D&B Announces Third Quarter 2009 Results; Reconfirms Guidance
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-- Diluted EPS Before Non-Core Gains and Charges Up 1%; GAAP Diluted EPS
down 14% Primarily Due to Discrete Tax Benefits in the Prior Year
-- Core Revenue Up 2% Before the Effect of Foreign Exchange (Flat to Prior
Year After the Effect of Foreign Exchange)
-- Total Revenue on a GAAP Basis Down 1% Before the Effect of Foreign
Exchange (Down 3% After the Effect of Foreign Exchange), Reflecting the
Impact of a Business Divested in the Second Quarter of 2009
SHORT HILLS, N.J.--(BUSINESS WIRE)-- D&B (NYSE: DNB), the leading provider of global business information, tools and commercial insight, today reported results for the third quarter ended September 30, 2009.
"Our third quarter performance was very much in line with our expectations," noted Steve Alesio, D&B's Chairman and CEO. "International delivered another quarter of strong growth. North America performed as expected and continues to focus on enhancing our value proposition and retaining customers for the long term. We feel good about our company's performance on a year-to-date basis in the context of the economic environment and relative to many other companies."
Third Quarter 2009 Results
Diluted earnings per share before non-core gains and charges for the quarter ended September 30, 2009, were $1.13, up 1 percent from $1.12 in the prior year similar period. On a GAAP basis, diluted earnings per share for the quarter ended September 30, 2009, were $1.02, down from $1.18 in the prior year similar period, due to discrete tax benefits recorded in the prior year quarter.
See attached Schedule 3 for a reconciliation of diluted earnings per share before non-core gains and charges to earnings per share on a GAAP basis, as well as the definitions of the non-GAAP financial measures that the Company uses to evaluate the business.
Core revenue for the third quarter of 2009 was $399.0 million, up 2 percent from the prior year similar period before the effect of foreign exchange (flat after the effect of foreign exchange).
Core revenue results for the third quarter of 2009 reflect the following by solution set:
-- Risk Management Solutions revenue of $264.8 million, up 3 percent before
the effect of foreign exchange (flat after the effect of foreign
exchange);
-- Sales & Marketing Solutions revenue of $105.9 million, up 2 percent both
before and after the effect of foreign exchange; and
-- Internet Solutions revenue of $28.3 million, down 8 percent before the
effect of foreign exchange (down 9 percent after the effect of foreign
exchange).
See attached Schedules 4, 5 and 6 for additional detail.
Total revenue for the third quarter of 2009, was $399.0 million. This result is down 1 percent as compared to the prior year similar period, which included the results of a divested business as described below, before the effect of foreign exchange (down 3 percent after the effect of foreign exchange).
We reclassified revenue associated with the domestic portion of our Italian operations as non-core as of the quarter ending June 30th, 2009, due to the sale of substantially all of the assets and liabilities associated with that portion of the business (see the Company's Form 8-K, filed with the SEC on June 1, 2009). Total revenue for the third quarter of 2008 included $10.2 million of revenue associated with the domestic portion of our Italian operations, with no revenue from those operations in the third quarter of 2009.
Operating income before non-core gains and charges for the third quarter of 2009 was $104.8 million, down 3 percent from the prior year similar period. On a GAAP basis, operating income was $92.6 million, up 2 percent from the prior year similar period. During the third quarter of 2009, the Company also incurred transition costs of $4.0 million compared with $3.1 million incurred in the prior year similar period.
Net income before non-core gains and charges for the third quarter of 2009 was $60.1 million, down 3 percent from the prior year similar period. On a GAAP basis, net income for the quarter was $54.0 million, down 17 percent from the prior year similar period, primarily due to discrete tax benefits in the same prior year period.
See attached Schedule 3 for additional detail.
Free cash flow for the first nine months of 2009, excluding the impact of legacy tax matters, was $244 million, compared with $273 million in the prior year similar period. The Company defines free cash flow as net cash provided by operating activities less capital expenditures and additions to computer software and other intangibles. On a GAAP basis, net cash provided by operating activities for the first nine months of 2009 was $303 million, compared with $348 million in the prior year similar period.
See attached Schedule 4 for additional detail.
Share repurchases during the third quarter of 2009 under the Company's discretionary repurchase program totaled $60 million, while repurchases made to offset the dilutive effect of shares issued under employee benefit plans totaled an additional $4 million.
The Company ended the quarter with $187 million of cash and cash equivalents.
Third Quarter 2009 Segment Results
North America
Core and total revenue for the third quarter of 2009 was $310.8 million, down 3 percent from the prior year similar period both before and after the effect of foreign exchange.
North America core and total revenue results for the third quarter of 2009 reflect the following:
-- Risk Management Solutions revenue of $198.7 million, down 1 percent both
before and after the effect of foreign exchange;
-- Sales & Marketing Solutions revenue of $84.7 million, down 5 percent
before the effect of foreign exchange (down 6 percent after the effect
of foreign exchange); and
-- Internet Solutions revenue of $27.4 million, down 8 percent before the
effect of foreign exchange (down 9 percent after the effect of foreign
exchange).
Operating income for the third quarter of 2009 was $105.4 million, down 7 percent from the prior year similar period. The result was primarily due to lower revenue, partially offset by reengineering savings.
International
Core revenue for the third quarter of 2009 was $88.2 million, up 24 percent from the prior year similar period before the effect of foreign exchange (up 13 percent after the effect of foreign exchange).
