Contacts: | ||
Joseph Jones (Media) | Rich Veldran (Investors/Analysts) | |
jonesjo@dnb.com | veldranr@dnb.com | |
973.921.5732 | 973.921.5863 |
D&B Announces Preliminary Second Quarter
2008 Results; Confirms 2008 Guidance
| • | Diluted EPS Before Non-Core Gains and Charges Up 20% |
| • | GAAP Diluted EPS Up 3%; Due Primarily to the Resolution of a Legacy Tax Matter With the IRS in the Prior Year Second Quarter |
| • | Core and Total Revenue Up 10% Before the Effect of Foreign Exchange; Up 12% After the Effect of Foreign Exchange |
Short Hills, NJ – July 14, 2008—In conjunction with its 2008 Investor Day event, D&B (NYSE: DNB), the leading provider of global business information, tools and commercial insight, today announced preliminary results for the second quarter ended June 30, 2008. The Company will issue a press release announcing its final second quarter 2008 results on July 31, 2008.
Preliminary Second Quarter 2008 Results
Diluted earnings per share before non-core gains and charges for the quarter ended June 30, 2008, were $1.15, up 20 percent from $0.96 in the prior year similar period. These results were primarily driven by operating income growth and additionally benefitted from the timing of tax benefits and share repurchases, partially offset by interest costs. On a GAAP basis, diluted earnings per share were $1.51, up 3% from $1.46 in the prior year similar period, due primarily to the resolution of a legacy tax matter with the IRS in the 2007 second quarter, which resulted in a $0.52 per diluted share, net non-core gain.
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 and total revenue for the second quarter of 2008 was $427.7 million, up 10 percent from the prior year similar period before the effect of foreign exchange (up 12 percent after the effect of foreign exchange).
Core and total revenue results for the second quarter of 2008 reflect the following by solution set:
| • | Risk Management Solutions revenue of $281.0 million, up 7 percent before the effect of foreign exchange (up 9 percent after the effect of foreign exchange); Supply Management Solutions contributed approximately 1 point of Risk Management revenue growth during the second quarter of 2008, before the effect of foreign exchange; |
| • | Sales & Marketing Solutions revenue of $115.6 million, up 17 percent before the effect of foreign exchange (up 18 percent after the effect of foreign exchange); and |
| • | Internet Solutions revenue of $31.1 million, up 18 percent both before and after the effect of foreign exchange. |
Operating income before non-core gains and charges for the second quarter of 2008 was $107.2 million, up 13 percent from the prior year similar period. On a GAAP basis, operating income for the quarter was $106.0 million, up 18 percent from the prior year similar period.
Net income before non-core gains and charges for the second quarter of 2008 was $64.0 million, up 11 percent from the prior year similar period. On a GAAP basis, net income for the quarter was $84.2 million, down 4 percent from the prior year similar period.
See attached Schedule 3 for additional detail.
Free cash flowfor the first six months of 2008, excluding the impact of legacy tax matters, was $211.6 million, up 5 percent from the first six months of 2007.
The Company defines free cash flow as net cash provided by operating activities less capital expenditures and additions to computer software and other intangibles. Net cash provided by operating activities for the first six months of 2008, excluding the impact of legacy tax matters, was $245.1 million, up 4 percent from the first six months of 2007. On a GAAP basis, net cash provided by operating activities for the first six months of 2008 was $262.3 million, compared to $234.9 million in the prior year similar period.
Page 2 of 7
See attached Schedule 4 for additional detail.
Share repurchases during the second quarter of 2008 under the Company’s discretionary repurchase program totaled $104.9 million, while repurchases made to offset the dilutive effect of shares issued under employee benefit plans totaled an additional $20.0 million.
The Company announced that it has increased its discretionary share repurchase target for the full year 2008 to approximately $300 million, up from a previous target of approximately $200 million.
The Company ended the quarter with $245.5 million of cash and cash equivalents.
Preliminary Second Quarter 2008 Segment Results
United States
Core and total revenue for the second quarter of 2008 was $319.3 million, up 10 percent from the prior year similar period. These results were primarily driven by continued strength in our core U.S. operation and additionally benefitted from some early renewals in Sales & Marketing as well as strong sales execution.
