The Dun & Bradstreet Corporation
DUN & BRADSTREET CORP/NW (Form: 10-Q, Received: 11/02/2016 09:54:39)
Table of Contents

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549  
___________________________________
Form 10-Q  
___________________________________
(Mark One)
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2016
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number 1-15967
___________________________________
The Dun & Bradstreet Corporation

(Exact name of registrant as specified in its charter)  
___________________________________
Delaware
22-3725387
(State of
incorporation)
(I.R.S. Employer
Identification No.)
 
 
103 JFK Parkway, Short Hills, NJ
07078
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (973) 921-5500
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   ý     No   ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   ý     No   ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one:)
Large accelerated filer
ý
Accelerated filer
o
Non-accelerated filer
o
Smaller reporting company
o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ¨     No   ý
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
Title of Class
 
Shares Outstanding at September 30, 2016
Common Stock,
 
36,783,689
 par value $0.01 per share
 
 
 


Table of Contents

THE DUN & BRADSTREET CORPORATION
INDEX TO FORM 10-Q
 
 
 
Page
 
PART I. UNAUDITED FINANCIAL INFORMATION
 
 
 
 
Item 1.
 
Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three Month and Nine Month Periods Ended September 30, 2016 and 2015
 
Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015
 
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2016 and 2015
 
Consolidated Statements of Shareholders’ Equity (Deficit) for the Nine Months Ended September 30, 2016 and 2015
 
Item 2.
Item 3.
Item 4.
 
 
 
 
PART II. OTHER INFORMATION
 
 
 
 
Item 1.
Item 1A.
Risk Factors
Item 2.
Item 6.
 
 
 
 

2

Table of Contents

PART I. UNAUDITED FINANCIAL INFORMATION
Item 1.
Financial Statements
The Dun & Bradstreet Corporation
Consolidated Statements of Operations and Comprehensive Income (Unaudited)
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2016
 
2015
 
2016
 
2015
 
(Amounts in millions, except per share data)
Revenue
$
412.8

 
$
406.2

 
$
1,186.6

 
$
1,137.8

Operating Expenses
130.7

 
132.4

 
396.1

 
399.8

Selling and Administrative Expenses
164.9

 
167.2

 
524.3

 
472.0

Depreciation and Amortization
17.2

 
16.1

 
50.9

 
42.6

Restructuring Charge
3.2

 
5.5

 
18.8

 
15.1

Operating Costs
316.0

 
321.2

 
990.1

 
929.5

Operating Income
96.8

 
85.0

 
196.5

 
208.3

Interest Income
0.4

 
0.3

 
1.4

 
1.1

Interest Expense
(13.2
)
 
(13.8
)
 
(40.1
)
 
(37.0
)
Other Income (Expense) - Net
(92.2
)
 
(9.2
)
 
(91.9
)
 
(7.4
)
Non-Operating Income (Expense) - Net
(105.0
)
 
(22.7
)
 
(130.6
)
 
(43.3
)
Income (Loss) Before Provision for Income Taxes and Equity in Net Income of Affiliates
(8.2
)
 
62.3

 
65.9

 
165.0

Less: Provision for Income Taxes
19.8

 
3.1

 
45.0

 
36.5

Equity in Net Income of Affiliates
1.2

 
0.9

 
2.9

 
2.9

Net Income (Loss) from Continuing Operations
(26.8
)
 
60.1

 
23.8

 
131.4

Less: Net Income Attributable to the Noncontrolling Interest
(1.7
)
 
(0.9
)
 
(3.5
)
 
(3.1
)
Net Income (Loss) from Continuing Operations Attributable to Dun & Bradstreet
$
(28.5
)
 
$
59.2

 
$
20.3

 
$
128.3

Income (Loss) from Discontinued Operations, Net of Income Taxes (1)

 
(0.1
)
 

 
2.1

Loss on Disposal of Business, Net of Income Taxes (1)
(0.9
)
 
(0.1
)
 
(0.9
)
 
(38.3
)
Loss from Discontinued Operations, Net of Income Taxes
(0.9
)
 
(0.2
)
 
(0.9
)
 
(36.2
)
Net Income (Loss) Attributable to Dun & Bradstreet
$
(29.4
)
 
$
59.0

 
$
19.4

 
$
92.1

Basic Earnings Per Share of Common Stock:
 
 
 
 
 
 
 
Income (Loss) from Continuing Operations Attributable to Dun & Bradstreet Common Shareholders
$
(0.78
)
 
$
1.64

 
$
0.56

 
$
3.56

Loss from Discontinued Operations Attributable to Dun & Bradstreet Common Shareholders
(0.02
)
 
(0.01
)
 
(0.03
)
 
(1.01
)
Net Income (Loss) Attributable to Dun & Bradstreet Common Shareholders
$
(0.80
)
 
$
1.63

 
$
0.53

 
$
2.55

Diluted Earnings Per Share of Common Stock:
 
 
 
 
 
 
 
Income (Loss) from Continuing Operations Attributable to Dun & Bradstreet Common Shareholders
$
(0.78
)
 
$
1.63

 
$
0.55

 
$
3.53

Loss from Discontinued Operations Attributable to Dun & Bradstreet Common Shareholders
(0.02
)
 
(0.01
)
 
(0.02
)
 
(1.00
)
Net Income (Loss) Attributable to Dun & Bradstreet Common Shareholders
$
(0.80
)
 
$
1.62

 
$
0.53

 
$
2.53

Weighted Average Number of Shares Outstanding-Basic
36.6

 
36.1

 
36.4

 
36.1

Weighted Average Number of Shares Outstanding-Diluted
36.6

 
36.4

 
36.7

 
36.4

Cash Dividend Paid Per Common Share
$
0.48

 
$
0.46

 
$
1.45

 
$
1.39

Other Comprehensive Income, Net of Income Taxes:
 
 
 
 
 
 
 
Net Income (Loss) from Continuing Operations
$
(26.8
)
 
$
60.1

 
$
23.8

 
$
131.4

Loss from Discontinued Operations, Net of Income Taxes (1)
(0.9
)
 
(0.2
)
 
(0.9
)
 
(36.2
)
Net Income (Loss)
(27.7
)
 
59.9

 
22.9

 
95.2

Foreign Currency Translation Adjustments, no Tax Impact
16.8

 
17.4

 
4.5

 
(36.7
)
Defined Benefit Pension Plans:
 
 
 
 
 
 
 
Prior Service Costs, Net of Tax Benefit (Expense) (2)
(0.2
)
 
(0.5
)
 
(0.6
)
 
(0.6
)
Net Actuarial Gain, Net of Tax Benefit (Expense) (3)
2.4

 
5.6

 
14.4

 
18.8

Total Other Comprehensive Income (Loss)
19.0

 
22.5

 
18.3

 
(18.5
)
Comprehensive Income (Loss), Net of Income Taxes
(8.7
)
 
82.4

 
41.2

 
76.7

Less: Comprehensive Income Attributable to the Noncontrolling Interest
(1.6
)
 
(0.7
)
 
(3.3
)
 
(2.5
)
Comprehensive Income (Loss) Attributable to Dun & Bradstreet
$
(10.3
)
 
$
81.7

 
$
37.9

 
$
74.2

(1)
Net of Tax Benefit of $2.2 million for the nine months ended September 30, 2015. See Note 14 to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for further detail.
(2)
Tax Benefit (Expense) of $0.2 million for each of the three months ended September 30, 2016 and 2015. Tax Benefit (Expense) of $0.4 million and $0.3 million during the nine months ended September 30, 2016 and 2015, respectively.
(3)
Tax Benefit (Expense) of $(1.0) million and $(2.8) million during the three months ended September 30, 2016 and 2015, respectively. Tax Benefit (Expense) of $(7.4) million and $(10.1) million during the nine months ended September 30, 2016 and 2015 , respectively.
The accompanying notes are an integral part of the unaudited consolidated financial statements.

3

Table of Contents

The Dun & Bradstreet Corporation
Consolidated Balance Sheets (Unaudited)
 
September 30,
2016
 
December 31,
2015
 
(Amounts in millions, 
except per share data)
ASSETS
 
 
 
Current Assets
 
 
 
Cash and Cash Equivalents
$
327.3

 
$
365.7

Accounts Receivable, Net of Allowance of $19.9 at September 30, 2016 and $20.6 at December 31, 2015
387.4

 
523.5

Other Receivables
15.1

 
13.7

Prepaid Taxes
2.2

 
6.4

Deferred Income Tax

 
12.0

Other Prepaids
30.1

 
36.7

Other Current Assets
2.7

 
1.6

Total Current Assets
764.8

 
959.6

Non-Current Assets
 
 
 
Property, Plant and Equipment, Net of Accumulated Depreciation of $49.5 at September 30, 2016 and $54.3 at December 31, 2015
34.0

 
27.2

Computer Software, Net of Accumulated Amortization of $366.7 at September 30, 2016 and $348.1 at December 31, 2015
110.8

 
102.6

Goodwill (Note 15)
661.1

 
704.0

Deferred Income Tax
99.6

 
93.8

Other Receivables
1.9

 
4.2

Other Intangibles (Note 15)
304.9

 
326.2

Other Non-Current Assets
39.8

 
48.9

Total Non-Current Assets
1,252.1

 
1,306.9

Total Assets
$
2,016.9

 
$
2,266.5

LIABILITIES
 
 
 
Current Liabilities
 
 
 
Accounts Payable
$
55.5

 
$
31.3

Accrued Payroll
89.6

 
108.8

Accrued Income Tax
16.5

 
28.7

Short-Term Debt
20.0

 
20.0

Other Accrued and Current Liabilities (Note 6)
154.4

 
122.6

Deferred Revenue
580.5

 
647.8

Total Current Liabilities
916.5

 
959.2

Pension and Postretirement Benefits
515.3

 
558.0

Long-Term Debt
1,586.4

 
1,797.0

Liabilities for Unrecognized Tax Benefits
2.9

 
8.3

Other Non-Current Liabilities
50.1

 
49.3

Total Liabilities
3,071.2

 
3,371.8

Contingencies (Note 7)

 

EQUITY
 
 
 
DUN & BRADSTREET SHAREHOLDERS’ EQUITY (DEFICIT)
 
 
 
Series A Junior Participating Preferred Stock, $0.01 par value per share, authorized - 0.5 shares; outstanding - none

 

Preferred Stock, $0.01 par value per share, authorized - 9.5 shares; outstanding - none

 

Series Common Stock, $0.01 par value per share, authorized - 10.0 shares; outstanding - none

 

Common Stock, $0.01 par value per share, authorized - 200.0 shares; issued - 81.9 shares
0.8

 
0.8

Capital Surplus
312.0

 
292.2

Retained Earnings
2,899.4

 
2,932.8

Treasury Stock, at cost, 45.2 shares at September 30, 2016 and 45.8 shares at December 31, 2015
(3,332.6
)
 
(3,377.1
)
Accumulated Other Comprehensive Income (Loss)
(947.0
)
 
(965.5
)
Total Dun & Bradstreet Shareholders’ Equity (Deficit)
(1,067.4
)
 
(1,116.8
)
Noncontrolling Interest
13.1

 
11.5

Total Equity (Deficit)
(1,054.3
)
 
(1,105.3
)
Total Liabilities and Shareholders’ Equity (Deficit)
$
2,016.9

 
$
2,266.5


The accompanying notes are an integral part of the unaudited consolidated financial statements.