International core revenue results for the third quarter of 2009 reflect the following:
-- Risk Management Solutions revenue of $66.1 million, up 16 percent before
the effect of foreign exchange (up 6 percent after the effect of foreign
exchange);
-- Sales & Marketing Solutions revenue of $21.2 million, up 54 percent
before the effect of foreign exchange (up 46 percent after the effect of
foreign exchange); and
-- Internet Solutions revenue of $0.9 million, down 2 percent before the
effect of foreign exchange (down 19 percent after the effect of foreign
exchange).
See attached Schedules 4, 5 and 6 for additional detail.
Total revenue for the third quarter of 2009, was $88.2 million, up 10 percent from the prior year similar period before the effect of foreign exchange (flat after the effect of foreign exchange). The results of the domestic portion of our Italian operation which we divested in the second quarter of 2009 are included in the prior year period total revenue.
Operating income for the third quarter of 2009 was $17.7 million, up 13 percent from the prior year similar period. The increase was primarily due to revenue growth in the International segment, lower costs resulting from the sale of our domestic portion of our Italian operations and the benefit of reengineering savings, partially offset by the negative impact of foreign exchange.
Non-Core Gains and Charges
During the third quarter of 2009 and 2008, the Company recorded:
-- A net pre-tax, non-core charge of $14.1 million in the third quarter of
2009 and a net pre-tax, non-core charge of $8.9 million in the third
quarter of 2008;
-- A net after-tax, non-core charge of $6.1 million in the third quarter of
2009 and a net after-tax, non-core gain of $3.0 million in the third
quarter of 2008.
See attached Schedule 3 for additional explanations and details of these charges.
D&B's restructuring charges may be viewed as recurring as they are part of its Financial Flexibility initiatives. In addition to reporting GAAP results, the Company reports results before restructuring charges and other non-core gains and charges because they do not reflect the Company's underlying business performance and they may have a disproportionate positive or negative impact on the results of its ongoing business operations. For additional information, see the section titled "Use of Non-GAAP Financial Measures" below.
Full Year 2009 Guidance
D&B today reconfirmed the following financial guidance for the full year 2009:
-- Core revenue down 1 percent to up 1 percent, before the effect of
foreign exchange;
-- Operating income down 3 percent to up 1 percent, before non-core gains
and charges;
-- Diluted EPS growth of 1 percent to 5 percent, before non-core gains and
charges; and
-- Free cash flow of $285 million to $315 million, excluding the impact of
legacy tax matters.
D&B does not provide guidance on a GAAP basis because D&B is unable to predict, with reasonable certainty, the future movement of foreign exchange rates or the future impact of non-core gains and charges, such as restructuring charges and legacy tax matters, which are a component of the most comparable financial measures calculated in accordance with GAAP. Non-core gains and charges are uncertain and will depend on several factors, including industry conditions, and could be material to D&B's results computed in accordance with GAAP.
Use of Non-GAAP Financial Measures
D&B reports non-GAAP financial measures in this press release and the schedules attached. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - How We Manage Our Business" in the Company's Annual Report on Form 10-K for the year ending December 31, 2008, filed February 24, 2009 with the SEC, for a discussion of how the Company defines these measures, why it uses them and why it believes they provide useful information to investors. Additionally, these measures are defined in Schedule 3 attached to this press release.
Third Quarter 2009 Teleconference
As previously announced, D&B will review its third quarter 2009 financial results in a conference call with the investment community on October 29, 2009, at 8 a.m. ET. Live audio, as well as a replay of the conference call and other related information, will be accessible on D&B's Investor Relations Web site at http://investor.dnb.com.
About Dun & Bradstreet(R) (D&B)
Dun & Bradstreet (NYSE: DNB) is the world's leading source of commercial information and insight on businesses, enabling companies to Decide with Confidence(R) for 168 years. D&B's global commercial database contains more than 150 million business records. The database is enhanced by D&B's proprietary DUNSRight(R) Quality Process, which provides our customers with quality business information. This quality information is the foundation of our global solutions that customers rely on to make critical business decisions.
D&B provides solution sets that meet a diverse set of customer needs globally. Customers use D&B Risk Management SolutionsTM to mitigate credit and supplier risk, increase cash flow and drive increased profitability; D&B Sales & Marketing SolutionsTM to increase revenue from new and existing customers; and D&B Internet SolutionsTM to convert prospects into clients faster by enabling business professionals to research companies, executives and industries. For more information, please visit www.dnb.com.
Forward-Looking and Cautionary Statements
This press release, including, in particular, the section titled "Full Year 2009 Guidance," contains projections of future results and other forward-looking statements that involve a number of trends, risks and uncertainties, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
The following important factors could cause actual results to differ materially from those projected in such forward-looking statements.
-- D&B relies significantly on third parties to support critical components
of its business model in a continuous and high-quality manner, including
third-party data providers, strategic third party members in its
Worldwide Network, and third parties with which it has outsourcing
arrangements.
-- Demand for D&B's products is subject to intense competition, changes in
customer preferences and economic conditions which impact customer
behavior.
-- D&B's solutions and brand image are dependent upon the integrity and
security of its global database and the continued availability thereof
through the Internet and by other means, as well as our ability to
protect key assets, such as our data centers.
-- D&B's ability to maintain the integrity of its brand and reputation,
which it believes are key assets and competitive advantages.
