The Dun & Bradstreet Corporation
Oct 25, 2012

D&B Announces Third Quarter 2012 Results and Reaffirms Full Year 2012 Guidance

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 third quarter ended September 30, 2012.

"D&B had a solid third quarter despite a difficult environment, and we remain on track to meet our full year guidance," stated Sara Mathew, Chairman and Chief Executive Officer. With 2012 mostly behind us, the management rotation between Byron and Manny is designed to get us ready for 2013. Both leaders have a deep understanding of our business and will play a critical role in driving value for our customers, shareholders and team members. Please join me in congratulating Manny and Byron on their new responsibilities."

Third Quarter 2012 Results

Diluted earnings per share before non-core gains and charges for the quarter ended September 30, 2012 were $1.76, up 24% from $1.42 in the prior year similar period.

On a GAAP basis, diluted earnings per share for the quarter ended September 30, 2012 were $1.76, up 48% from $1.19 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 third quarter of 2012 was $413.2 million, up 2% before the effect of foreign exchange (up 1% after the effect of foreign exchange), as compared to the prior year similar period.

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

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

Total revenue for the third quarter of 2012 was $413.2 million, down 5% before the effect of foreign exchange (down 6% after the effect of foreign exchange), as compared to the prior year similar period. Total revenue for the third quarter of 2011 included the results from businesses that were divested or shut down. Deferred revenue was $543.4 million, down 2% from the prior year similar period.

See attached Schedule 3 for additional detail.

Operating income before non-core gains and charges for the third quarter of 2012 was $127.9 million, up 8% from the prior year similar period, primarily due to reengineering savings as well as the effects of recent business divestitures. On a GAAP basis, operating income for the third quarter of 2012 was $109.7 million, up 9% from the prior year similar period.

See attached Schedule 3 for additional detail.

Net income attributable to D&B before non-core gains and charges for the third quarter of 2012 was $79.4 million, up 14% from the prior year similar period. On a GAAP basis, net income attributable to D&B for the third quarter of 2012 was $79.6 million, up 36% from the prior year similar period.

See attached Schedule 3 for additional detail.

Free cash flow for the first nine months of 2012, excluding the impact of legacy tax matters, was $255.2 million, including approximately $34 million related to MaxCV, compared with $230.9 million and $32 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 nine months of 2012 was $307.1 million, compared with $271.2 million in the prior year similar period.

See attached Schedule 4 for additional detail.

Share repurchases during the third quarter of 2012 under the Company's discretionary repurchase program totaled $36.0 million (approximately 0.4 million shares), while there were no repurchases made to offset the dilutive effect of shares issued under employee benefit plans.

The Company ended the third quarter of 2012 with $137.0 million of cash and cash equivalents and total gross debt of $1,024.1 million.

Third Quarter 2012 Segment Results

North America

Core revenue for the third quarter of 2012 was $308.3 million, up 1% both before and after the effect of foreign exchange, as compared to the prior year similar period.

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

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

Total revenue for the third quarter of 2012 was $308.3 million, up 1% before the effect of foreign exchange (flat after the effect of foreign exchange), as compared to the prior year similar period. Total revenue for the third quarter of 2011 included the results of AllBusiness and Purisma that were divested.

Operating income for the third quarter of 2012 was $117.3 million, up 5% from the prior year similar period, primarily due to higher total revenue and reengineering savings.

Asia Pacific

Core revenue for the third quarter of 2012 was $44.8 million, up 9% before the effect of foreign exchange (up 4% after the effect of foreign exchange), as compared to the prior year similar period.

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

Total revenue for the third quarter of 2012 was $44.8 million, down 34% before the effect of foreign exchange (down 36% after the effect of foreign exchange), as compared to the prior year similar period. Total revenue for the third 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 Roadway operations in 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 third quarter of 2012 was $6.4 million, up 29% from the prior year similar period, primarily due to the positive impact from the restructuring of our Japan operation where we exited the domestic Japanese market and retained the high margin cross border business.

On a GAAP basis, operating income for the third quarter of 2012 was $5.1 million, up 1% from the prior year similar period.

See attached Schedule 3 for additional detail.

Europe & Other International Markets

Core and total revenue for the third quarter of 2012 was $60.1 million, up 3% before the effect of foreign exchange (down 4% 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 third quarter of 2012 reflect the following:

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

Operating income for the third quarter of 2012 was $17.3 million, up 12% from the prior year similar period, primarily related to savings from our reengineering efforts, partially offset by the negative impact of foreign exchange.

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 third quarter of 2012, the Company incurred $6.7 million of total pre-tax expenses (or $0.11 per diluted share) on MaxCV, which is included in the Non-Core Gains and Charges noted below, and $6.1 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.

Non-Core Gains and Charges

During the third 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.

D&B Announces Changes to Global Leadership Team, Effective January 1, 2013

Manny Conti has been named President, North America. Mr. Conti joined D&B in June 2003 and has held various roles of increasing responsibility. These positions included: Leader of Corporate Strategy, Vice President of Small Business Solutions in North America, President of Europe, Latin America and Partnerships, Chief Administrative Officer and President, International.