U.S. core and total revenue results for the second quarter of 2008 reflect the following:
| • | Risk Management Solutions revenue of $196.1 million, up 5 percent; Supply Management Solutions contributed approximately 1 point of Risk Management revenue growth during the second quarter of 2008; |
| • | Sales & Marketing Solutions revenue of $93.8 million, up 17 percent; and |
| • | Internet Solutions revenue of $29.4 million, up 20 percent. |
Operating income for the second quarter of 2008 was $105.3 million, up 10 percent from the prior year similar period.
Page 3 of 7
International
Core and total revenue for the second quarter of 2008 was $108.4 million, up 12 percent before the effect of foreign exchange (up 22 percent after the effect of foreign exchange) from the prior year similar period.
International core and total revenue results for the second quarter of 2008 reflect the following:
| • | Risk Management Solutions revenue of $84.9 million, up 12 percent before the effect of foreign exchange (up 22 percent after the effect of foreign exchange); Supply Management Solutions did not have a meaningful contribution to Risk Management revenue growth during the second quarter of 2008; |
| • | Sales & Marketing Solutions revenue of $21.8 million, up 13 percent before the effect of foreign exchange (up 23 percent after the effect of foreign exchange); and |
| • | Internet Solutions revenue of $1.7 million, down 6 percent before the effect of foreign exchange (flat after the effect of foreign exchange). |
Operating incomefor the second quarter of 2008 was $25.5 million, up 18 percent from the prior year similar period.
Non-Core Gains and Charges
During the second quarter of 2008 and 2007, the Company recorded:
| • | Net pre-tax, non-core charges of $8.6 million and $3.7 million, respectively; and |
| • | Net after-tax, non-core gains of $20.2 million and $29.9 million, respectively. |
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 are not a component of its ongoing income or expenses and
Page 4 of 7
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.
Full Year 2008 Outlook Confirmed
D&B confirmed the following full year financial guidance for 2008:
| • | Core revenue growth of 8 percent to 10 percent, before the effect of foreign exchange; |
| • | Operating income growth of 11 percent to 13 percent, or $501 million to $510 million, before non-core gains and charges; |
| • | Diluted EPS growth of 14 percent to 16 percent, or $5.19 to $5.29, before non-core gains and charges; |
| • | Free cash flow of $337 million to $352 million, excluding the impact of legacy tax matters; and |
| • | Tax rate of approximately 37 percent to 37.5 percent, before non-core gains and charges. |
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, 2007, filed February 25, 2008 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.
Page 5 of 7
D&B 2008 Investor Day Presentation
As previously announced, D&B will host its 2008 Investor Day event tomorrow, July 15, 2008, at the Time Warner Conference Center in New York City (60 Columbus Circle at 60th Street). The meeting, which is open to investors and analysts, will begin at 7:30 a.m. (Eastern Time) with breakfast and product demonstrations. Presentations will begin at 8:30 a.m. A live audio webcast and presentation slides will be available on D&B’s Investor Relations Web site, accessible at http://investor.dnb.com beginning at 8:30 a.m., and a replay of the Investor Day webcast will be posted following the live event.
The Company looks forward to reporting its third quarter 2008 financial results, and hosting its next conference call with analysts and investors, in late October 2008.
**************
About D&B
D&B (NYSE:DNB) is the world’s leading source of commercial information and insight on businesses, enabling companies to Decide with Confidence® for 167 years. D&B’s global commercial database contains more than 130 million business records. The database is enhanced by D&B’s proprietary DUNSRight® Quality Process, which provides our customers with quality business information. This quality information is the foundation of our global solutions that customers rely on to make critical business decisions.
D&B provides solution sets that meet a diverse set of customer needs globally. Customers use D&B Risk Management SolutionsTM to mitigate credit and supplier risk, increase cash flow and drive increased profitability; D&B Sales & Marketing SolutionsTM to increase revenue from new and existing customers; and D&B Internet Solutions 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 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.
Page 6 of 7
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.