-- D&B's ability to renew large contracts, the related revenue recognition
and the timing thereof may impact its results of operations from period
to period.
-- As a result of the credit market crisis and other macro-economic
challenges currently affecting the global economy, our customers or
vendors may experience cash flow problems. This may cause our customers
to delay, cancel or significantly decrease their purchases from us and
impact their ability to pay amounts owed to us. In addition, our vendors
may substantially increase their prices without notice. Such behavior
may adversely affect our earnings and cash flow. In addition, if
economic conditions in the United States and other key markets
deteriorate further or do not show improvement, we may experience
material adverse impacts to our business and operating results.
-- D&B's results are subject to the effects of foreign economies, exchange
rate fluctuations, legislative or regulatory requirements, such as the
adoption of new or changes in accounting policies and practices,
including pronouncements by the Financial Accounting Standards Board or
other standard-setting bodies, and the implementation or modification of
fees or taxes that we must pay to acquire, use, and/or redistribute
data.
-- D&B's ability to introduce new solutions or services in a seamless way
and without disruption to existing solutions such as DNBi.
-- D&B's ability to acquire and successfully integrate other complementary
businesses, products and technologies into its existing business,
without significant disruption to its existing business or to its
financial results.
-- The continued adherence by third party members of our D&B Worldwide
Network to our quality standards, our brand and communication standards
and to the terms and conditions of our commercial services arrangements.
-- D&B's future success requires that it attract and retain qualified
personnel, including members of its sales force, in regions throughout
the world.
-- The profitability of D&B's International segment depends on its ability
to identify and execute on various initiatives, such as the
implementation of subscription plan pricing and successfully managing
its D&B Worldwide Network, and its ability to identify and contend with
various challenges present in foreign markets, such as local competition
and the availability of public records at no cost.
-- D&B's ability to successfully implement its growth strategy requires
that it successfully reduce its expense base through its Financial
Flexibility initiatives, and reallocate certain of the expense-base
reductions into initiatives that produce desired revenue growth.
-- D&B is involved in various tax matters and legal proceedings, the
outcomes of which are unknown and uncertain with respect to the impact
on D&B's cash flow and profitability. See the Company's most recent
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and notes
to the financial statements included therewith, for a more detailed
description of these matters.
-- D&B's ability to repurchase shares is subject to market conditions,
including trading volume in its stock, and its ability to repurchase
shares in accordance with applicable securities laws.
-- D&B's projection for free cash flow is dependent upon its ability to
generate revenue, its collection processes, customer payment patterns,
the timing and volume of stock option exercises and the amount and
timing of payments related to the tax and other matters and legal
proceedings in which it is involved, as referenced above and as more
fully described in the Company's filings with the SEC, including its
most recent Annual Report on Form 10-K and Quarterly Reports on Form
10-Q and notes to the financial statements included therewith.
For a more detailed discussion of the trends, risks and uncertainties that may affect D&B's operating and financial results and its ability to achieve the financial objectives discussed in this press release, readers should review the Company's most recent filings with the SEC, including the Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Copies of the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q are available on its Web site at www.dnb.com and on the SEC's web site at www.sec.gov. D&B cautions that the foregoing list of important factors is not complete and except as otherwise required by federal securities laws does not undertake any obligation to update any forward-looking statements.
The Dun & Schedule
Bradstreet 1
Corporation
Consolidated Statement of Operations
(unaudited) - GAAP Results
Quarter Ended Effects Year-To-Date Effects
of of
September 30, AFX Foreign BFX September 30, AFX Foreign BFX
% Exchange % % Exchange % Change
Change Change Change
Amounts in
millions, 2009 2008 Fav/ Fav/ Fav/ 2009 2008 Fav/ Fav/ Fav/
except per (Unfav) (Unfav) (Unfav) (Unfav) (Unfav) (Unfav)
share data
Revenue:
North America $ 310.8 $ 321.0 (3 )% 0 % (3 )% $ 952.3 $ 984.4 (3 )% 0 % (3 )%
International 88.2 78.0 13 % (11 )% 24 % 249.1 231.5 8 % (14 )% 22 %
Core Revenue 399.0 399.0 0 % (2 )% 2 % 1,201.4 1,215.9 (1 )% (2 )% 1 %
Divested - 10.2 N/M N/M N/M 21.9 35.7 (39 )% (9 )% (30 )%
Business (1)
