Exhibit 99.1
PRESS RELEASE
| | | |
| Contacts: | | |
| Joseph Jones (Media) | | Richard Veldran (Investors/Analysts) |
| jonesjo@dnb.com | | veldranr@dnb.com |
| 973.921.5732 | | 973.921.5863 |
D&B Announces Third Quarter 2006 Results
| • | | EPS Up 16 Percent Before Non-Core Gains and Charges |
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| • | | EPS Up 57 Percent on a GAAP Basis; Due Primarily to Expenses in the Prior Year Associated with Cash Repatriation and the Resolution of a Legacy Tax Matter |
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| • | | Core and Total Revenue Up 4 Percent Before Foreign Exchange; Up 5 Percent After Foreign Exchange |
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| • | | Announces Strategic Agreement to Establish Joint Venture in China |
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| • | | Updates Full-Year 2006 Guidance |
Short Hills, NJ — November 2, 2006¾ 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, 2006.
“We are pleased with the continued earnings and cash flow momentum we delivered in the third quarter, which represented our 24th consecutive quarter of double-digit EPS growth” said Steve Alesio, chairman and CEO of D&B. “While we were not satisfied with our top-line growth this quarter, we are beginning to execute against our strategic plan and remain very confident in our prospects for the future.”
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PRESS RELEASE
Third Quarter 2006 Results
Diluted earnings per sharebefore non-core gains and charges for the quarter ended September 30, 2006, were $0.87, up 16 percent from $0.75 in the prior year quarter. On a GAAP basis, diluted earnings per share were $0.72, up 57 percent from $0.46 in the prior year quarter, due primarily to expenses in the prior year associated with cash repatriation and the resolution of a legacy tax matter.
See attached Schedule 3 for a reconciliation of 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 and total revenuefor the quarter were $359.2 million, up 4 percent before the effect of foreign exchange (up 5 percent after the effect of foreign exchange) from the prior year quarter.
Core and total revenue results for the third quarter of 2006 reflect the following:
| | • | | Risk Management Solutions revenue of $239.8 million, up 3 percent before the effect of foreign exchange (up 4 percent after the effect of foreign exchange); |
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| | • | | Sales & Marketing Solutions revenue of $84.3 million, roughly flat with the prior year quarter (both before and after the effect of foreign exchange); |
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| | • | | E-Business Solutions revenue of $22.0 million, up 23 percent (both before and after the effect of foreign exchange); and |
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| | • | | Supply Management Solutions revenue of $ 13.1 million, up 30 percent before the effect of foreign exchange (up 31 percent after the effect of foreign exchange). |
See attached Schedules 4 and 5 for additional detail.
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PRESS RELEASE
Operating incomebefore non-core gains and charges was $ 90.7 million, up 9 percent from the prior year quarter. On a GAAP basis, operating income was $76.5 million, down 3 percent from the prior year quarter. During the quarter, the Company also incurred transition costs of $4.6 million compared with $4.2 million in the prior year quarter.
See attached Schedule 3 for additional detail.
Net incomebefore non-core gains and charges was $55.2 million for the quarter, up 6 percent from $52.1 million in the prior year quarter. On a GAAP basis, net income was $45.8 million, up 44 percent from $31.7 million in the prior year quarter.
See attached Schedule 3 for additional detail.
Free cash flowfor the first nine months of 2006, excluding the impact of legacy tax matters, was $240.3 million, up 25 percent from the first nine months of 2005. Free cash flow includes the effect of our adoption of expensing stock options pursuant to SFAS No. 123R, which resulted in a reclassification of $30.2 million from Cash Flow from Operating Activities to Cash Flow from Financing Activities in the first nine months of 2006.
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 2006 was $235.1 million, up 48 percent from the prior year period. Net cash provided by operating activities for the first nine months of 2006, excluding $45.6 million of legacy tax matters was $280.7 million, up 34 percent from the first nine months of 2005, which excluded $50.3 million of legacy tax matters.
See attached Schedule 4 for additional detail.
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PRESS RELEASE
Share repurchasesduring the quarter under our two-year $500 million program totaled $88.8 million, completing the program commenced in the first quarter of 2005. These repurchases are in addition to the Company’s repurchases to offset the dilutive effect of shares issued under employee benefit plans, which totaled $26.2 million in the third quarter of 2006. Given the completion of its existing share repurchase program in the quarter, the company commenced its new one-year, $200 million share repurchase program in October 2006.
The Company ended the quarter with $138.9 million of cash.
Third Quarter 2006 Segment Results
United States
Core and total revenuefor the quarter was $271.2 million, up 5 percent from $259.0 million in the prior year quarter.
U.S. core and total revenue results for the third quarter of 2006 reflect the following:
| | • | | Risk Management Solutions revenue of $165.3 million, up 3 percent; |
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| | • | | Sales & Marketing Solutions revenue of $73.3 million, up 2 percent; |
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| | • | | E-Business Solutions revenue of $20.6 million, up 21 percent; and |
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| | • | | Supply Management Solutions revenue of $12.0 million, up 30 percent. |
See attached Schedules 4 and 5 for additional detail.
Operating incomefor the quarter was $94.0 million, up 8 percent from the prior year quarter. This increase was primarily due to improved revenue in the U.S. segment and benefits from the Company’s Financial Flexibility program, partially offset by higher benefit costs and costs associated with our revenue generating investments, the effect of the adoption of SFAS 123R, and increased costs associated with the acquisition of Open Ratings in the first quarter of 2006.
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PRESS RELEASE
International
Core and total revenuefor the quarter were $88.0 million, up 3 percent before the effect of foreign exchange (up 7 percent after the effect of foreign exchange from $82.6 million in the prior year quarter).
International core and total revenue results for the third quarter of 2006 reflect the following:
| | • | | Risk Management Solutions revenue of $74.5 million, up 4 percent before the effect of foreign exchange (up 8 percent after the effect of foreign exchange); |
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| | • | | Sales & Marketing Solutions revenue of $11.0 million, down 10 percent before the effect of foreign exchange (down 7 percent after the effect of foreign exchange); |
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| | • | | E-Business Solutions revenue of $1.4 million, up 45 percent before the effect of foreign exchange (up 49 percent after the effect of foreign exchange); and |
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| | • | | Supply Management Solutions revenue of $1.1 million, up 35 percent before the effect of foreign exchange (up 40 percent after the effect of foreign exchange). |
See attached Schedules 4 and 5 for additional detail.
Operating incomefor the quarter was $16.3 million, up 29 percent from $12.7 million in the prior year quarter. This increase was primarily due to improved revenue in the International segment and increased costs in 2005 related to the investigation and final resolution of the dispute on the sale of our French business with no comparable costs in 2006, partially offset by increased selling costs and increased costs associated with data purchases for our global customers. On a GAAP basis, operating income was $16.3 million, up 25 percent from $13.1 million in the prior year quarter.