Byron Vielehr has been named President, International and Global Operations. Mr. Vielehr joined D&B in July 2005 and has held various roles of increasing responsibility. These positions included: Chief Information Officer and Leader, Technology, Chief Quality Officer, President, Integration Solutions, President, Global Risk & Analytics and President, North America.

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.

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.

Third Quarter 2012 Teleconference

As previously announced, D&B will review its third quarter financial results in a conference call with the investment community on Friday, October 26, 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.

**************

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 215 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
September 30, % Change Exchange % Change September 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 $ 308.3 $ 304.7 1 % 0 % 1 % $ 872.8 $ 879.2 (1 %) 0 % (1 %)

 

Asia Pacific 44.8 43.2 4 % (5 %) 9 % 133.2 122.1 9 % (3 %) 12 %
Europe and Other International Markets   60.1     62.9   (4 %) (7 %) 3 %   175.8     179.0   (2 %) (5 %) 3 %
International 104.9 106.1 (1 %) (6 %) 5 % 309.0 301.1 3 % (3 %) 6 %
         
Core Revenue $ 413.2 $ 410.8 1 % (1 %) 2 % $ 1,181.8 $ 1,180.3 0 % (1 %) 1 %
 
Divested and Other Business (1) - 28.6 N/M N/M N/M 18.1 79.5 (77 %) 1 % (78 %)
         
Total Revenue $ 413.2   $ 439.4   (6 %) (1 %) (5 %) $ 1,199.9   $ 1,259.8   (5 %) (1 %) (4 %)
 
Operating Income (Loss):
 
North America $ 117.3 $ 112.1 5 % $ 323.0 $ 324.0 0 %
 
Asia Pacific (2) 5.1 5.0 1 % (0.4 ) 10.7 N/M
Europe and Other International Markets   17.3     15.4   12 %   46.1     36.2   27 %
International 22.4 20.4 10 % 45.7 46.9 (3 %)
 
Corporate and Other (3) (30.0 ) (31.8 ) 6 % (95.3 ) (91.2 ) (5 %)
         
Total Operating Income 109.7 100.7 9 % 273.4 279.7 (2 %)
 
Interest Income 0.2 0.4 (52 %) 0.5 1.3 (60 %)
Interest Expense (9.5 ) (9.1 ) (4 %) (27.8 ) (27.4 ) (1 %)
Other Income (Expense) - Net (4) (15.4 ) (8.9 ) (73 %) (8.8 ) (20.5 ) 57 %
         
Non-Operating Income (Expense) - Net (24.7 ) (17.6 ) (40 %) (36.1 ) (46.6 ) 23 %
         
Income Before Provision for Income Taxes 85.0 83.1 2 % 237.3 233.1 2 %
 
Less: Provision for Income Taxes 4.8 24.7 81 % 37.3 68.4 46 %
Equity in Net Income (Loss) of Affiliates 0.5 0.4 (7 %) 1.3 1.1 8 %
         
Net Income 80.7 58.8 37 % 201.3 165.8 21 %
 
Less: Net (Income) Loss Attributable to the Noncontrolling Interest (5) (1.1 ) (0.4 ) N/M (1.8 ) 1.0 N/M
         
Net Income Attributable to D&B (6)   79.6     58.4   36 %   199.5     166.8   20 %
 
Less: Allocation to Participating Securities 0.0 (0.1 ) 79 % (0.1 ) (0.2 ) 72 %
         
Net Income Attributable to D&B Common Shareholders   79.6     58.3   36 %   199.4     166.6   20 %
 
Basic Earnings Per Share of Common Stock

Attributable to D&B Common Shareholders

$ 1.77   $ 1.19   49 % $ 4.29   $ 3.38   27 %
 
Diluted Earnings Per Share of Common Stock

Attributable to D&B Common Shareholders (7)

$ 1.76   $ 1.19   48 % $ 4.26   $ 3.36   27 %
         
Weighted Average Number of Shares Outstanding:
Basic   44.8     48.9   8 %   46.4     49.2   6 %
Diluted   45.2     49.1   8 %   46.8     49.6   6 %
 
AFX - After Effects of Foreign Exchange
BFX - Before Effects of Foreign Exchange
N/M - Not Meaningful
 
See Schedule 3 (Notes to Schedules), which is an integral part of the consolidated statement of operations.

This financial information should be read in conjunction with the consolidated financial statements and related notes of The Dun & Bradstreet Corporation contained in filings with the Securities and Exchange Commission.

