D&B Reports Strong 2005 Results; Expects Continued Strength in 2006.SHORT HILLS, N.J. -- 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 ): --2005 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. Up 17% Before Non-Core Gains and Charges, GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). EPS Up 10% --2005 Core Revenue Up 8%, Both Before and After the Effect of Foreign Exchange --2005 Total Revenue Up 2% on a GAAP Basis, Up 1% Before Foreign Exchange, Reflecting the Impact of Divested International Businesses --Outlines Plans to Create $70 Million to $75 Million of Financial Flexibility in 2006 --Adds $100 Million to Existing 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, tools and insight, today reported strong results for the fourth quarter and full year 2005. "We are pleased with our 2005 financial performance, which reflects strong revenue, 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. , EPS, and free cash flow growth. We met or exceeded each of our guidance elements and delivered our fifth consecutive year of strong earnings growth," said Steve v. t. 1. To pack or stow, as cargo in a ship's hold. See Steeve. Alesio, chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of D&B. "Looking ahead, we are well-positioned to continue to deliver strong financial results - we have a large marketplace opportunity in front of us, we have a team that has a track record for winning, and we are well-organized to drive growth globally. Our confidence in the future is expressed in our guidance, and we expect 2006 to be another successful year for D&B." Fourth Quarter 2005 Results 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 before non-core gains and charges for the quarter ended December December: see month. 31, 2005, were $1.29, up 15 percent from $1.12 in the prior year period. On a GAAP basis, diluted earnings per share were $1.32, up 27 percent from $1.04 in the prior year period. 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. Core revenue for the fourth quarter was $409.0 million, up 7 percent (up 8 percent before the effect of foreign exchange) compared with the prior year period. Core revenue results for the fourth quarter of 2005 reflect the following by solution set: --Risk Management Solutions revenue of $243.5 million, up 7 percent (up 8 percent before the effect of foreign exchange); --Sales & Marketing Solutions revenue of $131.6 million, up 4 percent (both before and after the effect of foreign exchange); --E-Business Solutions revenue of $19.8 million, up 42 percent (both before and after the effect of foreign exchange); and --Supply Management Solutions revenue of $14.1 million, up 14 percent (both before and after the effect of foreign exchange). See attached Schedules 4 and 5 for additional detail. Total revenue for the fourth quarter was $409.0 million, up 6 percent (both before and after the effect of foreign exchange) compared with the prior year period revenue of $387.5 million. The difference between core revenue and total revenue growth was due to the impact of the divested international businesses that had revenue of $5.8 million in the fourth quarter of 2004. See attached Schedule 6 for a detailed reconciliation of international total revenue to international core revenue by quarter. Operating income for the quarter was $145.7 million, up 15 percent from the prior year period, before non-core gains and charges in both years. On a GAAP basis, operating income was $136.6 million, up 18 percent from the prior year period. During the quarter, the Company also incurred transition costs of $3.4 million as compared to $6.5 million in the prior year period. See attached Schedule 3 for additional detail. Net income for the quarter was $88.3 million, up 10 percent from $80.5 million in the prior year period, before non-core gains and charges in both years. On a GAAP basis, net income for the quarter was $90.3 million, up 20 percent from $75.0 million in the prior year period. See attached Schedule 3 for additional detail. Fourth Quarter 2005 Segment Results United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Total revenue and core revenue for the fourth quarter were $311.9 million, up 9 percent from $286.4 million in the prior year period, all of which was organic. U.S. total and core revenue results for the 2005 fourth quarter reflect the following by solution set: --Risk Management Solutions revenue of $165.0 million, up 7 percent; --Sales & Marketing Solutions revenue of $115.2 million, up 7 percent; --E-Business Solutions revenue of $18.9 million, up 36 percent; and --Supply Management Solutions revenue of $12.8 million, up 21 percent. See attached Schedules 4 and 5 for additional detail. Operating income for the quarter was $137.8 million, up 16 percent from the prior year quarter. Improvement in revenue and the benefits of the Company's financial flexibility program contributed to the increase. International Core Revenue for the fourth quarter was $97.1 million, up 2 percent (up 5 percent before the effect of foreign exchange) from $95.3 million in the prior year quarter. International core revenue results for the fourth quarter of 2005 reflect the following by solution set: --Risk Management Solutions revenue of $78.5 million, up 5 percent (up 8 percent before the effect of foreign exchange); --Sales & Marketing Solutions revenue of $16.4 million, down 13 percent (down 11 percent before the effect of foreign exchange); --E-Business Solutions revenue of $0.9 million; and --Supply Management Solutions revenue of $1.3 million, down 30 percent (down 27 percent before the effect of foreign exchange). See attached Schedules 4 and 5 for additional detail. Total revenue for the fourth quarter was $97.1 million, down 4 percent (down 2 percent before the effect of foreign exchange) compared with the prior year period revenue of $101.1 million. The difference between core and total revenue growth was due to the loss of revenue from divested international businesses that had revenue of $5.8 million in 2004. See attached Schedule 6 for a detailed reconciliation of international total revenue to international core revenue by quarter. Operating income for the quarter was $26.7 million, a decrease of 7 percent from the prior year quarter. This decrease was primarily due to a decline in revenue in the U.K. and the loss of income from our divested businesses. Full Year Results Diluted earnings per share before non-core gains and charges for 2005 were $3.49, up 17 percent from the year ago period. On a GAAP basis, the Company reported 2005 diluted earnings per share of $3.19, up 10 percent from the year ago period. 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. Core revenue for the year was $1.444 billion, up 8 percent (both before and after the effect of foreign exchange) over the same period last year. Core revenue results for the full year 2005 reflect the following by solution set: --Risk Management Solutions revenue of $953.2 million, up 8 percent (up 7 percent before the effect of foreign exchange); --Sales & Marketing Solutions revenue of $382.8 million, up 4 percent (both before and after the effect of foreign exchange); --E-Business Solutions revenue of $70.0 million, up 40 percent (both before and after the effect of foreign exchange); and --Supply Management Solutions revenue of $37.6 million, up 10 percent (up 9 percent before the effect of foreign exchange). See attached Schedules 4 and 5 for additional detail. Total revenue for 2005 was $1.444 billion, up 2 percent (up 1 percent before the effect of foreign exchange) compared with prior year revenue of $1.414 billion. The difference between core and total revenue growth was due to the loss of revenue from divested international businesses that had revenue of $79.5 million in 2004. See Schedule 6 for a detailed reconciliation of international total revenue to international core revenue by quarter. Operating income was $395.1 million for 2005, up 13 percent from 2004, before non-core charges in both periods, with contributions from both the U.S. and International segments. On a GAAP basis, operating income for 2005 was $364.0 million, up 14 percent from the year ago period. GAAP results include $31.1 million of non-core charges in 2005 and $32.0 million of non-core charges in 2004. During the year, the Company also incurred transition costs of $21.5 million as compared to $20.6 million in the prior year period. See attached Schedule 3 for additional detail. Net income for the year was $242.0 million, up 11 percent from the prior year period, before non-core gains and charges in both years. On a GAAP basis, net income was $221.2 million, up 4 percent from the prior year period. See attached Schedule 3 for additional detail. Free cash flow for full-year 2005, excluding the impact of legacy tax payments, was $283.2 million, up 19 percent from the prior year period. The Company paid $50.3 million in 2005 in connection with its legacy tax matters. The Company defines free cash flow as net cash provided by operating activities less capital expenditures and additions to computer software and 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. . Net cash provided by operating activities excluding $50.3 million of legacy tax payments was $311.8 million for full-year 2005, up 17 percent from the prior year period. On a GAAP basis, net cash provided by operating activities was $261.5 million, down 2 percent from the prior year period. See attached Schedule 4 for additional detail. Share repurchases during the quarter, under the Company's $400 million two-year program commenced in the first quarter of 2005, totaled $50 million, with $200 million repurchased since inception INCEPTION. The commencement; the beginning. In making a will, for example, the writing is its inception. 