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PRESS RELEASE
D&B Announces Strategic Agreement to Establish Joint Venture in China
D&B today announced that it has signed an agreement with Huaxia International Credit Consulting Co. Limited — a leading provider of business information and credit management services in China — to establish a new joint venture to trade under the name Huaxia D&B China. D&B will be the majority shareholder in the new venture, which the Company expects will commence business in early December, subject to completion of certain regulatory and contractual conditions. Additional financial details are not being disclosed.
Huaxia D&B China is expected to significantly improve D&B’s quality and coverage of commercial data in China and enhance the Company’s competitive position in the Asia-Pacific market. The joint venture will leverage the parent companies’ best-in-class data collection capabilities and the D&B Worldwide Network to deliver superior commercial insight and value to customers around the world. The new entity will distribute both D&B and co-branded products and solutions throughout China. In addition, the parent companies will jointly develop new business information and credit management solutions.
Non-Core Gains and Charges
During the third quarter of 2006, the Company recorded a net pre-tax, non-core charge of $14.2 million related to its 2006 and 2005 Financial Flexibility initiatives.
During the third quarter of 2005, the Company recorded net pre-tax, non-core charges of $6.9 million and non-core charges for taxes of $15.4 million.
The pre-tax non-core charges of $6.9 million in the third quarter of 2005 included a charge of $4.7 million related to both the 2005 and 2004 Financial Flexibility initiatives and charges totaling an additional $2.2 million related to
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PRESS RELEASE
final resolution of all disputes on the sale of the Company’s French business, as described more fully in the Company’s Form 10-Q for the quarter ending June 30, 2005.
The non-core charges for taxes of $15.4 million in the third quarter of 2005 included a $9.1 million tax charge related to the Company’s repatriation of foreign cash and a $6.3 million charge resulting from an increase in the tax legacy reserve for the matter referred to as “Royalty Expense Deductions 1993-1997” in the Company’s Form 10-Q for the quarter ending June 30, 2005.
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 are not a component of its ongoing income or expenses and may have a disproportionate positive or negative impact on the results of its ongoing underlying business operations. For additional information, see the section titled “Use of Non-GAAP Financial Measures” below.
See attached Schedule 3 for additional detail.
2006 Outlook
The Company updated its full-year guidance for 2006, which includes the expensing of stock options, as follows:
| | • | | Core revenue growth at the low end of the Company’s previous range of 6 percent to 8 percent, specifically close to 6 percent, before the effect of foreign exchange, all of which will be organic; |
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| | • | | Operating income growth before non-core gains and charges at the low end of the Company’s previous range of 8 percent to 10 percent, specifically close to 8 percent; |
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| | • | | Diluted EPS at the high end of the Company’s previous range of $3.86 to $3.96 before non-core gains and charges, specifically close to $3.96; |
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| | • | | Free cash flow unchanged at $290 million to $305 million. As a reminder, the Company’s free cash flow outlook excludes the impact of the Company’s legacy tax matters; and |
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| | • | | Tax rate before non-core gains and charges unchanged at approximately 37 to 38 percent. |
D&B does not provide revenue growth guidance on a GAAP basis because D&B is unable to predict, with reasonable certainty, the future movement of foreign exchange rates. Additionally, the Company does not provide EPS guidance, operating income growth, free cash flow or tax rate guidance on a GAAP basis because the Company is unable to predict, with reasonable certainty, 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. The impact of these non-core gains and charges could be material to D&B’s results computed in accordance with GAAP.
See attached Schedule 3 for additional detail.
Use of Non-GAAP Financial Measures
D&B reports non-GAAP financial measures in this press release and the schedules attached. D&B reports core revenue after the effects of foreign exchange and core revenue growth before and after the effects of foreign exchange. Additionally, the Company reports organic revenue growth and each of operating income, operating margin, net income, diluted earnings per share and tax rate (defined as Provision for Income Taxes divided by Income before Provision for Income Taxes) before non-core gains and charges, free cash flow, and net debt position.
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PRESS RELEASE
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — How We Manage Our Business” in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q , as filed 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. These measures are defined in Schedule 3 attached to this earnings release.
Third Quarter Teleconference
As previously announced, D&B will review its third quarter financial results in a conference call with the investment community on Friday, November 3, 2006, at 10 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.
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About D&B
D&B (NYSE:DNB) is the world’s leading source of commercial information and insight, enabling companies to Decide with Confidence® for 165 years. D&B’s global commercial database contains more than 100 million business records. The database is enhanced by D&B’s proprietary DUNSRight® Quality Process, which transforms the enormous amount of data D&B collects daily into decision-ready insight. Through the D&B Worldwide Network — an unrivaled alliance of D&B and leading business information providers around the world — customers gain access to the world’s largest and highest quality global commercial business information database.
D&B partners with many of the world’s largest and most successful enterprises as well as mid-size companies and entrepreneurial start-ups. Customers use D&B Risk Management SolutionsTM to mitigate credit risk, increase cash flow and drive increased profitability; D&B Sales & Marketing SolutionsTM to increase revenue from new and existing customers; D&B E-Business SolutionsTM to convert
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PRESS RELEASE
prospects into clients faster by enabling business professionals to research companies, executives and industries; and D&B Supply Management SolutionsTM to generate ongoing savings through supplier consolidation, and to protect their businesses from supply chain disruption and serious financial, operational and regulatory risk. For more information, please visit www.dnb.com.
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Forward-Looking and Cautionary Statements
This press release, including, in particular, the section titled “2006 Outlook,” 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 partners in its Worldwide network, and outsourcing partners. |
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| | • | | Demand for D&B’s products is subject to intense competition, changes in customer preferences and, to a lesser extent, economic conditions which impact customer behavior. |
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| | • | | 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 Worldwide Network, and to identify and contend with various challenges present in foreign markets, such as local competition and the availability of public records at no cost. |
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PRESS RELEASE
| | • | | 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. |
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| | • | | D&B’s results, including operating income, are subject to the effects of foreign economies, exchange rate fluctuations, U.S. and foreign legislative or regulatory requirements, such as the implementation of fees or taxes that we must pay to acquire, use, and/or redistribute data, and the adoption of new or changes in accounting policies and practices, including pronouncements by the Financial Accounting Standards Board or other standard-setting bodies. |
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| | • | | D&B’s solutions and brand image are dependent upon the integrity 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 data center capacity. |
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| | • | | 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. |
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| | • | | D&B’s ability to successfully implement its Blueprint for Growth Strategy requires that it successfully reduce its expense base through its Financial Flexibility Program, and reallocate certain of the expense base reductions into initiatives that produce desired revenue growth. |
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| | • | | D&B’s future success requires that it attract and retain qualified personnel in regions throughout the world. |
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| | • | | D&B’s ability to repurchase shares is subject to market conditions, including trading volume in its stock, and its ability to repurchase securities in accordance with applicable securities laws. |
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| | • | | 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. |
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| | • | | D&B’s projection for free cash flow in 2006 is dependent upon its ability to generate revenue, its collection processes, customer payment patterns, the timing and volume of stock option exercises, 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 statement 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 Report 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 does not undertake any obligation to update any forward-looking statements.
