D&B Announces 2003 Fourth Quarter and Full Year Results.Business Editors SHORT HILLS, N.J.--(BUSINESS WIRE)--Feb. 2, 2004 D&B (NYSE NYSE See: New York Stock Exchange :DNB DNB Dictionary of National Biography DNB Drum N Bass (music) DNB De Nederlandsche Bank DNB Dun & Bradstreet (stock symbol) DNB Den Norske Bank DNB David Nelson Band ) -- Fourth Quarter EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. of $0.98 Up 17 Percent on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Basis, No Non-Core Gains and Charges in the Quarter -- 2003 EPS of $2.30 Up 23 Percent; Up 18 Percent to $2.54 Before Non-Core Gains and Charges -- Fourth Quarter Revenue Growth of 14 Percent, 9 Percent Before Foreign Exchange; Full Year Revenue Results Come in at High End of Previous Guidance of 1 to 4 Percent -- Announces Plans for $70 to $80 million of Additional Financial Flexibility -- Announces A New $200 million One-Year adj. 1. completing its life cycle within a year. Adj. 1. one-year - completing its life cycle within a year; "a border of annual flowering plants" annual phytology, botany - the branch of biology that studies plants Share Repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. Program D&B (NYSE:DNB), the leading provider of global business information and technology solutions, today reported results for the fourth quarter and full year 2003. The Company also announced a new share repurchase program and its next series of financial flexibility initiatives. "Our results for the fourth quarter and 2003 as a whole played out as we expected," said Allan Allan can refer to:
p. p. 1. strong p. p. os> of Lose. Noun 1. Loren - Italian film actress (born in 1934) Sofia Scicolone, Sophia Loren , Chairman and Chief Executive Officer of D&B. "We met our commitments for revenue growth, EPS, and net cash provided by operating activities. We achieved revenue growth in both our North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. and International segments and each of our customer solution sets contributed to our growth. When we laid out our Blueprint blueprint, white-on-blue photographic print, commonly of a working drawing used during building or manufacturing. The plan is first drawn to scale on a special paper or tracing cloth through which light can penetrate. for Growth strategy three years ago, we also said that we wanted the majority of our revenue delivered over the Web. At the end of 2003 we reached 76 percent and our plans call for reaching 80 percent in 2004. I am proud of our team as we stepped up our leadership this year and we did what we said we would do." Fourth Quarter 2003 Results The Company reported diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the quarter ended December December: see month. 31, 2003, of 98 cents, up 17 percent from 84 cents in the prior year quarter. Total revenue for the quarter was $404.4 million, a 14 percent (9 percent before the effect of foreign exchange) increase compared with the prior year quarter, with 3 percentage points of the increase due to the Company's recent acquisitions. The total revenue results reflect the following by product line:
-- Risk Management Solutions revenue of $249.3 million, up 9
percent
(4 percent before the effect of foreign exchange);
-- Sales & Marketing Solutions revenue of $127 million, up 14
percent
(11 percent before the effect of foreign exchange);
-- Supply Management Solutions revenue of $18 million, up 18
percent
(14 percent before the effect of foreign exchange); and
-- E-Business Solutions revenue of $10.1 million, representing
the results of Hoover's, Inc., which was acquired in March
2003 and contributed
3 percentage points of the Company's overall revenue growth.
Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the fourth quarter was $121 million, up 13 percent from the year ago period, primarily due to the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact of foreign exchange which contributed 6 percentage points of growth, and the increased revenue. Net income for the quarter was $73.5 million, up 14 percent from $64.3 million in the prior-year period. The Company did not record any non-core gains or charges in the fourth quarter. During the fourth quarter, net cash provided by operating activities was $79.4 million. The Company repurchased a total of $30 million of its common stock during the quarter under its $100 million share repurchase program approved by its Board of Directors in October October: see month. 2002, completing that program. Fourth Quarter 2003 Segment Results North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. North America's fourth quarter total and core revenue (defined as total revenue less divested businesses) was $275.1 million, up 12 percent from $245 million in the prior year period. North America's revenue results include: -- $149.4 million from Risk Management Solutions, up 5 percent (4 percent before the effect of foreign exchange from Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. operations); -- $102.2 million from Sales & Marketing Solutions, up 13 percent; -- $13.4 million from Supply Management Solutions, up 11 percent; and -- $10.1 million from E-Business (Electronic-BUSINESS) Doing business online. The term is often used synonymously with e-commerce, but e-business is more of an umbrella term for having a presence on the Web. Solutions, which represents the results of Hoover's Hoover's, Inc. is a business research company that has provided information on U.S. and foreign companies and industries since 1990. Since 1993, the company has made its information available on its website www.hoovers.com. , Inc. North America's operating income for the quarter was $105.9 million, up 7 percent from $99.3 million in the prior year quarter. The increase was primarily due to the increased revenue, partially offset by increased investments to drive growth in 2004. International The International segment's fourth-quarter core revenue was $129.3 million, up 18 percent (4 percent before the effect of foreign exchange) from $109.5 million in the prior year quarter. These International revenue results reflect: -- $99.9 million from Risk Management Solutions, up 17 percent (3 percent before the effect of foreign exchange); -- $24.8 million from Sales & Marketing Solutions, up 19 percent (6 percent before the effect of foreign exchange) and; -- $4.6 million from Supply Management Solutions, up 45 percent (24 percent before the effect of foreign exchange). The International segment's operating income for the quarter was $31.4 million, compared with operating income of $25.6 million in the prior year quarter, an increase of 22 percent. This improvement in profitability was due to the favorable impact of foreign exchange. Full Year Results For the year, D&B had diluted earnings per share of $2.54 before non-core gains and charges, up 18 percent compared with $2.15 before non-core gains and charges in 2002. On a GAAP basis, the Company reported 2003 diluted earnings per share of $2.30, up 23 percent compared with $1.87 in 2002. The non-core gains and charges are described below and in the schedules accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. this release. Core revenue for the period was $1,383.1 million, a 9 percent (4 percent before the effect of foreign exchange) increase over the same period last year. Total revenue, was $1,386.4 million, a 9 percent (4 percent before the effect of foreign exchange) increase over total revenue in the year ago period. Revenue from the Company's recent acquisitions contributed approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 4 percentage points to the core revenue increase, with 2 percentage points from Hoover's, acquired in the first quarter of 2003, and 2 percentage points from Data House, acquired in the third quarter of 2002 and the three Italian real estate information companies acquired in the second quarter of 2003, which are reported as part of the Risk Management Solutions revenue in the International segment. Operating income for the full year was $323 million, up 13 percent from 2002, before non-core charges, primarily due to favorable impact of foreign exchange which contributed 5 points of growth, and the increased revenue. On a GAAP basis, operating income was $291.8 million, up 14 percent compared with $255.9 million last year. GAAP results include $31.2 million of non-core charges in 2003 and $30.9 million of non-core charges in 2002. Net cash provided by operating activities during 2003 was $235.7 million, up 11 percent from 2002. The Company ended the year with $239 million of cash and cash equivalents. D&B continued to make progress in migrating its product delivery to the Web. At the end of 2003, D&B delivered 76 percent of its revenue over the Web, up from 74 percent in the third quarter of 2003, and from 65 percent at the end of 2002. Full Year Segment Results North America For the full year 2003, North America's core and total revenue was $960.1 million, up 5 percent compared with $912.1 million in 2002. Operating income was $329.9 million, up 5 percent over last year. International 2003 core revenue from the International segment was $423 million, up 18 percent (3 percent before the effect of foreign exchange) from last year. Total revenue was $426.3 million, up 17 percent (2 percent before the effect of foreign