Total Revenue $ 399.0 $ 409.2 (3 )% (2 )% (1 )% $ 1,223.3 $ 1,251.6 (2 )% (3 )% 1 %
Operating
Income (Loss):
North America $ 105.4 $ 113.1 (7 )% $ 338.7 $ 345.8 (2 )%
International 17.7 15.7 13 % 51.9 45.4 14 %
Total 123.1 128.8 (5 )% 390.6 391.2 0 %
Divisions
Corporate and (30.5 ) (37.6 ) 19 % (73.3 ) (93.7 ) 22 %
Other (2)
Operating 92.6 91.2 2 % 317.3 297.5 7 %
Income
Interest 0.6 2.9 (79 )% 2.5 9.0 (73 )%
Income
Interest (11.4 ) (11.7 ) 3 % (34.2 ) (34.3 ) 1 %
Expense
Other Income
(Expense) - (2.0 ) 9.9 N/M 13.9 1.8 N/M
Net (3)
Non-Operating
Income (12.8 ) 1.1 N/M (17.8 ) (23.5 ) 25 %
(Expense) -
Net
Income before
Provision for 79.8 92.3 (14 )% 299.5 274.0 9 %
Income Taxes
Provision for 25.4 27.3 7 % 63.5 64.8 2 %
Income Taxes
Equity in Net
Income (Loss) 0.3 0.3 0 % 1.0 0.9 11 %
of Affiliates
Income From
Continuing 54.7 65.3 (16 )% 237.0 210.1 13 %
Operations
Discontinued
Operations:
Income from
Discontinued
Operations, - - 0 % - 0.7 N/M
Net of Income
Taxes
Gain on
Disposal of
Italian Real
Estate - - 0 % - 0.4 N/M
business, No
Income Tax
Impact
Income from
Discontinued
Operations, - - 0 % - 1.1 N/M
Net of Income
Taxes
Net Income $ 54.7 $ 65.3 (16 )% $ 237.0 $ 211.2 12 %
Less: Net
(Income) Loss
Attributable (0.7 ) (0.2 ) N/M (2.0 ) (0.7 ) N/M
to the
Noncontrolling
Interest
Net Income
Attributable $ 54.0 $ 65.1 (17 )% $ 235.0 $ 210.5 12 %
to D&B (4)
Basic Earnings
Per Share of
Common Stock:
Income from
Continuing
Operations $ 1.03 $ 1.20 (14 )% $ 4.44 $ 3.79 17 %
Attributable
to D&B Common
Shareholders
Income from
Discontinued
Operations - - 0 % - 0.02 N/M
Attributable
to D&B Common
Shareholders
Net Income
Attributable $ 1.03 $ 1.20 (14 )% $ 4.44 $ 3.81 17 %
to D&B Common
Shareholders
Diluted
Earnings Per
Share of
Common Stock:
Income from
Continuing
Operations $ 1.02 $ 1.18 (14 )% $ 4.39 $ 3.73 18 %
Attributable
to D&B Common
Shareholders
Income from
Discontinued
Operations - - 0 % - 0.02 N/M
Attributable
to D&B Common
Shareholders
Net Income
Attributable
to D&B Common $ 1.02 $ 1.18 (14 )% $ 4.39 $ 3.75 17 %
Shareholders
(5)
Weighted
Average Number
of Shares
Outstanding:
Basic 52.0 53.9 4 % 52.6 54.8 4 %
Diluted 52.6 54.8 4 % 53.2 55.8 5 %
Amounts
Attributable
to D&B Common
Shareholders:
Income from
Continuing
Operations, $ 54.0 $ 65.1 (17 )% $ 235.0 $ 209.4 12 %
Net of Income
Taxes
Income from
Discontinued
Operations, - - 0 % - 1.1 N/M
Net of Income
Taxes
Net Income $ 54.0 $ 65.1 (17 )% $ 235.0 $ 210.5 12 %
AFX - After
Effects of
Foreign
Exchange
BFX - Before
Effects of
Foreign
Exchange
N/M - Not
Meaningful
See Schedule 3 (Notes to Schedules), which is an integral part of the consolidated statement of operations.
This financial information should be read in conjunction with the consolidated financial statements and related notes of
The Dun & Bradstreet Corporation contained in filings with the Securities and Exchange Commission.
The Dun & Schedule
Bradstreet 2
Corporation
Consolidated Statement of Operations (unaudited) - (On a Continuing Operations Basis) -
Before Non-Core Gains and Charges
Quarter Ended Effects Year-To-Date Effects
of of
September 30, AFX Foreign BFX September 30, AFX Foreign BFX
% Exchange % % Exchange % Change
Change Change Change
Amounts in
millions, 2009 2008 Fav/ Fav/ Fav/ 2009 2008 Fav/ Fav/ Fav/
except per (Unfav) (Unfav) (Unfav) (Unfav) (Unfav) (Unfav)
share data
Revenue:
North America $ 310.8 $ 321.0 (3 )% 0 % (3 )% $ 952.3 $ 984.4 (3 )% 0 % (3 )%
International 88.2 78.0 13 % (11 )% 24 % 249.1 231.5 8 % (14 )% 22 %
Core Revenue 399.0 399.0 0 % (2 )% 2 % 1,201.4 1,215.9 (1 )% (2 )% 1 %
Divested - 10.2 N/M N/M N/M 21.9 35.7 (39 )% (9 )% (30 )%
Business (1)
Total Revenue $ 399.0 $ 409.2 (3 )% (2 )% (1 )% $ 1,223.3 $ 1,251.6 (2 )% (3 )% 1 %
Operating
Income (Loss):
North America $ 105.4 $ 113.1 (7 )% $ 338.7 $ 345.8 (2 )%
International 17.7 15.7 13 % 51.9 45.4 14 %
Total 123.1 128.8 (5 )% 390.6 391.2 0 %
Divisions
Corporate and (18.3 ) (20.4 ) 11 % (57.0 ) (64.9 ) 12 %
Other (2)
Operating 104.8 108.4 (3 )% 333.6 326.3 2 %
Income
Interest 0.6 2.9 (79 )% 2.5 9.0 (73 )%
Income
Interest (11.4 ) (11.7 ) 3 % (34.2 ) (34.3 ) 1 %
Expense
Other Income
(Expense) - (0.1 ) 1.6 N/M (0.2 ) 0.5 N/M
Net (3)
Non-Operating
Income (10.9 ) (7.2 ) (50 )% (31.9 ) (24.8 ) (28 )%
(Expense) -
Net
Income before
Provision for 93.9 101.2 (7 )% 301.7 301.5 0 %
Income Taxes
Provision for 33.4 39.2 15 % 104.0 110.3 6 %
Income Taxes
Equity in Net
Income (Loss) 0.3 0.3 0 % 1.0 0.9 11 %
of Affiliates
Net Income $ 60.8 $ 62.3 (2 )% $ 198.7 $ 192.1 3 %
Less: Net
(Income) Loss
Attributable (0.7 ) (0.2 ) N/M (2.0 ) (0.7 ) N/M
to the
Noncontrolling
Interest
Net Income
Attributable $ 60.1 $ 62.1 (3 )% $ 196.7 $ 191.4 3 %
to D&B (4)
Basic Earnings
Per Share of $ 1.15 $ 1.14 1 % $ 3.72 $ 3.47 7 %
Common Stock
Diluted
Earnings Per
Share of $ 1.13 $ 1.12 1 % $ 3.67 $ 3.41 8 %
Common Stock
(5)
Weighted
Average Number
of Shares
Outstanding:
Basic 52.0 53.9 4 % 52.6 54.8 4 %
Diluted 52.6 54.8 4 % 53.2 55.8 5 %
AFX - After
Effects of
Foreign
Exchange
BFX - Before
Effects of
Foreign
Exchange
N/M - Not
Meaningful
See Schedule 3 (Notes to Schedules) for a definition of Non-GAAP measures and a reconciliation of non-core gains and
charges.