 
                   
The Dun & Bradstreet Corporation Schedule 2

Consolidated Statement of Operations (unaudited) - Before Non-Core Gains and Charges

 
Effects of Effects of
Quarter Ended AFX Foreign BFX Year-To-Date AFX Foreign BFX
September 30, % Change Exchange % Change September 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 $ 308.3 $ 304.7 1 % 0 % 1 % $ 872.8 $ 879.2 (1 %) 0 % (1 %)
 
Asia Pacific 44.8 43.2 4 % (5 %) 9 % 133.2 122.1 9 % (3 %) 12 %
Europe and Other International Markets   60.1     62.9   (4 %) (7 %) 3 %   175.8     179.0   (2 %) (5 %) 3 %
International 104.9 106.1 (1 %) (6 %) 5 % 309.0 301.1 3 % (3 %) 6 %
         
Core Revenue $ 413.2 $ 410.8 1 % (1 %) 2 % $ 1,181.8 $ 1,180.3 0 % (1 %) 1 %
 
Divested and Other Business (1) - 28.6 N/M N/M N/M 18.1 79.5 (77 %) 1 % (78 %)
         
Total Revenue $ 413.2   $ 439.4   (6 %) (1 %) (5 %) $ 1,199.9   $ 1,259.8   (5 %) (1 %) (4 %)
 
Operating Income (Loss):
 
North America $ 117.3 $ 112.1 5 % $ 323.0 $ 324.0 0 %
 
Asia Pacific (2) 6.4 5.0 29 % 14.3 10.7 34 %
Europe and Other International Markets   17.3     15.4   12 %   46.1     36.2   27 %
International 23.7 20.4 16 % 60.4 46.9 29 %
 
Corporate and Other (3) (13.1 ) (14.0 ) 7 % (35.5 ) (40.6 ) 13 %
         
Total Operating Income 127.9 118.5 8 % 347.9 330.3 5 %
 
Interest Income 0.2 0.4 (52 %) 0.5 1.3 (60 %)
Interest Expense (9.5 ) (9.1 ) (4 %) (27.8 ) (27.4 ) (1 %)
Other Income (Expense) - Net (4) 0.0 (0.9 ) 99 % 0.2 (1.7 ) N/M
         
Non-Operating Income (Expense) - Net (9.3 ) (9.6 ) 3 % (27.1 ) (27.8 ) 3 %
         
Income Before Provision for Income Taxes 118.6 108.9 9 % 320.8 302.5 6 %
 
Less: Provision for Income Taxes 38.6 38.9 1 % 105.3 103.0 (2 %)
Equity in Net Income (Loss) of Affiliates 0.5 0.4 (7 %) 1.3 1.1 8 %
         
Net Income 80.5 70.4 14 % 216.8 200.6 8 %
 
Less: Net (Income) Loss Attributable to the Noncontrolling Interest (5) (1.1 ) (0.4 ) N/M (1.7 ) 1.0 N/M
         
Net Income Attributable to D&B (5)   79.4     70.0   14 %   215.1     201.6   7 %
 
Less: Allocation to Participating Securities 0.0 (0.1 ) 82 % 0.0 (0.3 ) 75 %
         
Net Income Attributable to D&B Common Shareholders (6)   79.4     69.9   14 %   215.1     201.3   7 %
 
Basic Earnings Per Share of Common Stock

Attributable to D&B Common Shareholders

$ 1.77   $ 1.43   24 % $ 4.63   $ 4.09   13 %
 
Diluted Earnings Per Share of Common Stock

Attributable to D&B Common Shareholders (7)

$ 1.76   $ 1.42   24 % $ 4.60   $ 4.06   13 %
         
Weighted Average Number of Shares Outstanding:
Basic   44.8     48.9   8 %   46.4     49.2   6 %
Diluted   45.2     49.1   8 %   46.8     49.6   6 %
 
AFX - After Effects of Foreign Exchange
BFX - Before Effects of Foreign Exchange
N/M - Not Meaningful
 
See Schedule 3 (Notes to Schedules), which is an integral part of the consolidated statement of operations.

This financial information should be read in conjunction with the consolidated financial statements and related notes of The Dun & Bradstreet Corporation contained in filings with the Securities and Exchange Commission.

 
         
The Dun & Bradstreet Corporation

Schedule 3

Notes to Schedules 1 and 2 (unaudited) and Definitions of Non-GAAP Measures
 
 
 
(1 ) The following table reconciles Divested and Other Business included in Schedule 1 and Schedule 2:
Quarter Ended Year-To-Date
September 30, September 30,
Amounts in millions   2012     2011     2012     2011  
 
Divested and Other Business:
Purisma $ - $ 1.4 $ - $ 3.1
AllBusiness - 0.9 - 3.1
Small Supply Management Company in North America - - - 1.1
Domestic Portion of Japan Operations - 15.9 12.7 45.4
Market Research Business in China - 4.7 - 11.3
Roadway China   -     5.7     5.4     15.5  
 
Total Divested and Other Business $ -   $ 28.6   $ 18.1   $ 79.5  
 
(2 ) The following table reconciles Asia Pacific Operating Income included in Schedule 1 and Schedule 2:
Quarter Ended Year-To-Date
September 30, September 30,
Amounts in millions   2012     2011     2012     2011  
 
Asia Pacific Operating Income - GAAP Results (Schedule 1) $ 5.1 $ 5.0 $ (0.4 ) $ 10.7
 
Legal Fees and Other Shut-Down Costs Associated with Matters in China (1.3 ) - (1.8 ) -
Impairments Related to Matters in China   -     -     (12.9 )   -  
 
Asia Pacific Operating Income - Before Non-Core Gains and Charges (Schedule 2) $ 6.4   $ 5.0   $ 14.3   $ 10.7  
 
