this press release and the schedules attached. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — How We Manage Our Business" in the Company's Annual Report on Form 10-K for the year ending December 31, 2011, filed February 29, 2012 with the SEC, for a discussion of how the Company defines these measures, why it uses them and why it believes they provide useful information to investors. Additionally, these measures are defined in Schedule 3 attached to this press release.

Second Quarter 2012 Teleconference

As previously announced, D&B will review its second quarter financial results in a conference call with the investment community on Thursday, August 9, 2012, at 8 a.m. ET. Live audio, as well as a replay of the conference call will be accessible on D&B's Investor Relations Web site at http://investor.dnb.com.

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About Dun & Bradstreet® (D&B)

Dun & Bradstreet (NYSE:DNB) is the world's leading source of commercial information and insight on businesses, enabling companies to Decide with Confidence® for 171 years. D&B's global commercial database contains more than 210 million business records. The database is enhanced by D&B's proprietary DUNSRight® Quality Process, which provides our customers with quality business information. This quality information is the foundation of our global solutions that customers rely on to make critical business decisions.

D&B provides solution sets that meet a diverse set of customer needs globally. Customers use D&B Risk Management SolutionsTM to mitigate credit and supplier risk, increase cash flow and drive increased profitability; D&B Sales & Marketing SolutionsTM to increase revenue from new and existing customers; and D&B Internet SolutionsTM to convert prospects into clients faster by enabling business professionals to research companies, executives and industries, over the web. For more information, please visit www.dnb.com.

Forward-Looking and Cautionary Statements

This press release, including, in particular, the section titled "Full Year 2012 Guidance," contains projections of future results and other forward-looking statements that involve a number of trends, risks and uncertainties, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

The following important factors could cause actual results to differ materially from those projected in such forward-looking statements.

For a more detailed discussion of the trends, risks and uncertainties that may affect D&B's operating and financial results and its ability to achieve the financial objectives discussed in this press release, readers should review the Company's filings with the SEC, including its most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Copies of the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q are available on its Web site at www.dnb.com and on the SEC's Web site at www.sec.gov. D&B cautions that the foregoing list of important factors is not complete and except as otherwise required by federal securities laws does not undertake any obligation to update any forward-looking statement.

The Dun & Bradstreet Corporation   Schedule 1

Consolidated Statement of Operations (unaudited) - GAAP Results

 
  Effects of   Effects of  
  Quarter Ended   AFX Foreign BFX   Year-To-Date   AFX Foreign BFX
June 30, % Change Exchange % Change June 30, % Change Exchange % Change

Dollar amounts in millions, except per share data

2012   2011 Fav (Unfav) Fav (Unfav) Fav (Unfav) 2012   2011 Fav (Unfav) Fav (Unfav) Fav (Unfav)
 
Revenue:
 
North America $ 279.0 $ 286.0 (2 %) 0 % (2 %) $ 564.5 $ 574.5 (2 %) 0 % (2 %)
 
Asia Pacific 46.6 42.4 10 % (2 %) 12 % 88.4 78.9 12 % (1 %) 13 %
Europe and Other International Markets   58.3     59.8   (3 %) (5 %) 2 %   115.7     116.1   0 % (2 %) 2 %
International 104.9 102.2 3 % (3 %) 6 % 204.1 195.0 5 % (2 %) 7 %
         
Core Revenue $ 383.9 $ 388.2 (1 %) (1 %) 0 % $ 768.6 $ 769.5 0 % 0 % 0 %