3 Co. 31 b; Plowd. 343. Vide Consummation; Progression. . The Company ended the year with $304.7 million of cash and cash equivalents. Full Year Segment Results United States Total revenue and core revenue for 2005 were $1.088 billion, up 8 percent from the prior year period, reflecting all organic growth during the year. U.S. total and core revenue results for full year 2005 reflect the following by solution set: --Risk Management Solutions revenue of $655.7 million, up 7 percent; --Sales & Marketing Solutions revenue of $331.5 million, up 6 percent; --E-Business Solutions revenue of $67.2 million, up 35 percent; and --Supply Management Solutions revenue of $33.4 million, up 13 percent. See attached Schedules 4 and 5 for additional detail. Operating income for 2005 was $405.5 million, up 14 percent over the prior year. This improvement was primarily due to increased revenue and ongoing benefits of the Company's financial flexibility program. International Core revenue for 2005 was $355.8 million, up 8 percent (up 6 percent before the effect of foreign exchange) from the prior year. International core revenue results for full-year 2005 reflect the following by solution set: --Risk Management Solutions revenue of $297.5 million, up 11 percent (up 8 percent before the effect of foreign exchange); --Sales & Marketing Solutions revenue of $51.3 million, down 8 percent (down 9 percent before the effect of foreign exchange); --E-Business Solutions revenue of $2.8 million; and --Supply Management Solutions revenue of $4.2 million, down 11 percent (down 12 percent before the effect of foreign exchange). See attached Schedules 4 and 5 for additional detail. Total revenue for 2005 was $355.8 million, down 13 percent (down 15 percent before the effect of foreign exchange) compared with prior year revenue of $409.1 million. The difference between core and total revenue growth was due to the loss of revenue from divested international businesses that had revenue of $79.5 million in 2004. See Schedule 6 for a detailed reconciliation of international total revenue to international core revenue by quarter. Operating income for the year was $62.6 million, down 16 percent, before non-core gains and charges, from the prior year, primarily due to a decline in revenue in the U.K., the loss of income from our divested businesses, and increased expenses related to the investigation and final resolution of the dispute on the sale of the Company's French business, as described more fully in the Company's Form 10-Q Form 10-Q See 10-Q. for the quarter ended September September: see month. 30, 2005. On a GAAP basis, operating income was $62.2 million, down 17 percent from the prior year. See attached Schedule 3 for additional detail. Financial Flexibility Initiatives In 2006, the Company will create financial flexibility through initiatives including the following: --Eliminating, standardizing, and consolidating redundant Repetitive. See redundancy. technology platforms, software licenses In computing, software that is copyrighted and licensed under a software license is done under a variety of licensing schemes. For end-users there are proprietary licenses and there are free software licenses, and there are proprietary Within these schemes are further classifications. and maintenance agreements; --Standardizing and consolidating customer service teams and processes to increase productivity and capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. ; --Consolidating the Company's vendors to improve purchasing power Purchasing Power 1. The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing power is important because, all else being equal, inflation decreases the amount of goods or services you'd be able to purchase. 2. ; and --Improving operating efficiencies of facilities. On an 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. basis, these actions are expected to create $70 million to $75 million of financial flexibility, of which approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $50 million to $55 million will be generated in 2006. To implement these initiatives, the Company expects to 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. transition costs of approximately $15 million. In addition, the Company expects to incur non-core charges totaling $23 million to $28 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta . Addition to Existing Share Repurchase Program The Company announced today that its Board of Directors has approved the addition of $100 million to its existing $400 million two-year share repurchase program of which $200 million was repurchased in 2005. The program is to be completed by the end of this year and in all, the Company plans to buy a total of $300 million under its special share repurchase program in 2006. This amount 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. Non-Core Gains and Charges During the fourth quarter of 2005, the Company recorded a net pre-tax, non-core charge of $9.1 million related to both the 2004 and 2005 Financial Flexibility initiatives. The Company also recorded a net non-core gain for taxes of $8.0 million, which included a $7.3 million gain related to tax benefits recognized upon the liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy of dormant Latent; inactive; silent. That which is dormant is not used, asserted, or enforced. A dormant partner is a member of a partnership who has a financial interest yet is silent, in that he or she takes no control over the business. international entities whose assets were divested as part of the Company's international strategy, a $0.9 million refund TO REFUND. To pay back by the party who has received it, to the party who has paid it, money which ought not to have been paid. 2. On a deficiency of assets, executors and administrators cum testamento annexo, are entitled to have refunded to them legacies related to the Company's legacy tax matter referred to as "Utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be of Capital Losses 1989-1990" in the Company's Form 10-Q for the quarter ending March 31, 2005, and a charge of $0.2 million related to the Company's repatriation Repatriation The process of converting a foreign currency into the currency of one's own country. Notes: If you are American, converting British Pounds back to U.S. dollars is an example of repatriation. of foreign cash. For the full year, the Company recorded a net pre-tax, non-core charge of $30.5 million and a net non-core gain for taxes of $1.6 million. The net pre-tax, non-core charge for 2005 included a charge of $30.7 million related to both the 2004 and 2005 Financial Flexibility initiatives and charges totaling $4.1 million related to 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 September 30, 2005. These charges were partially offset by gains of $3.5 million related to the sale of a 5 percent investment in a South African company and $0.8 million related to lower than expected costs related to the sale of the Company's Iberian Iberian Any member of a prehistoric people of southern and eastern Spain. They were largely untouched by the migrations of Celtic peoples to northern and central Spain beginning in the 8th century BC. Culturally they were influenced by Greek and Phoenician trading colonies. business. The net non-core gain for taxes for the full year of 2005 included a gain of $16.3 million related to tax benefits recognized upon the liquidation of dormant international entities whose assets were