(3 ) The following table reconciles Corporate and Other expenses included in Schedule 1 and Schedule 2:
Quarter Ended Year-To-Date
September 30, September 30,
Amounts in millions   2012     2011     2012     2011  
 
Corporate and Other - GAAP Results (Schedule 1) $ (30.0 ) $ (31.8 ) $ (95.3 ) $ (91.2 )
 
Restructuring Charges (4.8 ) (5.3 ) (23.2 ) (18.0 )
MaxCV (6.7 ) (12.5 ) (25.6 ) (32.6 )
Legal Fees and Other Shut-Down Costs Associated with Matters in China   (5.4 )   -     (11.0 )   -  
 
Corporate and Other - Before Non-Core Gains and Charges (Schedule 2) $ (13.1 ) $ (14.0 ) $ (35.5 ) $ (40.6 )
 
(4 ) The following table reconciles Other Income (Expense)-Net included in Schedule 1 and Schedule 2:
Quarter Ended Year-To-Date
September 30, September 30,
Amounts in millions   2012     2011     2012     2011  
 
Other Income (Expense)-Net - GAAP Results (Schedule 1) $ (15.4 ) $ (8.9 ) $ (8.8 ) $ (20.5 )
Effect of Legacy Tax Matters (15.4 ) 0.3 (15.0 ) (7.4 )
Gain (Loss) on Sale of Businesses - - 6.0 -
Gain (Loss) on Investment - (8.3 ) - (11.4 )
       
Other Income (Expense)-Net - Before Non-Core Gains and Charges (Schedule 2) $ -   $ (0.9 ) $ 0.2   $ (1.7 )
 
Quarter Ended Year-To-Date
September 30, September 30,
Amounts in millions   2012     2011     2012     2011  
Total Pre-Tax Impacts:
Restructuring Charges $ (4.8 ) $ (5.3 ) $ (23.2 ) $ (18.0 )
MaxCV (6.7 ) (12.5 ) (25.6 ) (32.6 )
Legal Fees and Other Shut-Down Costs Associated with Matters in China (6.7 ) - (12.8 ) -
Impairments Related to Matters in China - - (12.9 ) -
Effect of Legacy Tax Matters (15.4 ) 0.3 (15.0 ) (7.4 )
Gain (Loss) on Sale of Businesses - - 6.0 -
Gain (Loss) on Investment - (8.3 ) - (11.4 )
       
Total Pre-Tax Impacts $ (33.6 ) $ (25.8 ) $ (83.5 ) $ (69.4 )
 
(5 ) The following table reconciles Net Income (Loss) Attributable to the Noncontrolling Interest Schedule 1 and Schedule 2:
Quarter Ended Year-To-Date
September 30, September 30,
Amounts in millions   2012     2011     2012     2011  
 
Net Income (Loss) Attributable to the Noncontrolling Interest - GAAP Results (Schedule 1) $ (1.1 ) $ (0.4 ) $ (1.8 ) $ 1.0
Minority Share of Gain on Sale of Business - - (0.9 ) -
Impairments Related to Matters in China - - 0.8 -
       
Net Income (Loss) Attributable to the Noncontrolling Interest - Before Non-Core Gains and Charges (Schedule 2) $ (1.1 ) $ (0.4 ) $ (1.7 ) $ 1.0  
 
(6 ) The following table reconciles Net Income Attributable to D&B included in Schedule 1 and Schedule 2:
Quarter Ended Year-To-Date
September 30, September 30,
Amounts in millions   2012     2011     2012     2011  
 
Net Income Attributable to D&B - GAAP Results (Schedule 1) $ 79.6 $ 58.4 $ 199.5 $ 166.8
 
Restructuring Charges (3.0 ) (3.6 ) (14.7 ) (11.8 )
MaxCV (5.1 ) (9.2 ) (18.3 ) (25.2 )
Legal Fees and Other Shut-Down Costs Associated with Matters in China (4.7 ) - (8.6 ) -
Impairments Related to Matters in China - - (12.1 ) -
Gain (Loss) on Investment - (7.3 ) - (11.1 )
Effect of Legacy Tax Matters 13.0 - 13.0 4.8
Gain (Loss) on Sale of Businesses - - 11.1 -
Minority Share of Gain on Sale of Business - - (0.9 ) -
Tax Benefit on a Loss on the Tax Basis of a Legal Entity - 8.5 14.9 8.5
       
After-Tax Impact 0.2 (11.6 ) (15.6 ) (34.8 )
       
Net Income Attributable to D&B - Before Non-Core Gains and Charges (Schedule 2) $ 79.4   $ 70.0   $ 215.1   $ 201.6  
 
 
(7 ) The following table reconciles Diluted Earnings Per Share Attributable to D&B included in Schedule 1 and Schedule 2:
Quarter Ended Year-To-Date
September 30, September 30,
      2012     2011     2012     2011  
 
Diluted EPS Attributable to D&B - GAAP Results (Schedule 1) $ 1.76 $ 1.19 $ 4.26 $ 3.36
 
Restructuring Charges (0.07 ) (0.07 ) (0.32 )

