UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| Date of Report (date of earliest event reported): | |||||
(Exact name of registrant as specified in its charter)
Commission file number 1-39361
| (State of incorporation) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices)
(973 ) 921-5500
Registrant’s telephone number, including area code
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition
On February 8, 2021, Dun & Bradstreet Holdings, Inc. (“Dun & Bradstreet”) issued a press release announcing its financial results for the fourth quarter and full year of 2020. Dun & Bradstreet also posted an investor presentation regarding the fourth quarter and full year 2020 financial results to its website www.dnb.com. The information in this Current Report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.
The Dun & Bradstreet Holdings, Inc. press release and presentation are attached as Exhibit 99.1 and Exhibit 99.2, respectively.
Item 9.01 Financial Statements and Exhibits
| Exhibit 99.1 | |||||
| Exhibit 99.2 | |||||
| Exhibit 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| DUN & BRADSTREET HOLDINGS, INC. | |||||||||||
| By: | /s/ BRYAN T. HIPSHER | ||||||||||
| Bryan T. Hipsher | |||||||||||
| Date: | February 8, 2021 | Chief Financial Officer | |||||||||
DUN & BRADSTREET REPORTS FOURTH QUARTER AND FULL YEAR 2020 FINANCIAL RESULTS
Short Hills, NJ, February 8, 2021: Dun & Bradstreet Holdings, Inc. (NYSE: DNB), a leading global provider of business decisioning data and analytics, today announced unaudited financial results for the fourth quarter and year ended December 31, 2020. A reconciliation of U.S. generally accepted accounting principles (“GAAP”) to non-GAAP financial measures has been provided in this press release, including the accompanying tables. An explanation of these measures is also included below under the heading “Use of Non-GAAP Financial Measures.”
•Revenue for the fourth quarter of 2020 was $480.1 million, an increase of 11.0% as reported, and 10.5% on a constant currency basis compared to the fourth quarter of 2019; which includes the net impact of lower deferred revenue purchase accounting adjustments of $39.0 million.
•Net income for the fourth quarter of 2020 was $7.0 million, or diluted loss per share of $0.02, and adjusted net income of $118.1 million, or adjusted diluted earnings per share of $0.28.
•Adjusted EBITDA for the fourth quarter of 2020 was $208.9 million, up 32.2% compared to the fourth quarter of 2019, and adjusted EBITDA margin of 43.5%, an increase of 700 basis points; which includes the net impact of lower deferred revenue purchase accounting adjustments of $39.0 million.
“We are pleased with our solid performance in the fourth quarter, which was in line with our expectations, and contributed to the achievement of our full year 2020 guidance,” said Anthony Jabbour, Dun & Bradstreet Chief Executive Officer. “2020 was an important year for us as we completed a successful IPO, signed a definitive agreement to acquire Bisnode and continued to execute on our growth and transformation strategies. These actions have laid the foundation for continued growth and we are excited about the opportunities to maximize shareholder value that lie ahead.”
•Revenue for the year ended December 31, 2020 was $1,738.1 million, an increase of 10.2% as reported, and 10.1% on a constant currency basis, compared to the year ended December 31, 2019 on a combined pro forma basis. This increase includes the net impact of lower deferred revenue purchase accounting adjustments of $133.8 million (inclusive of a pro forma deferred revenue adjustment) and international lag adjustment of $25.9 million which had a combined ten percentage point impact on the year over year growth.
•Net loss for the year ended December 31, 2020 was $175.6 million, or diluted loss per share of $0.48, and adjusted net income of $349.7 million, or adjusted diluted earnings per share of $0.95.
•Adjusted EBITDA for the year ended December 31, 2020 was $715.4 million, an increase of 29.5% compared to the year ended December 31, 2019 on a combined pro forma basis, and adjusted EBITDA margin of 41.2%, an increase of 670 basis points, compared to the year ended December 31, 2019 on a combined pro forma basis. This includes the net impact of lower deferred revenue purchase accounting adjustments of $133.8 million (inclusive of a pro forma deferred revenue adjustment) which had a 25
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percentage point impact on the year over year growth, and a five percentage point impact on the margin improvement.
Segment Results
North America
For the fourth quarter of 2020, North America revenue was $400.8 million, an increase of less than 1% both as reported and on a constant currency basis compared to the fourth quarter of 2019.
•Finance and Risk revenue for the fourth quarter of 2020 was $217.9 million, an increase of less than 1% both as reported and on a constant currency basis compared to the fourth quarter of 2019, primarily due to the shift of $4 million government contract from Q3, higher subscription-based revenues, partially offset by known, transient headwinds of $1 million from structural changes within our legacy Credibility solutions and $8 million in lower usage compared to an elevated Q4 2019 along with the impact of COVID-19.
•Sales and Marketing revenue for the fourth quarter of 2020 was $182.9 million, an increase of less than 1% both as reported and on a constant currency basis compared to the fourth quarter of 2019, primarily due to higher revenue of approximately $8 million from our D&B Direct solution, partially offset by lower royalty revenue of approximately $6 million from the Data.com legacy partnership.
North America adjusted EBITDA for the fourth quarter of 2020 was $198.3 million, a decrease of less than 1%, with adjusted EBITDA margin of 49.5%, a decrease of 20 basis points both compared to the fourth quarter of 2019.
For the year ended December 31, 2020, North America revenue was $1,459.9 million a decrease of $4.8 million, or less than 1% both as reported and on a constant currency basis compared to the year ended December 31, 2019 on a combined pro forma basis.
•Finance & Risk revenue for the year ended December 31, 2020 was $811.1 million, an increase of $2.5 million, or less than 1% both as reported and on a constant currency basis compared to the year ended December 31, 2019 on a combined pro forma basis. The increase was primarily due to higher subscription-based revenue of approximately $30 million, partially offset by lower revenues of approximately $17 million of lower usage, primarily attributable to the impact of COVID-19 and lower revenue of approximately $11 million primarily due to structural changes we made within our legacy Credibility solutions and lower usage.
•Sales & Marketing revenue for the year ended December 31, 2020 was $648.8, a decrease of $7.3 million, or 1.1% as reported and 1.2% on a constant currency basis compared to the year ended December 31, 2019 on a combined pro forma basis. The decrease was primarily due to lower royalty revenue of approximately $20 million from Data.com legacy partnership along with lower usage revenue across our Sales & Marketing solutions partially due to the impact of COVID-19. The aforementioned decreases were partially offset by a net increase in revenue across our Sales & Marketing solutions of approximately $6 million largely attributable to our D&B Direct solutions. In addition, revenue increased by $6.5 million from the acquisition of Lattice, which was acquired at the beginning of the third quarter of 2019.
North America adjusted EBITDA for the year ended December 31, 2020 was $696.4 million, an increase of $6.5 million, or 1.0%, for the year ended December 31, 2020, compared to the year ended December 31, 2019 on a combined pro forma basis. North America adjusted EBITDA margin of 47.7% increased 60 basis points for the year ended December 31, 2020 compared to the year ended December 31, 2019 on a combined pro forma basis. The improvement in both adjusted EBITDA and adjusted EBITDA margin was primarily due to lower operating costs primarily resulting from ongoing cost management driven by lower net personnel expenses.
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International
International revenue for the fourth quarter of 2020 was $79.9 million, an increase of $7.3 million or 9.9% as reported, and 7.6% on a constant currency basis compared to the fourth quarter of 2019.
•Finance and Risk revenue for the fourth quarter of 2020 was $63.9 million, an increase of $6.4 million or 11.0% as reported, and 8.5% on a constant currency basis compared to the fourth quarter of 2019, primarily due to higher revenue of approximately $4 million from WWN alliances due to higher cross border data sales and higher revenue from risk solutions in our U.K. market of approximately $1 million.
•Sales and Marketing revenue for the fourth quarter of 2020 was $16.0 million, an increase of $0.9 million or 5.7% as reported and 4.3% on a constant currency basis compared to the fourth quarter of 2019, primarily attributable to higher revenue from API solutions in our U.K. market of approximately $1 million.
International adjusted EBITDA for the fourth quarter of 2020 was $23.2 million, an increase of $0.9 million or 3.6%, with adjusted EBITDA margin of 29.0%, a decrease of 170 basis points both compared to the fourth quarter of 2019.
For the year ended December 31, 2020, International revenue was $299.3 million, an increase of $6.6 million, or 2.2% as reported and 1.4% on a constant currency basis compared to the year ended December 31, 2019 on a combined pro forma basis.
•Finance & Risk revenue for the year ended December 31, 2020 was $243.6 million, an increase of $8.9 million, or 3.8% as reported and 2.9% on a constant currency basis compared to the year ended December 31, 2019 on a combined pro forma basis. The increase was driven primarily by higher revenue of approximately $10 million from WWN alliances due to higher cross border data sales, higher revenue of approximately $1 million from increased sales of risk solutions in the U.K., and $2 million from our Greater China market driven by solutions targeted at small businesses, partially offset by lower usage volume in our Asia markets of approximately $2 million primarily due to the impact of COVID-19 and transitory headwinds in the WWN and U.K. of $6 million.
•Sales & Marketing revenue for the year ended December 31, 2020 was $55.7 million, a decrease of $2.3 million, or 4.0% as reported and 4.6% on a constant currency basis compared to the year ended December 31, 2019 on a combined pro forma basis. The decrease in revenue was driven primarily by lower product royalties from our WWN alliances of approximately $1 million, and lower usage volume in our Asia market of approximately $1 million primarily due to the impact of COVID-19.
International adjusted EBITDA was $94.8 million, a decrease of $3.7 million, or 4.0%, for the year ended December 31, 2020, compared to the year ended December 31, 2019 on a combined pro forma basis. International adjusted EBITDA margin of 31.7% decreased 190 basis points for the year ended December 31, 2020 compared to the year ended December 31, 2019 on a combined pro forma basis. The decrease in both adjusted EBITDA and adjusted EBITDA margin was primarily due to higher WWN alliances data expense.
Balance Sheet
As of December 31, 2020, we had cash and cash equivalents of $354.5 million and total principal amount of debt of $3,381.0 million. We had the full capacity available on our $850 million revolving credit facility as of December 31, 2020.