4

Table of Contents

The Dun & Bradstreet Corporation
Consolidated Statements of Cash Flows (Unaudited)
 
Nine Months Ended
 
September 30,
 
2016
 
2015
 
(Amounts in millions)
Cash Flows from Operating Activities:
 
 
 
Net Income
$
22.9

 
$
95.2

Less:
 
 
 
Loss on Disposal of Business, Net of Income Taxes
(0.9
)
 
(38.3
)
Income from Discontinued Operations

 
2.1

Net Income from Continuing Operations
$
23.8

 
$
131.4

Reconciliation of Net Income to Net Cash Provided by Operating Activities:
 
 
 
Depreciation and Amortization
50.9

 
42.6

Amortization of Unrecognized Pension Loss
26.9

 
30.0

Loss from Sales of Business
89.6

 

Income Tax Benefit from Stock-Based Awards
13.7

 
6.1

Excess Tax Benefit on Stock-Based Awards
(7.1
)
 
(2.8
)
Equity-Based Compensation
15.4

 
11.9

Restructuring Charge
18.8

 
15.1

Restructuring Payments
(28.4
)
 
(13.1
)
Changes in Deferred Income Taxes, Net
(1.5
)
 

Changes in Accrued Income Taxes, Net
(19.0
)
 
(19.8
)
Changes in Current Assets and Liabilities, Net of Acquisitions:
 
 
 
(Increase) Decrease in Accounts Receivable
109.7

 
120.5

(Increase) Decrease in Other Current Assets
8.7

 
6.1

Increase (Decrease) in Deferred Revenue
(38.2
)
 
(28.7
)
Increase (Decrease) in Accounts Payable
26.1

 
9.1

Increase (Decrease) in Accrued Liabilities
15.3

 
(23.7
)
Increase (Decrease) in Other Accrued and Current Liabilities
9.9

 
12.6

Changes in Non-Current Assets and Liabilities, Net of Acquisitions:
 
 
 
(Increase) Decrease in Other Long-Term Assets
10.0

 
20.9

Net Increase (Decrease) in Long-Term Liabilities
(45.6
)
 
(32.4
)
Other Non-Cash Adjustments, Net
1.0

 
(2.3
)
Net Cash Provided by Operating Activities from Continuing Operations
280.0

 
283.5

Net Cash Provided by Operating Activities from Discontinued Operations

 
6.4

Net Cash Provided by Operating Activities
280.0

 
289.9

Cash Flows from Investing Activities:
 
 
 
Proceeds from Sales of Businesses, Net of Cash Divested and Transaction Costs
(3.1
)
 
151.6

Payments for Acquisitions of Businesses, Net of Cash Acquired

 
(444.2
)
Proceeds from Maturity and (Payment) for Debt Security Investment
0.5

 
(6.3
)
Cash Settlements of Foreign Currency Contracts
(5.5
)
 
(10.3
)
Capital Expenditures
(12.1
)
 
(6.8
)
Additions to Computer Software and Other Intangibles
(35.8
)
 
(36.6
)
Other

 
(0.1
)
Net Cash Used in Investing Activities from Continuing Operations
(56.0
)
 
(352.7
)
Net Cash Used in Investing Activities from Discontinued Operations

 
(5.4
)
Cash Flows Used In Investing Activities
(56.0
)
 
(358.1
)
Cash Flows from Financing Activities:
 
 
 
Net Proceeds from Stock-Based Plans
42.3

 
7.3

Payment of Debt Issuance Costs

 
(4.7
)
Proceeds from Issuance of Long-Term Debt

 
298.8

Payments of Dividends
(52.7
)
 
(50.0
)
Proceeds from Borrowings on Credit Facilities
331.5

 
773.8

Payments of Borrowings on Credit Facilities
(528.9
)
 
(965.4
)
Payments of Borrowings on Term Loan Facilities
(15.0
)
 

Excess Tax Benefit on Stock-Based Awards
7.1

 
2.8

Payment for Capital Lease and Other Long-Term Financing Obligation
(0.2
)
 
(0.3
)
Other
(3.1
)
 
(0.6
)
Net Cash (Used in) Provided by Financing Activities from Continuing Operations
(219.0
)
 
61.7

Effect of Exchange Rate Changes on Cash and Cash Equivalents
(39.8
)
 
(19.0
)
Increase (Decrease) in Cash and Cash Equivalents Before Classified to Asset as Held for Sale
(34.8
)
 
(25.5
)
Cash Classified as Asset Held for Sale
(3.6
)
 

Cash and Cash Equivalents, Beginning of Period
$
365.7

 
$
319.4

Cash and Cash Equivalents, End of Period
$
327.3

 
$
293.9

Cash and Cash Equivalents of Discontinued Operations, End of Period

 

Cash and Cash Equivalents of Continuing Operations, End of Period
$
327.3

 
$
293.9

Supplemental Disclosure of Cash Flow Information:
 
 
 
Cash Paid for:
 
 
 
Income Taxes, Net of Refunds
$
51.8

 
$
50.3

Interest
$
29.5

 
$
24.0


The accompanying notes are an integral part of the unaudited consolidated financial statements.

5

Table of Contents

The Dun & Bradstreet Corporation
Consolidated Statements of Shareholders’ Equity (Deficit) (Unaudited)
 
 
 
 
 
For the Nine Months Ended September 30, 2016 and 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
(Amounts in millions)
 
 
 
 
 
 
 
Common
Stock ($0.01
Par Value)
 
Capital
Surplus
 
Retained
Earnings
 
Treasury
Stock
 
Cumulative
Translation
Adjustment
 

Pension
Liability
Adjustment
 
Total Dun & Bradstreet
Shareholders’
Equity
(Deficit)
 
Noncontrolling
Interest
 
Total
Equity
(Deficit)
Balance, December 31, 2014
$
0.8

 
$
279.3

 
$
2,831.1

 
$
(3,392.4
)
 
$
(233.4
)
 
$
(688.7
)
 
$
(1,203.3
)
 
$
8.7

 
$
(1,194.6
)
Net Income

 

 
92.1

 

 

 

 
92.1

 
3.1

 
95.2

Payment to Noncontrolling Interest

 

 

 

 

 

 

 
(0.6
)
 
(0.6
)
Equity-Based Plans

 
9.5

 

 
12.8

 

 

 
22.3

 

 
22.3

Pension Adjustments, net of tax expense of $9.8

 

 

 

 

 
18.2

 
18.2

 

 
18.2

Dividend Declared

 

 
(50.3
)
 

 

 

 
(50.3
)
 

 
(50.3
)
Change in Cumulative Translation Adjustment

 

 

 

 
(36.1
)
 

 
(36.1
)
 
(0.6
)
 
(36.7
)
Balance, September 30, 2015
$
0.8

 
$
288.8

 
$
2,872.9

 
$
(3,379.6
)
 
$
(269.5
)
 
$
(670.5
)
 
$
(1,157.1
)
 
$
10.6

 
$
(1,146.5
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, December 31, 2015
$
0.8

 
$
292.2

 
$
2,932.8

 
$
(3,377.1
)
 
$
(291.7
)
 
$
(673.8
)
 
$
(1,116.8
)
 
$
11.5

 
$
(1,105.3
)
Net Income

 

 
19.4

 

 

 

 
19.4

 
3.5

 
22.9

Payment to Noncontrolling Interest

 

 

 

 

 

 

 
(1.7
)
 
(1.7
)
Equity-Based Plans

 
19.8

 

 
44.5

 

 

 
64.3

 

 
64.3

Pension Adjustments, net of tax expense of $7.0

 

 

 

 

 
13.8

 
13.8

 

 
13.8

Dividend Declared

 

 
(52.8
)
 

 

 

 
(52.8
)
 

 
(52.8
)
Change in Cumulative Translation Adjustment

 

 

 

 
4.7

 

 
4.7

 
(0.2
)
 
4.5

Balance, September 30, 2016
$
0.8

 
$
312.0

 
$
2,899.4

 
$
(3,332.6
)
 
$
(287.0
)
 
$
(660.0
)
 
$
(1,067.4
)
 
$
13.1

 
$
(1,054.3
)



The accompanying notes are an integral part of the unaudited consolidated financial statements.

6

Table of Contents

THE DUN & BRADSTREET CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(Tabular dollar amounts in millions, except per share data)
Note 1 --
Basis of Presentation
These interim unaudited consolidated financial statements have been prepared in accordance with the instructions to the Quarterly Report on Form 10-Q. They should be read in conjunction with the consolidated financial statements and related notes, which appear in The Dun & Bradstreet Corporation’s (“Dun & Bradstreet” or “we” or “us” or “our” or the “Company”) Annual Report on Form 10-K for the year ended December 31, 2015 . The unaudited consolidated results for interim periods do not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for annual financial statements and are not necessarily indicative of results for the full year or any subsequent period. In the opinion of our management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of the unaudited consolidated financial position, results of operations and cash flows at the dates and for the periods presented have been included.
All inter-company transactions have been eliminated in consolidation.
We manage and report our business through the following two segments:
Americas (which consists of our operations in the United States (“U.S.”), Canada and Latin America (which we divested in September 2016)); and
Non-Americas (which primarily consists of our operations in the United Kingdom (“U.K.”), the Netherlands (which we expect to divest in November 2016), Belgium (which we expect to divest in November 2016), Greater China, India and our Dun & Bradstreet Worldwide Network). See Note 14 to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for further detail.
The financial statements of the subsidiaries outside of the U.S. and Canada reflect results for the three month and nine month periods ended August 31 in order to facilitate the timely reporting of the unaudited consolidated financial results and unaudited consolidated financial position.
In June 2015, we divested our business in Australia and New Zealand (“ANZ”) for $169.8 million , which was part of our Non-Americas segment. Accordingly, we have reclassified the historical financial results of our business in ANZ as discontinued operations for all periods presented as set forth in Item 1. of this Quarterly Report on Form 10-Q. See Note 14 to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for further detail.
The prior period consolidated balance sheet was adjusted associated with the adoption of Accounting Standards Update (“ASU”) No. 2015-03 “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” in the first quarter of 2016. The impact was an adjustment of $7.1 million to the consolidated balance sheet at December 31, 2015. See Note 2 and Note 4 to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for further detail.
In August of 2016, we announced the sale of our domestic operations in Belgium and Netherlands (“Benelux”) and Latin America, shifting these businesses into our Worldwide Network partnership model. Our Worldwide Network arrangements include long-term commercial agreements that provide our partners with access to key Dun & Bradstreet assets, including global data, brand usage, consulting and technology services. Historically, technology services were not classified as revenue as we viewed them as ancillary in nature. As a result of the above divestiture transactions, the ongoing technology services now represent activities that constitute part of our ongoing and central operations. Accordingly, we began to classify the technology fees to revenue in the third quarter of 2016. See Note 14 to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for further detail on the divestitures.
Where appropriate, we have reclassified certain prior year amounts to conform to the current year presentation.
Note 2 --
Recent Accounting Pronouncements
We consider the applicability and impact of all ASUs. The ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on our consolidated financial position and/or results of operations.