(0.24

)
MaxCV (0.11 ) (0.19 ) (0.39 ) (0.51 )
Legal Fees and Other Shut-Down Costs Associated with Matters in China (0.11 ) - (0.19 ) -
Impairments Related to Matters in China - - (0.26 ) -
Gain (Loss) on Investment - (0.14 ) - (0.22 )
Minority Share of Gain on Sale of Business - - (0.02 ) -
Effect of Legacy Tax Matters 0.29 - 0.28 0.10
Gain (Loss) on Sale of Businesses - - 0.24 -
Tax Benefit on a Loss on the Tax Basis of a Legal Entity - 0.17 0.32 0.17
       
Diluted EPS Attributable to D&B - Before Non-Core Gains and Charges (Schedule 2) $ 1.76   $ 1.42   $ 4.60   $ 4.06  

 

N/M - Not Meaningful

 

The following defines the non-GAAP measures used to evaluate performance:

 

*Total revenue excluding the revenue of divested and shut-down businesses is referred to as "core revenue." Core revenue includes the revenue from acquired businesses from the date of acquisition

*Core revenue growth, excluding the effects of foreign exchange, is referred to as "core revenue growth before the effects of foreign exchange." We also separately, from time to time, analyze core revenue growth before the effects of foreign exchange among two components, "organic core revenue growth" and "core revenue growth from acquisitions"

*Results (such as operating income, operating income growth, operating margin, net income, tax rate and diluted earnings per share) exclude Restructuring Charges (whether recurring or non-recurring) and certain other items that we consider do not reflect our underlying business performance. We refer to these Restructuring Charges and other items as "non-core gains and (charges)"

* Net cash provided by operating activities minus capital expenditures and additions to computer software and other intangibles is referred to as "free cash flow

 

This financial information should be read in conjunction with the consolidated financial statements and related notes of The Dun & Bradstreet Corporation contained in filings with the Securities and Exchange Commission.

 
                 
The Dun & Bradstreet Corporation Schedule 4
Supplemental GAAP Financial Data (unaudited)
 
 
 
Quarter Ended Effects of Year-To-Date Effects of
September 30, AFX Foreign BFX September 30, AFX Foreign BFX
% Change Exchange % Change % Change Exchange % Change
Amounts in millions     2012     2011   Fav/(Unfav) Fav/(Unfav) Fav/(Unfav)   2012     2011   Fav/(Unfav) Fav/(Unfav) Fav/(Unfav)
 
Geographic and Customer Solution Set Revenue:
North America:
Risk Management Solutions $ 178.8 $ 183.5 (3 )% (1 )% (2 )% $ 518.5 $ 539.8 (4 )% 0 % (4 )%
Sales & Marketing Solutions 100.5 91.6 10 % 0 % 10 % 267.3 253.1 6 % 0 % 6 %
Internet Solutions   29.0     29.6   (3 )% 0 % (3 )%   87.0     86.3   1 % 0 % 1 %
 
Subtotal Core Revenue 308.3 304.7 1 % 0 % 1 % 872.8 879.2 (1 )% 0 % (1 )%
 
Divested and Other Business 1 - 2.3 N/M N/M N/M - 7.3 N/M N/M N/M
       
Total North America Revenue 308.3 307.0 0 % (1 )% 1 % 872.8 886.5 (2 )% 0 % (2 )%
 
Asia Pacific:
Risk Management Solutions $ 38.1 $ 38.9 (2 )% (5 )% 3 % $ 112.2 $ 108.0 4 % (2 )% 6 %
Sales & Marketing Solutions 6.5 4.1 58 % (15 )% 73 % 20.5 13.4 53 % (10 )% 63 %
Internet Solutions   0.2     0.2   (18 )% (15 )% (3 )%   0.5     0.7   (12 )% (11 )% (1 )%
 
Subtotal Core Revenue 44.8 43.2 4 % (5 )% 9 % 133.2 122.1 9 % (3 )% 12 %
 
Divested and Other Business 1 - 26.3 N/M N/M N/M 18.1 72.2 (75 )% 1 % (76 )%
       
Total Asia Pacific Revenue 44.8 69.5 (36 )% (2 )% (34 )% 151.3 194.3 (22 )% 0 % (22 )%
 
Europe and Other International Markets:
Risk Management Solutions $ 48.9 $ 50.6 (3 )% (7 )% 4 % $ 145.1 $ 147.8 (2 )% (5 )% 3 %
Sales & Marketing Solutions 10.5 11.6 (10 )% (5 )% (5 )% 28.7 29.4 (2 )% (3 )% 1 %
Internet Solutions   0.7     0.7   1 % (4 )% 5 %   2.0     1.8   9 % (3 )% 12 %
 
Subtotal Core Revenue 60.1 62.9 (4 )% (7 )% 3 % 175.8 179.0 (2 )% (5 )% 3 %
 
Divested and Other Business 1 - - 0 % 0 % 0 % - - 0 % 0 % 0 %
       
Total Europe and Other International Markets Revenue 60.1 62.9 (4 )% (7 )% 3 % 175.8 179.0 (2 )% (5 )% 3 %
 