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On January 27, 2021 we refinanced our term loan and reduced the spread by 50 basis points, from 375 basis points to 325 basis points which will save us approximately $14 million of annual interest.
Business Outlook
Dun & Bradstreet’s full year 2021 outlook is as follows:
•Adjusted Revenues are expected to be in the range of $2,145 million to $2,175 million.
•Adjusted EBITDA is expected to be in the range of $840 million to $855 million.
•Adjusted EPS is expected to be in the range of $1.02 to $1.06.
The foregoing forward-looking statements reflect Dun & Bradstreet’s expectations as of today's date and Revenue assumes constant foreign currency rates. Given the number of risk factors, uncertainties and assumptions discussed below, actual results may differ materially. Dun & Bradstreet does not intend to update its forward-looking statements until its next quarterly results announcement, other than in publicly available statements.
Earnings Conference Call and Audio Webcast
Dun & Bradstreet will host a conference call to discuss the fourth quarter 2020 financial results on February 8, 2021 at 8:30 a.m. ET. The conference call can be accessed live over the phone by dialing 866-324-3683, or for international callers 509-844-0959. The conference call replay will be available from 11:30 a.m. ET on February 8, 2021, through February 15, 2021, by dialing 855-859-2056, or for international callers 404-537-3406. The replay passcode will be 5189506.
The call will also be webcast live from Dun & Bradstreet’s investor relations website at https://investor.dnb.com. Following the completion of the call, a recorded replay of the webcast will be available on the website.
About Dun & Bradstreet
Dun & Bradstreet, a leading global provider of business decisioning data and analytics, enables companies around the world to improve their business performance. Dun & Bradstreet’s Data Cloud fuels solutions and delivers insights that empower customers to accelerate revenue, lower cost, mitigate risk, and transform their businesses. Since 1841, companies of every size have relied on Dun & Bradstreet to help them manage risk and reveal opportunity. For more information on Dun & Bradstreet, please visit www.dnb.com.
Use of Non-GAAP Financial Measures
In addition to reporting GAAP results, we evaluate performance and report our results on the non-GAAP financial measures discussed below. We believe that the presentation of these non-GAAP measures provides useful information to investors and rating agencies regarding our results, operating trends and performance between periods. These non-GAAP financial measures include adjusted revenue, adjusted earnings before interest, taxes, depreciation and amortization (‘‘adjusted EBITDA’’), adjusted EBITDA margin and adjusted net income. Adjusted results are non-GAAP measures that adjust for the impact due to purchase accounting application and divestitures, restructuring charges, equity-based compensation, acquisition and divestiture-related costs (such as costs for bankers, legal fees, due diligence, retention payments and contingent consideration adjustments) and other non-core gains and charges that are not in the normal course of our business (such as gains and losses on sales of businesses, impairment charges, effect of significant changes in tax laws and material tax and legal settlements). We exclude amortization of recognized intangible assets resulting from the application of purchase accounting because it is non-cash and not indicative of our ongoing and underlying operating performance. Recognized intangible assets arise from acquisitions, or primarily the Take-Private Transaction. We believe that recognized intangible assets by their nature are fundamentally different from other depreciating assets that are replaced on a predictable operating cycle. Unlike other depreciating assets, such as developed and purchased software licenses or property and equipment, there is no replacement cost once these recognized intangible assets expire and the assets are not replaced.
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Additionally, our costs to operate, maintain and extend the life of acquired intangible assets and purchased intellectual property are reflected in our operating costs as personnel, data fee, facilities, overhead and similar items. Management believes it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation. Amortization of recognized intangible assets will recur in future periods until such assets have been fully amortized. In addition, we isolate the effects of changes in foreign exchange rates on our revenue growth because we believe it is useful for investors to be able to compare revenue from one period to another, both after and before the effects of foreign exchange rate changes. The change in revenue performance attributable to foreign currency rates is determined by converting both our prior and current periods’ foreign currency revenue by a constant rate. As a result, we monitor our adjusted revenue growth both after and before the effects of foreign exchange rate changes. We believe that these supplemental non-GAAP financial measures provide management and other users with additional meaningful financial information that should be considered when assessing our ongoing performance and comparability of our operating results from period to period. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the factors management uses in planning for and forecasting future periods. Non-GAAP financial measures should be viewed in addition to, and not as an alternative to our reported results prepared in accordance with GAAP.
Our non-GAAP or adjusted financial measures reflect adjustments based on the following items, as well as the related income tax.
Adjusted Revenue
We define adjusted revenue as revenue adjusted to include revenue for the period from January 8 to February 7, 2019 (‘‘International lag adjustment’’) for the Predecessor related to the lag reporting for our International operations. On a GAAP basis, we report International results on a one-month lag, and for 2019 the Predecessor period for International is December 1, 2018 through January 7, 2019. The Successor period for International is February 8, 2019 (commencing on the closing date of the Take-Private Transaction) through November 30, 2019 for the Successor period from January 1, 2019 to December 31, 2019. The International lag adjustment is to facilitate comparability of 2019 periods to 2020 periods.
Adjusted EBITDA and Adjusted EBITDA Margin
We define adjusted EBITDA as net income (loss) attributable to Dun & Bradstreet Holdings, Inc. (Successor) / The Dun & Bradstreet Corporation (Predecessor) excluding the following items:
•depreciation and amortization;
•interest expense and income;
•income tax benefit or provision;
•other expenses or income;
•equity in net income of affiliates;
•net income attributable to non-controlling interests;
•dividends allocated to preferred stockholders;
•revenue and expense adjustments to include results for the period from January 8 to February 7, 2019, for the Predecessor related to the International lag adjustment (see above discussion);
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•other incremental or reduced expenses from the application of purchase accounting (e.g. commission asset amortization);
•equity-based compensation;
•restructuring charges;
•merger and acquisition-related operating costs;
•transition costs primarily consisting of non-recurring incentive expenses associated with our synergy program;
•legal reserve and costs associated with significant legal and regulatory matters; and
•asset impairment.
We calculate adjusted EBITDA margin by dividing adjusted EBITDA by adjusted revenue.
Adjusted Net Income
We define adjusted net income as net income (loss) attributable to Dun & Bradstreet Holdings, Inc. (Successor) / The Dun & Bradstreet Corporation (Predecessor) adjusted for the following items:
•revenue and expense adjustments to include results for the period from January 8 to February 7, 2019, for the Predecessor related to the International lag adjustment (see above discussion);
•incremental amortization resulting from the application of purchase accounting. We exclude amortization of recognized intangible assets resulting from the application of purchase accounting because it is non-cash and is not indicative of our ongoing and underlying operating performance. The Company believes that recognized intangible assets by their nature are fundamentally different from other depreciating assets that are replaced on a predictable operating cycle. Unlike other depreciating assets, such as developed and purchased software licenses or property and equipment, there is no replacement cost once these recognized intangible assets expire and the assets are not replaced. Additionally, the Company’s costs to operate, maintain and extend the life of acquired intangible assets and purchased intellectual property are reflected in the Company’s operating costs as personnel, data fee, facilities, overhead and similar items;
•other incremental or reduced expenses from the application of purchase accounting (e.g. commission asset amortization);
•equity-based compensation;
•restructuring charges;
•merger and acquisition-related operating costs;
•transition costs primarily consisting of non-recurring incentive expenses associated with our synergy program;
•legal reserve and costs associated with significant legal and regulatory matters;
•change in fair value of the make-whole derivative liability associated with the Series A Preferred Stock;
•asset impairment;
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•non-recurring pension charges, related to pension settlement charge and actuarial loss amortization eliminated as a result of the Take-Private Transaction;
•dividends allocated to preferred stockholders;
•merger, acquisition and divestiture-related non-operating costs;
•debt refinancing and extinguishment costs; and
•tax effect of the non-GAAP adjustments and the impact resulting from the enactment of the CARES Act.
Adjusted Net Earnings per Diluted Share
We calculate adjusted net earnings per diluted share by dividing adjusted net income (loss) by the weighted average number of common shares outstanding for the period plus the dilutive effect of common shares potentially issuable in connection with awards outstanding under our stock incentive plan. For consistency purposes, we assume the stock split effected on June 23, 2020 to be the number of shares outstanding during the Predecessor period.
Forward-Looking Statements
The statements contained in this release that are not purely historical are forward-looking statements, including statements regarding expectations, hopes, intentions or strategies regarding the future. Forward-looking statements are based on Dun & Bradstreet’s management’s beliefs, as well as assumptions made by, and information currently available to, them. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods, or by the inclusion of forecasts or projections. Examples of forward-looking statements include, but are not limited to, statements we make regarding the outlook for our future business and financial performance. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. It is not possible to predict or identify all risk factors. Consequently, the risks and uncertainties listed below should not be considered a complete discussion of all of our potential trends, risks and uncertainties. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
The risks and uncertainties that forward-looking statements are subject to include, but are not limited to: (i) an outbreak of disease, global or localized health pandemic or epidemic, or the fear of such an event (such as the COVID-19 global pandemic), including the global economic uncertainty and measures taken in response; (ii) the short- and long-term effects of the COVID-19 global pandemic, including the pace of recovery or any future resurgence; (iii) our ability to implement and execute our strategic plans to transform the business; (iv) our ability to develop or sell solutions in a timely manner or maintain client relationships; (v) competition for our solutions; (vi) harm to our brand and reputation; (vii) unfavorable global economic conditions; (viii) risks associated with operating and expanding internationally; (ix) failure to prevent cybersecurity incidents or the perception that confidential information is not secure; (x) failure in the integrity of our data or systems; (xi) system failures and personnel disruptions, which could delay the delivery of our solutions to our clients; (xii) loss of access to data sources; (xiii) failure of our software vendors and network and cloud providers to perform as expected or if our relationship is terminated; (xiv) loss or diminution of one or more of our key clients, business partners or government contracts; (xv) dependence on strategic alliances, joint ventures and acquisitions to grow our business; (xvi) our ability to protect our intellectual property adequately or cost-effectively; (xvii) claims for intellectual property infringement; (xviii) interruptions, delays or outages to subscription or payment processing platforms; (xix) risks related to acquiring and integrating businesses and divestitures of existing businesses; (xx) our ability to retain members of the senior leadership team and attract and retain skilled employees; (xxi) compliance with governmental laws and regulations; (xxii) risks associated with our structure and status as a "controlled company;" and (xxiii) the other factors described under the headings “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Cautionary Note Regarding Forward-Looking Statements” and other sections of our final prospectus dated June 30, 2020 and filed with the Securities and Exchange Commission on July 2, 2020.