This financial information should be read in conjunction with the consolidated financial statements and related notes
of The Dun & Bradstreet Corporation contained in filings with the Securities and Exchange Commission.
The Dun & Schedule
Bradstreet 3
Corporation
Notes to Schedules 1 and 2 (unaudited) and
Definitions of Non-GAAP Measures
Includes
revenue from
(1) the Italian
Domestic
business
The following table reconciles Corporate and
(2) Other expenses included in Schedule 1 and
Schedule 2:
Quarter Ended Year-To-Date
September 30, September 30,
% % Change
Change
Amounts in 2009 2008 Fav/ 2009 2008 Fav/
millions (Unfav) (Unfav)
Corporate and
Other - GAAP $ (30.5 ) $ (37.6 ) 19 % $ (73.3 ) $ (93.7 ) 22 %
Results
(Schedule 1)
Restructuring (12.2 ) (17.2 ) 29 % (16.3 ) (28.8 ) 43 %
Charges
Corporate and
Other - Before
Non-Core Gains $ (18.3 ) $ (20.4 ) 11 % $ (57.0 ) $ (64.9 ) 12 %
and Charges
(Schedule 2)
(3) The following table reconciles Other Income (Expense)-Net
included in Schedule 1 and Schedule 2:
Quarter Ended Year-To-Date
September 30, September 30,
% % Change
Change
Amounts in 2009 2008 Fav/ 2009 2008 Fav/
millions (Unfav) (Unfav)
Other Income
(Expense)-Net - $ (2.0 ) $ 9.9 N/M $ 13.9 $ 1.8 N/M
GAAP Results
(Schedule 1)
Effect of
Legacy Tax 0.3 0.2 (50 )% 0.7 0.9 22 %
Matters
Tax Reserve
true-up for
the Settlement
of 2003 tax - - N/M - (7.7 ) N/M
year, related
to the
"Amortization
and
Royalty
Expense
Deductions"
transaction
Settlement of
Legacy Tax - 8.1 N/M 4.1 8.1 N/M
Matter
Arbitration
Gain on
Disposal of
Italian (2.2 ) - N/M 9.3 - N/M
Domestic
business
Other Income
(Expense)-Net -
Before Non-Core $ (0.1 ) $ 1.6 N/M $ (0.2 ) $ 0.5 N/M
Gains and
Charges
(Schedule 2)
(4) The following table reconciles Net Income
included in Schedule 1 and Schedule 2:
Quarter Ended Year-To-Date
September 30, September 30,
% % Change
Change
Amounts in 2009 2008 Fav/ 2009 2008 Fav/
millions (Unfav) (Unfav)
Net Income
Attributable to
D&B - GAAP $ 54.0 $ 65.1 (17 )% $ 235.0 $ 210.5 12 %
Results
(Schedule 1)
Restructuring (7.6 ) (11.0 ) 31 % (10.2 ) (18.7 ) 45 %
Charges
Settlement of
Legacy Tax - 5.0 N/M 1.0 5.0 (80 )%
Matter
Arbitration
Tax Reserve
true-up for
the Settlement
of 2003 tax - - N/M - 7.7 N/M
year, related
to the
"Amortization
and
Royalty
Expense
Deductions"
transaction
Favorable
resolution of
Global Tax
Audits - 9.0 N/M - 22.7 N/M
including the
Liquidation of
Dormant
International
Corporations
and/or
Divested
Entities
Interest on - - N/M - 1.3
IRS Deposit
Benefits
Derived From
Worldwide 3.0 - N/M 36.2 - N/M
Legal Entity
Simplification
Gain on
Disposal of
Italian (1.5 ) - N/M 11.3 - N/M
Domestic
business
Income from
Discontinued
Operations, - - N/M - 0.7 N/M
Net of Income
Taxes
Gain on
Disposal of
Italian Real - - N/M - 0.4 N/M
Estate
business
Net Income
Attributable to
D&B - (On a
Continuing
Operations $ 60.1 $ 62.1 (3 )% $ 196.7 $ 191.4 3 %
Basis) - Before
Non-Core Gains
and Charges
(Schedule 2)
The following table reconciles
(5) Diluted Earnings Per Share included
in Schedule 1 and Schedule 2:
Quarter Ended Year-To-Date
September 30, September 30,
% % Change
Change
2009 2008 Fav/ 2009 2008 Fav/
(Unfav) (Unfav)
Diluted EPS
Attributable to
D&B - GAAP $ 1.02 $ 1.18 (14 )% $ 4.39 $ 3.75 17 %
Results
(Schedule 1)