divested as part of the Company's international strategy, a $9.3 million tax charge related to the Company's repatriation of foreign cash, a $6.3 million charge resulting from an increase in the tax legacy reserve for the matter referred to as "Royalty Compensation for the use of property, usually copyrighted works, patented inventions, or natural resources, expressed as a percentage of receipts from using the property or as a payment for each unit produced. Expense Deductions 1993-1997" in the Company's Form 10-Q for the quarter ended September 30, 2005, and a $0.9 million refund related to the Company's legacy tax matter referred to as "Utilization of Capital Losses 1989-1990" in the Company's Form 10-Q for the quarter ended March 31, 2005. During the fourth quarter of 2004, the Company recorded a net pre-tax, non-core gain of $2.3 million and a non-core charge for taxes of $4.5 million related to the settlement of the tax matter referred to as "Utilization of Capital Losses 1989-1990." The net pre-tax non-core gain in the fourth quarter of 2004 included a charge of $11.1 million related to financial flexibility initiatives and a gain of $13.4 million related to the sale of the Company's operations in Iberia Iberia (ībĭr`ēə), ancient country of Transcaucasia, roughly the eastern part of present-day Georgia. It was inhabited in earliest times by various tribes, collectively called Iberians by ancient historians, although Herodotus called and France. For the full year 2004, the Company recorded a net pre-tax, non-core charge of $1.7 million and a non-core charge for taxes of $4.5 million (referenced above). The net pre-tax non-core charge for the full year of 2004 included a charge of $32.0 million related to financial flexibility initiatives, partially offset by a gain of $30.3 million related to the sale of D&B's operations in the Nordic region, India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. and distribution channels in Pakistan Pakistan (păk`ĭstăn', päkĭstän`), officially Islamic Republic of Pakistan, republic (2005 est. pop. 162,420,000), 310,403 sq mi (803,944 sq km), S Asia. and the Middle East, Central Europe Central Europe is the region lying between the variously and vaguely defined areas of Eastern and Western Europe. In addition, Northern, Southern and Southeastern Europe may variously delimit or overlap into Central Europe. , Iberia and France. D&B's 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. 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 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 dis·pro·por·tion·ate adj. Out of proportion, as in size, shape, or amount. dis  pro·por positive or negative impact on the results of its
ongoing underlying business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets . For additional information, see
the section titled "Use of Non-GAAP Financial Measures" below.Full Year 2006 Outlook The Company provided the following full year 2006 guidance, which includes the impact of expensing stock options: --Core revenue growth of 6 percent to 8 percent, before the effect of foreign exchange, all of which will be organic; --Operating income growth before non-core gains and charges of 8 percent to 10 percent, which includes an approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. 4 point impact from stock option expensing; --Diluted EPS of $3.83 to $3.93 before non-core gains and charges, representing 10 percent to 13 percent growth, which includes an approximate 4 point impact from stock option expensing; --Free cash flow of $290 million to $305 million, which includes approximately $15 million of impact from stock option expensing. As a reminder, the Company's free cash flow outlook excludes the impact of any payments made in connection with the Company's legacy tax matters; and --Tax rate before non-core gains and charges of approximately 38 percent. D&B will expense stock options beginning in 2006. The annualized expense for stock options in 2006 is expected to be approximately $14 million, or $0.14 per share. This $0.14 per share is included in the guidance outlined above. D&B does not provide revenue growth guidance on a GAAP basis because D&B is unable to predict, with reasonable certainty CERTAINTY, UNCERTAINTY, contracts. In matters of obligation, a thing is certain, when its essence, quality, and quantity, are described, distinctly set forth, Dig. 12, 1, 6. It is uncertain, when the description is not that of one individual object, but designates only the kind. Louis. , 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 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 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. 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 and core revenue growth before the effects of foreign exchange. Additionally, the Company reports organic revenue growth and each of operating income, operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: , 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, and free cash flow. See "Item 1. Business - How We Evaluate our Performance" in 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 period ending December 31, 2004, filed March 14, 2005 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. Fourth-Quarter and Full Year 2005 Teleconference D&B will review its fourth quarter and full year financial results as well as its 2006 outlook, in a conference call with the investment community on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , February February: see month. 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 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) quality process provides customers with quality business information. 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;
D&B's 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 to convert prospects into clients
faster; and D&B Supply Management Solutions to identify purchasing
savings, manage risk and ensure compliance within the supply base. 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 This press release, including, in particular, the section titled "Full Year 2006 Outlook," 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. --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 (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. partners. --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. --The profitability of D&B's International segment depends on its ability to identify and execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution 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. --D&B's ability to renew large contracts and the timing thereof. --D&B's results, including operating income, are 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. , and the adoption of new or changes in accounting policies and practices, including pronouncements by the Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). or other standard setting bodies. --D&B's solutions and brand image are dependent upon the integrity of its global database and the continued availability thereof through the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and by other means. --D&B is involved in various 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. , 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, including the notes to the financial statements Notes to the financial statements A detailed set of notes immediately following the financial statements in an annual report that explain and expand on the information in the financial statements. , for a more detailed description of these matters. --D&B's ability to successfully implement its 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 requires that it successfully reduce its expense base through its Financial Flexibility program, and 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 certain of the expense base reductions into initiatives that produce desired revenue growth. --D&B's future success requires that it attract and retain qualified personnel in regions throughout the world. --D&B'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 its stock, and its ability to repurchase securities in accordance with applicable securities laws. --D&B'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 2006 is dependent upon its ability to generate revenue, its collection processes, customer payment patterns and the amount and timing of payments related to the tax and other matters and legal proceedings in which it is involved, as referenced above. 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 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 any obligation to update any forward-looking statements.