exchange) from last year. Operating income was $59.9 million, up 38 percent from $43.5 million in the year ago period. This improvement in profitability was primarily due to the favorable impact of foreign exchange which contributed 28 percentage points of growth, as well as the increased revenue. See Schedule 1 for results as reported in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP"), Schedule 2 for results before non-core gains and charges, and Schedule 3 for a reconciliation of GAAP results to results before non-core gains and charges. See Schedule 4 for revenue by product line for each geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. segment and other supplemental information. Also see below for a discussion of the Company's use of non-GAAP financial measures. Financial Flexibility Initiatives An integral component of the Company's Blueprint for Growth strategy is creating financial flexibility to fund investments for growth and to create shareholder value. In 2004, the Company plans to create additional financial flexibility through cross functional re-engineering re-engineering - The examination and modification of a system to reconstitute it in a new form and the subsequent implementation of the new form. http://erg.abdn.ac.uk/users/brant/sre. that is expected to generate $70 to $80 million of annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. savings. The Company anticipates that it will incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of approximately $30 to $35 million during 2004 related to these initiatives. The Company's plans include the continued implementation of its European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. market leadership strategy and re-engineering and consolidating a variety of business processes. This includes streamlining its technology infrastructure and its data acquisition and delivery techniques, as well as optimizing its financial processes. The Company plans to announce further details of its financial flexibility plans in April 2004. "Our financially flexible business model is a cornerstone cornerstone Ceremonial building block, dated or otherwise inscribed, usually placed in an outer wall of a building to commemorate its dedication. Often the stone is hollowed out to contain newspapers, photographs, or other documents reflecting current customs, with a view to of our Blueprint for Growth strategy and essential to our success because it allows us to invest in initiatives necessary to grow our business and increase shareholder value. It is the engine that fuels our growth and as such, is one of our competitive advantages," Loren said. New $200 Million One-Year Share Repurchase Program The Company announced today that its Board of Directors has authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: a new one year share repurchase program of up to $200 million, which at current market prices represents approximately 6 percent of shares outstanding. This program is in addition to the Company's existing repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. program to offset the dilutive effect Dilutive effect Result of a transaction that decreases earnings per common share (EPS). of shares issued under employee benefit plans. The repurchase program will be funded from cash on hand. Non-Core Gains and Charges The Company did not record any non-core gains and charges in the fourth quarter of 2003. For the full year 2003, the Company recorded non-core charges related to its fourth phase of financial flexibility and the previously announced monetization Monetization The securitization of the gross revenues of a contract. of real estate of $17.4 million and $13.8 million, respectively. The charges have been recorded within full year operating income as Corporate and other expense. Additionally, the Company recorded a $7 million non-core gain related to an insurance recovery within full year non-operating income (expense)-net. D&B's restructuring charges may be viewed as recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. as they are incurred as part of each phase 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 it does not consider these charges and other similar items to reflect its underlying business performance. See "Use of Non-GAAP Financial Measures" below. 2004 Outlook The Company expects 2004 diluted earnings per share to be between $2.76 and $2.87 on a GAAP basis. This range of EPS represents between 20 and 25 percent growth, compared to diluted earnings per share of $2.30 reported on a GAAP basis for 2003. This EPS guidance includes a non-core gain of $.14 to $.15 from the sale of businesses in its International segment during the first quarter of 2004. The Company also anticipates that it will incur non-core charges of $.27 to $.32 during 2004 related to its next phase of financial flexibility. Before non-core gains and charges, D&B expects 2004 diluted earnings per share to be between $2.94 and $2.99, representing between 16 and 18 percent growth, compared to $2.54 of diluted earnings per share before non-core gains and charges of 24 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. in 2003. This guidance includes the effect of the new share repurchase program. D&B expects full-year core revenue growth will be in a range of 3 to 5 percent before the effect of foreign exchange. Because D&B is unable to predict the future movements of foreign exchange rates the Company is unable to provide an outlook for 2004 revenue on a GAAP basis. Beginning with this press release, D&B began reporting and projecting the amount of free cash flow that it generates. For 2004, the Company expects to generate free cash flow of $230 to $245 million. Free cash flow is a non-GAAP financial measure, which D&B defines as net cash provided by operating activities minus capital expenditures and additions to computer software & other intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. . See the section "Use of Non-GAAP Financial Measures" below for a discussion of free cash flow. These expected ranges are before any potential payments in settlement of tax or legal matters described in D&B's Form 10-Q Form 10-Q See 10-Q. for the fiscal quarter ended September September: see month. 