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Dun & Bradstreet Holdings, Inc.
Consolidated Statement of Operations
(Amounts in millions, except per share data)
| Three-Month Period | Twelve-Month Period | |||||||||||||||||||||||||||||||||||||||||||
| Successor | Predecessor | |||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended December 31, 2020 | Three Months Ended December 31, 2019 | Year Ended December 31, 2020 | Period from January 1 to December 31, 2019 | Period from January 1 to February 7, 2019 | Pro Forma Adjustments for the year ended December 31, 2019 | Combined Pro Forma for the year ended December 31, 2019 | ||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 480.1 | $ | 432.7 | $ | 1,738.1 | $ | 1,413.9 | $ | 178.7 | $ | (16.0) | $ | 1,576.6 | ||||||||||||||||||||||||||||||
| Operating expenses | 141.5 | 131.3 | 545.6 | 448.5 | 56.7 | — | 505.2 | |||||||||||||||||||||||||||||||||||||
| Selling and administrative expenses | 156.6 | 158.9 | 557.8 | 651.2 | 122.4 | (212.9) | 560.7 | |||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 135.9 | 141.8 | 536.9 | 482.4 | 11.1 | 45.1 | 538.6 | |||||||||||||||||||||||||||||||||||||
| Restructuring charges | 18.6 | 7.7 | 34.8 | 51.8 | 0.1 | — | 51.9 | |||||||||||||||||||||||||||||||||||||
| Operating costs | 452.6 | 439.7 | 1,675.1 | 1,633.9 | 190.3 | (167.8) | 1,656.4 | |||||||||||||||||||||||||||||||||||||
| Operating income (loss) | 27.5 | (7.0) | 63.0 | (220.0) | (11.6) | 151.8 | (79.8) | |||||||||||||||||||||||||||||||||||||
| Interest income | 0.1 | 0.3 | 0.8 | 2.4 | 0.3 | — | 2.7 | |||||||||||||||||||||||||||||||||||||
| Interest expense | (49.3) | (82.9) | (271.1) | (303.5) | (5.5) | (29.7) | (338.7) | |||||||||||||||||||||||||||||||||||||
| Other income (expense) - net | 30.2 | (173.4) | (12.0) | (154.8) | (86.0) | 89.5 | (151.3) | |||||||||||||||||||||||||||||||||||||
| Non-operating income (expense) - net | (19.0) | (256.0) | (282.3) | (455.9) | (91.2) | 59.8 | (487.3) | |||||||||||||||||||||||||||||||||||||
| Income (loss) before provision (benefit) for income taxes and equity in net income of affiliates | 8.5 | (263.0) | (219.3) | (675.9) | (102.8) | 211.6 | (567.1) | |||||||||||||||||||||||||||||||||||||
| Less: provision (benefit) for income taxes | 0.6 | (34.1) | (110.5) | (118.2) | (27.5) | 47.2 | (98.5) | |||||||||||||||||||||||||||||||||||||
| Equity in net income of affiliates | 0.4 | 0.8 | 2.3 | 4.2 | 0.5 | — | 4.7 | |||||||||||||||||||||||||||||||||||||
| Net income (loss) | 8.3 | (228.1) | (106.5) | (553.5) | (74.8) | 164.4 | (463.9) | |||||||||||||||||||||||||||||||||||||
| Less: net (income) loss attributable to the non-controlling interest | (1.3) | (3.2) | (5.0) | (6.5) | (0.8) | — | (7.3) | |||||||||||||||||||||||||||||||||||||
| Less: Dividends allocated to preferred stockholders | — | (32.0) | (64.1) | (114.0) | — | (13.7) | (127.7) | |||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Dun & Bradstreet Holdings, Inc. (Successor) / The Dun & Bradstreet Corporation (Predecessor) | $ | 7.0 | $ | (263.3) | $ | (175.6) | $ | (674.0) | $ | (75.6) | $ | 150.7 | $ | (598.9) | ||||||||||||||||||||||||||||||
| Basic earnings (loss) per share of common stock: | ||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Dun & Bradstreet Holdings, Inc. (Successor) / The Dun & Bradstreet Corporation (Predecessor) | $ | 0.02 | $ | (0.84) | $ | (0.48) | $ | (2.14) | $ | (1.90) | ||||||||||||||||||||||||||||||||||
| Diluted earnings (loss) per share of common stock: | ||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Dun & Bradstreet Holdings, Inc. (Successor) / The Dun & Bradstreet Corporation (Predecessor) | $ | 0.02 | $ | (0.84) | $ | (0.48) | $ | (2.14) | $ | (1.90) | ||||||||||||||||||||||||||||||||||
| Weighted average number of shares outstanding-basic | 422.7 | 314.5 | 367.1 | 314.5 | 314.5 | |||||||||||||||||||||||||||||||||||||||
| Weighted average number of shares outstanding-diluted | 423.6 | 314.5 | 367.1 | 314.5 | 314.5 | |||||||||||||||||||||||||||||||||||||||
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Dun & Bradstreet Holdings, Inc.
Consolidated Balance Sheets
(Amounts in millions, except share data and per share data)
| December 31, 2020 | December 31, 2019 | ||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 354.5 | $ | 98.6 | |||||||
| Accounts receivable, net of allowance of $11.0 at December 31, 2020 and $7.3 at December 31, 2019 | 313.7 | 269.3 | |||||||||
| Other receivables | 7.6 | 10.0 | |||||||||
| Prepaid taxes | 130.3 | 4.0 | |||||||||
| Other prepaids | 38.6 | 31.4 | |||||||||
| Other current assets | 29.3 | 4.6 | |||||||||
| Total current assets | 874.0 | 417.9 | |||||||||
| Non-current assets | |||||||||||
| Property, plant and equipment, net of accumulated depreciation of $14.0 at December 31, 2020 and $7.5 at December 31, 2019 | 26.4 | 29.4 | |||||||||
| Computer software, net of accumulated amortization of $126.0 at December 31, 2020 and $52.9 at December 31, 2019 | 432.7 | 379.8 | |||||||||
| Goodwill | 2,856.2 | 2,840.1 | |||||||||
| Deferred income tax | 14.0 | 12.6 | |||||||||
| Other intangibles | 4,812.0 | 5,251.4 | |||||||||
| Deferred costs | 83.6 | 47.0 | |||||||||
| Other non-current assets | 120.5 | 134.6 | |||||||||
| Total non-current assets | 8,345.4 | 8,694.9 | |||||||||
| Total assets | $ | 9,219.4 | $ | 9,112.8 | |||||||
| Liabilities | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | 61.2 | $ | 55.0 | |||||||
| Accrued payroll | 104.4 | 137.9 | |||||||||
| Accrued income tax | 5.1 | 7.8 | |||||||||
| Short-term debt | 25.3 | 81.9 | |||||||||
| Make-whole derivative liability | — | 172.4 | |||||||||
| Other accrued and current liabilities | 160.3 | 167.3 | |||||||||
| Deferred revenue | 467.2 | 467.5 | |||||||||
| Total current liabilities | 823.5 | 1,089.8 | |||||||||
| Long-term pension and postretirement benefits | 293.5 | 206.6 | |||||||||
| Long-term debt | 3,255.8 | 3,818.9 | |||||||||
| Liabilities for unrecognized tax benefits | 18.9 | 16.8 | |||||||||
| Deferred income tax | 1,105.3 | 1,233.5 | |||||||||
| Other non-current liabilities | 143.2 | 137.7 | |||||||||
| Total liabilities | 5,640.2 | 6,503.3 | |||||||||
| Commitments and contingencies | |||||||||||
| Cumulative Series A Preferred Stock $0.001 par value per share,1,050,000 shares authorized and issued at December 31, 2019; Liquidation Preference of $1,067.9 at December 31, 2019 | — | 1,031.8 | |||||||||
| Equity | |||||||||||
| Successor Common Stock, $0.0001 par value per share, authorized—2,000,000,000 shares; 423,418,131 shares issued and 422,952,228 shares outstanding at December 31, 2020 and 314,494,968 shares issued and outstanding at December 31, 2019 | — | — | |||||||||
| Capital surplus | 4,310.2 | 2,116.9 | |||||||||
| Accumulated deficit | (685.0) | (573.5) | |||||||||
Treasury Stock, 465,903 shares at December 31, 2020 | — | — | |||||||||
| Accumulated other comprehensive loss | (104.5) | (23.5) | |||||||||
| Total stockholder equity | 3,520.7 | 1,519.9 | |||||||||
| Non-controlling interest | 58.5 | 57.8 | |||||||||
| Total equity | 3,579.2 | 1,577.7 | |||||||||
| Total liabilities and stockholder equity | $ | 9,219.4 | $ | 9,112.8 | |||||||
9
Dun & Bradstreet Holdings, Inc.