Restructuring (0.14 ) (0.20 ) 30 % ($0.19 ) (0.34 ) 44 %
Charges
Settlement of
Legacy Tax - 0.09 N/M 0.02 0.09 N/M
Matter
Arbitration
Tax Reserve
true-up for
the Settlement
of 2003 tax - - N/M - 0.14 N/M
year, related
to the
"Amortization
and
Royalty
Expense
Deductions"
transaction
Favorable
resolution of
Global Tax
Audits - 0.17 N/M - 0.41 N/M
including the
Liquidation of
Dormant
International
Corporations
and/or
Divested
Entities
Interest on - - N/M - 0.02 N/M
IRS Deposit
Benefits
Derived From
Worldwide 0.06 - N/M 0.68 - N/M
Legal Entity
Simplification
Gain on
Disposal of
Italian (0.03 ) - N/M 0.21 - N/M
Domestic
business
Income from
Discontinued
Operations, - - N/M - 0.02 N/M
Net of Income
Taxes
Diluted EPS
Attributable to
D&B- (On a
Continuing
Operations $ 1.13 $ 1.12 1 % $ 3.67 $ 3.41 8 %
Basis) - Before
Non-Core Gains
and Charges
(Schedule 2)
N/M - Not
Meaningful
The following defines the non-GAAP measures used to evaluate performance:
*For 2008, our non-GAAP measures reflect results on a "Continuing Operations" basis
*Total revenue excluding the revenue of divested businesses is referred to as "core
revenue." Core revenue includes the revenue from acquired businesses from the date
of acquisition
*Core revenue growth, excluding the effects of foreign exchange, is referred to as
"core revenue growth before the effects of foreign exchange." We also separately,
from time to time, analyze core revenue growth before the effects of foreign
exchange among two components, "organic core revenue growth" and "core revenue
growth from acquisitions"
*Results (such as operating income, operating income growth, operating margin, net
income, tax rate and diluted earnings per share) exclude Restructuring Charges
(whether recurring or non-recurring) and certain other items that we consider do no
reflect our underlying business performance. We refer to these Restructuring Charges
and other items as "non-core gains and (charges)"
*Net cash provided by operating activities minus capital expenditures and additions
to computer software and other intangibles is referred to as "free cash flow"
This financial information should be read in conjunction with the consolidated
financial statements and related notes of The Dun & Bradstreet Corporation contained
in filings with the Securities and Exchange Commission.
The Dun & Bradstreet Corporation Schedule
4
Supplemental GAAP Financial Data (unaudited)
Quarter Ended Effects of Year-To-Date Effects
of
September 30, AFX Foreign BFX September 30, AFX Foreign BFX
% Change Exchange % Change % Exchange % Change
Change
Amounts in 2009 2008 Fav/(Unfav) Fav/(Unfav) Fav/(Unfav) 2009 2008 Fav/ Fav/ Fav/
millions (Unfav) (Unfav) (Unfav)
Geographic and
Customer
Solution Set
Revenue:
North America:
Risk Management 198.7 201.5 (1 )% 0 % (1 )% 607.1 615.6 (1 )% 0 % (1 )%
Solutions
Sales &
Marketing 84.7 89.6 (6 )% (1 )% (5 )% 258.1 279.3 (8 )% (1 )% (7 )%
Solutions
Internet 27.4 29.9 (9 )% (1 )% (8 )% 87.1 89.5 (3 )% (1 )% (2 )%
Solutions
Subtotal Core 310.8 321.0 (3 )% 0 % (3 )% 952.3 984.4 (3 )% 0 % (3 )%
Revenue
Divested - - N/M N/M N/M - - N/M N/M N/M
Business
Total North 310.8 321.0 (3 )% 0 % (3 )% 952.3 984.4 (3 )% 0 % (3 )%
America Revenue
International:
Risk Management 66.1 62.2 6 % (10 )% 16 % 187.8 182.0 3 % (15 )% 18 %