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Schedule 1
The Dun & Bradstreet Corporation
Consolidated Statement of Operations(unaudited) — As Reported
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | | | | | Effects of | | | | | | | Year-to-Date | | | | | | | Effects of | | | | |
| | | September 30, | | | AFX | | | Foreign | | | BFX | | | September 30, | | | AFX | | | Foreign | | | BFX | |
| | | | | | | | | | | % Change | | | Exchange | | | % Change | | | | | | | | | | | % Change | | | Exchange | | | % Change | |
| Amounts in millions, except per share data | | 2006 | | | 2005 | | | Fav/(Unfav) | | | Fav/(Unfav) | | | Fav/(Unfav) | | | 2006 | | | 2005 | | | Fav/(Unfav) | | | Fav/(Unfav) | | | Fav/(Unfav) | |
Revenue: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| U.S. | | $ | 271.2 | | | $ | 259.0 | | | | 5 | % | | | 0 | % | | | 5 | % | | $ | 828.4 | | | $ | 775.9 | | | | 7 | % | | | 0 | % | | | 7 | % |
| International | | | 88.0 | | | | 82.6 | | | | 7 | % | | | 4 | % | | | 3 | % | | | 265.4 | | | | 258.7 | | | | 3 | % | | | (2 | )% | | | 5 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Core and Total Revenue | | $ | 359.2 | | | $ | 341.6 | | | | 5 | % | | | 1 | % | | | 4 | % | | $ | 1,093.8 | | | $ | 1,034.6 | | | | 6 | % | | | 0 | % | | | 6 | % |
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Operating Income (Loss): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| U.S. | | $ | 94.0 | | | $ | 87.3 | | | | 8 | % | | | | | | | | | | $ | 285.5 | | | $ | 267.7 | | | | 7 | % | | | | | | | | |
International (1) | | | 16.3 | | | | 13.1 | | | | 25 | % | | | | | | | | | | | 48.7 | | | | 35.5 | | | | 38 | % | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Divisions | | | 110.3 | | | | 100.4 | | | | 10 | % | | | | | | | | | | | 334.2 | | | | 303.2 | | | | 10 | % | | | | | | | | |
Corporate and Other (2) | | | (33.8 | ) | | | (21.2 | ) | | | (59 | )% | | | | | | | | | | | (86.1 | ) | | | (75.8 | ) | | | (14 | )% | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating Income | | | 76.5 | | | | 79.2 | | | | (3 | )% | | | | | | | | | | | 248.1 | | | | 227.4 | | | | 9 | % | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest Income | | | 1.3 | | | | 2.2 | | | | (41 | )% | | | | | | | | | | | 5.6 | | | | 8.1 | | | | (31 | )% | | | | | | | | |
| Interest Expense | | | (5.1 | ) | | | (5.4 | ) | | | 4 | % | | | | | | | | | | | (14.7 | ) | | | (15.7 | ) | | | 6 | % | | | | | | | | |
| Minority Interest Income (Loss) | | | (0.2 | ) | | | (0.2 | ) | | | 0 | % | | | | | | | | | | | (0.4 | ) | | | 0.1 | | | | N/M | | | | | | | | | |
Other Income (Expense) — Net (3) | | | (0.4 | ) | | | (2.7 | ) | | | N/M | | | | | | | | | | | | (0.5 | ) | | | 0.5 | | | | N/M | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-Operating Income (Expense) — Net | | | (4.4 | ) | | | (6.1 | ) | | | 27 | % | | | | | | | | | | | (10.0 | ) | | | (7.0 | ) | | | (43 | )% | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Income before Provision for Income Taxes | | | 72.1 | | | | 73.1 | | | | (1 | )% | | | | | | | | | | | 238.1 | | | | 220.4 | | | | 8 | % | | | | | | | | |
| Provision for Income Taxes | | | 26.4 | | | | 41.8 | | | | 37 | % | | | | | | | | | | | 88.9 | | | | 90.1 | | | | 1 | % | | | | | | | | |
| Equity in Net Income (Loss) of Affiliates | | | 0.1 | | | | 0.4 | | | | (71 | )% | | | | | | | | | | | 0.3 | | | | 0.6 | | | | (52 | )% | | | | | | | | |
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Net Income (4) | | $ | 45.8 | | | $ | 31.7 | | | | 44 | % | | | | | | | | | | $ | 149.5 | | | $ | 130.9 | | | | 14 | % | | | | | | | | |
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Basic Earnings Per Share of Common Stock | | $ | 0.74 | | | $ | 0.48 | | | | 54 | % | | | | | | | | | | $ | 2.33 | | | $ | 1.95 | | | | 20 | % | | | | | | | | |
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Diluted Earnings Per Share of Common Stock (5) | | $ | 0.72 | | | $ | 0.46 | | | | 57 | % | | | | | | | | | | $ | 2.27 | | | $ | 1.87 | | | | 21 | % | | | | | | | | |
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Weighted Average Number of Shares Outstanding: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | | 61.7 | | | | 66.5 | | | | 7 | % | | | | | | | | | | | 64.1 | | | | 67.1 | | | | 5 | % | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Diluted | | | 63.4 | | | | 69.2 | | | | 8 | % | | | | | | | | | | | 65.9 | | | | 69.9 | | | | 6 | % | | | | | | | | |
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| AFX | | — After Effects of Foreign Exchange |
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| BFX | | — Before Effects of Foreign Exchange |
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| 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.