Consolidated Statements of Cash Flows
(Tabular amounts in millions)
| Successor | Predecessor | |||||||||||||||||||
| Year Ended December 31, 2020 | Period from January 1 to December 31, 2019 | Period from January 1 to February 7, 2019 | ||||||||||||||||||
| Cash flows provided by (used in) operating activities: | ||||||||||||||||||||
| Net income (loss) | $ | (106.5) | $ | (553.5) | $ | (74.8) | ||||||||||||||
| Reconciliation of net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||||||||
| Depreciation and amortization | 536.9 | 482.4 | 11.1 | |||||||||||||||||
| Amortization of unrecognized pension loss (gain) | (0.4) | — | 3.8 | |||||||||||||||||
| Pension settlement charge | 0.6 | — | 85.8 | |||||||||||||||||
| Pension settlement payments | — | (105.9) | (190.5) | |||||||||||||||||
| Income tax benefit from stock-based awards | — | — | 10.3 | |||||||||||||||||
| Equity-based compensation expense | 45.1 | 68.0 | 11.7 | |||||||||||||||||
| Restructuring charge | 34.8 | 51.8 | 0.1 | |||||||||||||||||
| Restructuring payments | (17.0) | (39.1) | (2.1) | |||||||||||||||||
| Change in fair value of make-whole derivative liability | 32.8 | 172.4 | — | |||||||||||||||||
| Changes in deferred income taxes | (97.7) | (137.6) | (33.2) | |||||||||||||||||
| Changes in prepaid and accrued income taxes | (133.5) | (10.0) | (8.1) | |||||||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||||||
| (Increase) decrease in accounts receivable | (42.3) | (15.2) | 16.3 | |||||||||||||||||
| (Increase) decrease in other current assets | (30.2) | 5.9 | (1.2) | |||||||||||||||||
| Increase (decrease) in deferred revenue | 4.1 | 66.1 | 20.8 | |||||||||||||||||
| Increase (decrease) in accounts payable | 5.0 | (19.6) | 37.8 | |||||||||||||||||
| Increase (decrease) in accrued liabilities | 29.0 | (10.2) | (39.7) | |||||||||||||||||
| Increase (decrease) in other accrued and current liabilities | (19.0) | 43.9 | 25.1 | |||||||||||||||||
| (Increase) decrease in other long-term assets | (48.3) | (38.3) | (96.0) | |||||||||||||||||
| Increase (decrease) in long-term liabilities | (40.8) | (57.0) | 154.6 | |||||||||||||||||
| Non-cash foreign exchange impacts | (5.6) | 15.1 | — | |||||||||||||||||
| Net, other non-cash adjustments (1) | 48.6 | 17.8 | 2.8 | |||||||||||||||||
| Net cash provided by (used in) operating activities | 195.6 | (63.0) | (65.4) | |||||||||||||||||
| Cash flows provided by (used in) investing activities: | ||||||||||||||||||||
| Payments for acquisitions of businesses, net of cash acquired | (20.6) | (6,078.0) | — | |||||||||||||||||
| Cash settlements of foreign currency contracts | 7.1 | (7.9) | — | |||||||||||||||||
| Capital expenditures | (7.7) | (12.5) | (0.2) | |||||||||||||||||
| Additions to computer software and other intangibles | (113.7) | (56.4) | (5.1) | |||||||||||||||||
| Net, other | 0.6 | 0.2 | — | |||||||||||||||||
| Net cash provided by (used in) investing activities | (134.3) | (6,154.6) | (5.3) | |||||||||||||||||
| Cash flows provided by (used in) financing activities: | ||||||||||||||||||||
| Proceeds from issuance of Class A common stock in the IPO transaction and Private Placement | 2,381.0 | — | — | |||||||||||||||||
| Proceeds from successor shareholders in the Take-Private Transaction | — | 3,176.8 | — | |||||||||||||||||
| Payments for IPO offering costs (2) | (132.8) | — | — | |||||||||||||||||
| Payment for the redemption of Cumulative Series A Preferred Stock | (1,067.9) | — | — | |||||||||||||||||
| Payment for make-whole liability | (205.2) | — | — | |||||||||||||||||
| Payment for debt early redemption premiums | (50.1) | — | — | |||||||||||||||||
| Payments of dividends | (64.1) | (96.1) | — | |||||||||||||||||
| Proceeds from borrowings on Predecessor's Credit Facility | — | — | 167.0 | |||||||||||||||||
| Proceeds from issuance of Successor's Senior Notes | — | 1,450.0 | — | |||||||||||||||||
| Proceeds from borrowings on Successor's Credit Facility | 407.2 | 228.3 | — | |||||||||||||||||
| Proceeds from borrowings on Successor's Term Loan Facility - net of issuance discount | — | 2,479.4 | — | |||||||||||||||||
| Retirement of Predecessor's Senior Notes | — | (625.1) | — | |||||||||||||||||
| Payments of borrowings on Predecessor's Credit Facility | — | — | (70.0) | |||||||||||||||||
| Payments of borrowings on Successor’s Senior Notes | (580.0) | — | — | |||||||||||||||||
| (Payments) proceeds of borrowings on Successor's Bridge Loan | (63.0) | 63.0 | — | |||||||||||||||||
| Payments of borrowings on Successor's Credit Facility | (407.2) | (228.3) | — | |||||||||||||||||
| Payments of borrowings on Successor’s Term Loan | (19.0) | — | — | |||||||||||||||||
| Payment of debt issuance costs | (2.5) | (122.6) | — | |||||||||||||||||
| Net, other | (7.1) | (3.6) | (0.1) | |||||||||||||||||
| Net cash provided by (used in) financing activities | 189.3 | 6,321.8 | 96.9 | |||||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 5.3 | (5.6) | 1.2 | |||||||||||||||||
| Increase (decrease) in cash and cash equivalents | 255.9 | 98.6 | 27.4 | |||||||||||||||||
| Cash and Cash Equivalents, Beginning of Period | 98.6 | — | 90.2 | |||||||||||||||||
| Cash and Cash Equivalents, End of Period | $ | 354.5 | $ | 98.6 | $ | 117.6 | ||||||||||||||
| Supplemental Disclosure of Cash Flow Information: | ||||||||||||||||||||
| Cash Paid for: | ||||||||||||||||||||
| Income Taxes, Net of Refunds | $ | 120.9 | $ | 29.3 | $ | 3.4 | ||||||||||||||
| Interest | $ | 249.0 | $ | 232.4 | $ | 2.4 | ||||||||||||||
(1) Includes non-cash adjustments for the write down of deferred debt issuance costs and discount of $23.2 million associated with the partial redemption of the Senior Unsecured Notes, Senior Secured Notes, amendment of the revolver and the term loan during the year ended December 31, 2020.
(2) $131.9 million was paid by proceeds raised from the offering and $0.9 million was paid prior to the IPO and Private Placement.
10
Dun & Bradstreet Holdings, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)
(Amounts in millions)
Reconciliation of Revenue to Adjusted Revenue
| Three-Month Period | Twelve-Month Period | |||||||||||||||||||||||||||||||||||||||||||
| Successor | Predecessor | |||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended December 31, 2020 | Three Months Ended December 31, 2019 | Year Ended December 31, 2020 | Period from January 1 to December 31, 2019 | Period from January 1 to February 7, 2019 | Pro Forma Adjustments for the year ended December 31, 2019 | Combined Pro Forma for the year ended December 31, 2019 | ||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 480.1 | $ | 432.7 | $ | 1,738.1 | $ | 1,413.9 | $ | 178.7 | $ | (16.0) | $ | 1,576.6 | ||||||||||||||||||||||||||||||
| International lag adjustment | — | — | — | — | 25.9 | — | 25.9 | |||||||||||||||||||||||||||||||||||||
| Adjusted revenue (a) | 480.1 | 432.7 | 1,738.1 | 1,413.9 | 204.6 | (16.0) | 1,602.5 | |||||||||||||||||||||||||||||||||||||
| Foreign currency impact | 1.3 | 2.8 | 6.9 | 7.9 | 1.0 | — | 8.9 | |||||||||||||||||||||||||||||||||||||
| Adjusted revenue before the effect of foreign currency | $ | 481.4 | $ | 435.5 | $ | 1,745.0 | $ | 1,421.8 | $ | 205.6 | $ | (16.0) | $ | 1,611.4 | ||||||||||||||||||||||||||||||
| North America | $ | 400.8 | $ | 399.7 | $ | 1,459.9 | $ | 1,316.5 | $ | 148.2 | $ | — | $ | 1,464.7 | ||||||||||||||||||||||||||||||
| International | 79.9 | 72.6 | 299.3 | 236.3 | 56.4 | — | 292.7 | |||||||||||||||||||||||||||||||||||||
| Segment revenue | 480.7 | 472.3 | 1,759.2 | 1,552.8 | 204.6 | — | 1,757.4 | |||||||||||||||||||||||||||||||||||||
| Corporate and other (a) | (0.6) | (39.6) | (21.1) | (138.9) | — | (16.0) | (154.9) | |||||||||||||||||||||||||||||||||||||
| Foreign currency impact | 1.3 | 2.8 | 6.9 | 7.9 | 1.0 | — | 8.9 | |||||||||||||||||||||||||||||||||||||