Page 7 of 7
| The Dun & Bradstreet Corporation | Schedule 1 | |
| Consolidated Statement of Operations(unaudited) -GAAP Results | ||
| Quarter Ended June 30, | AFX % Change Fav/(Unfav) | Effects of Foreign Exchange Fav/(Unfav) | BFX % Change Fav/(Unfav) | Year-To-Date June 30, | AFX % Change Fav/(Unfav) | Effects of Foreign Exchange Fav/(Unfav) | BFX % Change Fav/(Unfav) | |||||||||||||||||||||||||||||
Amounts in millions, except per share data | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||||||
U.S. | $ | 319.3 | $ | 291.6 | 10 | % | 0 | % | 10 | % | $ | 640.5 | $ | 594.1 | 8 | % | 0 | % | 8 | % | ||||||||||||||||
International | 108.4 | 89.2 | 22 | % | 10 | % | 12 | % | 201.9 | 165.7 | 22 | % | 10 | % | 12 | % | ||||||||||||||||||||
Core and Total Revenue | $ | 427.7 | $ | 380.8 | 12 | % | 2 | % | 10 | % | $ | 842.4 | $ | 759.8 | 11 | % | 2 | % | 9 | % | ||||||||||||||||
Operating Income (Loss): | ||||||||||||||||||||||||||||||||||||
U.S. | $ | 105.3 | $ | 96.0 | 10 | % | $ | 223.7 | $ | 205.1 | 9 | % | ||||||||||||||||||||||||
International (1) | 25.5 | 21.6 | 18 | % | 38.7 | 31.4 | 23 | % | ||||||||||||||||||||||||||||
Total Divisions | 130.8 | 117.6 | 11 | % | 262.4 | 236.5 | 11 | % | ||||||||||||||||||||||||||||
Corporate and Other (2) | (24.8 | ) | (27.6 | ) | 10 | % | (56.1 | ) | (62.1 | ) | 10 | % | ||||||||||||||||||||||||
Operating Income | 106.0 | 90.0 | 18 | % | 206.3 | 174.4 | 18 | % | ||||||||||||||||||||||||||||
Interest Income | 3.7 | 1.6 | N/M | 6.1 | 3.0 | N/M | ||||||||||||||||||||||||||||||
Interest Expense | (13.2 | ) | (6.5 | ) | N/M | (22.6 | ) | (12.9 | ) | (75 | )% | |||||||||||||||||||||||||
Other Income (Expense) - Net (3) | (8.4 | ) | 1.7 | N/M | (8.1 | ) | 7.6 | N/M | ||||||||||||||||||||||||||||
Non-Operating Income (Expense) - Net | (17.9 | ) | (3.2 | ) | N/M | (24.6 | ) | (2.3 | ) | N/M | ||||||||||||||||||||||||||
Income before Provision for Income Taxes | 88.1 | 86.8 | 2 | % | 181.7 | 172.1 | 6 | % | ||||||||||||||||||||||||||||
Provision for Income Taxes | 3.7 | 1.2 | N/M | 37.5 | 34.3 | (9 | )% | |||||||||||||||||||||||||||||
Minority Interest Income (Expense) | (0.6 | ) | 0.4 | N/M | (0.5 | ) | 0.5 | N/M | ||||||||||||||||||||||||||||
Equity in Net Income (Loss) of Affiliates | 0.4 | 0.3 | 35 | % | 0.6 | 0.4 | 39 | % | ||||||||||||||||||||||||||||
Income From Continuing Operations | 84.2 | 86.3 | (2 | )% | 144.3 | 138.7 | 4 | % | ||||||||||||||||||||||||||||
Discontinued Operations: | ||||||||||||||||||||||||||||||||||||
Income from Discontinued Operations, Net of Income Taxes | — | 1.3 | N/M | 0.7 | 1.6 | (55 | )% | |||||||||||||||||||||||||||||
Gain on Disposal of Italian Real Estate business, No Income Tax Impact | — | — | N/M | 0.4 | — | N/M | ||||||||||||||||||||||||||||||
Income from Discontinued Operations, Net of Income Taxes | — | 1.3 | N/M | 1.1 | 1.6 | (29 | )% | |||||||||||||||||||||||||||||
Net Income (4) | $ | 84.2 | $ | 87.6 | (4 | )% | $ | 145.4 | $ | 140.3 | 4 | % | ||||||||||||||||||||||||
Basic Earnings Per Share of Common Stock: | ||||||||||||||||||||||||||||||||||||
Continuing Operations | $ | 1.55 | $ | 1.47 | 5 | % | $ | 2.61 | $ | 2.35 | 11 | % | ||||||||||||||||||||||||