Schedule 1
The Dun & Bradstreet Corporation
Consolidated Statement of Operations (unaudited) - As Reported
Quarter Ended
December 31,
-------------- Effects of BFX
AFX Foreign %Change
Amounts in millions, %Change Exchange Fav/
except per share data 2005 2004 Fav/(Unfav) Fav/(Unfav)(Unfav)
---------------------------------------------------------------------
Revenue:
U.S. (1) $ 311.9 $ 286.4 9% 0% 9%
International (1) 97.1 95.3 2% (3)% 5%
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Core Revenue 409.0 381.7 7% (1)% 8%
Divested Businesses (2) - 5.8 N/M N/M N/M
---------------------- ------- -------
Total Revenue $ 409.0 $ 387.5 6% 0% 6%
====================== ======= ======= ====== ======
Operating Income (Loss):
U.S. $ 137.8 $ 118.4 16%
International (3) 26.7 28.9 (7)%
------- -------
Total Divisions 164.5 147.3 12%
Corporate and Other (4) (27.9) (31.5) 12%
---------------------- ------- -------
Operating Income 136.6 115.8 18%
====================== ======= ========
Interest Income 2.5 2.4 0%
Interest Expense (5.4) (4.4) (21)%
Minority Interest (0.1) - N/M
Other Income (Expense) -
Net (5) 0.1 13.1 N/M
---------------------- ------- -------
Non-Operating Income
(Expense) - Net (2.9) 11.1 N/M
---------------------- ------- -------
Income before Provision
for Income Taxes 133.7 126.9 6%
Provision for Income
Taxes 43.5 51.8 16%
Equity in Net Income
(Loss) of Affiliates 0.1 (0.1) N/M
---------------------- ------- -------
Net Income (6) $ 90.3 $ 75.0 20%
====================== ======= ========
Basic Earnings Per
Share of Common Stock $ 1.37 $ 1.09 26%
====================== ======= ========
Diluted Earnings Per Share
of Common Stock (7) $ 1.32 $ 1.04 27%
====================== ======= ========
Weighted Average Number
of Shares Outstanding:
Basic 66.0 69.1 4%
---------------------- ------- -------
Diluted 68.5 71.9 5%
====================== ======= ========
Year-to-Date
December 31,
-------------- Effects of BFX
AFX Foreign %Change
Amounts in millions, %Change Exchange Fav/
except per share data 2005 2004 Fav/(Unfav) Fav/(Unfav)(Unfav)
----------------------------------------------------------------------
Revenue:
U.S. (1) $1,087.8 $1,004.9 8% 0% 8%
International (1) 355.8 329.6 8% 2% 6%
---------------------- -------- --------
Core Revenue 1,443.6 1,334.5 8% 0% 8%
Divested Businesses (2) - 79.5 N/M N/M N/M
---------------------- -------- --------
Total Revenue $1,443.6 $1,414.0 2% 1% 1%
====================== ======== ======== ===== =====
Operating Income (Loss):
U.S. $ 405.5 $ 354.9 14%
International (3) 62.2 74.7 (17)%
-------- --------
Total Divisions 467.7 429.6 9%
Corporate and Other (4) (103.7) (110.8) 6%
---------------------- -------- --------
Operating Income 364.0 318.8 14%
====================== ======== ========
Interest Income 10.6 8.4 26%
Interest Expense (21.1) (18.9) (11)%
Minority Interest - - N/M
Other Income (Expense)
- Net (5) 0.6 32.5 N/M
---------------------- -------- --------
Non-Operating Income
(Expense) - Net (9.9) 22.0 N/M
---------------------- -------- --------
Income before Provision
for Income Taxes 354.1 340.8 4%
Provision for Income
Taxes 133.6 129.2 (4)%
Equity in Net Income
(Loss) of Affiliates 0.7 0.2 N/M
---------------------- -------- --------
Net Income (6) $ 221.2 $ 211.8 4%
====================== ======== ========
Basic Earnings Per Share
of Common Stock $ 3.31 $ 3.01 10%
====================== ======== ========
Diluted Earnings Per
Share of Common Stock
(7) $ 3.19 $ 2.90 10%
====================== ======== ========
Weighted Average Number
of Shares Outstanding:
Basic 66.8 70.4 5%
---------------------- -------- --------
Diluted 69.4 73.1 5%
====================== ======== ========
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.
Schedule 2
The Dun & Bradstreet Corporation
Consolidated Statement of Operations (unaudited) -
Before Non-Core Gains and Charges
Quarter Ended
December 31,
-------------- Effects of BFX
AFX Foreign %Change
Amounts in millions, %Change Exchange Fav/
except per share data 2005 2004 Fav/(Unfav) Fav/(Unfav)(Unfav)
----------------------------------------------------------------------
Revenue:
U.S. (1) $ 311.9 $ 286.4 9% 0% 9%
International (1) 97.1 95.3 2% (3)% 5%
---------------------- -------- --------
Core Revenue 409.0 381.7 7% (1)% 8%
Divested Businesses (2) - 5.8 N/M N/M N/M
---------------------- -------- --------
Total Revenue $ 409.0 $ 387.5 6% 0% 6%
====================== ======== ======== ===== =====
Operating Income (Loss):
U.S. $ 137.8 $ 118.4 16%
International (3) 26.7 28.9 (7)%
Total Divisions 164.5 147.3 12%
Corporate and Other (4) (18.8) (20.4) 8%
---------------------- -------- --------
Operating Income 145.7 126.9 15%
====================== ======== ========
Interest Income 2.5 2.4 0%
Interest Expense (5.4) (4.4) (21)%
Minority Interest (0.1) - N/M
Other Income (Expense)
- Net (5) 0.1 (0.3) N/M
---------------------- -------- --------
Non-Operating Income
(Expense) - Net (2.9) (2.3) (25)%
---------------------- -------- --------
Income before Provision
for Income Taxes 142.8 124.6 15%
Provision for Income
Taxes 54.6 44.0 (25)%
Equity in Net Income
(Loss) of Affiliates 0.1 (0.1) N/M
---------------------- -------- --------
Net Income (6) $ 88.3 $ 80.5 10%
====================== ======== ========
Basic Earnings Per
Share of Common Stock $ 1.34 $ 1.17 15%
====================== ======== ========
Diluted Earnings Per
Share of Common
Stock (7) $ 1.29 $ 1.12 15%
====================== ======== ========
Weighted Average Number
of Shares Outstanding:
Basic 66.0 69.1 4%
---------------------- -------- --------
Diluted 68.5 71.9 5%
====================== ======== ======== =====
Year-to-Date
December 31,
-------------- Effects of BFX
AFX Foreign %Change
Amounts in millions, %Change Exchange Fav/
except per share data 2005 2004 Fav/(Unfav) Fav/(Unfav)(Unfav)
----------------------------------------------------------------------
Revenue:
U.S. (1) $1,087.8 $1,004.9 8% 0% 8%
International (1) 355.8 329.6 8% 2% 6%
---------------------- -------- --------
Core Revenue 1,443.6 1,334.5 8% 0% 8%
Divested Businesses (2) - 79.5 N/M N/M N/M
---------------------- -------- --------
Total Revenue $1,443.6 $1,414.0 2% 1% 1%
====================== ======== ========
Operating Income (Loss):
U.S. $ 405.5 $ 354.9 14%
International (3) 62.6 74.7 (16)%
Total Divisions 468.1 429.6 9%
Corporate and Other(4) $ (73.0) (78.8) 7%
---------------------- -------- --------
Operating Income 395.1 350.8 13%
====================== ======== ========
Interest Income 10.6 8.4 26%
Interest Expense (21.1) (18.9) (11)%
Minority Interest - - N/M
Other Income (Expense)
- Net (5) - 2.2 N/M
---------------------- -------- --------
Non-Operating Income
(Expense) - Net (10.5) (8.3) (27)%
---------------------- -------- --------
Income before Provision
for Income Taxes 384.6 342.5 12%
Provision for Income
Taxes 143.3 125.0 (15)%
Equity in Net Income
(Loss) of Affiliates 0.7 0.2 N/M
---------------------- -------- --------
Net Income (6) $ 242.0 $ 217.7 11%
====================== ======== ========
Basic Earnings Per
Share of Common Stock $ 3.63 $ 3.09 18%
====================== ======== ========
Diluted Earnings Per
Share of Common
Stock (7) $ 3.49 $ 2.98 17%
====================== ======== ========
Weighted Average Number
of Shares Outstanding:
Basic 66.8 70.4 5%
---------------------- -------- --------
Diluted 69.4 73.1 5%
====================== ======== ======== =====
AFX - After Effects of Foreign Exchange
BFX - Before Effects of Foreign Exchange
N/M - Not Meaningful
See Schedule 3 (Notes to Schedules) for a definition of Non-GAAP
measures and a reconciliation of non-core gains and charges.