| Adjusted revenue before the effect of foreign currency | $ | 481.4 | $ | 435.5 | $ | 1,745.0 | $ | 1,421.8 | $ | 205.6 | $ | (16.0) | $ | 1,611.4 | ||||||||||||||||||||||||||||||
| (a) Includes deferred revenue purchase accounting adjustments | $ | (0.6) | $ | (39.6) | $ | (21.1) | $ | (138.9) | $ | — | $ | (16.0) | $ | (154.9) | ||||||||||||||||||||||||||||||
11
Reconciliation of Net Income (Loss) to Adjusted EBITDA
| Three-Month Period | Twelve-Month Period | |||||||||||||||||||||||||||||||||||||||||||
| Successor | Predecessor | |||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended December 31, 2020 | Three Months Ended December 31, 2019 | Year Ended December 31, 2020 | Period from January 1 to December 31, 2019 | Period from January 1 to February 7, 2019 | Pro Forma Adjustments for the year ended December 31, 2019 | Combined Pro Forma for the year ended December 31, 2019 | ||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Dun & Bradstreet Holdings, Inc. (Successor) / Dun & Bradstreet Corporation (Predecessor) | $ | 7.0 | $ | (263.3) | $ | (175.6) | $ | (674.0) | $ | (75.6) | $ | 150.7 | $ | (598.9) | ||||||||||||||||||||||||||||||
| Depreciation and amortization | 135.9 | 141.8 | 536.9 | 482.4 | 11.1 | 45.1 | 538.6 | |||||||||||||||||||||||||||||||||||||
| Interest expense - net | 49.2 | 82.6 | 270.3 | 301.1 | 5.2 | 29.7 | 336.0 | |||||||||||||||||||||||||||||||||||||
| (Benefit) provision for income tax - net | 0.6 | (34.1) | (110.5) | (118.2) | (27.5) | 47.2 | (98.5) | |||||||||||||||||||||||||||||||||||||
| EBITDA | 192.7 | (73.0) | 521.1 | (8.7) | (86.8) | 272.7 | 177.2 | |||||||||||||||||||||||||||||||||||||
| Other income (expense) - net | (30.2) | 173.4 | 12.0 | 154.8 | 86.0 | (89.5) | 151.3 | |||||||||||||||||||||||||||||||||||||
| Equity in net income of affiliates | (0.4) | (0.8) | (2.3) | (4.2) | (0.5) | — | (4.7) | |||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to non-controlling interest | 1.3 | 3.2 | 5.0 | 6.5 | 0.8 | — | 7.3 | |||||||||||||||||||||||||||||||||||||
| Dividends allocated to preferred stockholders | — | 32.0 | 64.1 | 114.0 | — | 13.7 | 127.7 | |||||||||||||||||||||||||||||||||||||
| International lag adjustment | — | — | — | — | 2.7 | — | 2.7 | |||||||||||||||||||||||||||||||||||||
| Other incremental or reduced expenses from the application of purchase accounting | (4.4) | (4.9) | (18.8) | (20.7) | — | (3.1) | (23.8) | |||||||||||||||||||||||||||||||||||||
| Equity-based compensation | 6.5 | 3.9 | 45.1 | 11.7 | 11.7 | (10.4) | 13.0 | |||||||||||||||||||||||||||||||||||||
| Restructuring charges | 18.6 | 7.7 | 34.8 | 51.8 | 0.1 | — | 51.9 | |||||||||||||||||||||||||||||||||||||
| Merger and acquisition-related operating costs | 7.4 | 1.5 | 14.1 | 156.0 | 52.0 | (199.4) | 8.6 | |||||||||||||||||||||||||||||||||||||
| Transition costs | 9.6 | 13.9 | 31.9 | 37.7 | 0.3 | — | 38.0 | |||||||||||||||||||||||||||||||||||||
| Legal reserve associated with significant legal and regulatory matters | 3.9 | — | 3.9 | (0.2) | — | — | (0.2) | |||||||||||||||||||||||||||||||||||||
| Asset impairment | 3.9 | 1.1 | 4.5 | 3.4 | — | — | 3.4 | |||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 208.9 | $ | 158.0 | $ | 715.4 | $ | 502.1 | $ | 66.3 | $ | (16.0) | $ | 552.4 | ||||||||||||||||||||||||||||||
| North America | 198.3 | 198.6 | 696.4 | 634.6 | 55.3 | — | 689.9 | |||||||||||||||||||||||||||||||||||||
| International | 23.2 | 22.3 | 94.8 | 78.2 | 20.3 | — | 98.5 | |||||||||||||||||||||||||||||||||||||
| Corporate and other (a) | (12.6) | (62.9) | (75.8) | (210.7) | (9.3) | (16.0) | (236.0) | |||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA (a) | $ | 208.9 | $ | 158.0 | $ | 715.4 | $ | 502.1 | $ | 66.3 | $ | (16.0) | $ | 552.4 | ||||||||||||||||||||||||||||||
| Adjusted EBITDA Margin (a) | 43.5 | % | 36.5 % | 41.2 | % | 35.5 | % | 32.4 | % | — | % | 34.5 | % | |||||||||||||||||||||||||||||||
| (a) Including impact of deferred revenue purchase accounting adjustments: | ||||||||||||||||||||||||||||||||||||||||||||
| Impact to adjusted EBITDA | $ | (0.6) | $ | (39.6) | $ | (21.1) | $ | (138.9) | $ | — | $ | (16.0) | $ | (154.9) | ||||||||||||||||||||||||||||||
| Impact to adjusted EBITDA margin | — | % | (5.3) | % | (0.7) | % | (5.8) | % | — | % | N/A | (5.8) | % | |||||||||||||||||||||||||||||||
12
Dun & Bradstreet Holdings, Inc.
Segment Revenue and Adjusted EBITDA (Unaudited)
(Amounts in millions)
| Successor | |||||||||||||||||||||||
| Three Months Ended December 31, 2020 | |||||||||||||||||||||||
| North America | International | Corporate and Other (a) | Total | ||||||||||||||||||||
| Adjusted revenue | $ | 400.8 | $ | 79.9 | $ | (0.6) | $ | 480.1 | |||||||||||||||
| Total operating costs | 214.8 | 58.9 | 14.2 | 287.9 | |||||||||||||||||||
| Operating income (loss) | 186.0 | 21.0 | (14.8) | 192.2 | |||||||||||||||||||
| Depreciation and amortization | 12.3 | 2.2 | 2.2 | 16.7 | |||||||||||||||||||
| Adjusted EBITDA | $ | 198.3 | $ | 23.2 | $ | (12.6) | $ | 208.9 | |||||||||||||||
| Adjusted EBITDA margin | 49.5 | % | 29.0 | % | N/A | 43.5 | % | ||||||||||||||||
| Successor | |||||||||||||||||||||||
| Three Months Ended December 31, 2019 | |||||||||||||||||||||||
| North America | International | Corporate and Other (a) | Total | ||||||||||||||||||||
| Adjusted revenue | $ | 399.7 | $ | 72.6 | $ | (39.6) | $ | 432.7 | |||||||||||||||
| Total operating costs | 210.6 | 52.0 | 25.7 | 288.3 | |||||||||||||||||||
| Operating income (loss) | 189.1 | 20.6 | (65.3) | 144.4 | |||||||||||||||||||
| Depreciation and amortization | 9.5 | 1.7 | 2.4 | 13.6 | |||||||||||||||||||
| Adjusted EBITDA | $ | 198.6 | $ | 22.3 | $ | (62.9) | $ | 158.0 | |||||||||||||||
| Adjusted EBITDA margin | 49.7 | % | 30.7 | % | N/A | 36.5 | % | ||||||||||||||||
| Successor | |||||||||||||||||||||||
| Year ended December 31, 2020 | |||||||||||||||||||||||
| North America | International | Corporate and Other (a) | Total | ||||||||||||||||||||
| Adjusted revenue | $ | 1,459.9 | $ | 299.3 | $ | (21.1) | $ | 1,738.1 | |||||||||||||||
| Total operating costs | 809.4 | 212.4 | 62.7 | 1,084.5 | |||||||||||||||||||
| Operating income (loss) | 650.5 | 86.9 | (83.8) | 653.6 | |||||||||||||||||||
| Depreciation and amortization | 45.9 | 7.9 | 8.0 | 61.8 | |||||||||||||||||||
| Adjusted EBITDA | $ | 696.4 | $ | 94.8 | $ | (75.8) | $ | 715.4 | |||||||||||||||
| Adjusted EBITDA margin | 47.7 | % | 31.7 | % | N/A | 41.2 | % | ||||||||||||||||
13
| Successor | |||||||||||||||||||||||
| Period from January 1 to December 31, 2019 | |||||||||||||||||||||||
| North America | International | Corporate and Other (a) | Total | ||||||||||||||||||||
| Adjusted revenue | $ | 1,316.5 | $ | 236.3 | $ | (138.9) | $ | 1,413.9 | |||||||||||||||
| Total operating costs | 716.9 | 163.8 | 78.5 | 959.2 | |||||||||||||||||||
| Operating income (loss) | 599.6 | 72.5 | (217.4) | 454.7 | |||||||||||||||||||
| Depreciation and amortization | 35.0 | 5.7 | 6.7 | 47.4 | |||||||||||||||||||
| Adjusted EBITDA | $ | 634.6 | $ | 78.2 | $ | (210.7) | $ | 502.1 | |||||||||||||||
| Adjusted EBITDA margin | 48.2 | % | 33.2 | % | N/A | 35.5 | % | ||||||||||||||||
| Predecessor | |||||||||||||||||||||||
| Period from January 1 to February 7, 2019 | |||||||||||||||||||||||
| North America | International | Corporate and Other (a) | Total | ||||||||||||||||||||
| Adjusted revenue | $ | 148.2 | $ | 56.4 | $ | — | $ | 204.6 | |||||||||||||||
| Total operating costs | 98.6 | 37.6 | 10.1 | 146.3 | |||||||||||||||||||
| Operating income (loss) | 49.6 | 18.8 | (10.1) | 58.3 | |||||||||||||||||||
| Depreciation and amortization | 5.7 | 1.5 | 0.8 | 8.0 | |||||||||||||||||||
| Adjusted EBITDA | $ | 55.3 | $ | 20.3 | $ | (9.3) | $ | 66.3 | |||||||||||||||
| Adjusted EBITDA margin | 37.3 | % | 35.9 | % | N/A | 32.4 | % | ||||||||||||||||
(a) Includes deferred revenue purchase accounting adjustments.