Discontinued Operations | — | 0.02 | N/M | 0.02 | 0.03 | (33 | )% | |||||||||||||||||||||||||||||
Basic Earnings Per Share of Common Stock | $ | 1.55 | $ | 1.49 | 4 | % | $ | 2.63 | $ | 2.38 | 11 | % | ||||||||||||||||||||||||
Diluted Earnings Per Share of Common Stock: | ||||||||||||||||||||||||||||||||||||
Continuing Operations | $ | 1.51 | $ | 1.44 | 5 | % | $ | 2.56 | $ | 2.29 | 12 | % | ||||||||||||||||||||||||
Discontinued Operations | — | 0.02 | N/M | 0.02 | �� | 0.03 | (33 | )% | ||||||||||||||||||||||||||||
Diluted Earnings Per Share of Common Stock (5) | $ | 1.51 | $ | 1.46 | 3 | % | $ | 2.58 | $ | 2.32 | 11 | % | ||||||||||||||||||||||||
Weighted Average Number of Shares Outstanding: | ||||||||||||||||||||||||||||||||||||
Basic | 54.4 | 58.6 | 7 | % | 55.2 | 59.0 | 6 | % | ||||||||||||||||||||||||||||
Diluted | 55.6 | 60.2 | 8 | % | 56.4 | 60.5 | 7 | % | ||||||||||||||||||||||||||||
AFX - After Effects of Foreign Exchange
BFX - Before Effects of Foreign Exchange
N/M - Not Meaningful
See Schedule 3 (Notes to Schedules), which is an integral part of the consolidated statement of operations.
This financial information should be read in conjunction with the consolidated financial statements and related notes of The Dun & Bradstreet Corporation contained in filings with the Securities and Exchange Commission.
| The Dun & Bradstreet Corporation | Schedule 2 | |
| Consolidated Statement of Operations(unaudited) - (On a Continuing Operations Basis) -Before Non-Core Gains and Charges | ||
| Quarter Ended June 30, | AFX % Change Fav/(Unfav) | Effects of Foreign Exchange Fav/(Unfav) | BFX % Change Fav/(Unfav) | Year-To-Date June 30, | AFX % Change Fav/(Unfav) | Effects of Foreign Exchange Fav/(Unfav) | BFX % Change Fav/(Unfav) | |||||||||||||||||||||||||||||
Amounts in millions, except per share data | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||||||
U.S. | $ | 319.3 | $ | 291.6 | 10 | % | 0 | % | 10 | % | $ | 640.5 | $ | 594.1 | 8 | % | 0 | % | 8 | % | ||||||||||||||||
International | 108.4 | 89.2 | 22 | % | 10 | % | 12 | % | 201.9 | 165.7 | 22 | % | 10 | % | 12 | % | ||||||||||||||||||||
Core and Total Revenue | $ | 427.7 | $ | 380.8 | 12 | % | 2 | % | 10 | % | $ | 842.4 | $ | 759.8 | 11 | % | 2 | % | 9 | % | ||||||||||||||||
Operating Income (Loss): | ||||||||||||||||||||||||||||||||||||
U.S. | $ | 105.3 | $ | 96.0 | 10 | % | $ | 223.7 | $ | 205.1 | 9 | % | ||||||||||||||||||||||||
International (1) | 25.5 | 21.6 | 18 | % | 38.7 | 32.2 | 20 | % | ||||||||||||||||||||||||||||
Total Divisions | 130.8 | 117.6 | 11 | % | 262.4 | 237.3 | 11 | % | ||||||||||||||||||||||||||||
Corporate and Other (2) | (23.6 | ) | (22.7 | ) | (4 | )% | (44.5 | ) | (42.4 | ) | (5 | )% | ||||||||||||||||||||||||
Operating Income | 107.2 | 94.9 | 13 | % | 217.9 | 194.9 | 12 | % | ||||||||||||||||||||||||||||
Interest Income | 3.7 | 1.6 | N/M | 6.1 | 3.0 | N/M | ||||||||||||||||||||||||||||||
Interest Expense | (13.2 | ) | (6.5 | ) | N/M | (22.6 | ) | (12.9 | ) | (75 | )% | |||||||||||||||||||||||||
Other Income (Expense) - Net (3) | (1.0 | ) | 0.5 | N/M | (1.1 | ) | 0.1 | N/M | ||||||||||||||||||||||||||||
Non-Operating Income (Expense) - Net | (10.5 | ) | (4.4 | ) | N/M | (17.6 | ) | (9.8 | ) | (79 | )% | |||||||||||||||||||||||||