Schedule 2
The Dun & Bradstreet Corporation
Consolidated Statement of Operations(unaudited) — Before Non-Core Gains and Charges
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | | | | | Effects of | | | | | | | Year-to-Date | | | | | | | Effects of | | | | |
| | | September 30, | | | AFX | | | Foreign | | | BFX | | | September 30, | | | AFX | | | Foreign | | | BFX | |
| | | | | | | | | | | % Change | | | Exchange | | | % Change | | | | | | | | | | | % Change | | | Exchange | | | % Change | |
| Amounts in millions, except per share data | | 2006 | | | 2005 | | | Fav/(Unfav) | | | Fav/(Unfav) | | | Fav/(Unfav) | | | 2006 | | | 2005 | | | Fav/(Unfav) | | | Fav/(Unfav) | | | Fav/(Unfav) | |
Revenue: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| U.S. | | $ | 271.2 | | | $ | 259.0 | | | | 5 | % | | | 0 | % | | | 5 | % | | $ | 828.4 | | | $ | 775.9 | | | | 7 | % | | | 0 | % | | | 7 | % |
| International | | | 88.0 | | | | 82.6 | | | | 7 | % | | | 4 | % | | | 3 | % | | | 265.4 | | | | 258.7 | | | | 3 | % | | | (2 | )% | | | 5 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Core and Total Revenue | | $ | 359.2 | | | $ | 341.6 | | | | 5 | % | | | 1 | % | | | 4 | % | | $ | 1,093.8 | | | $ | 1,034.6 | | | | 6 | % | | | 0 | % | | | 6 | % |
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Operating Income (Loss): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| U.S. | | $ | 94.0 | | | $ | 87.3 | | | | 8 | % | | | | | | | | | | $ | 285.5 | | | $ | 267.7 | | | | 7 | % | | | | | | | | |
International (1) | | | 16.3 | | | | 12.7 | | | | 29 | % | | | | | | | | | | | 48.7 | | | | 35.9 | | | | 36 | % | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Divisions | | | 110.3 | | | | 100.0 | | | | 10 | % | | | | | | | | | | | 334.2 | | | | 303.6 | | | | 10 | % | | | | | | | | |
Corporate and Other (2) | | | (19.6 | ) | | | (16.5 | ) | | | (19 | )% | | | | | | | | | | | (61.9 | ) | | | (54.2 | ) | | | (14 | )% | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating Income | | | 90.7 | | | | 83.5 | | | | 9 | % | | | | | | | | | | | 272.3 | | | | 249.4 | | | | 9 | % | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest Income | | | 1.3 | | | | 2.2 | | | | (41 | )% | | | | | | | | | | | 5.6 | | | | 8.1 | | | | (31 | )% | | | | | | | | |
| Interest Expense | | | (5.1 | ) | | | (5.4 | ) | | | 4 | % | | | | | | | | | | | (14.7 | ) | | | (15.7 | ) | | | 6 | % | | | | | | | | |
| Minority Interest Income (Loss) | | | (0.2 | ) | | | (0.2 | ) | | | 0 | % | | | | | | | | | | | (0.4 | ) | | | 0.1 | | | | N/M | | | | | | | | | |
Other Income (Expense) — Net (3) | | | (0.4 | ) | | | (0.1 | ) | | | N/M | | | | | | | | | | | | (0.5 | ) | | | (0.1 | ) | | | N/M | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-Operating Income (Expense) — Net | | | (4.4 | ) | | | (3.5 | ) | | | (24 | )% | | | | | | | | | | | (10.0 | ) | | | (7.6 | ) | | | (31 | )% | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Income before Provision for Income Taxes | | | 86.3 | | | | 80.0 | | | | 8 | % | | | | | | | | | | | 262.3 | | | | 241.8 | | | | 9 | % | | | | | | | | |
| Provision for Income Taxes | | | 31.2 | | | | 28.3 | | | | (10 | )% | | | | | | | | | | | 96.5 | | | | 88.7 | | | | (9 | )% | | | | | | | | |
| Equity in Net Income (Loss) of Affiliates | | | 0.1 | | | | 0.4 | | | | (71 | )% | | | | | | | | | | | 0.3 | | | | 0.6 | | | | (52 | )% | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Income (4) | | $ | 55.2 | | | $ | 52.1 | | | | 6 | % | | | | | | | | | | $ | 166.1 | | | $ | 153.7 | | | | 8 | % | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic Earnings Per Share of Common Stock | | $ | 0.89 | | | $ | 0.78 | | | | 14 | % | | | | | | | | | | $ | 2.59 | | | $ | 2.29 | | | | 13 | % | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Diluted Earnings Per Share of Common Stock (5) | | $ | 0.87 | | | $ | 0.75 | | | | 16 | % | | | | | | | | | | $ | 2.52 | | | $ | 2.20 | | | | 15 | % | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted Average Number of Shares Outstanding: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | | 61.7 | | | | 66.5 | | | | 7 | % | | | | | | | | | | | 64.1 | | | | 67.1 | | | | 5 | % | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Diluted | | | 63.4 | | | | 69.2 | | | | 8 | % | | | | | | | | | | | 65.9 | | | | 69.9 | | | | 6 | % | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| 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 & Bradstreet Corporation
Notes to Schedules 1 and 2 (unaudited) and Definitions of Non-GAAP Measures
Schedule 3
(1)The following table reconciles International Operating Income included in Schedule 1 and Schedule 2:
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | | | | | Year-to-Date | | | | |
| | | September 30, | | | | | | | September 30, | | | | |
| | | | | | | | | | | % Change | | | | | | | | | | | % Change | |
| Amounts in millions | | 2006 | | | 2005 | | | Fav/(Unfav) | | | 2006 | | | 2005 | | | Fav/(Unfav) | |
| International Operating Income — As Reported (Schedule 1) | | $ | 16.3 | | | $ | 13.1 | | | | 25 | % | | $ | 48.7 | | | $ | 35.5 | | | | 38 | % |
| Final Resolution of All Disputes on the Sale of the Company’s French Business | | | — | | | | 0.4 | | | | N/M | | | | — | | | | (0.4 | ) | | | N/M | |
| | | | | | | | | | | | | | | | | | | | | |
| International Operating Income — Before Non-Core Gains and Charges (Schedule 2) | | $ | 16.3 | | | $ | 12.7 | | | | 29 | % | | $ | 48.7 | | | $ | 35.9 | | | | 36 | % |
| | | | | | | | | | | | | | | | | | | | | |
(2)The following table reconciles Corporate and Other expenses included in Schedule 1 and Schedule 2:
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | | | | | Year-to-Date | | | | |
| | | September 30, | | | | | | | September 30, | | | | |
| | | | | | | | | | | % Change | | | | | | | | | | | % Change | |
| Amounts in millions | | 2006 | | | 2005 | | | Fav/(Unfav) | | | 2006 | | | 2005 | | | Fav/(Unfav) | |