This financial information should be read in conjunction with the
consolidated financial statements and related notes of The Dun &
Bradstreet Corporation contained in filings with the Securities and
Exchange Commission.
Schedule 3
The Dun & Bradstreet Corporation
Notes to Schedules 1 and 2 (unaudited) and Definitions of Non-GAAP
Measures
(1) On January 1, 2005, we began managing our business in Canada in
the International segment and have conformed historical amounts to
reflect the new segment structure.
(2) 2004 includes revenues from the Company's operations in France,
Iberia (Spain and Portugal), Central Europe (Germany, Austria,
Switzerland, Poland, Hungary and Czech Republic), India and
Distribution Channels in Pakistan and the Middle East.
(3) The following table reconciles International Operating Income
included in Schedule 1 and Schedule 2:
Quarter Ended Year-to-Date
December 31, December 31,
------------- -------------
% Change % Change
Amounts in millions Fav/ Fav/
2005 2004 (Unfav) 2005 2004 (Unfav)
----------------------- ------ ------ -------- ------ ------ ---------
International Operating
Income - As Reported
(Schedule 1) $26.7 $28.9 (7)% $62.2 $74.7 (17)%
Final resolution of
all disputes on the
sale of the Company's
French business - - N/M (0.4) - N/M
------ ------ ------ ------
International Operating
Income - Before Non-
Core Gains and Charges
(Schedule 2) $26.7 $28.9 (7)% $62.6 $74.7 (16)%
------ ------ ------ ------ ------ ---------
(4) The following table reconciles Corporate and Other expenses
included in Schedule 1 and Schedule 2:
Quarter Ended Year-to-Date
December 31, December 31,
--------------- -----------------
% Change % Change
Amounts in millions Fav/ Fav/
2005 2004 (Unfav) 2005 2004 (Unfav)
------------------ ------- ------- ------- ------- -------- ---------
Corporate and Other
- As Reported
(Schedule 1) $(27.9) $(31.5) 12% $(103.7) $(110.8) 6%
Restructuring
Charge (9.1) (11.1) 18% (30.7) (32.0) 4%
------- ------- -------- --------
Corporate and Other
- Before Non-Core
Gains and Charges
(Schedule 2) $(18.8) $(20.4) 8% $(73.0) $(78.8) 7%
------- ------- ------ -------- -------- ---------
(5) The following table reconciles Other Income (Expense)-Net included
in Schedule 1 and Schedule 2:
Quarter Ended Year-to-Date
December 31, December 31,
------------ ------------
% Change % Change
Amounts in millions Fav/ Fav/
2005 2004 (Unfav) 2005 2004 (Unfav)
--------------------------- ----- ----- ------- ----- ----- --------
Other Income (Expense)-Net
- As Reported (Schedule 1) $ 0.1 $13.1 N/M $ 0.6 $32.5 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 - - N/M (3.7) - N/M
Gain on Sale of Operations
in Nordic (Sweden,
Denmark, Norway and
Finland) - - N/M - 7.9 N/M
Gain on Sale of Operations
in India and Distribution
Channels in Pakistan and
the Middle East - - N/M - 3.8 N/M
Gain on Sale of Operations
in Central Europe
(Germany, Austria,
Switzerland, Poland,
Hungary and Czech
Republic) - - N/M - 5.6 N/M
Gain on Sale of Operations
in France - 12.9 N/M - 12.9 N/M
Gain (Loss) on Sale of
Operations in Iberia
(Spain and Portugal) - 0.5 N/M - 0.1 N/M
----- ----- ----- -----
Other Income (Expense)-Net
- Before Non-Core Gains
and Charges (Schedule 2) $ 0.1 $(0.3) N/M $ - $ 2.2 N/M
----- ----- ------- ----- ----- --------
(6) The following table reconciles Net Income included in Schedule 1
and Schedule 2:
Quarter Ended Year-to-Date
December 31, December 31,
------------- ---------------
% %
Change Change
Amounts in millions Fav/ Fav/
2005 2004 (Unfav) 2005 2004 (Unfav)
------------------------ ------ ------ ------- ------ ------- --------
Net Income - As Reported
(Schedule 1) $90.3 $75.0 20% $221.2 $211.8 4%
Restructuring Charge (6.0) (7.1) N/M (22.6) (20.8) 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
Final Resolution of all
Disputes on the Sale
of the Company's
French Business - - N/M (2.6) - N/M
Gain on Sale of
Operations in Nordic
(Sweden, Denmark,
Norway and Finland) - - N/M - 9.6 N/M
Gain on Sale of
Operations in India
and Distribution
Channels in Pakistan
and the Middle East - - N/M - 1.9 N/M
Gain on Sale of
Operations in Central
Europe (Germany,
Austria, Switzerland,
Poland, Hungary and
Czech Republic) - - N/M - 2.9 N/M
Gain on Sale of
Operations in France - 5.6 N/M - 5.6 N/M
Gain (Loss) on Sales of
Operations in Iberia
(Spain and Portugal) - 0.5 N/M - (0.6) N/M
Increase in Tax Legacy
Reserve for "Royalty
Expense Deductions
1993-1997" - - N/M (6.3) - N/M
Tax Charge Related to
the Company's
Repatriation of
Foreign Cash (0.2) - N/M (9.3) - N/M
Tax Legacy Refund for
"Utilization of
Capital Losses 1989-
1990" 0.9 - N/M 0.9 - N/M
Tax Benefits Recognized
Upon the Liquidation
of Dormant
International
Corporations 7.3 - N/M 16.3 - N/M
Increase in Tax Legacy
Reserve for
"Utilization of
Capital Losses 1989-
1990" - (4.5) N/M - (4.5) N/M
------ ------ ------- -------
Net Income - Before Non-
Core Gains and Charges
(Schedule 2) $88.3 $80.5 10% $242.0 $217.7 11%
------ ------ ------ ------- ------- --------
(7) The following table reconciles Diluted Earnings Per Share included
in Schedule 1 and Schedule 2:
Quarter Ended Year-to-Date
December 31, December 31,
-------------- -------------
% Change % Change
Fav/ Fav/
2005 2004 (Unfav) 2005 2004 (Unfav)
------------------------- ----- ------- ------- ----- ------ ---------
Diluted EPS - As Reported
(Schedule 1) $1.32 $1.04 27% $3.19 $2.90 10%
Restructuring Charge (0.09) (0.10) N/M (0.32) (0.28) 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
Final Resolution of all
Disputes on the Sale