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(Tabular dollar amounts in millions, except per share data)


Recently Adopted Accounting Pronouncements
In November 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-17 “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” This standard requires entities to present deferred tax assets and deferred tax liabilities to be classified as noncurrent in the balance sheet. The standard is effective for fiscal years and the interim periods within those fiscal years beginning after December 15, 2016. The guidance can be applied either prospectively or retrospectively. In the period that the ASU is adopted, an entity will need to disclose the nature of and the reason for the change in accounting principle. If the new guidance is applied prospectively, the entity should disclose that prior balance sheets were not retrospectively adjusted. If the new guidance is applied retrospectively, the entity will need to disclose the quantitative effects of the change on the prior balance sheets presented. Early adoption was permitted. We adopted this standard in the first quarter of 2016 on a prospective basis. The impact to the prior periods is immaterial, and as a result, the prior period consolidated balance sheet was not retrospectively adjusted.
In August 2015, the FASB issued ASU No. 2015-15 “Interest-Imputation (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements.” This standard incorporates into the Accounting Standards Codification (“ASC”) the Securities and Exchange Commission s (“SEC”) view on the presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements. The SEC staff announced that it would not object to an entity presenting the cost of securing a revolving line-of-credit as an asset, regardless of whether a balance is outstanding. The guidance in this ASU provides an alternative for presentation of these costs. This guidance retains the requirement to subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement. The adoption of this authoritative guidance did not have a material impact on our consolidated financial statements.
In July 2015, the FASB issued ASU No. 2015-12 “Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962) and Health and Welfare Benefit Plans (Topic 965): I. Fully Benefit-Responsive Investment Contracts; II. Plan Investment Disclosures; III. Measurement Date Practical Expedient.” This three-part ASU simplifies current benefit plan accounting and requires (i) fully benefit-responsive investment contracts (“FBRICs) to be measured, presented, and disclosed only at contract value and accordingly removes the requirement to reconcile their contract value to fair value; (ii) benefit plans to disaggregate their investments measured using fair value by general type, either on the face of the financial statements or in the notes to the financial statements; (iii) the net appreciation or depreciation in investments for the period to be presented in the aggregate rather than by general type, and removes certain disclosure requirements relevant to individual investments that represent five percent or more of net assets available for benefits. Further, the amendments in this ASU eliminate the requirement to disclose the investment strategy for certain investments that are measured using Net Asset Value (“NAV”) per share using the practical expedient in the FASB ASC Topic 820. Part III of the ASU provides a practical expedient to permit employee benefit plans to measure investments and investment-related accounts as of the month-end that is closest to the plan’s fiscal year-end, when the fiscal period does not coincide with a month-end, while requiring certain additional disclosures. The amendments in Parts I and II of this standard were effective retrospectively for fiscal years beginning after December 15, 2015. The amendments in Part III of this standard were effective prospectively for fiscal years beginning after December 15, 2015. Early application for all amendments was permitted. The adoption of this authoritative guidance did not have a material impact on our consolidated financial statements.
In April 2015, the FASB issued ASU No. 2015-05 “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” This standard provides guidance to assist an entity in evaluating the accounting for fees paid by a customer in a cloud computing arrangement. Specifically, the amendments in this update provide guidance to customers related to whether a cloud computing arrangement includes a software license. If the cloud computing arrangement includes a software license, the guidance requires that the customer account for the software license element of the arrangement in a manner consistent with the acquisition of other software licenses. Where the arrangement does not include a software license, the guidance requires the customer to account for the arrangement as a service contract. The amendments in this update apply only to internal-use software that a customer obtains access to in a hosting arrangement if certain criteria are met. The new standard supersedes certain guidance in ASC 350-40 “Internal-Use Software” which will require the accounting for all software licenses within the scope of such guidance to be consistent with the accounting for other licenses of intangible assets. The standard was effective for fiscal years and the interim periods within those fiscal years beginning on or after December 15, 2015. The guidance may be applied (i) prospectively to all arrangements entered into or materially modified after the effective date, or (ii) retrospectively. The standard requires additional disclosures under each method of adoption. Early adoption was permitted. The adoption of this authoritative guidance did not have a material impact on our consolidated financial statements.
In April 2015, the FASB issued ASU No. 2015-03. The new standard requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability in a

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(Tabular dollar amounts in millions, except per share data)


manner consistent with the treatment for debt discounts. The amendments in this update do not affect the recognition and measurement guidance for debt issuance costs. In addition, the ASU requires that the amortization of debt issuance costs be reported as interest expense. The standard was effective for fiscal years and the interim periods within those fiscal years beginning on or after December 15, 2015. The guidance should be applied retrospectively to all prior periods presented in the financial statements, subject to the disclosure requirements for a change in an accounting principle. Early adoption was permitted for financial statements that have not been previously issued. The adoption of this authoritative guidance did not have a material impact on our consolidated financial statements. See Note 4 to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for further detail.
In January 2015, the FASB issued ASU No. 2015-01 “Income Statement Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.” This standard eliminates such concept from existing GAAP. Under the new guidance an entity is no longer required to: (i) segregate an extraordinary item from the results of ordinary operations; (ii) separately present an extraordinary item on its income statement, net of tax, after income from continuing operations; and (iii) disclose income taxes and earnings-per share data applicable to an extraordinary item. The new standard retains the existing requirement to separately present on a pre-tax basis within income from continuing operations items that are of an unusual nature or occur infrequently. Additionally, the new standard requires similar separate presentation of items that are both unusual and infrequent in nature. The standard was effective for fiscal years and the interim periods within those fiscal years beginning on or after December 15, 2015. The guidance may be applied prospectively or retrospectively to all prior periods presented in the financial statements, with additional disclosures for entities electing prospective application. Early application was permitted as of the beginning of the fiscal year of adoption. The adoption of this authoritative guidance did not have a material impact on our consolidated financial statements.
Recently Issued Accounting Pronouncements
In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.” The standard eliminates the exception within Topic 740 of the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. As a result of the removal of the exception, a reporting entity would recognize the tax expense from the sale of the asset in the seller's tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer's jurisdiction would also be recognized at the time of the transfer. The standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. Early adoption is permitted but the guidance can only be adopted in the first interim period of a fiscal year. Entities must apply the modified retrospective approach, with a cumulative-effect adjustment recorded in retained earnings as of the beginning of the period of the adoption. We do not expect the adoption of this authoritative guidance to have a material impact on our consolidated financial statements.
In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force).” The standard amends the guidance in ASC 230 on the classification of certain cash receipts and payments in the statement of cash flows. The standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. Early adoption is permitted. Entities must apply the guidance retrospectively to all periods presented but may apply it prospectively from the earliest date practicable if retrospective application would be impracticable. The adoption of this authoritative guidance will not have a material impact on our consolidated financial statements.
In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The standard changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than reductions in the amortized cost of the securities. Entities will have to disclose significantly more information, including information they use to track credit quality by year of origination for most financing receivables. The standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019. The guidance requires entities to apply the amendments through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). For certain assets (such as debt securities for which an other-than-temporary impairment has been recognized before the effective date), a prospective transition approach is required. We do not expect that the adoption of this authoritative guidance will have a material impact on our consolidated financial statements.
In March 2016, the FASB issued ASU No. 2016-09 “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This guidance simplifies several aspects of accounting for employee share-based

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(Tabular dollar amounts in millions, except per share data)


payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2016. Early adoption will be permitted in any interim or annual reporting period for which financial statements have not yet been issued or have not been made available for issuance. We do not expect that the adoption of this authoritative guidance will have a material impact on our consolidated financial statements.
In March 2016, the FASB issued ASU No. 2016-07 “Simplifying the Transition to the Equity Method of Accounting.” This guidance eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. The standard is effective for fiscal years beginning after December 15, 2016 and the interim periods within those years. Early adoption is permitted. The guidance should be applied prospectively for investments that qualify for the equity method of accounting after the effective date. We do not expect that the adoption of this authoritative guidance will have a material impact on our consolidated financial statements.
In March 2016, the FASB issued ASU No. 2016-05 “Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships.” This guidance clarifies that a change in counterparty to a derivative contract, in and of itself, does not require the dedesignation of a hedging relationship. The standard is effective for fiscal years beginning after December 15, 2016 and interim periods within those years. Early adoption is permitted. Entities may adopt the guidance prospectively or use a modified retrospective approach to apply it to derivatives outstanding during all or a portion of the periods presented in the period of adoption. We do not expect that the adoption of this authoritative guidance will have a material impact on our consolidated financial statements.
In February 2016, the FASB issued ASU No. 2016-02 “Leases (Topic 842).” This standard requires entities that lease assets to recognize on the balance sheet, subject to certain exceptions, the assets and liabilities for the rights and obligations created by those leases. The standard is effective for fiscal years and the interim periods within those fiscal years beginning after December 15, 2018. The guidance is required to be applied by the modified retrospective transition approach. Early adoption is permitted. We are currently assessing the impact of the adoption of this authoritative guidance on our consolidated financial statements.
New Revenue Recognition Standard:
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers and supersedes and replaces nearly all existing GAAP revenue recognition guidance, including industry-specific guidance. The authoritative guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The five steps are: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; and (v) recognize revenue when or as each performance obligation is satisfied. The authoritative guidance applies to all contracts with customers except those that are within the scope of other topics in the FASB ASC. The authoritative guidance requires significantly expanded disclosures about revenue recognition and was initially effective for fiscal years and the interim periods within these fiscal years beginning on or after December 15, 2016. In August 2015, the FASB issued ASU No. 2015-14 “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date.” This standard defers for one year the effective date of ASU No. 2014-09. The deferral will result in this standard being effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016 including interim reporting periods within that reporting period.
In March 2016, the FASB issued ASU No. 2016-08 “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” This guidance amends the principal versus agent guidance in the new revenue standard. The amendments retain the guidance that the principal in an arrangement controls a good or service before it is transferred to a customer. The amendments clarify how an entity should identify the unit of accounting for principal versus agent evaluation and how it should apply the control principle to certain types of arrangements, such as service transactions. The amendments also reframe the indicators to focus on evidence that an entity is acting as a principal rather than an agent, revise examples in the new standard and add new examples.
In April 2016, the FASB issued ASU No. 2016-10 “Revenue From Contracts With Customers (Topic 606): Identifying Performance Obligations and Licensing.” The guidance amends identifying performance obligations and accounting for licenses of intellectual property in the new revenue standard. The amendments address implementation issues that were raised by stakeholders and discussed by the Revenue Recognition Transition Resource Group. The amendments updated examples and added several new examples to illustrate the new guidance.