30, 2003. Free cash flow was $205 million in 2003. Use of Non-GAAP Financial Measures D&B reports non-GAAP financial measures in this press release and the schedules attached. As it has done throughout 2003, D&B reports core revenue, revenue growth before the effects of foreign exchange, and operating income, net income and diluted earnings per share before non-core gains and charges. Please see D&B's Form 10-Q for the fiscal quarter ended September 30, 2003 under the section entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "Item 2. Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations - How We Evaluate Performance" for a discussion of how the Company defines these measures, why it uses them and why it believes they provide useful information to investors. As noted above, beginning with this press release the Company is reporting free cash flow. Free cash flow measures the Company's available cash flow for potential debt repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan , stock repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. and additions to cash, cash equivalents and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments. The Company believes free cash flow to be relevant and useful information to our investors as this measure is used by our management in evaluating our liquidity and the cash generated by our consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: operating businesses. Free cash flow should not be considered as a substitute measure of cash flows from operating activities, and does not necessarily represent amounts available for discretionary expenditures. Therefore, the Company believes it is important to view free cash flow as a complement to our entire consolidated statements of cash flows determined in accordance with GAAP. Fourth-Quarter Teleconference D&B will review its fourth-quarter financial results and 2004 outlook in a conference call with the investment community on Tuesday Tuesday: see week. , February February: see month. 3, 2004, 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 Investor relations The process by which the corporation communicates with its investors. Web site at http://investor.dnb.com. About D&B D&B (NYSE:DNB), the leading provider of global business information, tools and insight, has enabled customers to Decide with Confidence for over 160 years. D&B's proprietary DUNSRight (TM) process provides customers with quality information whenever and wherever they need it. This quality information is the foundation of D&B's solutions that customers rely on to make critical business decisions. Customers use D&B Risk Management Solutions to mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. risk, increase cash flow and drive increased profitability,
D&B Sales & Marketing Solutions to increase revenue from new and
existing customers, and D&B Supply Management Solutions to identify
purchasing savings, manage risk and ensure compliance within the supply
base. D&B's E-Business Solutions help customers convert
prospects to clients faster. Over 90 percent of the Business Week Global
1000 rely on D&B as a trusted partner to make more confident
business decisions. For more information, please visit www.dnb.com.Forward-Looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. and Cautionary Statements The section entitled "2004 Outlook" of this press release contains projections of future results and other forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve a number of trends, risks and uncertainties and are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. The following important factors could cause actual results to differ materially from those projected in such forward-looking statements. Demand for D&B's products is subject to intense competition, changes in customer preferences and economic conditions which impact customer behavior. The Company's results are also dependent upon its continued ability to: -- reallocate Verb 1. reallocate - allocate, distribute, or apportion anew; "Congressional seats are reapportioned on the basis of census data" reapportion allocate, apportion - distribute according to a plan or set apart for a special purpose; "I am allocating a loaf of expenses to invest for growth through its financial flexibility program; -- invest in its database and maintain its reputation for providing reliable data; -- execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution on its plan to improve the business model of its International segment and thereby improve its global data quality while realizing improved financial performance in that segment; -- manage employee satisfaction and maintain its global expertise as it implements its financial flexibility program; -- protect against damage or interruptions affecting its database or its data centers; -- develop new products or enhance existing ones to meet customer needs; and -- develop and maintain a successful Web-based business model. The Company is also subject to the effects of foreign economies, exchange rate fluctuations and