International
Risk Management Solutions $ 87.0 $ 89.5 (3 )% (7 )% 4 % $ 257.3 $ 255.8 1 % (3 )% 4 %
Sales & Marketing Solutions 17.0 15.7 8 % (7 )% 15 % 49.2 42.8 15 % (5 )% 20 %
Internet Solutions   0.9     0.9   (4 )% (7 )% 3 %   2.5     2.5   3 % (5 )% 8 %
 
Subtotal Core Revenue 104.9 106.1 (1 )% (6 )% 5 % 309.0 301.1 3 % (3 )% 6 %
 
Divested and Other Business 1 - 26.3 N/M N/M N/M 18.1 72.2 (75 )% 1 % (76 )%
       
Total International Revenue 104.9 132.4 (21 )% (4 )% (17 )% 327.1 373.3 (12 )% (1 )% (11 )%
 
Total Corporation:
Risk Management Solutions $ 265.8 $ 273.0 (3 )% (2 )% (1 )% $ 775.8 $ 795.6 (3 )% (2 )% (1 )%
Sales & Marketing Solutions 117.5 107.3 10 % (1 )% 11 % 316.5 295.9 7 % (1 )% 8 %
Internet Solutions   29.9     30.5   (3 )% (1 )% (2 )%   89.5     88.8   1 % 0 % 1 %
 
Subtotal Core Revenue 413.2 410.8 1 % (1 )% 2 % 1,181.8 1,180.3 0 % (1 )% 1 %
 
Divested and Other Business 1 - 28.6 N/M N/M N/M 18.1 79.5 (77 )% 1 % (78 )%
       
Total Corporation Revenue   413.2     439.4     (6 )%   (1 )%   (5 )%   1,199.9     1,259.8   (5 )% (1 )% (4 )%
 
Operating Costs:
Operating Expenses $ 124.2 $ 150.2 17 % $ 395.2 $ 431.1 8 %
Selling and Administrative Expenses 154.5 162.6 5 % 448.2 470.4 5 %
Depreciation and Amortization 20.0 20.6 3 % 59.9 60.6 1 %
Restructuring Expense   4.8     5.3   8 %   23.2     18.0   (29 )%
 
Total Operating Costs 2 $ 303.5   $ 338.7   10 % $ 926.5   $ 980.1   6 %
 
Capital Expenditures 3 $ 1.0   $ 1.0   0 % $ 2.1   $ 3.0   30 %
 
Additions to Computer Software & Other Intangibles 3 $ 16.7   $ 12.7     (32 )% $ 49.8   $ 29.7   (68 )%
 
 
Quarter Ended
 
Amounts in millions     Sep 30, 2012 Jun 30, 2012 Mar 31, 2012 Dec 31, 2011 Sep 30, 2011 Jun 30, 2011 Mar 31, 2011
 
Net Debt Position:
Cash and Cash Equivalents $ 137.0 $ 118.6 $ 117.7 $ 84.4 $ 89.5 $ 83.1 $ 83.6
Short-Term Debt (400.2 ) (400.6 ) (1.0 ) (1.1 ) (188.6 ) (160.9 ) (2.1 )
Long-Term Debt   (623.9 )   (613.0 )   (841.8 )   (963.9 )   (704.6 )   (700.6 )   (888.6 )
 
Net Debt $ (887.1 ) $ (895.0 ) $ (725.1 ) $ (880.6 ) $ (803.7 ) $ (778.4 ) $ (807.1 )
 
 
Year-To-Date
 
 
Amounts in millions       Sep 30, 2012 Sep 30, 2011 % Change Fav/(Unfav)
 
Free Cash Flow:
Net Cash Provided By Operating Activities (GAAP Results) $ 307.1 $ 271.2 13 %
Less:
Capital Expenditures (GAAP Results) 3 2.1 3.0 30 %
Additions to Computer Software & Other Intangibles (GAAP Results) 3   49.8     29.7   (68 )%
 
Free Cash Flow $ 255.2 $ 238.5 7 %
Legacy Tax Matters (Refund) Payment   -     (7.6 ) N/M
Free Cash Flow Excluding Legacy Tax Matters $ 255.2   $ 230.9     11 %
 
 
Year-To-Date
 
 
Amounts in millions       Sep 30, 2012 Sep 30, 2011 % Change Fav/(Unfav)
 
Net Cash Provided By Operating Activities excluding Legacy Tax Matters:
Net Cash Provided By Operating Activities (GAAP Results) $ 307.1 $ 271.2 13 %
Legacy Tax Matters (Refund) Payment   -     (7.6 ) N/M
 
Net Cash Provided By Operating Activities Excluding Legacy Tax Matters $ 307.1   $ 263.6     17 %
 
 
Notes:
 