| Corporate and Other — As Reported (Schedule 1) | | $ | (33.8 | ) | | $ | (21.2 | ) | | | (59 | )% | | $ | (86.1 | ) | | $ | (75.8 | ) | | | (14 | )% |
| Restructuring Charges | | | (14.2 | ) | | | (4.7 | ) | | | N/M | | | | (24.2 | ) | | | (21.6 | ) | | | (12 | )% |
| | | | | | | | | | | | | | | | | | | | | |
| Corporate and Other — Before Non-Core Gains and Charges (Schedule 2) | | $ | (19.6 | ) | | $ | (16.5 | ) | | | (19 | )% | | $ | (61.9 | ) | | $ | (54.2 | ) | | | (14 | )% |
| | | | | | | | | | | | | | | | | | | | | |
(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 millions | | 2006 | | | 2005 | | | Fav/(Unfav) | | | 2006 | | | 2005 | | | Fav/(Unfav) | |
| Other Income (Expense)-Net — As Reported (Schedule 1) | | $ | (0.4 | ) | | $ | (2.7 | ) | | | N/M | | | $ | (0.5 | ) | | $ | 0.5 | | | | N/M | |
| Gain on Sale of a 5% Investment in a South African Company | | | — | | | | — | | | | N/M | | | | — | | | | 3.5 | | | | N/M | |
| Lower Costs Related to the Sale of Iberia (Spain and Portugal) | | | — | | | | — | | | | N/M | | | | — | | | | 0.8 | | | | N/M | |
| Final Resolution of All Disputes on the Sale of the Company’s French Business | | | — | | | | (2.6 | ) | | | N/M | | | | — | | | | (3.7 | ) | | | N/M | |
| | | | | | | | | | | | | | | | | | | | | |
| Other Income (Expense)-Net — Before Non-Core Gains and Charges (Schedule 2) | | $ | (0.4 | ) | | $ | (0.1 | ) | | | N/M | | | $ | (0.5 | ) | | $ | (0.1 | ) | | | N/M | |
| | | | | | | | | | | | | | | | | | | | | |
The Dun & Bradstreet Corporation
Notes to Schedules 1 and 2 (unaudited) and Definitions of Non-GAAP Measures
Schedule 3
(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 millions | | 2006 | | | 2005 | | | Fav/(Unfav) | | | 2006 | | | 2005 | | | Fav/(Unfav) | |
| Net Income — As Reported (Schedule 1) | | $ | 45.8 | | | $ | 31.7 | | | | 44 | % | | $ | 149.5 | | | $ | 130.9 | | | | 14 | % |
| Restructuring Charges | | | (9.4 | ) | | | (3.6 | ) | | | N/M | | | | (15.8 | ) | | | (16.6 | ) | | | 5 | % |
| Tax Benefits Recognized upon the Liquidation of Dormant International Corporations | | | — | | | | — | | | | N/M | | | | — | | | | 9.0 | | | | N/M | |
| Gain on Sale of a 5% Investment in a South African Company | | | — | | | | — | | | | N/M | | | | — | | | | 2.0 | | | | N/M | |
| Lower Costs Related to the Sale of Iberia (Spain and Portugal) | | | — | | | | — | | | | N/M | | | | — | | | | 0.8 | | | | N/M | |
| Tax Charge Related to the Company’s Repatriation of Foreign Cash | | | — | | | | (9.1 | ) | | | N/M | | | | — | | | | (9.1 | ) | | | N/M | |
| Charge/Increase in Tax Legacy Reserve for “Royalty Expense Deductions 1993-1997” | | | — | | | | (6.3 | ) | | | N/M | | | | (0.8 | ) | | | (6.3 | ) | | | N/M | |
| Final Resolution of All Disputes on the Sale of the Company’s French Business | | | — | | | | (1.4 | ) | | | N/M | | | | — | | | | (2.6 | ) | | | N/M | |
| | | | | | | | | | | | | | | | | | | | | |
| Net Income — Before Non-Core Gains and Charges (Schedule 2) | | $ | 55.2 | | | $ | 52.1 | | | | 6 | % | | $ | 166.1 | | | $ | 153.7 | | | | 8 | % |
| | | | | | | | | | | | | | | | | | | | | |
(5)The following table reconciles Diluted Earnings Per Share included in Schedule 1 and Schedule 2:
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | | | | | Year-to-Date | | | | |
| | | September 30, | | | | | | | September 30, | | | | |
| | | | | | | | | | | % Change | | | | | | | | | | | % Change | |
| | | 2006 | | | 2005 | | | Fav/(Unfav) | | | 2006 | | | 2005 | | | Fav/(Unfav) | |
| Diluted EPS — As Reported (Schedule 1) | | $ | 0.72 | | | $ | 0.46 | | | | 57 | % | | $ | 2.27 | | | $ | 1.87 | | | | 21 | % |
| Restructuring Charges | | | (0.15 | ) | | | (0.05 | ) | | | N/M | | | | (0.24 | ) | | | (0.24 | ) | | | N/M | |
| Tax Benefits Recognized upon the Liquidation of Dormant International Corporations | | | — | | | | — | | | | N/M | | | | — | | | | 0.13 | | | | N/M | |
| Gain on Sale of a 5% Investment in a South African Company | | | — | | | | — | | | | N/M | | | | — | | | | 0.03 | | | | N/M | |
| Lower Costs Related to the Sale of Iberia (Spain and Portugal) | | | — | | | | — | | | | N/M | | | | — | | | | 0.01 | | | | N/M | |
| Tax Charge Related to the Company’s Repatriation of Foreign Cash | | | — | | | | (0.13 | ) | | | N/M | | | | — | | | | (0.13 | ) | | | N/M | |
| Charge/Increase in Tax Legacy Reserve for “Royalty Expense Deductions 1993-1997” | | | — | | | | (0.09 | ) | | | N/M | | | | (0.01 | ) | | | (0.09 | ) | | | N/M | |
| Final Resolution of All Disputes on the Sale of the Company’s French Business | | | — | | | | (0.02 | ) | | | N/M | | | | — | | | | (0.04 | ) | | | N/M | |
| | | | | | | | | | | | | | | | | | | | | |
| Diluted EPS — Before Non-Core Gains and Charges (Schedule 2) | | $ | 0.87 | | | $ | 0.75 | | | | 16 | % | | $ | 2.52 | | | $ | 2.20 | | | | 15 | % |
| | | | | | | | | | | | | | | | | | | | | |
N/M — Not Meaningful
The following defines the non-GAAP measures used to evaluate performance:
*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 “revenue growth before the effects of foreign exchange.” We also separately analyze core revenue growth before the effects of foreign exchange among two components, “organic core revenue growth” and “core revenue growth from acquisitions.” In addition, we analyze core revenue both before and after the financial results of our Italian real estate data business because of the distortion of comparability of financial results due to significant price increases implemented in 2005 in response to legislative changes and the uncertainty of other regulatory changes.
*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 not to 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.”
* Cash, cash equivalents and marketable securities minus short-term debt and long-term debt is referred to as “net debt position.”
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.