14
Dun & Bradstreet Holdings, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)
(Amounts in millions)
Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss)
| Three-Month Period | Twelve-Month Period | |||||||||||||||||||||||||||||||||||||||||||
| Successor | Predecessor | |||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended December 31, 2020 | Three Months Ended December 31, 2019 | Year Ended December 31, 2020 | Period from January 1 to December 31, 2019 | Period from January 1 to February 7, 2019 | Pro Forma Adjustments for the year ended December 31, 2019 | Combined Pro Forma for the year ended December 31, 2019 | ||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Dun & Bradstreet Holdings, Inc. (Successor) / The Dun & Bradstreet Corporation (Predecessor) | $ | 7.0 | $ | (263.3) | $ | (175.6) | $ | (674.0) | $ | (75.6) | $ | 150.7 | $ | (598.9) | ||||||||||||||||||||||||||||||
| International lag adjustment | — | — | — | — | 2.7 | — | 2.7 | |||||||||||||||||||||||||||||||||||||
| Incremental amortization of intangible assets resulting from the application of purchase accounting | 119.3 | 128.1 | 475.1 | 435.0 | 3.0 | 45.1 | 483.1 | |||||||||||||||||||||||||||||||||||||
| Other incremental or reduced expenses from the application of purchase accounting | (4.4) | (4.9) | (18.8) | (20.7) | — | (3.1) | (23.8) | |||||||||||||||||||||||||||||||||||||
| Equity-based compensation | 6.5 | 3.9 | 45.1 | 11.7 | 11.7 | (10.4) | 13.0 | |||||||||||||||||||||||||||||||||||||
| Restructuring charges | 18.6 | 7.7 | 34.8 | 51.8 | 0.1 | — | 51.9 | |||||||||||||||||||||||||||||||||||||
| Merger and acquisition-related operating costs | 7.4 | 1.5 | 14.1 | 156.0 | 52.0 | (199.4) | 8.6 | |||||||||||||||||||||||||||||||||||||
| Transition costs | 9.6 | 13.9 | 31.9 | 37.7 | 0.3 | — | 38.0 | |||||||||||||||||||||||||||||||||||||
| Legal reserve and costs associated with significant legal and regulatory matters | 3.9 | — | 3.9 | (0.2) | — | — | (0.2) | |||||||||||||||||||||||||||||||||||||
| Change in fair value of make-whole derivative liability | — | 172.4 | 32.8 | 172.4 | — | — | 172.4 | |||||||||||||||||||||||||||||||||||||
| Asset impairment | 3.8 | 1.1 | 4.5 | 3.4 | — | — | 3.4 | |||||||||||||||||||||||||||||||||||||
| Non-recurring pension charges | 0.6 | — | 0.6 | — | 89.4 | (89.5) | (0.1) | |||||||||||||||||||||||||||||||||||||
| Predecessor pro forma incremental interest expense | — | — | — | — | — | 29.7 | 29.7 | |||||||||||||||||||||||||||||||||||||
| Dividends allocated to preferred stockholders | — | 32.0 | 64.1 | 114.0 | — | 13.7 | 127.7 | |||||||||||||||||||||||||||||||||||||
| Merger and acquisition-related non-operating costs | (23.6) | — | (23.6) | (0.8) | 0.5 | — | (0.3) | |||||||||||||||||||||||||||||||||||||
| Debt refinancing and extinguishment costs | 2.5 | — | 76.6 | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Tax impact of the CARES Act | — | — | (57.8) | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Tax effect of the non-GAAP adjustments | (33.1) | (40.9) | (158.0) | (144.9) | (38.3) | 50.8 | (132.4) | |||||||||||||||||||||||||||||||||||||
| Adjusted net income (loss) attributable to Dun & Bradstreet Holdings, Inc. (Successor) / The Dun & Bradstreet Corporation (Predecessor) (a) | $ | 118.1 | $ | 51.5 | $ | 349.7 | $ | 141.4 | $ | 45.8 | $ | (12.4) | $ | 174.8 | ||||||||||||||||||||||||||||||
| Adjusted diluted earnings (loss) per share of common stock | $ | 0.28 | $ | 0.16 | $ | 0.95 | $ | 0.45 | $ | 0.15 | $ | (0.04) | $ | 0.56 | ||||||||||||||||||||||||||||||
| Weighted average number of shares outstanding - diluted (b) | 423.6 | 314.5 | 367.3 | 314.5 | 314.5 | 314.5 | 314.5 | |||||||||||||||||||||||||||||||||||||
| (a) Including impact of deferred revenue purchase accounting adjustments: | ||||||||||||||||||||||||||||||||||||||||||||
| Pre-tax impact | $ | (0.6) | $ | (39.6) | $ | (21.1) | $ | (138.9) | $ | — | $ | (16.0) | $ | (154.9) | ||||||||||||||||||||||||||||||
| Tax impact | 0.1 | 11.5 | 5.4 | 35.9 | — | 3.6 | 39.5 | |||||||||||||||||||||||||||||||||||||
| Net impact to adjusted net income (loss) attributable to Dun & Bradstreet Holdings, Inc. (Successor) / The Dun & Bradstreet Corporation (Predecessor) | $ | (0.5) | $ | (28.1) | $ | (15.7) | $ | (103.0) | $ | — | $ | (12.4) | $ | (115.4) | ||||||||||||||||||||||||||||||
| Net impact to adjusted diluted earnings (loss) per share of common stock | $ | — | $ | (0.09) | $ | (0.04) | $ | (0.33) | $ | — | N/A | $ | (0.37) | |||||||||||||||||||||||||||||||
(b) For consistency purposes, we assume the stock split effected on June 23, 2020 to be the number of shares outstanding during the Predecessor period.
15
For more information, please contact:
Media Contact:
Lisette Kwong
973-921-6263
KwongL@dnb.com
Investor Contact:
Debra McCann
973-921-6008
IR@dnb.com
16
Dun & Bradstreet FOURTH QUARTER AND FULL YEAR 2020 FINANCIAL RESULTS February 8, 2021
This presentation contains estimates and other “forward–looking statements” regarding Dun & Bradstreet Holdings, Inc. (“Dun & Bradstreet”), and its subsidiaries (collectively, the “Company”), its financial condition and its results of operations that reflect Dun & Bradstreet’s current views and information currently available that are subject to a number of trends, known and unknown risks, uncertainties and other factors many of which are outside the control of the Company and its officers, employees, agents or associates. Forward-looking statements include all statements that do not relate solely to historical or current facts and can generally be identified by the use of forward-looking words such as “may”, “will”, “would”, “could”, “expect”, “intend”, “plan”, “aim”, “estimate”, “target”, “anticipate”, “believe”, “continue”, “objectives”, “outlook”, “guidance” or other similar words, and include statements regarding the Company’s plans, strategies, objectives, targets and expected financial performance. You are cautioned not to place undue reliance on the utility of the information in this Presentation as a predictor of future performance. Any estimates and statements contained herein may be forward-looking in nature and involve significant elements of subjective judgment and analysis, which may or may not be correct. Risks, uncertainties and other factors may cause actual results to vary materially and potentially adversely from those anticipated, estimated or projected. For example, throughout this Presentation we discuss the Company’s business strategy and certain short and long term financial and operational expectations that we believe would be achieved based upon our planned business strategy for the next several years. These expectations can only be achieved if the assumptions underlying our business strategy are fully realized –some of which we cannot control (e.g., market growth rates, macroeconomic conditions and customer preferences) and we will review these assumptions as part of our annual planning process. The risks and uncertainties that forward-looking statements are subject to include, but are not limited to: (i) an outbreak of disease, global or localized health pandemic or epidemic, or the fear of such an event (such as the COVID-19 global pandemic), including the global economic uncertainty and measures taken in response; (ii) the short- and long-term effects of the COVID-19 global pandemic, including the pace of recovery or any future resurgence; (iii) our ability to implement and execute our strategic plans to transform the business; (iv) our ability to develop or sell solutions in a timely manner or maintain client relationships; (v) competition for our solutions; (vi) harm to our brand and reputation; (vii) unfavorable global economic conditions; (viii) risks associated with operating and expanding internationally; (ix) failure to prevent cybersecurity incidents or the perception that confidential information is not secure; (x) failure in the integrity of our data or systems; (xi) system failures and personnel disruptions, which could delay the delivery of our solutions to our clients; (xii) loss of access to data sources; (xiii) failure of our software vendors and network and cloud providers to perform as expected or if our relationship is terminated; (xiv) loss or diminution of one or more of our key clients, business partners or government contracts; (xv) dependence on strategic alliances, joint ventures and acquisitions to grow our business; (xvi) our ability to protect our intellectual property adequately or cost-effectively; (xvii) claims for intellectual property infringement; (xviii) interruptions, delays or outages to subscription or payment processing platforms; (xix) risks related to acquiring and integrating businesses and divestitures of existing businesses; (xx) our ability to retain members of the senior leadership team and attract and retain skilled employees; (xxi) compliance with governmental laws and regulations; (xxii) risks associated with our structure and status as a "controlled company;" and (xxiii) the other factors described under the headings “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Cautionary Note Regarding Forward-Looking Statements” and other sections of our final prospectus dated June 30, 2020 and filed with the Securities and Exchange Commission on July 2, 2020. All information herein speaks only as of (1) the date hereof, in the case of information about the Company (2) the date of such information, in the case of information from persons other than the Company. There can be no assurance any forecasts and estimates will prove accurate in whole or in part. The Company does not undertake any duty to update or revise the information contained herein, publicly or otherwise. The Presentation also includes certain financial information that is not presented in accordance with Generally Accepted Accounting Principles (“GAAP”), including, but not limited to, EBITDA, Adjusted EBITDA, and certain ratios and other metrics derived therefrom. These non-GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing the Company’s financial results. Further, it is important to note that non-GAAP financial measures should not be considered in isolation and may be considered in addition to GAAP financial information but should not be used as substitutes for the corresponding GAAP measures. It is also important to note that EBITDA, Adjusted EBITDA for specified fiscal periods have been calculated in accordance with the definitions thereof as set out in our public disclosures and are not projections of anticipated results but rather reflect permitted adjustments. You should be aware that Dun & Bradstreet’s presentation of these and other non-GAAP financial measures in this Presentation may not be comparable to similarly-titled measures used by other companies. All amounts in this Presentation are in USD unless otherwise stated. All trademarks and logos depicted in this Presentation are the property of their respective owners and are displayed solely for purposes of illustration. DISCLAIMER