Income before Provision for Income Taxes | 96.7 | 90.5 | 7 | % | 200.3 | 185.1 | 8 | % | ||||||||||||||||||||||||||||
Provision for Income Taxes | 32.5 | 33.5 | 3 | % | 71.1 | 69.0 | (3 | )% | ||||||||||||||||||||||||||||
Minority Interest Income (Expense) | (0.6 | ) | 0.4 | N/M | (0.5 | ) | 0.5 | N/M | ||||||||||||||||||||||||||||
Equity in Net Income (Loss) of Affiliates | 0.4 | 0.3 | 35 | % | 0.6 | 0.4 | 39 | % | ||||||||||||||||||||||||||||
Net Income (4) | $ | 64.0 | $ | 57.7 | 11 | % | $ | 129.3 | $ | 117.0 | 11 | % | ||||||||||||||||||||||||
Basic Earnings Per Share of Common Stock | $ | 1.18 | $ | 0.99 | 19 | % | $ | 2.34 | $ | 1.98 | 18 | % | ||||||||||||||||||||||||
Diluted Earnings Per Share of Common Stock (5) | $ | 1.15 | $ | 0.96 | 20 | % | $ | 2.29 | $ | 1.93 | 19 | % | ||||||||||||||||||||||||
Weighted Average Number of Shares Outstanding: | ||||||||||||||||||||||||||||||||||||
Basic | 54.4 | 58.6 | 7 | % | 55.2 | 59.0 | 6 | % | ||||||||||||||||||||||||||||
Diluted | 55.6 | 60.2 | 8 | % | 56.4 | 60.5 | 7 | % | ||||||||||||||||||||||||||||
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 | Schedule 3 | |
| Notes to Schedules 1 and 2(unaudited) and Definitions of Non-GAAP Measures | ||
(1) The following table reconciles International Operating Income included in Schedule 1 and Schedule 2:
Amounts in millions | Quarter Ended June 30, | % Change Fav/(Unfav) | Year-to-Date June 30, | % Change Fav/(Unfav) | ||||||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||||||||
International Operating Income - GAAP Results (Schedule 1) | $ | 25.5 | $ | 21.6 | 18 | % | $ | 38.7 | $ | 31.4 | 23 | % | ||||||||||
Settlement of International Payroll Tax Matter Related to a Divested Entity | — | — | N/M | — | (0.8 | ) | N/M | |||||||||||||||
International Operating Income - Before Non-Core Gains and Charges (Schedule 2) | $ | 25.5 | $ | 21.6 | 18 | % | $ | 38.7 | $ | 32.2 | 20 | % | ||||||||||
(2) The following table reconciles Corporate and Other expenses included in Schedule 1 and Schedule 2:
|
| |||||||||||||||||||||
Amounts in millions | Quarter Ended June 30, | % Change Fav/(Unfav) | Year-to-Date June 30, | % Change Fav/(Unfav) | ||||||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||||||||
Corporate and Other - GAAP Results (Schedule 1) | $ | (24.8 | ) | $ | (27.6 | ) | 10 | % | $ | (56.1 | ) | $ | (62.1 | ) | 10 | % | ||||||
Restructuring Charges | (1.2 | ) | (4.9 | ) | 76 | % | (11.6 | ) | (19.7 | ) | 41 | % | ||||||||||
Corporate and Other - Before Non-Core Gains and Charges (Schedule 2) | $ | (23.6 | ) | $ | (22.7 | ) | (4 | )% | $ | (44.5 | ) | $ | (42.4 | ) | (5 | )% | ||||||
(3) The following table reconciles Other Income (Expense)-Net included in Schedule 1 and Schedule 2:
|
| |||||||||||||||||||||
Amounts in millions | Quarter Ended June 30, | % Change Fav/(Unfav) | Year-to-Date June 30, | % Change Fav/(Unfav) | ||||||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||||||||
Other Income (Expense) - Net - GAAP Results (Schedule 1) | $ | (8.4 | ) | $ | 1.7 | N/M | $ | (8.1 | ) | $ | 7.6 | N/M | ||||||||||
Effect of Legacy Tax Matters | 0.3 | 0.4 | (25 | )% | 0.7 | 0.9 | (22 | )% | ||||||||||||||