Schedule 4
The Dun & Bradstreet Corporation
Supplemental Financial Data (unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | | | | | Effects of | | | | | | | Year-to-Date | | | | | | | Effects of | | | | |
| | | September 30, | | | AFX | | | Foreign | | | BFX | | | September 30, | | | AFX | | | Foreign | | | BFX | |
| | | | | | | | | | | % Change | | | Exchange | | | % Change | | | | | | | | | | | % Change | | | Exchange | | | % Change | |
| Amounts in millions | | 2006 | | | 2005 | | | Fav/(Unfav) | | | Fav/(Unfav) | | | Fav/(Unfav) | | | 2006 | | | 2005 | | | Fav/(Unfav) | | | Fav/(Unfav) | | | Fav/(Unfav) | |
Geographic and Customer Solution Set Revenue: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S.: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Risk Management Solutions | | $ | 165.3 | | | $ | 160.7 | | | | 3 | % | | | 0 | % | | | 3 | % | | $ | 511.1 | | | $ | 490.7 | | | | 4 | % | | | 0 | % | | | 4 | % |
| Sales & Marketing Solutions | | | 73.3 | | | | 72.1 | | | | 2 | % | | | 0 | % | | | 2 | % | | | 230.6 | | | | 216.3 | | | | 7 | % | | | 0 | % | | | 7 | % |
| E-Business Solutions | | | 20.6 | | | | 17.0 | | | | 21 | % | | | 0 | % | | | 21 | % | | | 60.4 | | | | 48.3 | | | | 25 | % | | | 0 | % | | | 25 | % |
| Supply Management Solutions | | | 12.0 | | | | 9.2 | | | | 30 | % | | | 0 | % | | | 30 | % | | | 26.3 | | | | 20.6 | | | | 27 | % | | | 0 | % | | | 27 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Core and Total U.S. | | | 271.2 | | | | 259.0 | | | | 5 | % | | | 0 | % | | | 5 | % | | | 828.4 | | | | 775.9 | | | | 7 | % | | | 0 | % | | | 7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
International: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Risk Management Solutions | | | 74.5 | | | | 68.9 | | | | 8 | % | | | 4 | % | | | 4 | % | | | 221.5 | | | | 219.0 | | | | 1 | % | | | (2 | )% | | | 3 | % |
| Sales & Marketing Solutions | | | 11.0 | | | | 12.0 | | | | (7 | )% | | | 3 | % | | | (10 | )% | | | 37.0 | | | | 34.9 | | | | 6 | % | | | (2 | )% | | | 8 | % |
| E-Business Solutions | | | 1.4 | | | | 0.9 | | | | 49 | % | | | 4 | % | | | 45 | % | | | 3.7 | | | | 1.9 | | | | N/M | | | | N/M | | | | N/M | |
| Supply Management Solutions | | | 1.1 | | | | 0.8 | | | | 40 | % | | | 5 | % | | | 35 | % | | | 3.2 | | | | 2.9 | | | | 7 | % | | | (4 | )% | | | 11 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Core and Total International | | | 88.0 | | | | 82.6 | | | | 7 | % | | | 4 | % | | | 3 | % | | | 265.4 | | | | 258.7 | | | | 3 | % | | | (2 | )% | | | 5 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Corporation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Risk Management Solutions | | | 239.8 | | | | 229.6 | | | | 4 | % | | | 1 | % | | | 3 | % | | | 732.6 | | | | 709.7 | | | | 3 | % | | | (1 | )% | | | 4 | % |
| Sales & Marketing Solutions | | | 84.3 | | | | 84.1 | | | | 0 | % | | | 0 | % | | | 0 | % | | | 267.6 | | | | 251.2 | | | | 7 | % | | | 0 | % | | | 7 | % |
| E-Business Solutions | | | 22.0 | | | | 17.9 | | | | 23 | % | | | 0 | % | | | 23 | % | | | 64.1 | | | | 50.2 | | | | 28 | % | | | 0 | % | | | 28 | % |
| Supply Management Solutions | | | 13.1 | | | | 10.0 | | | | 31 | % | | | 1 | % | | | 30 | % | | | 29.5 | | | | 23.5 | | | | 25 | % | | | 0 | % | | | 25 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Core and Total Revenue | | $ | 359.2 | | | $ | 341.6 | | | | 5 | % | | | 1 | % | | | 4 | % | | $ | 1,093.8 | | | $ | 1,034.6 | | | | 6 | % | | | 0 | % | | | 6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating Costs: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Expenses | | $ | 114.5 | | | $ | 105.7 | | | | (8 | )% | | | | | | | | | | $ | 341.6 | | | $ | 307.8 | | | | (11 | )% | | | | | | | | |
| Selling and Administrative Expenses | | | 145.8 | | | | 143.4 | | | | (2 | )% | | | | | | | | | | | 457.7 | | | | 451.8 | | | | (1 | )% | | | | | | | | |
| Depreciation and Amortization | | | 8.2 | | | | 8.6 | | | | 5 | % | | | | | | | | | | | 22.2 | | | | 26.0 | | | | 15 | % | | | | | | | | |
| Restructuring Expense | | | 14.2 | | | | 4.7 | | | | N/M | | | | | | | | | | | | 24.2 | | | | 21.6 | | | | (12 | )% | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Operating Costs | | $ | 282.7 | | | $ | 262.4 | | | | (8 | )% | | | | | | | | | | $ | 845.7 | | | $ | 807.2 | | | | (5 | )% | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Capital Expenditures | | $ | 5.0 | | | $ | — | | | | N/M | | | | | | | | | | | $ | 9.2 | | | $ | 4.5 | | | | N/M | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Additions to Computer Software & Other Intangibles | | $ | 14.4 | | | $ | 8.3 | | | | (73 | )% | | | | | | | | | | $ | 31.2 | | | $ | 13.4 | | | | N/M | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | Year-to-Date | | | Quarter Ended | |
| Reconciliation of International Revenue Growth excluding | | Sep 30, 2006 | | | Sep 30, 2006 | | | Jun 30, 2006 | | | Mar 31, 2006 | |
Italian Real Estate Data Business: | | | | | | | | | | | | | | | | |
Total and Core RevenueAFX | | | 3 | % | | | 7 | % | | | (2 | )% | | | 4 | % |
| Unfavorable Effects of Foreign Exchange | | | (2 | )% | | | 4 | % | | | (3 | )% | | | (7 | )% |
| | | | | | | | | | | | | |
Total and Core RevenueBFX | | | 5 | % | | | 3 | % | | | 1 | % | | | 11 | % |