U.S. and foreign legislative or regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. . Its results are also dependent upon the availability of data from its database. In addition, the Company's ability to repurchase shares is subject to market conditions, including trading volume Trading volume The number of shares transacted every day. As there is a seller for every buyer, one can think of the trading volume as half of the number of shares transacted. That is, if A sells 100 shares to B, the volume is 100 shares. in the Company's stock. Developments in any of these areas could cause results to differ materially from results that have been or may be projected. The Company's projection projection, in psychology: see defense mechanism. See rear-projection TV, front-projection TV and LCD panel. (theory) projection - In domain theory, a function, f, which is (a) idempotent, i.e. for free cash flow in 2004 is dependent upon, among other things, the Company's ability to generate revenue, the Company's collection processes, customer payment patterns and the amount and timing of payments related to tax matters and legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. involving the Company as more fully described in the Company's filings with the SEC as detailed below. 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 Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended December 31, 2002, including the section entitled "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A")," and the subsection subsection Noun any of the smaller parts into which a section may be divided Noun 1. subsection - a section of a section; a part of a part; i.e. entitled "Trends, Risks and Uncertainties" in the MD&A. Copies of the Company's Annual Report on Form 10-K are available on its web site at www.dnb.com and on the SEC's web site at www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. . D&B cautions that the foregoing list of important factors is not complete and does not undertake to update any forward-looking statements.
Schedule 1
The Dun & Bradstreet Corporation
Consolidated Statement of Operations (unaudited) - As Reported
----------------------------------------------------------------------
Quarter Ended Effects of
December 31, AFX Foreign BFX
Amounts in millions, ------------ % Change Exchange % Change
except per share data 2003 2002 Fav/(Unfav) Fav/(Unfav) Fav/(Unfav)
--------------------- ----- ------ ----------- ----------- -----------
Revenue:
North America $275.1 $245.0 12% 0% 12%
International 129.3 109.5 18% 14% 4%
-------------- ------- -------
Core Revenue 404.4 354.5 14% 5% 9%
Divested
Businesses(1) - 1.6 -100% 0% -100%
-------------- ------- -------
Total Revenue $404.4 $356.1 14% 5% 9%
-------------- ------- ------- ---------- ----------
Operating
Income (Loss):
North America $105.9 $99.3 7%
International 31.4 25.6 22%
------- -------
Total Divisions 137.3 124.9 10%
Corporate and
Other(2) (16.3) (17.6) 8%
----------------- ------- -------
Operating Income 121.0 107.3 13%
---------------- ------- -------
Interest Income 1.5 1.0 54%
Interest Expense (4.6) (4.7) 4%
Other Income
(Expense) - Net(3) .1 1.8 -94%
------------------ ------- -------
Non-Operating Income
(Expense) - Net (3.0) (1.9) -60%
-------------------- ------- -------
Income before
Provision for Income
Taxes 118.0 105.4 12%
Provision for Income
Taxes 44.9 41.1 -9%
Equity in Net Income
(Loss) of
Affiliates .4 - -
-------------------- ------- -------
Net Income(4) $73.5 $64.3 14%
-------------- ------- -------
Basic Earnings Per
Share of Common
Stock $1.01 $.86 17%
-------------------- ------- -------
Diluted Earnings Per
Share of Common
Stock(5) $.98 $.84 17%
-------------------- ------- -------
Weighted Average Number of Shares Outstanding:
Basic 72.5 74.4 3%
-------------- ------- -------
Diluted 75.3 76.7 2%
-------------- ------- ------- ----------
Year-to-Date Effects of
December 31, AFX Foreign BFX
Amounts in millions, ----------- % Change Exchange % Change
except per share data 2003 2002 Fav/(Unfav) Fav/(Unfav) Fav/(Unfav)
--------------------- ----- ------ ----------- ----------- -----------
Revenue:
North America $960.1 $912.1 5% 0% 5%
International 423.0 357.4 18% 15% 3%
-------------- --------- ---------
Core Revenue 1,383.1 1,269.5 9% 5% 4%
Divested
Businesses(1) 3.3 6.1 -45% 3% -48%
-------------- --------- ---------
Total Revenue $1,386.4 $1,275.6 9% 5% 4%
-------------- --------- --------- ---------- -----------
Operating
Income (Loss):
North America $329.9 $313.1 5%
International 59.9 43.5 38%
--------- ---------
Total
Divisions 389.8 356.6 9%
Corporate and
Other(2) (98.0) (100.7) 3%
-------------- --------- ---------
Operating
Income 291.8 255.9 14%
-------------- --------- ---------
Interest Income 4.2 3.0 41%
Interest Expense (18.6) (19.5) 5%
Other Income
(Expense) -
Net(3) 3.0 (.2) -
---------------- --------- ---------
Non-Operating
Income
(Expense) - Net (11.4) (16.7) 32%
---------------- --------- ---------
Income before
Provision for
Income Taxes 280.4 239.2 17%
Provision for
Income Taxes 106.2 94.1 -13%
Equity in Net
Income (Loss)
of Affiliates .3 (1.7) -
-------------- --------- ---------
Net Income(4) $174.5 $143.4 22%
-------------- --------- ---------
Basic Earnings
Per Share of
Common Stock $2.37 $1.93 23%
-------------------------- ---------
Diluted Earnings
Per Share of
Common Stock(5) $2.30 $1.87 23%
-------------------------- ---------
Weighted Average Number of Shares Outstanding:
Basic 73.5 74.5 1%
-------------- --------- ---------
Diluted 75.8 76.9 1%
-------------- --------- --------- ----------
See Schedule 3 (Notes to Schedules), which is an integral part of the