FINANCIAL HIGHLIGHTS (GAAP) METRICS FOURTH QUARTER 2020 FULL YEAR 2020 1 Revenue $480 million, +11% (+10.5% constant currency) $1,738 million, +10% (+10% constant currency) Net income/(loss) $7 million vs. $(263) million Q4’19 $(176) million vs. $(599) million FY’19 Diluted loss per share $0.02 $(0.48) 1 1) Comparative results for the year ended 2019 are on combined proforma basis
FINANCIAL HIGHLIGHTS (NON-GAAP) METRICS FOURTH QUARTER 2020 FULL YEAR 2020 1 Adjusted Revenue (2) (3) $480 million, +11% (+10.5% constant currency) $1,738 million, +8% (+8% constant currency) Adjusted EBITDA (4) (5) $209 million, +32% $715 million, +30% Adjusted EBITDA Margin 43.5% 41.2% Adjusted Net Income $118 million $350 million Adjusted diluted earnings per share $0.28 $0.95 (1) Comparative results for the year ended 2019 are on a combined proforma basis (2) Adjusted Revenue Q4: The fourth quarter growth rate includes the net impact of the lower deferred revenue purchase accounting adjustment of $39 million, a nine-percentage point impact (3) Adjusted Revenue FY: Same as GAAP for 2020, but 2019 Adjusted includes an international lag adjustment from first quarter 2019 which decreases the growth rate from 10% to 8%. The 2020 growth rate includes the net impact of lower deferred revenue purchase accounting adjustments of $134 million (inclusive of the 2019 proforma deferred revenue adjustment), an eight-percentage point impact (4) Adjusted EBITDA Q4: The growth rate includes the net impact of the lower deferred revenue purchase accounting adjustment of $39 million, a 26-percentage point impact (5) Adjusted EBITDA FY: the growth rate includes the net impact of lower deferred revenue purchase accounting adjustments of $134 million (inclusive of the 2019 proforma deferred revenue adjustment) or a 25-percentage point impact 2
FOURTH QUARTER HIGHLIGHTS • Finance & Risk revenue increased less than 1% primarily due to higher subscription revenue, partially offset by known headwinds including lower usage volumes primarily due to COVID-19 and structural changes within legacy Credibility solutions • Sales & Marketing revenue increased less than 1% primarily driven by higher revenue from our D&B Direct solution partially offset by the Data.com legacy partnership • EBITDA declined slightly $ IN MILLIONS $182.6 $182.9 $217.1 $217.9 Q4 2019 Q4 2020 <1% $399.7 $400.8 <1% <1% Finance & Risk Sales & Marketing NORTH AMERICA - Q4 49.7% 49.5% Q4 2019 Q4 2020 ADJUSTED EBITDA MARGIN % (20bps) <1% <1% <1% BFX 1 (1) BFX represents the growth rate before the impact of foreign exchange AFX 3 REVENUE ADJUSTED EBITDA 198.6 198.3 Q4 2019 Q4 2020 <(1%)
FULL YEAR HIGHLIGHTS • Finance & Risk revenue increased less than1% primarily due to higher subscription-based revenue, partially offset by the impact of lower usage volumes primarily due to COVID-19 and structural changes within legacy Credibility solutions • Sales & Marketing revenue declined 1% primarily driven by the Data.com legacy partnership and lower usage revenues • EBITDA increased primarily due to ongoing cost management $ IN MILLIONS $656.1 $648.8 $808.6 $811.1 Full Year 2019 Full Year 2020 (1%) $1,464.7 $1,459.9 <1% <(1%) Finance & Risk Sales & Marketing NORTH AMERICA – FULL YEAR ADJUSTED EBITDA ADJUSTED EBITDA MARGIN % (1%) <1% <(1%) BFX 1 (1) BFX represents the growth rate before the impact of foreign exchange AFX 4 REVENUE $689.9 $696.4 FY 2019 FY 2020 +1% 47.1% 47.7% FY 2019 FY 2020 +60bps
30.7% 29.0% Q4 2019 Q4 2020 FOURTH QUARTER HIGHLIGHTS • Finance & Risk revenue increased 8% primarily due to higher cross border sales from WWN and higher revenue from Risk solutions in UK • Sales & Marketing revenue increased 4% primarily due to higher revenue from API solutions in UK • EBITDA increased primarily due to higher revenues $ IN MILLIONS $15.1 $16.0 $57.5 $63.9 Q4 2019 Q4 2020 +6% $72.6 $79.9 +11% +10% Finance & Risk Sales & Marketing INTERNATIONAL – Q4 $22.3 $23.2 Q4 2019 Q4 2020 ADJUSTED EBITDA ADJUSTED EBITDA MARGIN % +4% (170bps) +4% +8% +8% (1) BFX represents the growth rate before the impact of foreign exchange BFX 1AFX 5 REVENUE
FULL YEAR HIGHLIGHTS • Finance & Risk revenue increased 3% primarily due to higher cross border sales from WWN and higher sales of Risk solutions in UK, partially offset by lower usage in Asia • Sales & Marketing revenue declined 5% primarily due to lower product royalties from our WWN alliances and lower usage in Asia • EBITDA decreased primarily due to higher WWN alliances data expense $ IN MILLIONS $58.0 $55.7 $234.7 $243.6 Full Year 2019 Full Year 2020 (4%) $292.7 $299.3 +4% +2% Finance & Risk Sales & Marketing INTERNATIONAL – FULL YEAR $98.5 $94.8 FY 2019 FY 2020 ADJUSTED EBITDA ADJUSTED EBITDA MARGIN % (4%) (5%) +3% +1% (1) BFX represents the growth rate before the impact of foreign exchange BFX 1AFX 6 REVENUE 33.6% 31.7% FY 2019 FY 2020 (190bps)
($ IN MILLIONS) DECEMBER 31, 2020 MATURITY INTEREST RATE Cash $354 New Revolving Facility ($850.0) $0.0 2025 LIBOR + 325 bps New Term Loan Facility (1) $2,511 2026 LIBOR + 375 bps (2) New Senior Secured Notes (1) $420.0 2026 6.875% New Senior Unsecured Notes (1) $450.0 2027 10.250% Total debt (1) $3,381 Net debt (1) $3,027 Net Debt / EBITDA 4.1x (1) Represents principal amount (2) Repriced to 325 bps on January 27, 2021 DEBT SUMMARY 7
FINANCIAL METRICS GUIDANCE Total Adjusted Revenue 1 $2,145 million to $2,175 million Adjusted EBITDA $840 million to $855 million Adjusted diluted earnings per share $1.02 to $1.06 Full year 2021 guidance is based upon the following estimates and assumptions: • Adjusted interest expense of $200 to $210 million • Depreciation and amortization expense of ~$90 million (excluding incremental depreciation and amortization expense resulting from purchase accounting) • Adjusted effective tax rate ~24% • Weighted average diluted shares outstanding of ~430 million • Capex of ~$160 million FULL YEAR 2021 FINANCIAL GUIDANCE 8 (1) 2021 revenue growth will include approximately 19 percentage points from Bisnode as well as approximately 1.5 percentage points from the $21.1 million deferred revenue adjustment in 2020
APPENDIX
In addition to reporting GAAP results, we evaluate performance and report our results on the non-GAAP financial measures discussed below. We believe that the presentation of these non-GAAP measures provides useful information to investors and rating agencies regarding our results, operating trends and performance between periods. These non-GAAP financial measures include adjusted revenue, adjusted earnings before interest, taxes, depreciation and amortization (‘‘adjusted EBITDA’’), adjusted EBITDA margin and adjusted net income. Adjusted results are non-GAAP measures that adjust for the impact due to purchase accounting application and divestitures, restructuring charges, equity-based compensation, acquisition and divestiture-related costs (such as costs for bankers, legal fees, due diligence, retention payments and contingent consideration adjustments) and other non-core gains and charges that are not in the normal course of our business (such as gains and losses on sales of businesses, impairment charges, effect of significant changes in tax laws and material tax and legal settlements). We exclude amortization of recognized intangible assets resulting from the application of purchase accounting because it is non-cash and not indicative of our ongoing and underlying operating performance. Recognized intangible assets arise from acquisitions, or primarily the Take-Private Transaction. We believe that recognized intangible assets by their nature are fundamentally different from other depreciating assets that are replaced on a predictable operating cycle. Unlike other depreciating assets, such as developed and purchased software licenses or property and equipment, there is no replacement cost once these recognized intangible assets expire and the assets are not replaced. Additionally, our costs to operate, maintain and extend the life of acquired intangible assets and purchased intellectual property are reflected in our operating costs as personnel, data fee, facilities, overhead and similar items. Management believes it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation. Amortization of recognized intangible assets will recur in future periods until such assets have been fully amortized. In addition, we isolate the effects of changes in foreign exchange rates on our revenue growth because we believe it is useful for investors to be able to compare revenue from one period to another, both after and before the effects of foreign exchange rate changes. The change in revenue performance attributable to foreign currency rates is determined by converting both our prior and current periods’ foreign currency revenue by a constant rate. As a result, we monitor our adjusted revenue growth both after and before the effects of foreign exchange rate changes. We believe that these supplemental non-GAAP financial measures provide management and other users with additional meaningful financial information that should be considered when assessing our ongoing performance and comparability of our operating results from period to period. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non- GAAP measures are among the factors management uses in planning for and forecasting future periods. Non-GAAP financial measures should be viewed in addition to, and not as an alternative to our reported results prepared in accordance with GAAP. Our non-GAAP or adjusted financial measures reflect adjustments based on the following items, as well as the related income tax. Adjusted Revenue We define adjusted revenue as revenue adjusted to include revenue for the period from January 8 to February 7, 2019 (‘‘International lag adjustment’’) for the Predecessor related to the lag reporting for our International operations. On a GAAP basis, we report International results on a one-month lag, and for 2019 the Predecessor period for International is December 1, 2018 through January 7, 2019. The Successor period for International is February 8, 2019 (commencing on the closing date of the Take-Private Transaction) through November 30, 2019 for the Successor period from January 1, 2019 to December 31, 2019. The International lag adjustment is to facilitate comparability of 2019 periods to 2020 periods. Adjusted EBITDA and Adjusted EBITDA Margin We define adjusted EBITDA as net income (loss) attributable to Dun & Bradstreet Holdings, Inc. (Successor) / The Dun & Bradstreet Corporation (Predecessor) excluding the following items: • depreciation and amortization; • interest expense and income; • income tax benefit or provision; • other expenses or income; • equity in net income of affiliates; • net income attributable to non-controlling interests; • dividends allocated to preferred stockholders; • revenue and expense adjustments to include results for the period from January 8 to February 7, 2019, for the Predecessor related to the International lag adjustment (see above discussion); • other incremental or reduced expenses from the application of purchase accounting (e.g. commission asset amortization); • equity-based compensation; • restructuring charges; • merger and acquisition-related operating costs; • transition costs primarily consisting of non-recurring incentive expenses associated with our synergy program; • legal reserve and costs associated with significant legal and regulatory matters; and asset impairment. We calculate adjusted EBITDA margin by dividing adjusted EBITDA by adjusted revenue. NON-GAAP FINANCIAL MEASURES 9