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(Tabular dollar amounts in millions, except per share data)


In May 2016, the FASB issued ASU No. 2016-11, “Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of Securities and Exchange Commission (“SEC”) Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting (SEC Update)” which rescinds certain SEC guidance from the FASB Accounting Standards Codification in response to announcements made by the SEC staff at the EITF’s March 3, 2016, meeting.
In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients,” which amends certain aspects of ASU No. 2014-09 such as assessing collectibility, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition.
We will adopt the new revenue guidance on January 1, 2018 and apply the modified retrospective transition method. We are currently assessing the impact of the adoption of this authoritative guidance on our consolidated financial statements.
Note 3 -- Restructuring Charge
We incurred restructuring charges (which generally consist of employee severance and termination costs, contract terminations and/or costs to terminate lease obligations less assumed sublease income). These charges were incurred as a result of eliminating, consolidating, standardizing and/or automating our business functions.
Restructuring charges have been recorded in accordance with ASC 712-10, “Nonretirement Postemployment Benefits,” or “ASC 712-10” and/or ASC 420-10, “Exit or Disposal Cost Obligations,” or “ASC 420-10,” as appropriate.
We record severance costs provided under an ongoing benefit arrangement once they are both probable and estimable in accordance with the provisions of ASC 712-10.
We account for one-time termination benefits, contract terminations and/or costs to terminate lease obligations less assumed sublease income in accordance with ASC 420-10, which addresses financial accounting and reporting for costs associated with restructuring activities. Under ASC 420-10, we establish a liability for costs associated with an exit or disposal activity, including severance and lease termination obligations, and other related costs, when the liability is incurred, rather than at the date that we commit to an exit plan. We reassess the expected cost to complete the exit or disposal activities at the end of each reporting period and adjust our remaining estimated liabilities, if necessary.
The determination of when we accrue for severance costs and which standard applies depends on whether the termination benefits are provided under an ongoing arrangement as described in ASC 712-10 or under a one-time benefit arrangement as defined by ASC 420-10. Inherent in the estimation of the costs related to the restructurings are assessments related to the most likely expected outcome of the significant actions to accomplish the exit or disposal activities. In determining the charges related to the restructurings, we had to make estimates related to the expenses associated with the restructurings. These estimates may vary significantly from actual costs depending, in part, upon factors that may be beyond our control. We will continue to review the status of our restructuring obligations on a quarterly basis and, if appropriate, record changes to these obligations in current operations based on management’s most current estimates.
Three Months Ended September 30, 2016 vs. Three Months Ended September 30, 2015
During the three months ended September 30, 2016 , we recorded a $3.2 million restructuring charge. This charge is comprised of:

Severance and termination costs of $3.2 million in accordance with the provisions of ASC 712-10. Approximately 70 employees were impacted. Of these 70 employees, approximately 60 employees exited the Company by the end of the third quarter of 2016 , with the remaining primarily to exit by the end of the fourth quarter of 2016 . The cash payments for these employees will be substantially completed by the end of the first quarter of 2017 .
During the three months ended September 30, 2015 , we recorded a $5.5 million restructuring charge. This charge is comprised of:

Severance and termination costs of $4.1 million in accordance with the provisions of ASC 712-10. Approximately 40 employees were impacted. Of these 40 employees, approximately 25 employees exited the Company by the end of the third quarter of 2015 , with the remaining primarily having exited by the end of the fourth quarter of 2015 . The cash payments for these employees were substantially completed by the end of the second quarter of 2016 ; and


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(Tabular dollar amounts in millions, except per share data)


Contract termination, lease term obligations and other exit costs of $ 1.4 million , including those to consolidate or close facilities.

Nine Months Ended September 30, 2016 vs. Nine Months Ended September 30, 2015
During the nine months ended September 30, 2016 , we recorded an $18.8 million restructuring charge. This charge is comprised of:

Severance and termination costs of $18.8 million in accordance with the provisions of ASC 712-10. Approximately 325 employees were impacted. Of these 325 employees, approximately 315 employees exited the Company by the end of the third quarter of 2016 , with the remaining primarily to exit by the end of the fourth quarter of 2016 . The cash payments for these employees will be substantially completed by the end of the first quarter of 2017 .
During the nine months ended September 30, 2015 , we recorded a $15.1 million restructuring charge. This charge is comprised of:

Severance and termination costs of $13.6 million in accordance with the provisions of ASC 712-10. Approximately 175 employees were impacted. Of these 175 employees, approximately 165 employees exited the Company by the end of the third quarter of 2015 , with the remaining primarily having exited by the end of the fourth quarter of 2015 . The cash payments for these employees were substantially completed by the end of the second quarter of 2016 ; and

Contract termination, lease term obligations and other exit costs of $1.5 million , including those to consolidate or close facilities.
    
The following tables set forth, in accordance with ASC 712-10 and/or ASC 420-10, the restructuring reserves and utilization:
 
 
Severance
and
Termination
 
Contract Termination, Lease
Termination
Obligations
and Other
Exit Costs
 
Total
Restructuring Charges:
 
 
 
 
 
Balance Remaining as of December 31, 2015
$
18.6

 
$
2.3

 
$
20.9

Charge Taken during First Quarter 2016
9.7

 

 
9.7

Payments during First Quarter 2016
(10.1
)
 
(0.3
)
 
(10.4
)
Balance Remaining as of March 31, 2016
$
18.2

 
$
2.0

 
$
20.2

Charge Taken during the Second Quarter 2016
5.9

 

 
5.9

Payments during Second Quarter 2016
(10.0
)
 
(0.4
)
 
(10.4
)
Balance Remaining as of June 30, 2016
$
14.1

 
$
1.6

 
$
15.7

Charge Taken during the Third Quarter 2016
$
3.2

 
$

 
$
3.2

Payments during Third Quarter 2016
(7.6
)
 
(0.1
)
 
(7.7
)
Balance Remaining as of September 30, 2016
$
9.7

 
$
1.5

 
$
11.2

 

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(Tabular dollar amounts in millions, except per share data)


 
Severance
and
Termination
 
Contract Termination, Lease
Termination
Obligations
and Other
Exit Costs
 
Total
Restructuring Charges:
 
 
 
 
 
Balance Remaining as of December 31, 2014
$
8.1

 
$
1.8

 
$
9.9

Charge Taken during First Quarter 2015
4.7

 
0.1

 
4.8

Payments during First Quarter 2015
(2.5
)
 
(0.3
)
 
(2.8
)
Balance Remaining as of March 31, 2015
$
10.3

 
$
1.6

 
$
11.9

Charge Taken during Second Quarter 2015
4.8

 

 
4.8

Payments during Second Quarter 2015
(5.3
)
 
(0.3
)
 
(5.6
)
Balance Remaining as of June 30, 2015
$
9.8

 
$
1.3

 
$
11.1

Charge Taken during Third Quarter 2015
$
4.1

 
$
1.4

 
$
5.5

Payments during Third Quarter 2015
(4.9
)
 

 
(4.9
)
Balance Remaining as of September 30, 2015
$
9.0

 
$
2.7

 
$
11.7


Note 4 --
Notes Payable and Indebtedness
Our borrowings are summarized in the following table:
 
 
 
 
September 30, 2016
 
December 31, 2015
 
Maturity
 
Principal Amount
 
Carrying Value
 
Principal Amount
 
Carrying Value
 
 
 
 
 
 
 
 
 
 
Debt Maturing Within One Year:
 
 
 
 
 
 
 
 
 
Term Loan Facility
 
 
$
20.0

 
$
20.0

 
$
20.0

 
$
20.0

Total Short-Term Debt
 
 
$
20.0

 
$
20.0

 
$
20.0

 
$
20.0

 
 
 
 
 
 
 
 
 
 
Debt Maturing After One Year:
 
 
 
 
 
 
 
 
 
3.25% senior notes issued in December 2012 (1) (4) (5)
December 1, 2017
 
$
450.0

 
$
449.2

 
$
450.0

 
$
448.7

4.375% senior notes issued in December 2012 (2) (4) (5)
December 1, 2022
 
300.0

 
296.7

 
300.0

 
296.3

4.00% senior notes issued in June 2015 (3) (4) (6)
June 15, 2020
 
300.0

 
297.1

 
300.0

 
296.5

Term Loan Facility (7)
November 13, 2020
 
360.0

 
358.6

 
375.0

 
373.3

Revolving Credit Facility
July 23, 2019
 
184.8

 
184.8

 
382.2

 
382.2

Commercial Paper Program
 
 

 

 

 

Total Long-Term Debt
 
 
$
1,594.8

 
$
1,586.4

 
$
1,807.2

 
$
1,797.0

(1) The notes were issued at a discount of less than $0.1 million with a remaining balance of less than $0.1 million at September 30, 2016 . In connection with the issuance, we incurred underwriting and other fees of approximately $3.4 million , with a remaining balance of $0.8 million as of September 30, 2016 .
(2)
The notes were issued at a discount of $2.9 million with a remaining balance of $1.8 million at September 30, 2016 . In connection with the issuance, we incurred underwriting and other fees of approximately $2.5 million , with a remaining balance of $1.5 million as of September 30, 2016 .
(3) The notes were issued at a discount of $1.2 million with a remaining balance of $0.9 million at September 30, 2016 . In connection with the issuance, we incurred underwriting and other fees of approximately $2.9 million , with a remaining balance of $2.0 million as of September 30, 2016 .
(4) The notes contain certain covenants that limit our ability to create liens, enter into sale and leaseback transactions and consolidate, merge or sell assets to another entity. We were in compliance with these non-financial covenants at September 30, 2016 and December 31, 2015. The notes do not contain any financial covenants.

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(Tabular dollar amounts in millions, except per share data)


(5) The interest rates are subject to upward adjustment if our debt ratings decline three levels below the Standard & Poor s ® and/or Fitch ® BBB+ credit ratings that we held on the date of issuance. After a rate adjustment, if our debt ratings are subsequently upgraded, the adjustment(s) would reverse. The maximum adjustment is 2.00% above the initial interest rates and the rates cannot adjust below the initial interest rates. As of September 30, 2016 , no such adjustments to the interest rates were required.
(6) The interest rate is subject to an adjustment if our debt ratings decline one level below the Standard & Poor’s BBB- credit rating and/or two levels below the Fitch BBB credit rating that we held on the date of issuance. After a rate adjustment, if our debt ratings are subsequently upgraded, the adjustment(s) would reverse. The maximum adjustment is 2.00% above the initial interest rate and the rate cannot adjust below the initial interest rate. As of September 30, 2016 , no such adjustment to the interest rate was required.
(7)
In connection with the placement of the term loan facility, we incurred $1.9 million in structuring and other fees, with a remaining balance of $1.4 million as of September 30, 2016 .

In the first quarter of 2016, we adopted ASU No. 2015-03. As required, the guidance was applied retrospectively to all prior periods. Accordingly, we have reclassified balances related to debt issuance costs from “Other Non-Current Assets” to “Long Term Debt” for all prior periods. Debt issuance costs are presented as a direct deduction from the carrying amount of the related debt liability. The impact to our consolidated balance sheet was $5.7 million and $7.1 million at September 30, 2016 and December 31, 2015, respectively.
Term Loan Facility

On May 14, 2015, we entered into a delayed draw unsecured term loan facility which provided for borrowings in the form of up to two drawdowns in an aggregate principal amount of up to $400 million at any time up to and including November 15, 2015 (the “term loan facility”). The term loan facility matures five years from the date of the initial drawdown. Proceeds under the term loan facility were designated to be used for general corporate purposes including the refinancing of the 2.875% senior notes that matured in November 2015 and the repayment of borrowings outstanding under the $1 billion revolving credit facility. Borrowings under the term loan facility bear interest at a rate of LIBOR plus a spread of 137.5 basis points. Our initial draw down under the term loan facility in the amount of $400 million was made in November 2015, establishing a facility maturity of November 2020. We also committed to repay the borrowings in prescribed installments over the five year period. Repayments expected to be made within one year are classified as “Short-Term Debt” and the remaining outstanding balance is classified as “Long-Term Debt.” The weighted average interest rates associated with the outstanding balances as of September 30, 2016 and December 31, 2015 were 1.90% and 1.73% , respectively.
The term loan facility requires the maintenance of interest coverage and total debt to Earnings Before Income Taxes, Depreciation and Amortization (“EBITDA”) ratios, which are defined in the term loan facility credit agreement and which are generally identical to those contained in the $1 billion revolving credit facility. We were in compliance with the term loan facility financial and non-financial covenants at September 30, 2016 and December 31, 2015.
Revolving Credit Facility and Commercial Paper Program

We currently have a $1 billion revolving credit facility maturing in July 2019. Borrowings under the $1 billion revolving credit facility bear interest at a rate of LIBOR plus a spread of 110.0 basis points. The revolving credit facility requires the maintenance of interest coverage and total debt to EBITDA ratios which are defined in the $1 billion revolving credit facility credit agreement. We were in compliance with the $1 billion revolving credit facility financial and non-financial covenants at September 30, 2016 and December 31, 2015.
In accordance with ASC 470, “Debt,” a short-term obligation that will be refinanced with successive short-term obligations may be classified as non-current as long as the cumulative period covered by the financing agreement is uninterrupted and extends beyond one year.  Accordingly, the outstanding balances under the revolving credit facility were classified as “Long-Term Debt” as of September 30, 2016 and December 31, 2015, respectively. The weighted average interest rates associated with the outstanding balances as of September 30, 2016 and December 31, 2015 were 1.70% and 1.51% , respectively.