of the Company's
French Business - - N/M (0.04) - N/M
Gain on Sale of
Operations in Nordic
(Sweden, Denmark,
Norway and Finland) - - N/M - 0.13 N/M
Gain on Sale of
Operations in India
and Distribution
Channels in Pakistan
and the Middle East - - N/M - 0.02 N/M
Gain on Sale of
Operations in Central
Europe (Germany,
Austria, Switzerland,
Poland, Hungary and
Czech Republic) - - N/M - 0.04 N/M
Gain on Sale of
Operations in France - 0.08 N/M - 0.08 N/M
Gain (Loss) on Sale of
Operations in Iberia
(Spain and Portugal) - - N/M - (0.01) N/M
Increase in Tax Legacy
Reserve for "Royalty
Expense Deductions
1993-1997" - - N/M (0.09) - N/M
Tax Charge Related to
the Company's
Repatriation of
Foreign Cash - - N/M (0.13) - N/M
Tax Legacy Refund for
"Utilization of
Capital Losses 1989-
1990" 0.01 - N/M 0.01 - N/M
Tax Benefits Recognized
Upon the Liquidation
of Dormant
International
Corporations 0.11 - N/M 0.23 - N/M
Increase in Tax Legacy
Reserve for
"Utilization of
Capital Losses 1989-
1990" - (0.06) N/M - (0.06) N/M
------ ------- ------ ------
Diluted EPS - Before Non-
Core Gains and Charges
(Schedule 2) $1.29 $1.12 15% $3.49 $2.98 17%
------ ------- ------ ------ ------ ---------
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"
- 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.
Schedule 4
The Dun & Bradstreet Corporation
Supplemental Financial Data (unaudited)
Effects
Quarter Ended of
December 31, AFX Foreign BFX
--------------- % Change Exchange % Change
Fav/ Fav/ Fav/
Amounts in millions 2005 2004 (Unfav) (Unfav) (Unfav)
-------------------------- ------ ------ --------------------------
Geographic and Customer
Solution Set Revenue:
U.S.:
Risk Management
Solutions $165.0 $153.7 7% 0% 7%
Sales & Marketing
Solutions 115.2 108.3 7% 0% 7%
E-Business Solutions 18.9 13.9 36% 0% 36%
Supply Management
Solutions 12.8 10.5 21% 0% 21%
------ ------
Core Revenue 311.9 286.4 9% 0% 9%
Divested Businesses - - N/M N/M N/M
------ ------
Total U.S. 311.9 286.4 9% 0% 9%
------ ------
International:
Risk Management
Solutions 78.5 74.5 5% (3)% 8%
Sales & Marketing
Solutions 16.4 18.9 (13)% (2)% (11)%
E-Business Solutions 0.9 0.1 N/M N/M N/M
Supply Management
Solutions 1.3 1.8 (30)% (3)% (27)%
------ ------
Core Revenue 97.1 95.3 2% (3)% 5%
Divested Businesses - 5.8 N/M N/M N/M
------ ------
Total International 97.1 101.1 (4)% (2)% (2)%
------ ------
Total Corporation:
Risk Management
Solutions 243.5 228.2 7% (1)% 8%
Sales & Marketing
Solutions 131.6 127.2 4% 0% 4%
E-Business Solutions 19.8 14.0 42% 0% 42%
Supply Management
Solutions 14.1 12.3 14% 0% 14%
------ ------
Core Revenue 409.0 381.7 7% (1)% 8%
Divested Businesses - 5.8 N/M N/M N/M
------ ------
Total Revenue $409.0 $387.5 6% 0% 6%
------ ------ ------ -------
Operating Costs:
Operating Expenses $104.2 $ 97.0 (7)%
Selling and
Administrative Expenses 149.0 150.6 1%
Depreciation and
Amortization 10.1 13.0 24%
Restructuring Expense 9.1 11.1 18%
------ ------
Total Operating Costs $272.4 $271.7 0%
------ ------
Capital Expenditures $ 1.2 $ 3.0 60%
------ ------
Additions to Computer
Software & Other
Intangibles $ 9.5 $ 6.2 (53)%
------ ------ --------
Effects
Year-to-Date of
December 31, AFX Foreign BFX
--------------- % Change Exchange % Change
Fav/ Fav/ Fav/
Amounts in millions 2005 2004 (Unfav) (Unfav) (Unfav)
-------------------------- ------ ------ --------------------------
Geographic and Customer
Solution Set Revenue:
U.S.:
Risk Management
Solutions $655.7 $613.0 7% 0% 7%
Sales & Marketing
Solutions 331.5 312.3 6% 0% 6%
E-Business Solutions 67.2 49.9 35% 0% 35%
Supply Management
Solutions 33.4 29.7 13% 0% 13%
------- ---------
Core Revenue 1,087.8 1,004.9 8% 0% 8%
Divested Businesses - - N/M N/M N/M
------- ---------
Total U.S. 1,087.8 1,004.9 8% 0% 8%
------- ---------
International:
Risk Management
Solutions 297.5 269.0 11% 3% 8%
Sales & Marketing
Solutions 51.3 55.9 (8)% 1% (9)%
E-Business Solutions 2.8 0.1 N/M N/M N/M
Supply Management
Solutions 4.2 4.6 (11)% 1% (12)%
------- ---------
Core Revenue 355.8 329.6 8% 2% 6%
Divested Businesses - 79.5 N/M N/M N/M
------- ---------
Total International 355.8 409.1 (13)% 2% (15)%
------- ---------
Total Corporation:
Risk Management
Solutions 953.2 882.0 8% 1% 7%
Sales & Marketing
Solutions 382.8 368.2 4% 0% 4%
E-Business Solutions 70.0 50.0 40% 0% 40%
Supply Management
Solutions 37.6 34.3 10% 1% 9%
------- ---------
Core Revenue 1,443.6 1,334.5 8% 0% 8%
Divested Businesses - 79.5 N/M N/M N/M
------- ---------
Total Revenue $1,443.6 $1,414.0 2% 1% 1%
------- --------- ------ ------
Operating Costs:
Operating Expenses $412.0 $ 403.9 (2)%
Selling and
Administrative
Expenses 600.8 612.0 2%
Depreciation and
Amortization 36.1 47.3 24%
Restructuring Expense 30.7 32.0 4%
------- ---------
Total Operating Costs $1,079.6 $1,095.2 1%
------- ---------
Capital Expenditures $ 5.7 $ 12.1 53%
------- ---------
Additions to Computer
Software & Other
Intangibles $22.9 $ 16.7 (37)%
------- --------- --------
The Dun & Bradstreet Corporation
Supplemental Financial Data (unaudited)
Dec 31, Sep 30, Jun 30, Mar 31,
Amounts in millions 2005 2005 2005 2005
----------------------------------- -------- -------- ------- --------
Net Debt Position:
Cash and Cash Equivalents (8) $304.7 $264.6 $245.3 $295.4
Short-Term Debt (300.8) (303.0) (303.3) (301.7)
Long-Term Debt (0.1) (0.3) (0.4) -
-------- -------- ------- --------
Net Debt $3.8 $(38.7) $(58.4) $(6.3)
======== ======== ======= ========
(8) In addition to Cash and Cash
Equivalents we had the
following net (investments)
redemptions in Marketable