Legacy Tax Matter related to the settlement of 2003 tax year | (7.7 | ) | — | N/M | (7.7 | ) | — | N/M | ||||||||||||||
Gain Associated with Huaxia/D&B China Joint Venture | — | — | N/M | — | 5.8 | N/M | ||||||||||||||||
Net Gain (Loss) on the Sale of Other Investments | — | 0.8 | N/M | — | 0.8 | N/M | ||||||||||||||||
Other Income (Expense) - Net - Before Non-Core Gains and Charges (Schedule 2) | $ | (1.0 | ) | $ | 0.5 | N/M | $ | (1.1 | ) | $ | 0.1 | N/M | ||||||||||
| The Dun & Bradstreet Corporation | Schedule 3 | |
| Notes to Schedules 1 and 2 (unaudited) and Definitions of Non-GAAP Measures | ||
(4) The following table reconciles Net Income included in Schedule 1 and Schedule 2:
Amounts in millions | Quarter Ended June 30, | % Change Fav/(Unfav) | Year-to-Date June 30, | % Change Fav/(Unfav) | ||||||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||||||||
Net Income - GAAP Results (Schedule 1) | $ | 84.2 | $ | 87.6 | (4 | )% | $ | 145.4 | $ | 140.3 | 4 | % | ||||||||||
Restructuring Charges | (1.2 | ) | (3.1 | ) | 61 | % | (7.7 | ) | (12.3 | ) | 37 | % | ||||||||||
Gain Associated with Huaxia/D&B China Joint Venture | — | — | N/M | — | 2.9 | N/M | ||||||||||||||||
Settlement of International Payroll Tax Matter Related to a Divested Entity | — | — | N/M | — | (0.6 | ) | N/M | |||||||||||||||
Net Gain (Loss) on the Sale of Other Investments | — | 0.5 | N/M | — | 0.5 | N/M | ||||||||||||||||
Tax Reserve true-up for the Settlement of 1997-2002 tax years, primarily related to the “Amortization and Royalty Expense Deductions/Royalty Income 1997-2007” transactions | — | 31.2 | N/M | — | 31.2 | N/M | ||||||||||||||||
Tax Reserve true-up for the Settlement of 2003 tax year, related to the “Amortization and Royalty Expense Deductions” transaction | 7.7 | — | N/M | 7.7 | — | N/M | ||||||||||||||||
Favorable resolution of Global Tax Audits related to the Liquidation of Dormant International Corporations | 13.7 | — | N/M | 13.7 | — | N/M | ||||||||||||||||
Interest on IRS Deposit | — | — | N/M | 1.3 | — | N/M | ||||||||||||||||
Income from Discontinued Operations, Net of Income Taxes | — | 1.3 | N/M | 0.7 | 1.6 | (56 | )% | |||||||||||||||
Gain on Disposal of Italian Real Estate business | — | — | N/M | 0.4 | — | N/M | ||||||||||||||||
Net Income - (On a Continuing Operations Basis) - Before Non-Core Gains and Charges (Schedule 2) | $ | 64.0 | $ | 57.7 | 11 | % | $ | 129.3 | $ | 117.0 | 11 | % | ||||||||||
(5) The following table reconciles Diluted Earnings Per Share included in Schedule 1 and Schedule 2:
|
| |||||||||||||||||||||
| Quarter Ended June 30, | % Change Fav/(Unfav) | Year-to-Date June 30, | % Change Fav/(Unfav) | |||||||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||||||||
Diluted EPS - GAAP Results (Schedule 1) | $ | 1.51 | $ | 1.46 | 3 | % | $ | 2.58 | $ | 2.32 | 11 | % | ||||||||||
Restructuring Charges | (0.03 | ) | (0.05 | ) | 40 | % | (0.14 | ) | (0.21 | ) | 33 | % | ||||||||||
Gain Associated with Huaxia/D&B China Joint Venture | — | — | N/M | — | 0.05 | N/M | ||||||||||||||||
Settlement of International Payroll Tax Matter Related to a Divested Entity | — | — | N/M | — | (0.01 | ) | N/M | |||||||||||||||
Net Gain (Loss) on the Sale of Other Investments | — | 0.01 | N/M | — | 0.01 | N/M | ||||||||||||||||