We borrowed under this facility from time to time during the nine months ended September 30, 2016 and the year ended December 31, 2015 to supplement the timing of receipts in order to fund our working capital. We also borrowed under this facility during the year ended December 31, 2015 to fund the acquisition of NetProspex and a portion of the consideration for Dun & Bradstreet Credibility Corp (“DBCC”). This facility also supports our commercial paper program. Under this program,

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(Tabular dollar amounts in millions, except per share data)


we may issue from time to time unsecured promissory notes in the commercial paper market in private placements exempt from registration under the Securities Act of 1933, as amended, for a cumulative face amount not to exceed $800 million outstanding at any one time and with maturities not exceeding 364 days from the date of issuance. Outstanding commercial paper would effectively reduce the amount available for borrowing under our $1 billion revolving credit facility. We did not borrow under our commercial paper program during the nine months ended September 30, 2016 or during the year ended December 31, 2015.
Other
At September 30, 2016 and December 31, 2015, we were contingently liable under open standby letters of credit and bank guarantees issued by our banks in favor of third parties totaling $2.7 million and $2.6 million , respectively.
Interest paid for all outstanding debt totaled $29.5 million and $24.0 million during the nine months ended September 30, 2016 and 2015 , respectively.
Note 5 --
Earnings Per Share
We assess if any of our share-based payment transactions are deemed participating securities prior to vesting and therefore need to be included in the earnings allocation when computing Earnings Per Share (“EPS”) under the two-class method. The two-class method requires earnings to be allocated between common shareholders and holders of participating securities. All outstanding unvested share-based payment awards that contain non-forfeitable rights to dividends are considered to be a separate class of common stock and should be included in the calculation of basic and diluted EPS. Based on a review of our stock-based awards, we have determined that for each of the three month and nine month periods ended September 30, 2016 and 2015, none of our outstanding awards were deemed to be participating securities.
Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed based on the weighted average number of common shares outstanding plus the dilutive effect of common shares potentially issuable in connection with awards outstanding under our stock incentive plans (i.e., restricted stock units, stock options and contingently issuable shares) for the period. However, in the case of a net loss, the dilutive effect of the awards outstanding under our stock incentive plans are not included in the computation of the diluted loss per share as the effect of including these shares in the calculation would be anti-dilutive. The dilutive effect of awards outstanding under our stock incentive plans reflected in diluted earnings per share is calculated under the treasury stock method.
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2016
 
2015
 
2016
 
2015
Income (Loss) from Continuing Operations Attributable to Dun & Bradstreet Common Shareholders – Basic and Diluted
$
(28.5
)
 
$
59.2

 
$
20.3

 
$
128.3

Loss from Discontinued Operations – Net of Income Taxes
(0.9
)
 
(0.2
)
 
(0.9
)
 
(36.2
)
Net Income (Loss) Attributable to Dun & Bradstreet Common Shareholders – Basic and Diluted
$
(29.4
)
 
$
59.0

 
$
19.4

 
$
92.1

Weighted Average Number of Shares Outstanding – Basic
36.6

 
36.1

 
36.4

 
36.1

Dilutive Effect of Our Stock Incentive Plans

 
0.3

 
0.3

 
0.3

Weighted Average Number of Shares Outstanding – Diluted
36.6

 
36.4

 
36.7

 
36.4

Basic Earnings (Loss) Per Share of Common Stock:
 
 
 
 
 
 
 
Income (Loss) from Continuing Operations Attributable to Dun & Bradstreet Common Shareholders
$
(0.78
)
 
$
1.64

 
$
0.56

 
$
3.56

Loss from Discontinued Operations Attributable to Dun & Bradstreet Common Shareholders
(0.02
)
 
(0.01
)
 
(0.03
)
 
(1.01
)
Net Income (Loss) Attributable to Dun & Bradstreet Common Shareholders
$
(0.80
)
 
$
1.63

 
$
0.53

 
$
2.55

Diluted Earnings (Loss) Per Share of Common Stock:
 
 
 
 
 
 
 
Income (Loss) from Continuing Operations Attributable to Dun & Bradstreet Common Shareholders
$
(0.78
)
 
$
1.63

 
$
0.55

 
$
3.53

Loss from Discontinued Operations Attributable to Dun & Bradstreet Common Shareholders
(0.02
)
 
(0.01
)
 
(0.02
)
 
(1.00
)
Net Income (Loss) Attributable to Dun & Bradstreet Common Shareholders
$
(0.80
)
 
$
1.62

 
$
0.53

 
$
2.53


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(Tabular dollar amounts in millions, except per share data)


The weighted average number of shares outstanding used in the computation of diluted earnings (loss) per share excluded the effect of outstanding common shares potentially issuable totaling 330,813 shares and 14,793 shares for the three month and nine month periods ended September 30, 2016 , respectively, as compared to 77,718 shares and 73,024 shares for the three month and nine month periods ended September 30, 2015 , respectively. These potentially issuable common shares were not included in the calculation of diluted earnings (loss) per share because their effect would be anti-dilutive.
No shares were repurchased during the three month and nine month periods ended September 30, 2016 and 2015 . We currently have in place a $100 million share repurchase program to mitigate the dilutive effect of shares issued under our stock incentive plans and Employee Stock Purchase Program, and to be used for discretionary share repurchases from time to time. This program was approved by our Board of Directors in August 2014 and will remain open until it has been fully utilized. There is currently no definitive timeline under which the program will be completed. As of September 30, 2016 , we have not yet commenced repurchasing under this program.


Note 6 -- Other Accrued and Current Liabilities
 
September 30,
2016
 
December 31, 2015
Restructuring Accruals
$
11.2

 
$
20.9

Professional Fees (1)
34.1

 
29.1

Operating Expenses
48.6

 
45.0

Other Accrued Liabilities (2)
60.5

 
27.6

 
$
154.4

 
$
122.6

(1)
The increase in professional fees from December 31, 2015 to September 30, 2016 was primarily related to technology spending as a result of our strategic investments.
(2)
The increase in other accrued liabilities from December 31, 2015 to September 30, 2016 was primarily related to the accrual for legal matters of approximately $28 million recorded in the second quarter of 2016. See Note 7 to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for further detail.
Note 7 -- Contingencies
We are involved in legal proceedings, claims and litigation arising in the ordinary course of business for which we believe that we have adequate reserves, and such reserves are not material to the consolidated financial statements. We record a liability when management believes that it is both probable that a liability has been incurred and we can reasonably estimate the amount of the loss. For such matters where management believes a liability is not probable but is reasonably possible, a liability is not recorded; instead, an estimate of loss or range of loss, if material individually or in the aggregate, is disclosed if reasonably estimable, or a statement will be made that an estimate of loss cannot be made. Once we have disclosed a matter that we believe is or could be material to us, we continue to report on such matter until there is finality of outcome or until we determine that disclosure is no longer warranted. Further, other than specifically stated below to the contrary, we believe our estimate of the aggregate range of reasonably possible losses, in excess of established reserves, for our legal proceedings was not material at September 30, 2016 . In addition, from time to time, we may be involved in additional matters, which could become material and for which we may also establish reserve amounts, as discussed below. In accordance with ASC 450, “Contingencies,” or “ASC 450,” during the three months ended June 30, 2016, we accrued approximately $28 million with respect to the matters set forth below.
China Operations
On March 18, 2012, we announced we had temporarily suspended our Shanghai Roadway D&B Marketing Services Co. Ltd. (“Roadway”) operations in China, pending an investigation into allegations that its data collection practices may have violated local Chinese consumer data privacy laws. Thereafter, the Company decided to permanently cease the operations of Roadway. In addition, we have been reviewing certain allegations that we may have violated the Foreign Corrupt Practices Act and certain other laws in our China operations. As previously reported, we have voluntarily contacted the Securities and Exchange Commission (“SEC”) and the United States Department of Justice (“DOJ”) to advise both agencies of our investigation, and we are continuing to meet with representatives of both the SEC and DOJ in connection therewith. Our investigation remains ongoing and is being conducted at the direction of the Audit Committee.

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(Tabular dollar amounts in millions, except per share data)


On September 28, 2012, Roadway was charged in a Bill of Prosecution, along with five former employees, by the Shanghai District Prosecutor with illegally obtaining private information of Chinese citizens. On December 28, 2012, the Chinese court imposed a monetary fine on Roadway and fines and imprisonment on four former Roadway employees. A fifth former Roadway employee was separated from the case.
During the three month and nine month periods ended September 30, 2016 , we incurred $0.4 million and $1.6 million , respectively, of legal and other professional fees related to matters in China as compared to $0.5 million and $1.7 million of legal and other professional fees related to matters in China for the three month and nine month periods ended September 30, 2015 , respectively.
As our investigation and our discussions with both the SEC and DOJ are ongoing, we cannot yet predict the ultimate outcome of the matter or its ultimate impact on our business, financial condition or results of operations. Based on our discussions with the SEC and DOJ, including indications from the SEC of its estimate of the amount of net benefit potentially earned by the Company as a result of the challenged activities, we continue to believe that it is probable that the Company will incur a loss related to the government’s investigation. The DOJ also advised the Company in February 2015 that they will be proposing terms of a potential settlement, but we are unable to predict the timing or terms of any such proposal. We continue to have follow-up meetings with the SEC and DOJ, most recently meeting with the SEC in June 2016 and with the DOJ in October 2016, and the parties are still discussing the evidence and other factors to help bring this matter to resolution. In our June 2016 meetings with the SEC, the SEC provided us with its current net benefit calculations, but has not indicated whether it will impose additional penalties. In accordance with ASC 450, an amount in respect of this matter has been accrued in the consolidated financial statements during the second quarter of 2016. We are still in discussions with the DOJ to determine what range of penalties the DOJ might propose. Accordingly, we remain unable at this time to reasonably estimate the final amount or ultimate range of any loss, although it is possible that the amount of such additional loss could be material.
Dun & Bradstreet Credibility Corp. Class Action Litigations
In May 2015, the Company acquired the parent company of DBCC pursuant to a merger transaction and, as a result, assumed all of DBCC’s obligations in the class action litigation matters described below. As described in Note 13 to our unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q, a part of the merger consideration was placed in escrow to indemnify the Company against a portion of the losses, if any, arising out of such class action litigation matters, subject to a cap and other conditions. In June 2016, we agreed to release the escrows after the Company was indemnified for $2.0 million out of such escrow accounts.
O&R Construction, LLC v. Dun & Bradstreet Credibility Corp., et al., No. 2:12 CV 02184 (TSZ) (W.D. Wash.)
On December 13, 2012, plaintiff O&R Construction LLC filed a putative class action in the United States District Court for the Western District of Washington against the Company and DBCC. In May 2015, the Company acquired the parent company of DBCC, Credibility. The complaint alleged, among other things, that defendants violated the antitrust laws, used deceptive marketing practices to sell the CreditBuilder credit monitoring products and allegedly misrepresented the nature, need and value of the products. The plaintiff purports to sue on behalf of a putative class of purchasers of CreditBuilder and seeks recovery of damages and equitable relief.
DBCC was served with the complaint on December 14, 2012. The Company was served with the complaint on December 17, 2012. On February 18, 2013, the defendants filed motions to dismiss the complaint. On April 5, 2013, plaintiff filed an amended complaint in lieu of responding to the motion. The amended complaint dropped the antitrust claims and retained the deceptive practices allegations. The defendants filed new motions to dismiss the amended complaint on May 3, 2013. On August 23, 2013, the Court heard the motions and denied DBCC’s motion but granted the Company’s motion. Specifically, the Court dismissed the contract claim against the Company with prejudice, and dismissed all the remaining claims against the Company without prejudice. On September 23, 2013, plaintiff filed a Second Amended Complaint (“SAC”). The SAC alleges claims for negligence, defamation and unfair business practices under Washington state law against the Company for alleged inaccuracies in small business credit reports.
The SAC also alleges liability against the Company under a joint venture or agency theory for practices relating to CreditBuilder ® . As against DBCC, the SAC alleges claims for negligent misrepresentation, fraudulent concealment, unfair and deceptive acts, breach of contract and unjust enrichment. DBCC filed a motion to dismiss the claims that were based on a joint venture or agency liability theory. The Company filed a motion to dismiss the SAC. On January 9, 2014, the Court heard argument on the defendants’ motions. It dismissed with prejudice the claims against the defendants based on a joint venture or agency liability theory. The Court denied the Company’s motion with respect to the negligence, defamation and unfair practices claims. On January 23, 2014, the defendants answered the SAC. At a court conference on December 17, 2014,