consolidated statement of operations.
AFX - After Effects of Foreign Exchange
BFX - Before Effects of Foreign Exchange
This financial information should 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
December 31, AFX Foreign BFX
Amounts in millions, ------------ % Change Exchange % Change
except per share data 2003 2002 Fav/(Unfav) Fav/(Unfav) Fav/(Unfav)
--------------------- ----- ------ ----------- ----------- -----------
Revenue:
North America $275.1 $245.0 12% 0% 12%
International 129.3 109.5 18% 14% 4%
-------------- ------- -------
Core Revenue 404.4 354.5 14% 5% 9%
Divested
Businesses(1) - 1.6 -100% 0% -100%
-------------- ------- -------
Total Revenue $404.4 $356.1 14% 5% 9%
-------------- ------- ------- ---------- ----------
Operating Income
(Loss):
North America $105.9 $99.3 7%
International 31.4 25.6 22%
------- -------
Total Divisions 137.3 124.9 10%
Corporate and
Other(2) (16.3) (17.6) 8%
----------------- ------- -------
Operating Income 121.0 107.3 13%
---------------- ------- -------
Interest Income 1.5 1.0 54%
Interest Expense (4.6) (4.7) 4%
Other Income
(Expense) - Net(3) 0.1 1.8 -94%
-------------- ------- -------
Non-Operating Income
(Expense) - Net (3.0) (1.9) -60%
-------------------- ------- -------
Income before
Provision for
Income Taxes 118.0 105.4 12%
Provision for
Income Taxes 44.9 41.1 -9%
Equity in Net
Income (Loss) of
Affiliates .4 - -
----------------- ------- -------
Net Income(4) $73.5 $64.3 14%
-------------- ------- -------
Basic Earnings Per
Share of Common
Stock $1.01 $.86 17%
-------------------- ------- -------
Diluted Earnings Per
Share of Common
Stock(5) $.98 $.84 17%
-------------------- ------- -------
Weighted Average Number of Shares Outstanding:
Basic 72.5 74.4 3%
-------------- ------- -------
Diluted 75.3 76.7 2%
-------------- ------- ------- ----------
Year-to-Date Effects of
December 31, AFX Foreign BFX
Amounts in millions, ----------- % Change Exchange % Change
except per share data 2003 2002 Fav/(Unfav) Fav/(Unfav) Fav/(Unfav)
--------------------- ----- ------ ----------- ----------- -----------
Revenue:
North America $960.1 $912.1 5% 0% 5%
International 423.0 357.4 18% 15% 3%
-------------- --------- ---------
Core Revenue 1,383.1 1,269.5 9% 5% 4%
Divested
Businesses (1) 3.3 6.1 -45% 3% -48%
-------------- --------- ---------
Total Revenue $1,386.4 $1,275.6 9% 5% 4%
-------------- --------- --------- ---------- -----------
Operating
Income (Loss):
North America $329.9 $313.1 5%
International 59.9 43.5 38%
--------- ---------
Total
Divisions 389.8 356.6 9%
Corporate and
Other(2) (66.8) (69.8) 5%
-------------- --------- ---------
Operating
Income 323.0 286.8 13%
-------------- --------- ---------
Interest
Income 4.2 3.0 41%
Interest
Expense (18.6) (19.5) 5%
Other Income
(Expense) -
Net(3) (4.0) (0.2) -
-------------- --------- ---------
Non-Operating
Income
(Expense) -
Net (18.4) (16.7) -11%
-------------- --------- ---------
Income before
Provision for
Income Taxes 304.6 270.1 13%
Provision for
Income Taxes 112.0 103.4 -8%
Equity in Net
Income (Loss)
of Affiliates .3 (1.7) -
-------------- --------- ---------
Net Income(4) $192.9 $165.0 17%
-------------- --------- ---------
Basic Earnings
Per Share of
Common Stock $2.62 $2.22 18%
-------------- --------- ---------
Diluted Earnings
Per Share of
Common Stock(5) $2.54 $2.15 18%
-------------- --------- ---------
Weighted Average Number of Shares Outstanding:
Basic 73.5 74.5 1%
-------------- --------- ---------
Diluted 75.8 76.9 1%
-------------- --------- --------- ----------
See Schedule 3 (Notes to Schedules), which is an integral part of the
consolidated statement of operations.
AFX - After Effects of Foreign Exchange
BFX - Before Effects of Foreign Exchange
Non-Core Gains and Charges - For internal management purposes, we
treat certain gains and charges which are included in "Corporate and
Other" and "Other Income (Expense) - Net" as non-core gains and
charges. These pre-tax non-core gains and charges are summarized in
Schedule 3. We exclude non-core gains and charges when evaluating
our financial performance because we do not consider these items to
reflect our underlying business performance.
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 3
The Dun & Bradstreet Corporation
Notes to Schedules 1 and 2 (unaudited)
(1) 2003 includes revenues from the Company's Israeli business and
2002 includes revenues from the Company's Israeli and Korean
businesses, which were divested in the quarter ended September 30,
2003 and the quarter ended December 31, 2002, respectively.
(2) The following table reconciles between Corporate and Other
expenses included in Schedule 1 and Schedule 2:
Quarter Ended
December 31,
---------------
% Change
Amounts in millions 2003 2002 Fav/(Unfav)
------------------- ------- ------- -----------
Corporate and Other - As Reported
(Schedule 1) $(16.3) $(17.6) 8%
Restructuring Charge - - N/M
High Wycombe, England, Building
Sale - - N/M
------- -------
Corporate and Other - Before Non-Core
Gains and Charges (Schedule 2) $(16.3) $(17.6) 8%
------- ------- ----------
Year-to-Date
December 31,
----------------
% Change
Amounts in millions 2003 2002 Fav/(Unfav)
------------------- ------- -------- -----------
Corporate and Other - As Reported
(Schedule 1) $(98.0) $(100.7) 3%
Restructuring Charge (17.4) (30.9) N/M
High Wycombe, England, Building
Sale (13.8) - N/M
------- --------
Corporate and Other - Before Non-Core
Gains and Charges (Schedule 2) $(66.8) $(69.8) 5%
------- -------- -----------
In 2003, the Company recorded, within Corporate and Other, a charge
for restructuring related to the fourth phase of its financial
flexibility program.