Securities $(109.4) $69.2 $(34.8) $48.2
======== ======== ======= ========
Dec 31, Sep 30, Jun 30, Mar 31,
Amounts in millions 2004 2004 2004 2004
----------------------------------- -------- -------- ------- --------
Net Debt Position:
Cash and Cash Equivalents (8) $252.9 $193.8 $217.2 $197.4
Short-Term Debt (1.0) - - -
Long-Term Debt (300.0) (299.9) (299.9) (299.9)
-------- -------- ------- --------
Net Debt $(48.1) $(106.1) $(82.7) $(102.5)
======== ======== ======= ========
(8) In addition to Cash and Cash
Equivalents we had the
following net (investments)
redemptions in Marketable
Securities $6.0 $7.9 $3.0 $(87.7)
======== ======== ======= ========
Year-To-Date
------------------------
% Change
Dec 31, Dec 31, Fav/
Amounts in millions 2005 2004 (Unfav)
--------------------------------------------- ------- ------- --------
Free Cash Flow:
Net Cash Provided By Operating Activities
(As Reported) $261.5 $267.6 (2)%
Less:
Capital Expenditures (As Reported) 5.7 12.1 53%
Additions to Computer Software & Other
Intangibles (As Reported) 22.9 16.7 (37)%
------- -------
Free Cash Flow 232.9 238.8 (2)%
Add: Legacy Tax Payment 50.3 N/M N/M
------- -------
Free Cash Flow excluding the effect of the
Legacy Tax Payment $283.2 $238.8 19%
======= ======= ========
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.
Schedule 5
The Dun & Bradstreet Corporation
Revenue Reconciliation and Detail
Quarter and Year Ended December 31, 2005 and 2004
Quarter Ended December 31, 2005 vs. 2004
--------------------------------------------------
Traditional/VAPs as a
% of Total Customer
Solution Sets/Core
AFX Effects BFX ----------------------
% Change of % Change 2005 % 2004 %
Amounts in Fav/ Foreign Fav/ Product Product
millions (Unfav) Exchange (Unfav) Line/Core Line/Core
------------------ -------- --------- -------- ---------- -----------
Revenue:
--------
U.S.:
Risk Management
Solutions:
Traditional 4% 0% 4% 73% 39% 76% 41%
VAPs 19% 0% 19% 27% 14% 24% 13%
Total Risk
Management
Solutions 7% 0% 7% 53% 54%
Sales & Marketing
Solutions:
Traditional 0% 0% 0% 34% 12% 36% 13%
VAPs 10% 0% 10% 66% 25% 64% 24%
Total Sales &
Marketing Solutions 7% 0% 7% 37% 37%
E-Business Solutions 36% 0% 36% 6% 5%
Supply Management
Solutions 21% 0% 21% 4% 4%
Core Revenue 9% 0% 9%
Divested Businesses N/M N/M N/M
Total U.S. 9% 0% 9%
International:
Risk Management
Solutions:
Traditional 4% -3% 7% 88% 71% 89% 70%
VAPs 17% -1% 18% 12% 10% 11% 8%
Total Risk
Management
Solutions 5% -3% 8% 81% 78%
Sales & Marketing
Solutions:
Traditional -17% -2% -15% 58% 10% 60% 12%
VAPs -8% -3% -5% 42% 7% 40% 8%
Total Sales &
Marketing Solutions -13% -2% -11% 17% 20%
E-Business Solutions N/M N/M N/M 1% 0%
Supply Management
Solutions -30% -3% -27% 1% 2%
Core Revenue 2% -3% 5%
Divested Businesses N/M N/M N/M
Total International -4% -2% -2%
Total Corporation:
Risk Management
Solutions:
Traditional 4% -1% 5% 78% 47% 80% 48%
VAPs 19% 0% 19% 22% 13% 20% 12%
Total Risk
Management
Solutions 7% -1% 8% 60% 60%
Sales & Marketing
Solutions:
Traditional -4% 0% -4% 37% 12% 39% 13%
VAPs 8% -1% 9% 63% 20% 61% 20%
Total Sales &
Marketing Solutions 4% 0% 4% 32% 33%
E-Business Solutions 42% 0% 42% 5% 4%
Supply Management
Solutions 14% 0% 14% 3% 3%
Core Revenue 7% -1% 8%
Divested Businesses N/M N/M N/M
Total Corporation 6% 0% 6%
-------- --------- -------- ---------- -----------
Year-to-Date Ended December 31, 2005 vs. 2004
--------------------------------------------------
Traditional/VAPs as a
% of Total Customer
Solution Sets/Core
AFX Effects BFX ----------------------
% Change of % Change 2005 % 2004 %
Amounts in Fav/ Foreign Fav/ Product Product
millions (Unfav) Exchange (Unfav) Line/Core Line/Core
------------------ -------- --------- -------- ---------- -----------
Revenue:
--------
U.S.:
Risk Management
Solutions:
Traditional 5% 0% 5% 77% 46% 79% 48%
VAPs 15% 0% 15% 23% 14% 21% 13%
Total Risk
Management
Solutions 7% 0% 7% 60% 61%
Sales & Marketing
Solutions:
Traditional 7% 0% 7% 43% 13% 43% 13%
VAPs 6% 0% 6% 57% 17% 57% 18%
Total Sales &
Marketing Solutions 6% 0% 6% 30% 31%
E-Business Solutions 35% 0% 35% 7% 5%
Supply Management
Solutions 13% 0% 13% 3% 3%
Core Revenue 8% 0% 8%
Divested Businesses N/M N/M N/M
Total U.S. 8% 0% 8%
International:
Risk Management
Solutions:
Traditional 10% 2% 8% 89% 75% 90% 73%
VAPs 14% 2% 12% 11% 9% 10% 9%
Total Risk
Management
Solutions 11% 3% 8% 84% 82%
Sales & Marketing
Solutions:
Traditional -24% 1% -25% 56% 8% 67% 11%
VAPs 23% 1% 22% 44% 6% 33% 6%
Total Sales &
Marketing Solutions -8% 1% -9% 14% 17%
E-Business Solutions N/M N/M N/M 1% 0%
Supply Management
Solutions -11% 1% -12% 1% 1%
Core Revenue 8% 2% 6%
Divested Businesses N/M N/M N/M
Total International -13% 2% -15%
Total Corporation:
Risk Management
Solutions:
Traditional 7% 1% 6% 81% 53% 82% 54%
VAPs 15% 1% 14% 19% 13% 18% 12%
Total Risk
Management
Solutions 8% 1% 7% 66% 66%
Sales & Marketing
Solutions:
Traditional 0% 1% -1% 45% 12% 47% 13%
VAPs 8% 0% 8% 55% 15% 53% 15%
Total Sales &
Marketing Solutions 4% 0% 4% 27% 28%
E-Business Solutions 40% 0% 40% 4% 3%
Supply Management
Solutions 10% 1% 9% 3% 3%
Core Revenue 8% 0% 8%
Divested Businesses N/M N/M N/M
Total Corporation 2% 1% 1%
-------- --------- -------- ---------- -----------
AFX - After Effects of Foreign Exchange
BFX - Before Effects of Foreign Exchange
N/M - Not Meaningful
This financial information should be read in conjunction with the
consolidated financial statements and related notes of The Dun &
Bradstreet Corporation contained in filings with the Securities and
Exchange Commission.