Effect of Italian Real Estate Data BusinessBFX | | | (1 | )% | | | (1 | )% | | | (5 | )% | | | 3 | % |
| | | | | | | | | | | | | |
Total and Core RevenueBFXexcluding Italian Real Estate Data Business | | | 6 | % | | | 4 | % | | | 6 | % | | | 8 | % |
| | | | | | | | | | | | | |
Schedule 4
The Dun & Bradstreet Corporation
Supplemental Financial Data (unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Amounts in millions | | Sep 30, 2006 | | | Jun 30, 2006 | | | Mar 31, 2006 | | | Dec 31, 2005 | | | Sep 30, 2005 | | | Jun 30, 2005 | | | Mar 31, 2005 | |
Net Debt Position: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash and Cash Equivalents | | $ | 138.9 | | | $ | 117.1 | | | $ | 126.1 | | | $ | 195.3 | | | $ | 264.6 | | | $ | 245.3 | | | $ | 295.4 | |
| Marketable Securities | | | — | | | | — | | | | 103.2 | | | | 109.4 | | | | — | | | | 69.2 | | | | 34.4 | |
| Short-Term Debt | | | (0.1 | ) | | | (0.4 | ) | | | (1.1 | ) | | | (300.8 | ) | | | (303.0 | ) | | | (303.3 | ) | | | (301.7 | ) |
| Long-Term Debt | | | (400.4 | ) | | | (354.3 | ) | | | (299.3 | ) | | | (0.1 | ) | | | (0.3 | ) | | | (0.4 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | |
| Net Debt | | $ | (261.6 | ) | | $ | (237.6 | ) | | $ | (71.1 | ) | | $ | 3.8 | | | $ | (38.7 | ) | | $ | 10.8 | | | $ | 28.1 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | Year-To-Date | |
| | | | | | | | | % Change | |
| Amounts in millions | | Sep 30, 2006 | | | Sep 30, 2005 | | | Fav/(Unfav) | |
Free Cash Flow: | | | | | | | | | | | | |
| Net Cash Provided By Operating Activities (As Reported) | | $ | 235.1 | | | $ | 159.1 | | | | 48 | % |
| Less: | | | | | | | | | | | | |
| Capital Expenditures (As Reported) | | | 9.2 | | | | 4.5 | | | | N/M | |
| Additions to Computer Software & Other Intangibles (As Reported) | | | 31.2 | | | | 13.4 | | | | N/M | |
| | | | | | | | | | | |
| Free Cash Flow | | | 194.7 | | | | 141.2 | | | | 38 | % |
| Add: Legacy Tax Matters | | | 45.6 | | | | 50.3 | | | | 9 | % |
| | | | | | | | | | | |
| Free Cash Flow Excluding Legacy Tax Matters | | $ | 240.3 | | | $ | 191.5 | | | | 25 | % |
| | | | | | | | | | |
| | | | | | | | | | | | | |
| | | Year-To-Date | |
| | | | | | | | | | | % Change | |
| Amounts in millions | | Sep 30, 2006 | | | Sep 30, 2005 | | | Fav/(Unfav) | |
Free Cash Flow excluding Legacy Tax Matters and the Effect of Adoption of SFAS 123R: | | | | | | | | | | | | |
| Free Cash Flow excluding Legacy Tax Matters | | $ | 240.3 | | | $ | 191.5 | | | | 25 | % |
Add: Effect of Adoption of SFAS No. 123R (6) | | | 30.2 | | | | — | | | | N/M | |
| | | | | | | | | | | |
| Free Cash Flow Excluding Legacy Tax Matters and the Effect of | | | | | | | | | | | | |
| Adoption of SFAS 123R | | $ | 270.5 | | | $ | 191.5 | | | | 41 | % |
| | | | | | | | | | |
| | | | | | | | | | | | | |
| | | Year-To-Date | |
| | | | | | | | | | | % Change | |
| Amounts in millions | | Sep 30, 2006 | | | Sep 30, 2005 | | | Fav/(Unfav) | |
Net Cash Provided By Operating Activities excluding Legacy Tax Matters: | | | | | | | | | | | | |
| Net Cash Provided By Operating Activities (As Reported) | | $ | 235.1 | | | $ | 159.1 | | | | 48 | % |
| Add: Legacy Tax Matters | | | 45.6 | | | | 50.3 | | | | 9 | % |
| | | | | | | | | | | |
| Net Cash Provided By Operating Activities Excluding Legacy Tax Matters | | $ | 280.7 | | | $ | 209.4 | | | | 34 | % |
| | | | | | | | | | |
AFX — After Effects of Foreign Exchange
BFX — Before Effects of Foreign Exchange
N/M — Not Meaningful
(6) We adopted SFAS 123R under the “Modified Prospective” method effective January 1, 2006. Accordingly, there is no corresponding amount for the 2005 time period.
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 Exchanged Commission.
Schedule 5
The Dun & Bradstreet Corporation
Revenue Reconciliation and Detail
Quarter Ended September 30, 2006
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended September 30, 2006 vs. 2005 | | | Year-to-Date Ended September 30, 2006 vs. 2005 | |
| | | | | | | | | | | | | | | Traditional/VAPs as a | | | | | | | | | | | | | | | Traditional/VAPs as a | |
| | | AFX | | | Effects of | | | BFX | | | % of Total Customer Solution Sets/Core | | | AFX | | | Effects of | | | BFX | | | % of Total Customer Solution Sets/Core | |
| | | % Change | | | Foreign | | | % Change | | | 2006 | | | 2005 | | | % Change | | | Foreign | | | % Change | | | 2006 | | | 2005 | |
| Amounts in millions | | Fav/(Unfav) | | | Exchange | | | Fav/(Unfav) | | | % Product Line/Core | | | % Product Line/Core | | | Fav/(Unfav) | | | Exchange | | | Fav/(Unfav) | | | % Product Line/Core | | | % Product Line/Core | |
Revenue: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S.: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Risk Management Solutions: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Traditional | | | 2 | % | | | 0 | % | | | 2 | % | | | 78 | % | | | 47 | % | | | 79 | % | | | 49 | % | | | 3 | % | | | 0 | % | | | 3 | % | | | 77 | % | | | 48 | % | | | 78 | % | | | 49 | % |
VAPs | | | 8 | % | | | 0 | % | | | 8 | % | | | 22 | % | | | 14 | % | | | 21 | % | | | 13 | % | | | 9 | % | | | 0 | % | | | 9 | % | | | 23 | % | | | 14 | % | | | 22 | % | | | 14 | % |
| Total Risk Management Solutions | | | 3 | % | | | 0 | % | | | 3 | % | | | | | | | 61 | % | | | | | | | 62 | % | | | 4 | % | | | 0 | % | | | 4 | % | | | | | | | 62 | % | | | | | | | 63 | % |