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(Tabular dollar amounts in millions, except per share data)


plaintiff informed the Court that it would not be seeking to certify a nationwide class, but instead limit the class to CreditBuilder purchasers in Washington. On May 29, 2015, plaintiff filed motions for class certification against the Company and DBCC. On July 29, 2015, Defendants filed oppositions to the motions for class certification.
On September 16, 2015, plaintiff filed reply briefs in support of the motions for class certification. At the request of the parties, on October 30, 2015, the Court entered an order striking plaintiff’s class certification motions without prejudice and striking all upcoming deadlines while the parties negotiated a written settlement agreement. On February 11, 2016, the parties entered into a written settlement term sheet, and on May 16, 2016 the parties executed a settlement agreement, which was subject to Court approval. On May 17, 2016, plaintiff filed an Unopposed Motion for Preliminary Approval of the Class Action Settlement. On August 9, 2016, the Court denied plaintiff’s motion without prejudice and directed the parties to file either a renewed motion for preliminary approval of the class action settlement or a joint status report. On October 14, 2016, the parties entered into an amended settlement agreement, which amended some of the non-monetary terms of the agreement. On the same day, plaintiff filed with the Court the amended settlement agreement together with an unopposed renewed motion for preliminary approval of the amended settlement. The Court has not yet ruled on the motion.
Our ultimate liability related to this matter is contingent upon our insurance coverage and we do not expect the impact will be material to our financial results (see further discussion of Sentry matter below).
Die-Mension Corporation v. Dun & Bradstreet Credibility Corp. et al., No. 2:14-cv-00855 (TSZ) (W.D. Wash.) (filed as No. 1:14-cv-392 (N.D. Oh.))
On February 20, 2014, plaintiff Die-Mension Corporation (“Die-Mension”) filed a putative class action in the United States District Court for the Northern District of Ohio against the Company and DBCC, purporting to sue on behalf of a putative class of all purchasers of a CreditBuilder product in the United States or in such state(s) as the Court may certify. The complaint alleged that DBCC used deceptive marketing practices to sell the CreditBuilder credit monitoring products. As against the Company, the complaint alleged a violation of Ohio’s Deceptive Trade Practices Act (“DTPA”), defamation, and negligence. As against DBCC, the complaint alleged violations of the DTPA, negligent misrepresentation and concealment.
On March 4, 2014, in response to a direction from the Ohio court, Die-Mension withdrew its original complaint and filed an amended complaint. The amended complaint contains the same substantive allegations as the original complaint, but limits the purported class to small businesses in Ohio that purchased the CreditBuilder product. On March 12, 2014, DBCC agreed to waive service of the amended complaint and on March 13, 2014, the Company agreed to waive service. On May 5, 2014, the Company and DBCC filed a Joint Motion to Transfer the litigation to the Western District of Washington. On June 9, 2014, the Ohio court issued an order granting the Defendants’ Joint Motion to Transfer. On June 22, 2014, the case was transferred to the Western District of Washington. Pursuant to an order entered on December 17, 2014 by the Washington court, this case was coordinated for pre-trial discovery purposes with related cases transferred to the Western District of Washington. On January 6, 2015, the Court entered a stipulation and order setting forth the case management schedule. On January 15, 2015, Defendants filed motions to dismiss the amended complaint. In response, Die-Mension filed a second amended complaint on March 13, 2015. On April 3, 2015, Defendants filed motions to dismiss the second amended complaint, and on May 22, 2015, Die-Mension filed its oppositions to the motions. Defendants filed reply briefs on June 12, 2015. On July 17, 2015, Die-Mension filed motions for class certification against the Company and DBCC. On September 9, 2015, the Washington court entered an order denying the Company’s motion to dismiss, and on September 10, 2015, it entered an order granting DBCC’s motion to dismiss without prejudice. At the request of the parties, on October 30, 2015, the Court entered an order striking plaintiff’s class certification motions without prejudice and striking all upcoming deadlines while the parties negotiated a written settlement agreement. On February 11, 2016, the parties entered into a written settlement term sheet, and on May 16, 2016, the parties executed a settlement agreement, which was subject to Court approval. On May 17, 2016, plaintiff filed an Unopposed Motion for Preliminary Approval of the Class Action Settlement. On August 9, 2016, the Court denied plaintiff’s motion without prejudice and directed the parties to file either a renewed motion for preliminary approval of the class action settlement or a joint status report. On October 14, 2016, the parties entered into an amended settlement agreement, which amended some of the non-monetary terms of the agreement. On the same day, plaintiff filed with the Court the amended settlement agreement together with an unopposed renewed motion for preliminary approval of the amended settlement. The Court has not yet ruled on the motion.
Our ultimate liability related to this matter is contingent upon our insurance coverage and we do not expect the impact will be material to our financial results (see further discussion of Sentry matter below).

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(Tabular dollar amounts in millions, except per share data)


Vinotemp International Corporation and CPrint®, Inc. v. Dun & Bradstreet Credibility Corp., et al., No. 2:14-cv-01021 (TSZ) (W.D. Wash.) (filed as No. 8:14-cv-00451 (C.D. Cal.))
On March 24, 2014, plaintiffs Vinotemp International Corporation (“Vinotemp”) and CPrint®, Inc. (“CPrint”) filed a putative class action in the United States District Court for the Central District of California against the Company and DBCC. Vinotemp and CPrint purport to sue on behalf of all purchasers of DBCC’s CreditBuilder product in the state of California. The complaint alleges that DBCC used deceptive marketing practices to sell the CreditBuilder credit monitoring products, in violation of §17200 and §17500 of the California Business and Professions Code. The complaint also alleges negligent misrepresentation and concealment against DBCC. As against the Company, the complaint alleges that the Company entered false and inaccurate information on credit reports in violation of §17200 of the California Business and Professions Code, and also alleges negligence and defamation claims.
On March 31, 2014, the Company agreed to waive service of the complaint and on April 2, 2014, DBCC agreed to waive service. On June 13, 2014, the Company and DBCC filed a Joint Unopposed Motion to Transfer the litigation to the Western District of Washington. On July 2, 2014, the California court granted the Defendants’ Joint Motion to Transfer, and on July 8, 2014, the case was transferred to the Western District of Washington. Pursuant to an order entered on December 17, 2014 by the Washington court, this case was coordinated for pre-trial discovery purposes with related cases transferred to the Western District of Washington. On January 6, 2015, the Court entered a stipulation and order setting forth the case management schedule. On January 15, 2015, Defendants filed motions to dismiss the complaint. In response, plaintiffs filed an amended complaint on March 13, 2015. On April 3, 2015, Defendants filed motions to dismiss the amended complaint, and on May 22, 2015, plaintiffs filed their oppositions to the motions. Defendants filed reply briefs on June 12, 2015. On July 17, 2015, Plaintiffs filed motions for class certification against the Company and DBCC. On September 9, 2015, the Washington court entered an order denying the Company’s motion to dismiss. At the request of the parties, on October 30, 2015, the Court entered an order striking plaintiff’s class certification motions and DBCC’s motion to dismiss without prejudice and striking all upcoming deadlines while the parties negotiated a written settlement agreement. On February 11, 2016, the parties entered into a written settlement term sheet, and on May 16, 2016, the parties executed a settlement agreement, which was subject to Court approval. On May 17, 2016, plaintiffs filed an Unopposed Motion for Preliminary Approval of the Class Action Settlement. On August 9, 2016, the Court denied plaintiffs' motion without prejudice and directed the parties to file either a renewed motion for preliminary approval of the class action settlement or a joint status report. On October 14, 2016, the parties entered into an amended settlement agreement, which amended some of the non-monetary terms of the agreement. On the same day, plaintiffs filed with the Court the amended settlement agreement together with an unopposed renewed motion for preliminary approval of the amended settlement. The Court has not yet ruled on the motion.
Our ultimate liability related to this matter is contingent upon our insurance coverage and we do not expect the impact will be material to our financial results (see further discussion of Sentry matter below).
Flow Sciences Inc. v. Dun & Bradstreet Credibility Corp., et al., No. 2:14-cv-01404 (TSZ) (W.D. Wash.) (filed as No. 7:14-cv-128 (E.D.N.C.))
On June 13, 2014, plaintiff Flow Sciences Inc. (“Flow Sciences”) filed a putative class action in the United States District Court for the Eastern District of North Carolina against the Company and DBCC. Flow Sciences purports to sue on behalf of all purchasers of DBCC’s CreditBuilder product in the state of North Carolina. The complaint alleges that the Company and DBCC engaged in deceptive practices in connection with DBCC’s sale of the CreditBuilder credit monitoring products, in violation of North Carolina’s Unfair Trade Practices Act, N.C. Gen. Stat. § 75-1.1 et seq. In addition, as against the Company, the complaint alleges negligence and defamation claims. The complaint also alleges negligent misrepresentation and concealment against DBCC.
On June 18, 2014, DBCC agreed to waive service of the complaint and on June 26, 2014, the Company agreed to waive service of the complaint. On August 4, 2014, the Company and DBCC filed a Joint Unopposed Motion to Transfer the litigation to the Western District of Washington. On September 8, 2014, the North Carolina court granted the motion to transfer, and on September 9, 2014, the case was transferred to the Western District of Washington. Pursuant to an order entered on December 17, 2014 by the Washington court, this case was coordinated for pre-trial discovery purposes with related cases transferred to the Western District of Washington. On January 6, 2015, the Court entered a stipulation and order setting forth the case management schedule. On January 15, 2015, Defendants filed motions to dismiss the complaint. In response, Flow Sciences filed an amended complaint on March 13, 2015. On April 3, 2015, Defendants filed motions to dismiss the amended complaint, and on May 22, 2015, Flow Science filed its oppositions to the motions. Defendants filed reply briefs on June 12, 2015. On July 17, 2015, Flow Sciences filed motions for class certification against the Company and DBCC. On September 9, 2015, the Washington court entered an order denying the Company’s motion to dismiss and on October 19, 2015, it entered an order denying DBCC’s motion to dismiss. At the request of the parties, on October 30, 2015,