Quarter Ended Year-To-Date
September 30, September 30,
 
  2012     2011     2012     2011  
1 Divested and Other Business:
North America:
Risk Management Solutions $ 0.0 $ 0.0 $ 0.0 $ 1.1
Sales & Marketing Solutions 0.0 1.4 0.0 3.1
Internet Solutions   0.0     0.9     0.0     3.1  
Total Divested and Other Business $ 0.0   $ 2.3   $ 0.0   $ 7.3  
Asia Pacific:
Risk Management Solutions $ 0.0 $ 10.1 $ 8.7 $ 27.3
Sales & Marketing Solutions 0.0 16.2 9.4 44.9
Internet Solutions   0.0     0.0     0.0     0.0  
Total Divested and Other Business $ 0.0   $ 26.3   $ 18.1   $ 72.2  
Europe and Other International Markets:
Risk Management Solutions $ 0.0 $ 0.0 $ 0.0 $ 0.0
Sales & Marketing Solutions 0.0 0.0 0.0 0.0
Internet Solutions   0.0     0.0     0.0     0.0  
Total Divested and Other Business $ 0.0   $ 0.0   $ 0.0   $ 0.0  
Total Corporation:
Risk Management Solutions $ 0.0 $ 10.1 $ 8.7 $ 28.4
Sales & Marketing Solutions 0.0 17.6 9.4 48.0
Internet Solutions   0.0     0.9     0.0     3.1  
Total Divested and Other Business $ 0.0   $ 28.6   $ 18.1   $ 79.5  
 
2 MaxCV:
Operating Expenses $ 6.6 $ 9.6 $ 26.8 $ 27.9
Selling and Administrative Expenses 0.0 2.0 (1.8 ) 2.4
Depreciation and Amortization   0.1     0.9     0.6     2.3  
Total Operating Costs $ 6.7   $ 12.5   $ 25.6   $ 32.6  
 
3 MaxCV:
Capital Expenditures $ 0.0 $ 0.0 $ 0.0 $ 0.9
Additions to Computer Software & Other Intangibles $ 6.1   $ 4.3   $ 22.4   $ 9.7  
 
 
AFX - After Effects of Foreign Exchange
BFX - Before Effects of Foreign Exchange

N/M - Not Meaningful

 

This financial information should be read in conjunction with the consolidated financial statements and related notes of The Dun & Bradstreet Corporation contained in filings with the Securities and Exchange Commission.

 
               
The Dun & Bradstreet Corporation

Schedule 5

GAAP Revenue Reconciliation and Detail (unaudited)
       
 
 
Quarter Ended September 30, 2012 vs. 2011 Year-To-Date September 30, 2012 vs. 2011
Traditional/VAPs as a Traditional/VAPs as a
AFX Effects of BFX % of Total Customer Solution Sets/Core AFX Effects of BFX % of Total Customer Solution Sets/Core
% Change Foreign % Change 2012 2011 % Change Foreign % Change 2012 2011
    Fav/(Unfav) Exchange Fav/(Unfav) % Product Line/Core % Product Line/Core Fav/(Unfav) Exchange Fav/(Unfav) % Product Line/Core % Product Line/Core
 
Revenue:
North America:
Risk Management Solutions:
Traditional (2 )% 0 % (2 )% 68 % 39 % 68 % 41 % (3 )% 0 % (3 )% 70 % 42 % 69 % 42 %
VAPs 1 % 0 % 1 % 24 % 14 % 23 % 14 % (6 )% 0 % (6 )% 22 % 13 % 23 % 14 %
Supply Management Solutions (14 )% 0 % (14 )% 8 % 5 % 9 % 5 % (9 )% 0 % (9 )% 8 % 5 % 8 % 5 %
Total Risk Management Solutions (3 )% (1 )% (2 )% 58 % 60 % (4 )% 0 % (4 )% 60 % 61 %
Sales & Marketing Solutions:
Traditional (4 )% 0 % (4 )% 26 % 9 % 29 % 9 % (11 )% 0 % (11 )% 24 % 7 % 28 % 8 %
VAPs 16 % 0 % 16 % 74 % 24 % 71 % 21 % 12 % 0 % 12 % 76 % 23 % 72 % 21 %
Total Sales & Marketing Solutions 10 % 0 % 10 % 33 % 30 % 6 % 0 % 6 % 30 % 29 %
Internet Solutions (3 )% 0 % (3 )% 9 % 10 % 1 % 0 % 1 % 10 % 10 %
Core Revenue 1 % 0 % 1 % (1 )% 0 % (1 )%
Divested and Other Business N/M N/M N/M N/M N/M N/M
 
Total North America 0 % (1 )% 1 % (2 )% 0 % (2 )%
 
Asia Pacific:
Risk Management Solutions:
Traditional (5 )% (4 )% (1 )% 91 % 77 % 94 % 84 % 3 % (2 )% 5 % 90 % 76 % 91 % 81 %
VAPs 46 % (2 )% 48 % 9 % 8 % 6 % 6 % 15 % 0 % 15 % 10 % 8 % 9 % 7 %
Supply Management Solutions 0 % 0 % 0 % 0 % 0 % 0 % 0 % 0 % 0 % 0 % 0 % 0 % 0 % 0 %
Total Risk Management Solutions (2 )% (5 )% 3 % 85 % 90 % 4 % (2 )% 6 % 84 % 88 %
Sales & Marketing Solutions:
Traditional 47 % (19 )% 66 % 63 % 9 % 68 % 7 % 37 % (12 )% 49 % 66 % 10 % 73 % 8 %
VAPs 80 % (7 )% 87 % 37 % 6 % 32 % 3 % 96 % (4 )% 100 % 34 % 6 % 27 % 3 %
Total Sales & Marketing Solutions 58 % (15 )% 73 % 15 % 10 % 53 % (10 )% 63 % 16 % 11 %
Internet Solutions (18 )% (15 )% (3 )% 0 % 0 % (12 )% (11 )% (1 )% 0 % 1 %
Core Revenue 4 % (5 )% 9 % 9 % (3 )% 12 %
Divested and Other Business N/M N/M N/M (75 )% 1 % (76 )%
 