Solutions
Sales &
Marketing 21.2 14.7 46 % (8 )% 54 % 58.7 46.2 27 % (10 )% 37 %
Solutions
Internet 0.9 1.1 (19 )% (17 )% (2 )% 2.6 3.3 (22 )% (22 )% 0 %
Solutions
Subtotal Core 88.2 78.0 13 % (11 )% 24 % 249.1 231.5 8 % (14 )% 22 %
Revenue
Divested - 10.2 N/M N/M N/M 21.9 35.7 (39 )% (9 )% (30 )%
Business
Total
International 88.2 88.2 0 % (10 )% 10 % 271.0 267.2 1 % (14 )% 15 %
Revenue
Total
Corporation:
Risk Management 264.8 263.7 0 % (3 )% 3 % 794.9 797.6 0 % (3 )% 3 %
Solutions
Sales &
Marketing 105.9 104.3 2 % 0 % 2 % 316.8 325.5 (3 )% (1 )% (2 )%
Solutions
Internet 28.3 31.0 (9 )% (1 )% (8 )% 89.7 92.8 (3 )% (1 )% (2 )%
Solutions
Subtotal Core 399.0 399.0 0 % (2 )% 2 % 1,201.4 1,215.9 (1 )% (2 )% 1 %
Revenue
Divested - 10.2 N/M N/M N/M 21.9 35.7 (39 )% (9 )% (30 )%
Business
Total Revenue $ 399.0 $ 409.2 (3 )% (2 )% (1 )% $ 1,223.3 $ 1,251.6 (2 )% (3 )% 1 %
Operating
Costs:
Operating $ 120.5 $ 116.6 (3 )% $ 366.9 $ 362.5 (1 )%
Expenses
Selling and
Administrative 159.9 169.8 6 % 480.4 521.1 8 %
Expenses
Depreciation
and 13.8 14.4 4 % 42.4 41.7 (2 )%
Amortization
Restructuring 12.2 17.2 29 % 16.3 28.8 43 %
Expense
Total Operating $ 306.4 $ 318.0 4 % $ 906.0 $ 954.1 5 %
Costs
Capital 2.6 $ 3.8 32 % 6.0 $ 9.3 35 %
Expenditures
Additions to
Computer $ 13.7 $ 11.8 (16 )% $ 41.9 $ 39.8 (5 )%
Software & Other
Intangibles
AFX - After Effects of Foreign Exchange
BFX - Before Effects of Foreign Exchange
N/M - Not Meaningful
This financial information should be read in conjunction with the consolidated financial statements and related notes of The Dun &
Bradstreet Corporation contained in filings with the Securities and Exchange Commission.
Quarter Ended
Amounts in millions Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
2009 2009 2009 2008 2008 2008 2008
Net Debt
Position:
Cash and Cash $ 187.3 $ 226.4 $ 179.9 $ 164.2 $ 230.6 $ 245.5 $ 215.7
Equivalents
Short-Term (1.3 ) (0.6 ) (0.6 ) - - - -
Debt
Long-Term Debt (894.2 ) (868.0 ) (900.0 ) (904.3 ) (864.6 ) (825.6 ) (790.0 )
Net Debt $ (708.2 ) $ (642.2 ) $ (720.7 ) $ (740.1 ) $ (634.0 ) $ (580.1 ) $ (574.3 )
Year-to-Date
% Change
Amounts in millions Sep 30, Sep 30, Fav/(Unfav)
2009 2008
Free Cash
Flow:
Net Cash Provided By
Operating Activities
from Continuing $ 302.8 $ 348.0 (13 )%
Operations (GAAP
Results)
Less:
Capital Expenditures 6.0 9.3 35 %
(GAAP Results)
Additions to Computer
Software & Other 41.9 39.8 (5 )%
Intangibles (GAAP
Results)
Free Cash Flow 254.9 298.9 (15 )%
Legacy Tax Matters (10.8 ) (25.6 ) 58 %
(Refund) Payment
Free Cash Flow Excluding $ 244.1 $ 273.3 (11 )%
Legacy Tax Matters
Year-to-Date
% Change
Amounts in millions Sep 30, Sep 30, Fav/(Unfav)
2009 2008
Net Cash Provided By
Operating Activities
excluding Legacy Tax
Matters:
Net Cash Provided By
Operating Activities
from Continuing $ 302.8 $ 348.0 (13 )%
Operations (GAAP
Results)
Legacy Tax Matters (10.8 ) (25.6 ) 58 %
(Refund) Payment
Net Cash Provided By
Operating Activities $ 292.0 $ 322.4 (9 )%
Excluding Legacy Tax
Matters
N/M - Not Meaningful
This financial information should be read in conjunction with the consolidated financial statements and related notes of The Dun & Bradstreet
Corporation contained in filings with the Securities and Exchange Commission.