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(Tabular dollar amounts in millions, except per share data)


the Court entered an order striking plaintiff’s class certification motions without prejudice and striking all upcoming deadlines while the parties negotiated a written settlement agreement. On February 11, 2016, the parties entered into a written settlement term sheet, and on May 16, 2016, the parties executed a settlement agreement, which was subject to Court approval. On May 17, 2016, plaintiff filed an Unopposed Motion for Preliminary Approval of the Class Action Settlement. On August 9, 2016, the Court denied plaintiff’s motion without prejudice and directed the parties to file either a renewed motion for preliminary approval of the class action settlement or a joint status report. On October 14, 2016, the parties entered into an amended settlement agreement, which amended some of the non-monetary terms of the agreement. On the same day, plaintiff filed with the Court the amended settlement agreement together with an unopposed renewed motion for preliminary approval of the amended settlement.The Court has not yet ruled on the motion.
Our ultimate liability related to this matter is contingent upon our insurance coverage and we do not expect the impact will be material to our financial results (see further discussion of Sentry matter below).
Altaflo, LLC v. Dun & Bradstreet Credibility Corp., et al., No. 2:14-cv-01288 (TSZ) (W.D. Wash.) (filed as No. 2:14-cv-03961 (D.N.J.))
On June 20, 2014, plaintiff Altaflo, LLC (“Altaflo”) filed a putative class action in the United States District Court for the District of New Jersey against the Company and DBCC. Altaflo purports to sue on behalf of all purchasers of DBCC’s CreditBuilder product in the state of New Jersey. The complaint alleges that the Company and DBCC engaged in deceptive practices in connection with DBCC’s sale of the CreditBuilder credit monitoring products, in violation of the New Jersey Consumer Fraud Act, N.J. Stat. § 56:8-1 et seq. In addition, as against the Company, the complaint alleges negligence and defamation claims. The complaint also alleges negligent misrepresentation and concealment against DBCC.
On June 26, 2014, the Company agreed to waive service of the complaint, and on July 2, 2014, DBCC agreed to waive service. On July 29, 2014, the Company and DBCC filed a Joint Unopposed Motion to Transfer the litigation to the Western District of Washington. On July 31, 2014, the New Jersey court granted the Defendants’ Joint Motion to Transfer, and the case was transferred to the Western District of Washington on August 20, 2014. Pursuant to an order entered on December 17, 2014 by the Washington court, this case was coordinated for pre-trial discovery purposes with related cases transferred to the Western District of Washington. On January 6, 2015, the Court entered a stipulation and order setting forth the case management schedule. On January 15, 2015, Defendants filed motions to dismiss the complaint. In response, Altaflo filed an amended complaint on March 13, 2015. On April 3, 2015, Defendants filed motions to dismiss the amended complaint, and on May 22, 2015, Altaflo filed its oppositions to the motions. Defendants filed reply briefs on June 12, 2015. On July 17, 2015, Altaflo filed motions for class certification against the Company and DBCC. On September 9, 2015, the Washington court entered an order denying the Company’s motion to dismiss, and on October 19, 2015, it entered an order granting DBCC’s motion to dismiss without prejudice. At the request of the parties, on October 30, 2015, the Court entered an order striking plaintiff’s class certification motions without prejudice and striking all upcoming deadlines while the parties negotiated a written settlement agreement. On February 11, 2016, the parties entered into a written settlement term sheet, and on May 16, 2016, the parties executed a settlement agreement, which was subject to Court approval. On May 17, 2016, plaintiff filed an Unopposed Motion for Preliminary Approval of the Class Action Settlement. On August 9, 2016, the Court denied plaintiff’s motion without prejudice and directed the parties to file either a renewed motion for preliminary approval of the class action settlement or a joint status report. On October 14, 2016, the parties entered into an amended settlement agreement, which amended some of the non-monetary terms of the agreement. On the same day, plaintiff filed with the Court the amended settlement agreement together with an unopposed renewed motion for preliminary approval of the amended settlement. The Court has not yet ruled on the motion.
Our ultimate liability related to this matter is contingent upon our insurance coverage and we do not expect the impact will be material to our financial results (see further discussion of Sentry matter below).
Sentry Insurance, a Mutual Company v. The Dun & Bradstreet Corporation and Dun & Bradstreet, Inc., No. 2:15-cv-01952 (SRC) (D.N.J.)
On March 17, 2015, Sentry Insurance filed a Declaratory Judgment Action in the United States District Court for the District of New Jersey against The Dun & Bradstreet Corporation and Dun & Bradstreet, Inc. (collectively, the “Company”). The Complaint seeks a judicial declaration that Sentry, which issued a General Commercial Liability insurance policy (the “CGL Policy”), to the Company, does not have a duty under the CGL Policy to provide the Company with a defense or indemnification in connection with five putative class action complaints (the “Class Actions”) filed against the Company and DBCC. Against the Company, the Class Actions complaints allege negligence, defamation and violations of state laws prohibiting unfair and deceptive practices in connection with DBCC’s marketing and sale of credit monitoring products. Sentry’s Complaint alleges that the Company is not entitled to a defense or indemnification for any losses it sustains in the

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(Tabular dollar amounts in millions, except per share data)


Class Actions because the underlying claims in the Class Actions fall within various exceptions in the CGL policy, including exclusions for claims: (i) that arise from Dun and Bradstreet’s provision of “professional services”; (ii) that are based on intentional or fraudulent acts; and (iii) that are based on conduct that took place prior to the beginning of the CGL Policy periods. We do not believe the exclusions are applicable under governing law interpreting similar provisions. On March 26, 2015, Sentry filed and served an Amended Complaint which added several exhibits but did not otherwise materially differ from the original Complaint. The Company filed an Answer to the Amended Complaint on April 16, 2015 and also asserted counterclaims. A preliminary conference with the Court was held on July 28, 2015 and the parties subsequently served their respective document demands and interrogatories, although no documents have been exchanged yet. In addition, the parties have held informal discussions regarding a possible resolution including the possibility of mediating the dispute. The litigation was temporarily stayed to accommodate the parties’ efforts to resolve the dispute amicably, but the stay has expired. The parties have been unable to settle the matter. On June 30, 2016, the Company filed a motion to join National Union Fire Insurance Company of Pittsburgh as an additional party due to National Union’s separate obligations under an errors & omissions policy to indemnify the Company for its losses in the Class Actions. The motion to join National Union was granted and, on August 2, 2016, the Company filed a Third Party Complaint. On October 31, 2016, National Union filed its Answer to the Company’s Complaint. A discovery conference with the Court is scheduled for November 16, 2016. As discussed above, at the Court’s direction, the parties in the underlying Class Actions have negotiated amendments to the settlement agreement in the Class Actions and on October 14, 2016, plaintiffs filed a renewed motion seeking preliminary approval of the amended class action settlement. The Company and National Union have discussed entering into an Interim Funding Agreement, under which National Union would fund the Company’s share of the settlement amount in the Class Actions (less the policy’s retention), with both the Company and National Union continuing to reserve their respective rights. The proposed Interim Funding Agreement has not been formally negotiated or finalized at this time. The Company is continuing to investigate the allegations in this matter, and discovery in this action is still in the very early stages. In accordance with ASC 450, we therefore do not have sufficient information upon which to determine that a loss in connection with this matter is probable, reasonably possible or estimable, and thus no reserve has been established nor has a range of loss been disclosed.
Jeffrey A. Thomas v. Dun & Bradstreet Credibility Corp., No. 2:15 cv 03194-BRO-GJS (C.D. Cal.)
On April 28, 2015, Jeffrey A. Thomas (“Plaintiff”) filed suit against DBCC in the United States District Court for the Central District of California. The complaint alleges that DBCC violated the Telephone Consumer Protection Act (“TCPA”) (47 U.S.C. § 227) because it placed telephone calls to Plaintiff’s cell phone using an automatic telephone dialing system (“ATDS”). The TCPA generally prohibits the use of an ATDS to place a call to a cell phone for non-emergency purposes and without the prior express written consent of the called party. The TCPA provides for statutory damages of $500 per violation, which may be trebled to $1,500 per violation at the discretion of the court if the plaintiff proves the defendant willfully violated the TCPA. Plaintiff sought to represent a class of similarly situated individuals who received calls on their cell phones from an ATDS. DBCC was served with a copy of the summons and complaint on April 30, 2015. On May 22, 2015, the Company made a statutory offer of judgment. Plaintiff did not respond to the offer. DBCC filed a motion to dismiss the complaint on June 12, 2015, which the Court denied on August 5, 2015. DBCC filed an Answer and asserted its Affirmative Defenses on November 12, 2015. Discovery commenced and the Court issued a schedule for amended pleadings, discovery, the filing of any class certification motion and trial.
During the discovery period, the parties agreed to attempt to settle the dispute through mediation. On June 2, 2016, the parties conducted one day of mediation, and shortly after the mediation, the parties reached an agreement to settle the dispute on a class-wide basis. Since that time the parties have finalized a written settlement agreement and all attendant documents. On September 8, 2016, Plaintiff filed an unopposed motion seeking preliminary approval of the class action settlement. On September 26, 2016, the parties appeared for a hearing on the motion for preliminary approval, after which the Court entered an Order granting the motion, conditionally certifying a settlement class, approving the class action settlement and approving the parties’ plan to give notice to class members. The Court scheduled a final approval hearing for March 20, 2017, after the settlement has been administered.
In accordance with ASC 450, a reserve has been accrued by the Company for this matter in the consolidated financial statements during the second quarter of 2016.
Other Matters
In addition, in the normal course of business, and including without limitation, our merger and acquisition activities, strategic relationships and financing transactions, Dun & Bradstreet indemnifies other parties, including customers, lessors and parties to other transactions with Dun & Bradstreet, with respect to certain matters. Dun & Bradstreet has agreed to hold the other parties harmless against losses arising from a breach of representations or covenants, or arising out of other claims

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(Tabular dollar amounts in millions, except per share data)


made against certain parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. Dun & Bradstreet has also entered into indemnity obligations with its officers and directors.
Additionally, in certain circumstances, Dun & Bradstreet issues guarantee letters on behalf of our wholly-owned subsidiaries for specific situations. It is not possible to determine the maximum potential amount of future payments under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made by Dun & Bradstreet under these agreements have not had a material impact on the consolidated financial statements.