Total Asia Pacific (36 )% (2 )% (34 )% (22 )% 0 % (22 )%
 
Europe and Other International Markets:
Risk Management Solutions:
Traditional (6 )% (8 )% 2 % 81 % 66 % 83 % 67 % (5 )% (5 )% 0 % 80 % 66 % 82 % 68 %
VAPs 7 % (7 )% 14 % 17 % 14 % 15 % 12 % 10 % (4 )% 14 % 18 % 15 % 16 % 13 %
Supply Management Solutions 16 % (19 )% 35 % 2 % 2 % 2 % 1 % 29 % (15 )% 44 % 2 % 2 % 2 % 1 %
Total Risk Management Solutions (3 )% (7 )% 4 % 82 % 80 % (2 )% (5 )% 3 % 83 % 82 %
Sales & Marketing Solutions:
Traditional (20 )% (4 )% (16 )% 64 % 11 % 72 % 14 % (6 )% (3 )% (3 )% 63 % 10 % 66 % 11 %
VAPs 17 % (9 )% 26 % 36 % 6 % 28 % 5 % 5 % (5 )% 10 % 37 % 6 % 34 % 6 %
Total Sales & Marketing Solutions (10 )% (5 )% (5 )% 17 % 19 % (2 )% (3 )% 1 % 16 % 17 %
Internet Solutions 1 % (4 )% 5 % 1 % 1 % 9 % (3 )% 12 % 1 % 1 %
Core Revenue (4 )% (7 )% 3 % (2 )% (5 )% 3 %
Divested and Other Business 0 % 0 % 0 % 0 % 0 % 0 %
 
Total Europe and Other International Markets (4 )% (7 )% 3 % (2 )% (5 )% 3 %
 
International:
Risk Management Solutions:
Traditional (5 )% (6 )% 1 % 85 % 71 % 88 % 74 % (1 )% (3 )% 2 % 85 % 70 % 86 % 73 %
VAPs 16 % (7 )% 23 % 13 % 11 % 11 % 9 % 11 % (3 )% 14 % 14 % 12 % 13 % 11 %
Supply Management Solutions 16 % (19 )% 35 % 2 % 1 % 1 % 1 % 29 % (15 )% 44 % 1 % 1 % 1 % 1 %
Total Risk Management Solutions (3 )% (7 )% 4 % 83 % 84 % 1 % (3 )% 4 % 83 % 85 %
Sales & Marketing Solutions:
Traditional (3 )% (7 )% 4 % 64 % 10 % 71 % 11 % 8 % (6 )% 14 % 64 % 10 % 68 % 10 %
VAPs 36 % (8 )% 44 % 36 % 6 % 29 % 4 % 29 % (5 )% 34 % 36 % 6 % 32 % 4 %
Total Sales & Marketing Solutions 8 % (7 )% 15 % 16 % 15 % 15 % (5 )% 20 % 16 % 14 %
Internet Solutions (4 )% (7 )% 3 % 1 % 1 % 3 % (5 )% 8 % 1 % 1 %
Core Revenue (1 )% (6 )% 5 % 3 % (3 )% 6 %
Divested and Other Business N/M N/M N/M (75 )% 1 % (76 )%
 
Total International (21 )% (4 )% (17 )% (12 )% (1 )% (11 )%
 
Total Corporation:
Risk Management Solutions:
Traditional (3 )% (2 )% (1 )% 74 % 48 % 74 % 50 % (2 )% (1 )% (1 )% 75 % 49 % 75 % 50 %
VAPs 4 % (1 )% 5 % 21 % 13 % 20 % 13 % (2 )% 0 % (2 )% 19 % 13 % 19 % 13 %
Supply Management Solutions (13 )% (1 )% (12 )% 5 % 4 % 6 % 4 % (7 )% 0 % (7 )% 6 % 4 % 6 % 4 %
Total Risk Management Solutions (3 )% (2 )% (1 )% 65 % 67 % (3 )% (2 )% (1 )% 66 % 67 %
Sales & Marketing Solutions:
Traditional (4 )% (2 )% (2 )% 31 % 9 % 36 % 9 % (5 )% (1 )% (4 )% 30 % 8 % 34 % 9 %
VAPs 17 % 0 % 17 % 69 % 19 % 64 % 17 % 13 % (1 )% 14 % 70 % 19 % 66 % 16 %
Total Sales & Marketing Solutions 10 % (1 )% 11 % 28 % 26 % 7 % (1 )% 8 % 27 % 25 %
Internet Solutions (3 )% (1 )% (2 )% 7 % 7 %