Adjusted Net Income We define adjusted net income as net income (loss) attributable to Dun & Bradstreet Holdings, Inc. (Successor) / The Dun & Bradstreet Corporation (Predecessor) adjusted for the following items: • revenue and expense adjustments to include results for the period from January 8 to February 7, 2019, for the Predecessor related to the International lag adjustment (see above discussion); • incremental amortization resulting from the application of purchase accounting. We exclude amortization of recognized intangible assets resulting from the application of purchase accounting because it is non- cash and is not indicative of our ongoing and underlying operating performance. The Company believes that recognized intangible assets by their nature are fundamentally different from other depreciating assets that are replaced on a predictable operating cycle. Unlike other depreciating assets, such as developed and purchased software licenses or property and equipment, there is no replacement cost once these recognized intangible assets expire and the assets are not replaced. Additionally, the Company’s costs to operate, maintain and extend the life of acquired intangible assets and purchased intellectual property are reflected in the Company’s operating costs as personnel, data fee, facilities, overhead and similar items; • other incremental or reduced expenses from the application of purchase accounting (e.g. commission asset amortization); • equity-based compensation; • restructuring charges; • merger and acquisition-related operating costs; • transition costs primarily consisting of non-recurring incentive expenses associated with our synergy program; • legal reserve and costs associated with significant legal and regulatory matters; • change in fair value of the make-whole derivative liability associated with the Series A Preferred Stock; • asset impairment; • non-recurring pension charges, related to pension settlement charge and actuarial loss amortization eliminated as a result of the Take-Private Transaction; • dividends allocated to preferred stockholders; • merger, acquisition and divestiture-related non-operating costs; • debt refinancing and extinguishment costs; and • tax effect of the non-GAAP adjustments and the impact resulting from the enactment of the CARES Act. Adjusted Net Earnings per Diluted Share We calculate adjusted net earnings per diluted share by dividing adjusted net income (loss) by the weighted average number of common shares outstanding for the period plus the dilutive effect of common shares potentially issuable in connection with awards outstanding under our stock incentive plan. For consistency purposes, we assume the stock split effected on June 23, 2020 to be the number of shares outstanding during the Predecessor period. NON-GAAP FINANCIAL MEASURES (CONTINUED) 10
($ IN MILLIONS) THREE MONTHS ENDED DECEMBER 31, 2020 2019 Revenue $480.1 $432.7 Adjusted Revenue $480.1 $432.7 Foreign currency impact 1.3 2.8 Adjusted revenue before the effect of foreign currency $481.4 $435.5 NON-GAAP RECONCILIATION: ADJUSTED REVENUE FOR THE THREE MONTHS ENDED DECEMBER 31 11
($ IN MILLIONS) Successor Predecessor Year ended December 31, 2020 Period from January 1 to December 31, 2019 Period from January 1 to February 7, 2019 Pro Forma Adjustments for the year ended December 31, 2019 Combined Pro Forma for the year ended December 31, 2019 Revenue $1,738.1 $1,413.9 $178.7 $(16.0) $1,576.6 Adjusted Revenue (1) $1,738.1 $1,413.9 $204.6 $(16.0) $1,602.5 Foreign currency impact 6.9 7.9 1.0 - 8.9 Adjusted revenue before the effect of foreign currency $1,745.0 $1,421.8 $205.6 $(16.0) $1,611.4 NON-GAAP RECONCILIATION: ADJUSTED REVENUE FOR THE YEAR ENDED DECEMBER 31 12 (1) Difference between 2019 Revenue and Adjusted Revenue is the $25.9 million international lag adjustment related to the Take-Private Transaction
($ IN MILLIONS) THREE MONTHS ENDED DECEMBER 31, 2020 2019 Net income (loss) $7.0 $(263.3) Depreciation and amortization 135.9 141.8 Interest expense - net 49.2 82.6 (Benefit) provision for income tax - net 0.6 (34.1) EBITDA $192.7 $(73.0) Other income (expense) - net (30.2) 173.4 Equity in net income of affiliates (0.4) (0.8) Net income (loss) attributable to the non-controlling interest 1.3 3.2 Dividends allocated to preferred stockholders - 32.0 International lag adjustment - - Other incremental or reduced expenses from the application of purchase accounting (4.4) (4.9) Equity-based compensation 6.5 3.9 Restructuring charges 18.6 7.7 Merger and acquisition-related operating costs 7.4 1.5 Transition costs 9.6 13.9 Legal reserve associated with significant legal and regulatory matters 3.9 - Asset impairment 3.9 1.1 Adjusted EBITDA $208.9 $158.0 Adjusted EBITDA Margin (%) 43.5% 36.5% NON-GAAP RECONCILIATION: ADJUSTED EBITDA FOR THE THREE MONTHS ENDED DECEMBER 31 12
($ IN MILLIONS) Successor Predecessor Year ended December 31, 2020 Period from January 1 to December 31, 2019 Period from January 1 to February 7, 2019 Pro Forma Adjustments for the year ended December 31, 2019 Combined Pro Forma for the year ended December 31, 2019 Net income (loss) $(175.6) $(674.0) $(75.6) $150.7 (598.9) Depreciation and amortization 536.9 482.4 11.1 45.1 538.6 Interest expense - net 270.3 301.1 5.2 29.7 336.0 (Benefit) provision for income tax - net (110.5) (118.2) (27.5) 47.2 (98.5) EBITDA $521.1 $(8.7) $(86.8) $272.7 $177.2 Other income (expense) - net 12.0 154.8 86.0 (89.5) 151.3 Equity in net income of affiliates (2.3) (4.2) (0.5) - (4.7) Net income (loss) attributable to the non-controlling interest 5.0 6.5 0.8 - 7.3 Dividends allocated to preferred stockholders 64.1 114.0 - 13.7 127.7 International lag adjustment - - 2.7 - 2.7 Other incremental or reduced expenses from the application of purchase accounting (18.8) (20.7) - (3.1) (23.8) Equity-based compensation 45.1 11.7 11.7 (10.4) 13.0 Restructuring charges 34.8 51.8 0.1 - 51.9 Merger and acquisition-related operating costs 14.1 156.0 52.0 (199.4) 8.6 Transition costs 31.9 37.7 0.3 - 38.0 Legal reserve associated with significant legal and regulatory matters 3.9 (0.2) - - (0.2) Asset impairment 4.5 3.4 - - 3.4 Adjusted EBITDA $715.4 $502.1 $66.3 $(16.0) 552.4 Adjusted EBITDA Margin (%) 41.2% 35.5% 32.4% 0.0% 34.5% NON-GAAP RECONCILIATION: ADJUSTED EBITDA FOR THE YEAR ENDED DECEMBER 31 12
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE DATA) THREE MONTHS ENDED DECEMBER 31, 2020 2019 Net income (loss) $7.0 $(263.3) International lag adjustment - - Incremental amortization of intangible assets resulting from the application of purchase accounting 119.2 128.1 Other incremental or reduced expenses from the application of purchase accounting (4.4) (4.9) Equity-based compensation 6.6 3.9 Restructuring charges 18.6 7.7 Merger and acquisition-related operating costs 7.4 1.5 Transition costs 9.6 13.9 Legal reserve and cost associated with significant legal and regulatory matters 3.9 - Change in fair value of make-whole derivative liability - 172.4 Asset impairment 3.8 1.1 Non-recurring pension charges 0.6 - Predecessor pro forma incremental interest expense - - Dividends allocated to preferred stockholders - 32.0 Merger and acquisition-related non-operating costs (23.6) - Debt extinguishment / refinancing costs 2.5 - Tax impact of the CARES Act - - Tax effect of the non-GAAP adjustments (33.1) (40.9) Adjusted net income (loss) attributable to Dun & Bradstreet Holdings, Inc. (a) $118.1 $51.5 Adjusted diluted earnings (loss) per share of common stock $0.28 $0.16 Weighted average number of shares outstanding – diluted 423.6 314.5 Pre-tax impact $(0.6) $(39.6) Tax impact 0.1 11.5 Net impact to adj. net income (loss) attrib. to Dun & Bradstreet Holdings, Inc. $(0.5) $(28.1) (a) Including impact of deferred revenue purchase accounting adjustments: NON-GAAP RECONCILIATION: ADJUSTED NET INCOME FOR THE THREE MONTHS ENDED DECEMBER 31 13
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE DATA) Successor Predecessor Year ended December 31, 2020 Period from January 1 to December 31, 2019 Period from January 1 to February 7, 2019 Pro Forma Adjustments for the year ended December 31, 2019 Combined Pro Forma for the year ended December 31, 2019 Net income (loss) $(175.6) $(674.0) $(75.6) $150.7 $(598.9) International lag adjustment - - 2.7 - 2.7 Incremental amortization of intangible assets resulting from the application of purchase accounting 475.1 435.0 3.0 45.1 483.1 Other incremental or reduced expenses from the application of purchase accounting (18.8) (20.7) - (3.1) (23.8) Equity-based compensation 45.1 11.7 11.7 (10.4) 13.0 Restructuring charges 34.8 51.8 0.1 - 51.9 Merger and acquisition-related operating costs 14.1 156.0 52.0 (199.4) 8.6 Transition costs 31.9 37.7 0.3 - 38.0 Legal reserve and cost associated with significant legal and regulatory matters 3.9 (0.2) - - (0.2) Change in fair value of make-whole derivative liability 32.8 172.4 - - 172.4 Asset impairment 4.5 3.4 - - 3.4 Non-recurring pension charges 0.6 - 89.4 (89.5) (0.1) Predecessor pro forma incremental interest expense - - - 29.7 29.7 Dividends allocated to preferred stockholders 64.1 114.0 - 13.7 127.7 Merger and acquisition-related non-operating costs (23.6) (0.8) 0.5 - (0.3) Debt extinguishment / refinancing costs 76.6 - - - - Tax impact of the CARES Act (57.8) - - - - Tax effect of the non-GAAP adjustments (158.0) (144.9) (38.3) 50.8 (132.4) Adjusted net income (loss) attributable to Dun & Bradstreet Holdings, Inc. (a) $349.7 $141.4 $45.8 $(12.4) $174.8 Adjusted diluted earnings (loss) per share of common stock $0.95 $0.45 $0.15 $(0.04) $0.56 Weighted average number of shares outstanding – diluted 367.3 314.5 314.5 314.5 314.5 Pre-tax impact $(21.1) $(138.9) $- $(16.0) $(154.9) Tax impact 5.4 35.9 - 3.6 39.5 Net impact to adj. net income (loss) attrib. to Dun & Bradstreet Holdings, Inc. $(15.7) $(103.0) $- $(12.4) $(115.4) (a) Including impact of deferred revenue purchase accounting adjustments: NON-GAAP RECONCILIATION: ADJUSTED NET INCOME FOR THE YEAR ENDED DECEMBER 31 13