Note 8 -- Income Taxes
For the three months ended September 30, 2016 , our effective tax rate was (243.2)% as compared to 5.0% for the three months ended September 30, 2015 . The negative effect to the effective tax rate in 2016 is attributable to the loss on the divestiture of our operations in Benelux and Latin America, most of which is attributable to the release of a cumulative foreign currency translation loss, that is not deductible for tax purposes. In addition, the current quarter's effective tax rate was negatively impacted by a lower tax benefit resulting from the release of reserves for uncertain tax positions in the current year period as compared to the prior year period. For the three months ended September 30, 2016, we released $6.2 million compared with $19.2 million for three months ended September 30, 2015 both primarily as a result of the expiration of statute of limitations for the 2012 and 2011 tax years, respectively. For the three months ended September 30, 2016, there are no known changes in our effective tax rate that either have had or that we expect may reasonably have a material impact on our operations or future performance.
For the nine months ended September 30, 2016 , our effective tax rate was 68.4% as compared to 22.2% for the nine months ended September 30, 2015 . The increase in the effective tax rate for 2016 is primarily attributable to: (i) the loss on the divestiture of our operations in Benelux and Latin America, most of which is attributable to the release of a cumulative foreign currency translation loss, that is not deductible for tax purposes; (ii) a non-deductible expense in the second quarter of 2016 related to the legal reserve associated with the ongoing SEC and DOJ investigation of our China operations; and (iii) a lower tax benefit recognized associated with the release of reserves for uncertain tax positions in the current year period ( $6.2 million during the nine month period ended September 30, 2016 compared to $19.2 million for the prior year similar period) primarily due to the expiration of statute of limitations. For the nine months ended September 30, 2016, there are no known changes in our effective tax rate that either have had or that we expect may reasonably have a material impact on our operations or future performance.
The total amount of gross unrecognized tax benefits as of September 30, 2016 was $5.6 million . The amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is $2.7 million , net of related tax benefits.
We or one of our subsidiaries file income tax returns in the U.S. federal, and various state, local and foreign jurisdictions. In the U.S. federal jurisdiction, we are no longer subject to examination by the Internal Revenue Service (“IRS”) for years prior to 2013. In state and local jurisdictions, with a few exceptions, we are no longer subject to examinations by tax authorities for years prior to 2011. In foreign jurisdictions, with a few exceptions, we are no longer subject to examinations by tax authorities for years prior to 2010.
We recognize accrued interest expense related to unrecognized tax benefits in income tax expense. The total amount of interest expense recognized for the three month and nine month periods ended September 30, 2016 was $0.1 million and $0.3 million , respectively, net of tax benefits, as compared to $0.1 million and $0.4 million , net of tax benefits, for the three month and nine month periods ended September 30, 2015 , respectively. The total amount of accrued interest as of September 30, 2016 was $0.2 million , net of tax benefits, as compared to $0.4 million , net of tax benefits, as of September 30, 2015 .

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(Tabular dollar amounts in millions, except per share data)


Note 9 -- Pension and Postretirement Benefits
The following table sets forth the components of the net periodic cost (income) associated with our pension plans and our postretirement benefit obligations:
 
Pension Plans
 
Postretirement Benefit Obligations
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
Components of Net Periodic Cost (Income):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Service Cost
$
0.8

 
$
1.1

 
$
2.3

 
$
3.1

 
$
0.1

 
$
0.2

 
$
0.5

 
$
0.6

Interest Cost
15.1

 
18.7

 
44.9

 
55.4

 
0.1

 
0.1

 
0.3

 
0.4

Expected Return on Plan Assets
(23.9
)
 
(25.8
)
 
(72.5
)
 
(77.1
)
 

 

 

 

Amortization of Prior Service Cost (Credit)
0.1

 

 
0.2

 
0.2

 
(0.4
)
 
(0.8
)
 
(1.2
)
 
(1.1
)
Recognized Actuarial Loss (Gain)
9.7

 
10.6

 
29.0

 
32.0

 
(0.3
)
 
(0.1
)
 
(1.1
)
 
(1.1
)
Net Periodic Cost (Income)
$
1.8

 
$
4.6

 
$
3.9

 
$
13.6

 
$
(0.5
)
 
$
(0.6
)
 
$
(1.5
)
 
$
(1.2
)
Effective January 1, 2016, we changed the approach used to measure service and interest cost components of net periodic benefit costs for our pension and postretirement benefit plans. Previously, we measured service and interest costs utilizing a single weighted average discount rate derived from the yield curve used to measure the plan obligations. For 2016, we elected to measure service and interest costs by applying the specific spot rates along that yield curve to the plans’ liability cash flows (“Spot Rate Approach”). We believe the new approach provides a more precise measurement of service and interest costs by improving the correlation between projected benefit cash flows and their corresponding spot rates on the yield curve. This change does not affect the measurement of our plan obligations and it is accounted for as a change in accounting estimate, which is applied prospectively. This change in estimate is expected to reduce our 2016 pension and postretirement net periodic cost by approximately $14 million compared to the prior estimate of approximately $19 million discussed in our Annual Report on Form 10-K for the year ended December 31, 2015. The reduction in pension and postretirement net periodic cost is primarily driven by the lower interest cost related to the U.S. Qualified Plan. The weighted average discount rate used to develop the 2016 interest and service cost for the U.S. Qualified Plan under the Spot Rate Approach was 3.04% . The weighted average discount rate used to measure the benefit obligation for the U.S. Qualified plan as of December 31, 2015 was 3.89% .
We previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015 that we expected to contribute approximately $29 million to our U.S. Non-Qualified plans and non-U.S. pension plans and $2 million to our postretirement benefit plan for the year ended December 31, 2016 . As of September 30, 2016 , we have made contributions to our U.S. Non-Qualified and non-U.S. pension plans of $21.1 million and we have made contributions of $0.9 million to our postretirement benefit plan. We expect contributions to the postretirement benefit plan to be approximately $1.5 million for the year ended December 31, 2016. The lower contributions to the postretirement benefit plan in 2016 as compared to our prior estimate discussed in our Annual Report on Form 10-K for the year ended December 31, 2015 was primarily due to subsidies received under the previous retiree medical program covered by a group-based company sponsored Medicare Part D program.
Note 10 -- Segment Information
    
The operating segments reported below are our segments for which separate financial information is available and upon which operating results are evaluated by management on a timely basis to assess performance and to allocate resources.
We manage and report our business through two segments:
Americas (which consists of our operations in the U.S., Canada and Latin America (which we divested in September 2016)); and
Non-Americas (which primarily consists of our operations in the U.K., the Netherlands (which we expect to divest in November 2016), Belgium (which we expect to divest in November 2016), Greater China, India and our Dun & Bradstreet Worldwide Network).
Our customer solution sets are D&B Risk Management Solutions™ and D&B Sales & Marketing Solutions™. Inter-segment sales are immaterial, and no single customer accounted for 10% or more of our total revenue. For management

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(Tabular dollar amounts in millions, except per share data)


reporting purposes, we evaluate business segment performance before restructuring charges and intercompany transactions, because these charges are not a component of our ongoing income or expenses and may have a disproportionate positive or negative impact on the results of our ongoing underlying business.
 
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
 
2016
 
2015
 
2016
 
2015
Revenue:
 
 
 
 
 
 
 
Americas
$
338.8

 
$
328.4

 
$
974.9

 
$
912.2

Non-Americas
74.0

 
77.8

 
211.7

 
225.6

Consolidated Total
$
412.8

 
$
406.2

 
$
1,186.6

 
$
1,137.8

Operating Income (Loss):
 
 
 
 
 
 
 
Americas
$
100.6

 
$
86.4

 
$
253.9

 
$
221.5

Non-Americas
20.0

 
22.8

 
47.2

 
63.4

Total Segments
120.6

 
109.2

 
301.1

 
284.9

Corporate and Other (1)
(23.8
)
 
(24.2
)
 
(104.6
)
 
(76.6
)
Consolidated Total
96.8

 
85.0

 
196.5

 
208.3

Non-Operating Income (Expense) - Net (2)
(105.0
)
 
(22.7
)
 
(130.6
)
 
(43.3
)
Income (Loss) Before Provision for Income Taxes and Equity in Net Income of Affiliates
$
(8.2
)
 
$
62.3

 
$
65.9

 
$
165.0

 
(1)
The following table summarizes “Corporate and Other:”
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
 
2016
 
2015
 
2016
 
2015
Corporate Costs
$
(20.0
)
 
$
(17.4
)
 
$
(57.5
)
 
$
(49.8
)
Restructuring Expense
(3.2
)
 
(5.5
)
 
(18.8
)
 
(15.1
)
Acquisition-Related Costs (a)
(0.2
)
 
(0.8
)
 
(0.8
)
 
(10.0
)
Accrual for Legal Matters (b)

 

 
(26.0
)
 

Legal and Other Professional Fees and Shut-Down Costs Related to Matters in China
(0.4
)
 
(0.5
)
 
(1.5
)
 
(1.7
)
Total Corporate and Other
$
(23.8
)
 
$
(24.2
)
 
$
(104.6
)
 
$
(76.6
)

(a) The acquisition-related costs (e.g., banker's fees) for the nine months ended September 30, 2015 were primarily related to the acquisition of NetProspex and Dun & Bradstreet Credibility Corporation (“DBCC”).

(b)
The accrual for legal matters for the nine months ended September 30, 2016 is related to litigation (Jeffrey A. Thomas v. Dun & Bradstreet Credibility Corp.), net of an indemnification from the DBCC acquisition escrows, and the ongoing SEC and DOJ investigation of our China operations. See Note 7 to our unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.
    
(2)
The following table summarizes “Non-Operating Income (Expense) - Net:”
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
 
2016
 
2015
 
2016
 
2015
Interest Income
$
0.4

 
$
0.3

 
$
1.4

 
$
1.1

Interest Expense
(13.2
)
 
(13.8
)
 
(40.1
)
 
(37.0
)
Other Income (Expense) - Net (a)
(92.2
)
 
(9.2
)
 
(91.9
)
 
(7.4
)
Non-Operating Income (Expense) - Net
$
(105.0
)
 
$
(22.7
)
 
$
(130.6
)
 
$
(43.3
)
 

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(Tabular dollar amounts in millions, except per share data)


(a) The increase in Other Expense - Net for the three month and nine month periods ended September 30, 2016 was primarily due to a loss of $89.6 million on the divestiture of our operations in Benelux and Latin America. See Note 14 to our unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.

Supplemental Geographic and Customer Solution Set Information:
 
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
 
2016
 
2015
 
2016
 
2015
Customer Solution Set Revenue:
 
 
 
 
 
 
 
Americas:
 
 
 
 
 
 
 
Risk Management Solutions
$
203.6

 
$
194.3

 
$
565.4

 
$
529.1

Sales & Marketing Solutions
135.2

 
134.1

 
409.5

 
383.1

Total Americas Revenue
$
338.8

 
$
328.4

 
$
974.9

 
$
912.2

 
 
 
 
 
 
 
 
Non-Americas:
 
 
 
 
 
 
 
Risk Management Solutions
$
60.3

 
$
61.1

 
$
175.0

 
$
180.8

Sales & Marketing Solutions
13.7

 
16.7

 
36.7

 
44.8

Total Non-Americas Revenue
$
74.0

 
$
77.8

 
$
211.7

 
$
225.6

 
 
 
 
 
 
 
 
Consolidated Total:
 
 
 
 
 
 
 
Risk Management Solutions
$
263.9

 
$
255.4

 
$
740.4

 
$
709.9

Sales & Marketing Solutions
148.9

 
150.8

 
446.2

 
427.9

Consolidated Total Revenue
$
412.8

 
$
406.2

 
$
1,186.6

 
$
1,137.8

 
 
At September 30, 2016
 
At December 31, 2015
Assets:
 
 
 
Americas (3)
$
1,312.9

 
$
1,451.3

Non-Americas (4)
566.5

 
787.1

Total Segments
1,879.4

 
2,238.4

Corporate and Other (5)
137.5

 
28.1

Consolidated Total
$
2,016.9

 
$
2,266.5

Goodwill:
 
 
 
Americas
$
555.3

 
$