| Sales & Marketing Solutions: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Traditional | | | (1 | )% | | | 0 | % | | | (1 | )% | | | 50 | % | | | 13 | % | | | 51 | % | | | 14 | % | | | 2 | % | | | 0 | % | | | 2 | % | | | 46 | % | | | 13 | % | | | 48 | % | | | 14 | % |
VAPs | | | 4 | % | | | 0 | % | | | 4 | % | | | 50 | % | | | 14 | % | | | 49 | % | | | 14 | % | | | 11 | % | | | 0 | % | | | 11 | % | | | 54 | % | | | 15 | % | | | 52 | % | | | 14 | % |
| Total Sales & Marketing Solutions | | | 2 | % | | | 0 | % | | | 2 | % | | | | | | | 27 | % | | | | | | | 28 | % | | | 7 | % | | | 0 | % | | | 7 | % | | | | | | | 28 | % | | | | | | | 28 | % |
| E-Business Solutions | | | 21 | % | | | 0 | % | | | 21 | % | | | | | | | 8 | % | | | | | | | 7 | % | | | 25 | % | | | 0 | % | | | 25 | % | | | | | | | 8 | % | | | | | | | 6 | % |
| Supply Management Solutions | | | 30 | % | | | 0 | % | | | 30 | % | | | | | | | 4 | % | | | | | | | 3 | % | | | 27 | % | | | 0 | % | | | 27 | % | | | | | | | 2 | % | | | | | | | 3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Core and Total U.S. Revenue | | | 5 | % | | | 0 | % | | | 5 | % | | | | | | | | | | | | | | | | | | | 7 | % | | | 0 | % | | | 7 | % | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
International: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Risk Management Solutions: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Traditional | | | 10 | % | | | 3 | % | | | 7 | % | | | 89 | % | | | 76 | % | | | 88 | % | | | 73 | % | | | 1 | % | | | (2 | )% | | | 3 | % | | | 89 | % | | | 75 | % | | | 90 | % | | | 76 | % |
VAPs | | | (9 | )% | | | 4 | % | | | (13 | )% | | | 11 | % | | | 9 | % | | | 12 | % | | | 10 | % | | | 4 | % | | | 1 | % | | | 3 | % | | | 11 | % | | | 9 | % | | | 10 | % | | | 9 | % |
| Total Risk Management Solutions | | | 8 | % | | | 4 | % | | | 4 | % | | | | | | | 85 | % | | | | | | | 83 | % | | | 1 | % | | | (2 | )% | | | 3 | % | | | | | | | 84 | % | | | | | | | 85 | % |
| Sales & Marketing Solutions: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Traditional | | | 5 | % | | | 3 | % | | | 2 | % | | | 68 | % | | | 9 | % | | | 60 | % | | | 9 | % | | | 8 | % | | | (1 | )% | | | 9 | % | | | 56 | % | | | 8 | % | | | 55 | % | | | 7 | % |
VAPs | | | (26 | )% | | | 1 | % | | | (27 | )% | | | 32 | % | | | 4 | % | | | 40 | % | | | 6 | % | | | 4 | % | | | (3 | )% | | | 7 | % | | | 44 | % | | | 6 | % | | | 45 | % | | | 6 | % |
| Total Sales & Marketing Solutions | | | (7 | )% | | | 3 | % | | | (10 | )% | | | | | | | 13 | % | | | | | | | 15 | % | | | 6 | % | | | (2 | )% | | | 8 | % | | | | | | | 14 | % | | | | | | | 13 | % |
| E-Business Solutions | | | 49 | % | | | 4 | % | | | 45 | % | | | | | | | 1 | % | | | | | | | 1 | % | | | N/M | | | | N/M | | | | N/M | | | | | | | | 1 | % | | | | | | | 1 | % |
| Supply Management Solutions | | | 40 | % | | | 5 | % | | | 35 | % | | | | | | | 1 | % | | | | | | | 1 | % | | | 7 | % | | | (4 | )% | | | 11 | % | | | | | | | 1 | % | | | | | | | 1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Core and Total International Revenue | | | 7 | % | | | 4 | % | | | 3 | % | | | | | | | | | | | | | | | | | | | 3 | % | | | (2 | )% | | | 5 | % | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Corporation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Risk Management Solutions: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Traditional | | | 4 | % | | | 1 | % | | | 3 | % | | | 81 | % | | | 54 | % | | | 81 | % | | | 54 | % | | | 2 | % | | | (1 | )% | | | 3 | % | | | 81 | % | | | 54 | % | | | 82 | % | | | 56 | % |
VAPs | | | 4 | % | | | 0 | % | | | 4 | % | | | 19 | % | | | 13 | % | | | 19 | % | | | 13 | % | | | 8 | % | | | 0 | % | | | 8 | % | | | 19 | % | | | 13 | % | | | 18 | % | | | 13 | % |
| Total Risk Management Solutions | | | 4 | % | | | 1 | % | | | 3 | % | | | | | | | 67 | % | | | | | | | 67 | % | | | 3 | % | | | (1 | )% | | | 4 | % | | | | | | | 67 | % | | | | | | | 69 | % |
| Sales & Marketing Solutions: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Traditional | | | 0 | % | | | 0 | % | | | 0 | % | | | 52 | % | | | 12 | % | | | 52 | % | | | 13 | % | | | 3 | % | | | 0 | % | | | 3 | % | | | 47 | % | | | 11 | % | | | 49 | % | | | 12 | % |
VAPs | | | 0 | % | | | 0 | % | | | 0 | % | | | 48 | % | | | 11 | % | | | 48 | % | | | 12 | % | | | 10 | % | | | (1 | )% | | | 11 | % | | | 53 | % | | | 13 | % | | | 51 | % | | | 12 | % |
| Total Sales & Marketing Solutions | | | 0 | % | | | 0 | % | | | 0 | % | | | | | | | 23 | % | | | | | | | 25 | % | | | 7 | % | | | 0 | % | | | 7 | % | | | | | | | 24 | % | | | | | | | 24 | % |
| E-Business Solutions | | | 23 | % | | | 0 | % | | | 23 | % | | | | | | | 6 | % | | | | | | | 5 | % | | | 28 | % | | | 0 | % | | | 28 | % | | | | | | | 6 | % | | | | | | | 5 | % |
| Supply Management Solutions | | | 31 | % | | | 1 | % | | | 30 | % | | | | | | | 4 | % | | | | | | | 3 | % | | | 25 | % | | | 0 | % | | | 25 | % | | | | | | | 3 | % | | | | | | | 2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Core and Total Revenue | | | 5 | % | | | 1 | % | | | 4 | % | | | | | | | | | | | | | | | | | | | 6 | % | | | 0 | % | | | 6 | % | | | | | | | | | | | | | | | | |
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.