(3) The following table reconciles between the Other Income (Expense)-
Net included in Schedule 1 and Schedule 2:
Quarter Ended
December 31,
---------------
% Change
Amounts in millions 2003 2002 Fav/(Unfav)
------------------- ------- ------- -----------
Other Income (Expense)-Net - As
Reported (Schedule 1) $.1 $1.8 -94%
Insurance Recovery related to World
Trade Center Tragedy - - N/M
------- -------
Other Income (Expense)-Net - Before Non-
Core Gains and Charges (Schedule 2) $.1 $1.8 -94%
------- ------- ----------
Year-to-Date
December 31,
----------------
% Change
Amounts in millions 2003 2002 Fav/(Unfav)
------------------- ------- -------- -----------
Other Income (Expense)-Net - As
Reported (Schedule 1) $3.0 $(.2) -
Insurance Recovery related to World
Trade Center Tragedy 7.0 - N/M
------- --------
Other Income (Expense)-Net - Before
Non-Core Gains and Charges (Schedule
2) $(4.0) $(.2) -
------- -------- -----------
(4) The following table reconciles between the Net Income included in
Schedule 1 and Schedule 2:
Quarter Ended
December 31,
---------------
% Change
Amounts in millions 2003 2002 Fav/(Unfav)
------------------- ------- ------- -----------
Net Income - As Reported (Schedule 1) $73.5 $64.3 14%
Restructuring Charge - - N/M
High Wycombe, England, Building Sale - - N/M
Insurance Recovery related to World
Trade Center Tragedy - - N/M
------- -------
Net Income - Before Non-Core Gains and
Charges (Schedule 2) $73.5 $64.3 14%
------- ------- ----------
Year-to-Date
December 31,
----------------
% Change
Amounts in millions 2003 2002 Fav/(Unfav)
------------------- ------- -------- ----------
Net Income - As Reported (Schedule 1) $174.5 $143.4 22%
Restructuring Charge (11.6) (21.6) N/M
High Wycombe, England, Building Sale (11.1) - N/M
Insurance Recovery related to World
Trade Center Tragedy 4.3 - N/M
------- --------
Net Income - Before Non-Core Gains and
Charges (Schedule 2) $192.9 $165.0 17%
------- -------- -----------
(5) The following table reconciles between the Diluted Earnings Per
Share included in Schedule 1 and Schedule 2:
Quarter Ended
December 31,
---------------
% Change
2003 2002 Fav/(Unfav)
------- ------- -----------
Diluted EPS - As Reported (Schedule 1) $.98 $.84 17%
Restructuring Charge - - N/M
High Wycombe, England, Building Sale - - N/M
Insurance Recovery related to World
Trade Center Tragedy - - N/M
------- -------
Diluted EPS - Before Non-Core Gains and
Charges (Schedule 2) $.98 $.84 17%
------- ------- ----------
Year-to-Date
December 31,
----------------
% Change
2003 2002 Fav/(Unfav)
------- -------- -----------
Diluted EPS - As Reported (Schedule 1) $2.30 $1.87 23%
Restructuring Charge (.16) (.28) N/M
High Wycombe, England, Building Sale (.14) - N/M
Insurance Recovery related to World
Trade Center Tragedy .06 - N/M
------- --------
Diluted EPS - Before Non-Core Gains and
Charges (Schedule 2) $2.54 $2.15 18%
------- -------- -----------
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
December 31, AFX Foreign BFX
------------- % Change Exchange % Change
Amounts in millions 2003 2002 Fav/(Unfav) Fav/(Unfav) Fav/(Unfav)
-------------------- ------ ------ ----------- ----------- -----------
Geographic and
Product Line
Revenue:
North America:
Risk Management
Solutions $149.4 $142.4 5% 1% 4%
Sales &
Marketing
Solutions 102.2 90.4 13% 0% 13%
Supply
Management
Solutions 13.4 12.2 11% 0% 11%
E-Business
Solutions 10.1 - N/M N/M N/M
------- --------
Core Revenue 275.1 245.0 12% 0% 12%
Divested
Businesses - - 0% 0% 0%
------- --------
Total North
America 275.1 245.0 12% 0% 12%
------- --------
International:
Risk Management
Solutions 99.9 85.6 17% 14% 3%
Sales &
Marketing
Solutions 24.8 20.8 19% 13% 6%
Supply
Management
Solutions 4.6 3.1 45% 21% 24%
------- --------
Core Revenue 129.3 109.5 18% 14% 4%
Divested
Businesses - 1.6 -100% 0% -100%
------- --------
Total
International 129.3 111.1 16% 14% 2%