The Dun & Bradstreet Corporation Schedule
5
GAAP Revenue Reconciliation and Detail (unaudited)
Quarter Ended September 30, 2009 vs. 2008 Year-To-Date September 30, 2009 vs. 2008
Traditional/VAPs as Traditional/VAPs as a
a
AFX Effects BFX % of Total Customer AFX Effects BFX % of Total Customer
of Solution Sets/Core of Solution Sets/Core
% Foreign % 2009 2008 % Foreign % 2009 2008
Change Change Change Change
Fav/ Exchange Fav/ % Product % Product Fav/ Exchange Fav/ % Product % Product
(Unfav) (Unfav) Line/Core Line/Core (Unfav) (Unfav) Line/Core Line/Core
Revenue:
North America:
Risk
Management
Solutions:
Traditional (3)% 0% (3)% 73% 47% 74% 46% (2)% (1)% (1)% 73% 47% 73% 46%
VAPs 1% 0% 1% 21% 13% 20% 13% (5)% (1)% (4)% 20% 13% 21% 13%
Supply
Management 14% (1)% 15% 6% 4% 6% 4% 11% 0% 11% 7% 4% 6% 4%
Solutions
Total Risk
Management (1)% 0% (1)% 64% 63% (1)% 0% (1)% 64% 63%
Solutions
Sales &
Marketing
Solutions:
Traditional (6)% 0% (6)% 45% 12% 45% 13% (13)% 0% (13)% 39% 10% 41% 12%
VAPs (5)% 0% (5)% 55% 15% 55% 15% (4)% (1)% (3)% 61% 17% 59% 16%
Total Sales &
Marketing (6)% (1)% (5)% 27% 28% (8)% (1)% (7)% 27% 28%
Solutions
Internet (9)% (1)% (8)% 9% 9% (3)% (1)% (2)% 9% 9%
Solutions
Core Revenue (3)% 0% (3)% (3)% 0% (3)%
Divested N/M N/M N/M N/M N/M N/M
Business
Total North (3)% 0% (3)% (3)% 0% (3)%
America Revenue
International:
Risk
Management
Solutions:
Traditional 9% (10)% 19% 83% 63% 81% 65% 8% (14)% 22% 84% 63% 80% 63%
VAPs (11)% (11)% 0% 15% 11% 18% 14% (16)% (15)% (1)% 15% 11% 19% 15%
Supply
Management 62% (22)% 84% 2% 1% 1% 1% 13% (22)% 35% 1% 1% 1% 1%
Solutions
Total Risk
Management 6% (10)% 16% 75% 80% 3% (15)% 18% 75% 79%
Solutions
Sales &
Marketing
Solutions:
Traditional N/M N/M N/M 58% 14% 44% 8% 55% (30)% 85% 50% 12% 41% 8%
VAPs 6% (1)% 7% 42% 10% 56% 11% 8% (1)% 9% 50% 12% 59% 12%
Total Sales &
Marketing 46% (8)% 54% 24% 19% 27% (10)% 37% 24% 20%
Solutions
Internet (19)% (17)% (2)% 1% 1% (22)% (22)% (0)% 1% 1%
Solutions
Core Revenue 13% (11)% 24% 8% (14)% 22%
Divested N/M N/M N/M (39)% (9)% (30)%
Business
Total
International 0% (10)% 10% 1% (14)% 15%
Revenue
Total
Corporation:
Risk
Management
Solutions:
Traditional 0% (2)% 2% 75% 50% 76% 50% 1% (3)% 4% 76% 50% 75% 49%
VAPs (2)% (3)% 1% 19% 13% 20% 13% (7)% (4)% (3)% 19% 13% 21% 13%
Supply
Management 17% 0% 17% 6% 3% 4% 3% 11% (1)% 12% 5% 3% 4% 3%
Solutions
Total Risk
Management 0% (3)% 3% 66% 66% (0)% (3)% 3% 66% 65%
Solutions
Sales &
Marketing
Solutions:
Traditional 8% (1)% 9% 47% 13% 45% 12% (4)% (3)% (1)% 41% 11% 41% 11%
VAPs (3)% 0% (3)% 53% 14% 55% 14% (2)% 0% (2)% 59% 16% 59% 16%
Total Sales &
Marketing 2% 0% 2% 27% 26% (3)% (1)% (2)% 27% 27%
Solutions
Internet (9)% (1)% (8)% 7% 8% (3)% (1)% (2)% 7% 8%
Solutions
Core Revenue 0% (2)% 2% (1)% (2)% 1%
Divested N/M N/M N/M (39)% (9)% (30)%
Business
Total Revenue (3)% (2)% (1)% (2)% (3)% 1%
AFX - After Effects of Foreign Exchange
BFX - Before Effects of Foreign Exchange
N/M - Not Meaningful
This financial information should be read in conjunction with the consolidated financial statements and related notes
of The Dun & Bradstreet Corporation contained in filings with the Securities and Exchange Commission.
The Dun &
Bradstreet Schedule 6
Corporation
Supplemental
Revenue Data
(unaudited)
Quarter Ended
Sep 30, Jun Mar Dec 31, Sep Jun
% of Product Line 2009 30, 31, 2008 30, 30, Mar 31, 2008
2009 2009 2008 2008
North America
Risk Management
Solutions
Subscription 1 64% 63% 58% 53% 52% 49% 45%
Non-Subscription 36% 37% 42% 47% 48% 51% 55%
1
North America
Risk Management
Solutions
DNBi 2 56% 54% 51% 45% 43% 38% 33%
Non-DNBi 2 44% 46% 49% 55% 57% 62% 67%
Year-to-Date Year-to-Date Full Year
September 30, 2009 September 30, 2008 December 31,
2008
Amounts Amounts Amounts
% of Core in % of in % of in % of
International millions Core millions Core millions Core
Revenue
International:
Europe and Other
International
Markets $ 152.4 61% $ 172.0 74% $ 230.7 73%
(excluding Asia
Pacific)
Asia Pacific 96.7 39% 59.5 26% 83.7 27%
Core Revenue $ 249.1 $ 231.5 $ 314.4
Notes:
1 We define Subscription and Non-Subscription revenue as follows:
- Subscription revenue represents contracts that allow customers unlimited use
within predefined ranges, subject to certain conditions. In these instances, we
recognize revenue ratably over the term of the contract, which is generally one
year.
- Non-Subscription revenue represents all other revenue streams.
2 We define DNBi and Non-DNBi revenue as follows:
- DNBi, is our interactive, customizable online application that offers our
customers real time access to our most complete and up-to-date global DUNSRight
information, comprehensive monitoring and portfolio analysis
- Non-DNBi revenue represents all
other revenue streams.
This financial information should be read in conjunction with the
consolidated financial statements and related notes of The Dun &
Bradstreet Corporation contained in filings with the Securities
and Exchange Commission.
Source: D&B
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