Schedule 6
The Dun & Bradstreet Corporation
Effect of Divestitures on International Results (unaudited)
2005
-----------------------------------
Amounts in Millions Q1 Q2 Q3 Q4 YTD
---------------------------------- ------ ------ ------ ------ -------
International:
Total Revenue with Canada as
Reported in 2005 $78.1 $98.0 $82.6 $97.1 $355.8
Less Canada N/A N/A N/A N/A N/A
------ ------ ------ ------ -------
Total Revenue as Reported in 2004 N/A N/A N/A N/A N/A
Less Divested Businesses:
India (February 2004) - - - - -
Central Europe (April 2004) - - - - -
France (October 2004) - - - - -
Iberia (October 2004) - - - - -
------ ------ ------ ------ -------
Divested Businesses * - - - - -
------ ------ ------ ------ -------
Core Revenue as Reported in 2004 N/A N/A N/A N/A N/A
Add Canada N/A N/A N/A N/A N/A
------ ------ ------ ------ -------
Core Revenue with Canada AFX as
Reported in 2005 * $78.1 $98.0 $82.6 $97.1 $355.8
---------------------------------- ====== ====== ====== ====== =======
2004
--------------------------------------
Full
Amounts in Millions Q1 Q2 Q3 Q4 Year
------------------------------- ------- ------- ------ ------- -------
International:
Total Revenue with Canada as
Reported in 2005 $101.2 $113.8 $93.0 $101.1 $409.1
Less Canada (8.3) (9.3) (7.6) (8.2) (33.4)
------- ------- ------ ------- -------
Total Revenue as Reported in
2004 92.9 104.5 85.4 92.9 375.7
------- ------- ------ ------- -------
Less Divested Businesses:
India (February 2004) 1.1 - - - 1.1
Central Europe (April 2004) 12.9 10.7 - - 23.6
France (October 2004) 9.8 10.8 8.9 3.4 32.9
Iberia (October 2004) 6.8 7.3 5.4 2.4 21.9
------- ------- ------ ------- -------
Divested Businesses * 30.6 28.8 14.3 5.8 79.5
------- ------- ------ ------- -------
Core Revenue as Reported in
2004 62.3 75.7 71.1 87.1 296.2
Add Canada 8.3 9.3 7.6 8.2 33.4
------- ------- ------ ------- -------
Core Revenue with Canada AFX
as Reported in 2005 * $70.6 $85.0 $78.7 $95.3 $329.6
------------------------------- ======= ======= ====== ======= =======
* Total Revenue, Divested Business Revenue and Core Revenue for the
International segment can be found on Schedule 4.
N/A - Not Applicable
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 7
The Dun & Bradstreet Corporation
Effect of Segment Change - Canada from North America to International
(unaudited)
2004
-----------------------------------------
Amounts in Millions Q1 Q2 Q3 Q4 Full Year
---------------------------- ------- ------- ------- ------- ---------
North America Core Revenue
as Reported in 2004 $250.5 $245.4 $247.8 $294.6 $1,038.3
Less Canada 8.3 9.3 7.6 8.2 33.4
------- ------- ------- ------- ---------
U.S. Core Revenue $242.2 $236.1 $240.2 $286.4 $1,004.9
---------------------------- ======= ======= ======= ======= =========
2004
-----------------------------------------
Amounts in Millions Q1 Q2 Q3 Q4 Full Year
---------------------------- ------- ------- ------- ------- ---------
International Core Revenue
as Reported in 2004 $62.3 $75.7 $71.1 $87.1 $296.2
Add Canada 8.3 9.3 7.6 8.2 33.4
------- ------- ------- ------- ---------
International Core Revenue
with Canada $70.6 $85.0 $78.7 $95.3 $329.6
---------------------------- ======= ======= ======= ======= =========
2004
-----------------------------------------
Amounts in Millions Q1 Q2 Q3 Q4 Full Year
---------------------------- ------- ------- ------- ------- ---------
North America Operating
Income as Reported in 2004 $87.5 $73.0 $82.4 $122.4 $365.3
Less Canada 2.2 2.8 1.4 4.0 10.4
------- ------- ------- ------- ---------
U.S. Operating Income $85.3 $70.2 $81.0 $118.4 $354.9
---------------------------- ======= ======= ======= ======= =========
2004
-----------------------------------------
Amounts in Millions Q1 Q2 Q3 Q4 Full Year
---------------------------- ------- ------- ------- ------- ---------
International Operating
Income as Reported in 2004 $7.1 $20.2 $12.1 $24.9 $64.3
Add Canada 2.2 2.8 1.4 4.0 10.4
------- ------- ------- ------- ---------
International Operating
Income with Canada $9.3 $23.0 $13.5 $28.9 $74.7
---------------------------- ======= ======= ======= ======= =========
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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