------- --------
Total
Corporation:
Risk Management
Solutions 249.3 228.0 9% 5% 4%
Sales &
Marketing
Solutions 127.0 111.2 14% 3% 11%
Supply
Management
Solutions 18.0 15.3 18% 4% 14%
E-Business
Solutions 10.1 - N/M N/M N/M
------- --------
Core Revenue 404.4 354.5 14% 5% 9%
Divested
Businesses - 1.6 -100% 0% -100%
------- --------
Total Revenue $404.4 $356.1 14% 5% 9%
------- -------- -------- --------
Operating Costs:
Operating
Expenses $107.6 $80.8 -33%
Selling and
Administrative
Expenses 158.3 144.1 -10%
Depreciation and
Amortization 17.5 23.9 27%
Restructuring
Expense - - -
------- --------
Total Operating
Costs $283.4 $248.8 -14%
------- --------
Capital
Expenditures $4.0 $7.6 47%
------- --------
Additions to
Computer Software &
Other Intangibles $6.5 $12.0 46%
------- -------- ---------
Year-to-Date Effects of
December 31, AFX Foreign BFX
------------- % Change Exchange % Change
Amounts in millions 2003 2002 Fav/(Unfav) Fav/(Unfav) Fav/(Unfav)
-------------------- ------ ------ ----------- ----------- -----------
Geographic and
Product Line
Revenue:
North America:
Risk Management
Solutions $603.6 $594.3 2% 1% 1%
Sales &
Marketing
Solutions 294.1 289.1 2% 0% 2%
Supply
Management
Solutions 33.4 28.7 17% 0% 17%
E-Business
Solutions 29.0 - N/M N/M N/M
--------- ---------
Core Revenue 960.1 912.1 5% 0 5%
Divested
Businesses - - 0% 0% 0%
--------- ---------
Total North
America 960.1 912.1 5% 0% 5%
--------- ---------
International:
Risk Management
Solutions 339.0 283.2 20% 16% 4%
Sales &
Marketing
Solutions 72.2 65.4 10% 13% -3%
Supply
Management
Solutions 11.8 8.8 34% 21% 13%
--------- ---------
Core Revenue 423.0 357.4 18% 15% 3%
Divested
Businesses 3.3 6.1 -45% 3% -48%
--------- ---------
Total
International 426.3 363.5 17% 15% 2%
--------- ---------
Total
Corporation:
Risk Management
Solutions 942.6 877.5 7% 5% 2%
Sales &
Marketing
Solutions 366.3 354.5 3% 2% 1%
Supply
Management
Solutions 45.2 37.5 21% 5% 16%
E-Business
Solutions 29.0 - N/M N/M N/M
--------- ---------
Core Revenue 1,383.1 1,269.5 9% 5% 4%
Divested
Businesses 3.3 6.1 -45% 3% -48%
--------- ---------
Total Revenue $1,386.4 $1,275.6 9% 5% 4%
--------- --------- ------- -------
Operating Costs:
Operating
Expenses $433.3 $392.1 -11%
Selling and
Administrative
Expenses 579.9 512.5 -13%
Depreciation and
Amortization 64.0 84.2 24%
Restructuring
Expense 17.4 30.9 44%
--------- ---------
Total Operating
Costs $1,094.6 $1,019.7 -7%
--------- ---------
Capital
Expenditures $11.0 $15.8 30%
--------- ---------
Additions to
Computer Software &
Other Intangibles $19.3 $37.7 49%
--------- --------- --------
Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,
2003 2003 2003 2003 2002
-------------------------------------------------
Net Debt
Position:
Cash and Cash
Equivalents $239.0 $199.7 $127.4 $149.3 $191.9
Notes Payable - - - (.1) (.1)
Long-Term Debt (299.9) (299.9) (299.8) (299.8) (299.9)
------- -------- -------- -------- --------
Net Debt $(60.9) $(100.2) $(172.4) $(150.6) $(108.1)
------- -------- -------- -------- --------
Sep 30, Jun 30, Mar 31,
2002 2002 2002
-----------------------------
Net Debt
Position:
Cash and Cash
Equivalents $136.0 $147.1 $89.4
Notes Payable (.1) (.1) (35.7)
Long-Term Debt (299.9) (299.7) (299.6)
--------- --------- --------
Net Debt $(164.0) $(152.7) $(245.9)
--------- --------- --------
Dec 31, Dec 31, % Change
2003 2002 Fav/(Unfav)
-----------------------------
Free Cash Flow:
Net Cash Provided
By Operating
Activities
(As Reported) $235.7 $213.1 11%
Less:
Capital
Expenditures
(As Reported) 11.0 15.8 30%
Additions to
Computer
Software &
Other
Intangibles
(As Reported) 19.3 37.7 49%
------- --------
Free Cash Flow $205.4 $159.6 29%
------- -------- --------
AFX - After Effects of Foreign Exchange
BFX - Before Effects of Foreign Exchange
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.
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