Tax Reserve true-up for the Settlement of 1997-2002 tax years, primarily related to the “Amortization and Royalty Expense Deductions/Royalty Income 1997-2007” transactions | — | 0.52 | N/M | — | 0.52 | N/M | ||||||||||||||||
Tax Reserve true-up for the Settlement of 2003 tax year, related to the “Amortization and Royalty Expense Deductions” transaction | 0.14 | — | N/M | 0.14 | — | N/M | ||||||||||||||||
Favorable resolution of Global Tax Audits related to the Liquidation of Dormant International Corporations | 0.25 | — | N/M | 0.25 | — | N/M | ||||||||||||||||
Interest on IRS Deposit | — | — | N/M | 0.02 | — | N/M | ||||||||||||||||
Income from Discontinued Operations, Net of Income Taxes | — | 0.02 | N/M | 0.02 | 0.03 | (33 | )% | |||||||||||||||
Diluted EPS - (On a Continuing Operations Basis) - Before Non-Core Gains and Charges (Schedule 2) | $ | 1.15 | $ | 0.96 | 20 | % | $ | 2.29 | $ | 1.93 | 19 | % | ||||||||||
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 not reflect our underlying business performance. We refer to these Restructuring Charges and other items as “non-core gains and (charges)”
*Net cash provided by operating activities minus capital expenditures and additions to computer software and other intangibles is referred to as “free cash flow”
This financial information should be read in conjunction with the consolidated financial statements and related notes of The Dun & Bradstreet Corporation contained in filings with the Securities and Exchange Commission.
| The Dun & Bradstreet Corporation | Schedule 4 | |
| Supplemental GAAP Financial Data (unaudited) | ||
| Quarter Ended June 30, | AFX % Change Fav/(Unfav) | Effects of Foreign Exchange Fav/(Unfav) | BFX % Change Fav/(Unfav) | Year-to-Date June 30, | AFX % Change Fav/(Unfav) | Effects of Foreign Exchange Fav/(Unfav) | BFX % Change Fav/(Unfav) | |||||||||||||||||||||||||
Amounts in millions | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||||||||||||||
Geographic and Customer Solution Set Revenue: | ||||||||||||||||||||||||||||||||
U.S.: | ||||||||||||||||||||||||||||||||
Risk Management Solutions1 | 196.1 | 187.0 | 5 | % | 0 | % | 5 | % | 396.5 | 377.0 | 5 | % | 0 | % | 5 | % | ||||||||||||||||
Sales & Marketing Solutions | 93.8 | 80.0 | 17 | % | 0 | % | 17 | % | 185.8 | 169.6 | 10 | % | 0 | % | 10 | % | ||||||||||||||||
Internet Solutions | 29.4 | 24.6 | 20 | % | 0 | % | 20 | % | 58.2 | 47.5 | 23 | % | 0 | % | 23 | % | ||||||||||||||||
Core and Total U.S. | 319.3 | 291.6 | 10 | % | 0 | % | 10 | % | 640.5 | 594.1 | 8 | % | 0 | % | 8 | % | ||||||||||||||||
International: | ||||||||||||||||||||||||||||||||
Risk Management Solutions1 | 84.9 | 69.8 | 22 | % | 10 | % | 12 | % | 158.8 | 130.3 | 22 | % | 10 | % | 12 | % | ||||||||||||||||
Sales & Marketing Solutions | 21.8 | 17.7 | 23 | % | 10 | % | 13 | % | 39.5 | 31.9 | 24 | % | 10 | % | 14 | % | ||||||||||||||||
Internet Solutions | 1.7 | 1.7 | — | 6 | % | (6 | )% | 3.6 | 3.5 | 4 | % | 6 | % | (2 | )% | |||||||||||||||||
Core and Total International | 108.4 | 89.2 | 22 | % | 10 | % | 12 | % | 201.9 | 165.7 | 22 | % | 10 | % | 12 | % | ||||||||||||||||
Total Corporation: | ||||||||||||||||||||||||||||||||
Risk Management Solutions1 | 281.0 | 256.8 | 9 | % | 2 | % | 7 | % | 555.3 | 507.3 | 9 | % | 2 | % | 7 | % | ||||||||||||||||
Sales & Marketing Solutions | 115.6 | 97.7 | 18 | % | 1 | % | 17 | % | 225.3 | 201.5 | 12 | % | 2 | % | 10 | % | ||||||||||||||||
Internet Solutions | 31.1 | 26.3 | 18 | % | 0 | % | 18 | % | 61.8 | 51.0 | 21 | % | 0 | % | 21 | % | ||||||||||||||||
Core and Total Revenue | $ | 427.7 | $ | 380.8 | 12 | % | 2 | % | 10 | % | $ | 842.4 | $ | 759.8 | 11 | % | 2 | % | 9 | % | ||||||||||||
Notes:
| 1 | On January 1, 2008, we began managing our Supply Management Solutions set as part of our Risk Management Solutions and have reclassified our historical financial results to reflect this change |
| Quarter Ended June 30, 2008 | Year-To-Date June 30, 2008 | |||||||||||||||||
| AFX % Change Fav/(Unfav) | Effects of Foreign Exchange Fav/(Unfav) | BFX % Change Fav/(Unfav) | AFX % Change Fav/(Unfav) | Effects of Foreign Exchange Fav/(Unfav) | BFX % Change Fav/(Unfav) | |||||||||||||
Risk Management Solutions without Supply Management Solutions: | ||||||||||||||||||
U.S. | 4 | % | 0 | % | 4 | % | 4 | % | 0 | % | 4 | % | ||||||
International | 22 | % | 10 | % | 12 | % | 22 | % | 10 | % | 12 | % | ||||||
Total Corporation | 9 | % | 3 | % | 6 | % | 9 | % | 3 | % | 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.
| The Dun & Bradstreet Corporation | Schedule 4 | |
| Supplemental GAAP Financial Data (unaudited) | ||
| Quarter Ended | ||||||||||||||||||||||||
Amounts in millions | June 30, 2008 | Mar 31, 2008 | Dec 31, 2007 | Sep 30, 2007 | Jun 30, 2007 | Mar 31, 2007 | ||||||||||||||||||
Net Debt Position: | ||||||||||||||||||||||||
Cash and Cash Equivalents | $ | 245.5 | $ | 215.7 | $ | 175.8 | $ | 156.1 | $ | 145.4 | $ | 130.7 | ||||||||||||
Short-Term Debt | — | — | — | — | (0.1 | ) | (0.1 | ) | ||||||||||||||||
Long-Term Debt | (825.6 | ) | (790.0 | ) | (724.8 | ) | (546.2 | ) | (475.8 | ) | (484.1 | ) | ||||||||||||
Net Debt | $ | (580.1 | ) | $ | (574.3 | ) | $ | (549.0 | ) | $ | (390.1 | ) | $ | (330.5 | ) | $ | (353.5 | ) | ||||||
| Year-To-Date | ||||||||||
Amounts in millions | June 30, 2008 | Jun 30, 2007 | % Change Fav/(Unfav) | |||||||
Free Cash Flow: | ||||||||||
Net Cash Provided By Operating Activities from Continuing Operations (GAAP Results) | $ | 262.3 | $ | 234.9 | 12 | % | ||||
Less: | ||||||||||
Capital Expenditures (GAAP Results) | 5.5 | 9.1 | 40 | % | ||||||
Additions to Computer Software & Other Intangibles (GAAP Results) | 28.0 | 23.5 | (19 | )% | ||||||
Free Cash Flow | 228.8 | 202.3 | 13 | % | ||||||
Legacy Tax Matters (Refund) Payment | (17.2 | ) | — | N/M | ||||||
Free Cash Flow Excluding Legacy Tax Matters | $ | 211.6 | $ | 202.3 | 5 | % | ||||
| Year-To-Date | ||||||||||
Amounts in millions | June 30, 2008 | Jun 30, 2007 | % Change Fav/(Unfav) | |||||||
Net Cash Provided By Operating Activities excluding Legacy Tax Matters: | ||||||||||
Net Cash Provided By Operating Activities from Continuing Operations (GAAP Results) | $ | 262.3 | $ | 234.9 | 12 | % | ||||
Legacy Tax Matters (Refund) Payment | (17.2 | ) | — | N/M | ||||||
Net Cash Provided By Operating Activities Excluding Legacy Tax Matters | $ | 245.1 | $ | 234.9 | 4 | % | ||||
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.