D&B Announces Second Quarter 2014 Results

  • Core and total revenue up 2% year over year, both before and after the effect of foreign exchange; and
  • Reaffirms full year 2014 guidance.

SHORT HILLS, N.J.--()--D&B (NYSE:DNB), the world's leading source of commercial information and insight on businesses, today reported results for the second quarter ended June 30, 2014.

"I’m pleased to report the company has posted its third consecutive quarter of top line growth and second quarter results came in ahead of our expectations,” said Bob Carrigan, President & CEO of Dun & Bradstreet. "We are investing in our strategy with a focus on helping our customers succeed in today’s increasingly data-driven world, and delivering long term sustainable growth as well as value for our customers."

Second Quarter 2014 Results

Diluted earnings per share before non-core gains and charges for the quarter ended June 30, 2014 were $1.47, down 4% from $1.53 in the prior year similar period.

On a GAAP basis, diluted earnings per share for the quarter ended June 30, 2014 were $1.35, down 6% from $1.44 in the prior year similar period.

See attached Schedule 5 for a reconciliation of diluted earnings per share before non-core gains and charges to earnings per share on a GAAP basis, as well as the definitions of the non-GAAP financial measures that the Company uses to evaluate the business.

Core revenue for the second quarter of 2014 was $393.0 million, up 2% both before and after the effect of foreign exchange, as compared to the prior year similar period.

Core revenue results for the second quarter of 2014 reflect the following by solution set:

  • Risk Management Solutions revenue of $255.9 million, down 1% year over year both before and after the effect of foreign exchange; and
  • Sales & Marketing Solutions revenue of $137.1 million, up 8% year over year both before and after the effect of foreign exchange.

See attached Schedule 3 for additional detail.

Total revenue for the second quarter of 2014 was $393.0 million, up 2% both before and after the effect of foreign exchange, as compared to the prior year similar period. Total revenue for the second quarter of 2013 included the results from businesses that were divested or shutdown.

See attached Schedules 3 and 5 for additional detail.

Deferred revenue for the Company as of June 30, 2014 was $578.2 million, flat compared to the prior year similar period.

Deferred revenue for North America as of June 30, 2014 was $449.8 million, down 3% year over year.

Deferred revenue for total International as of June 30, 2014 was $128.4 million, up 9% year over year.

Operating income before non-core gains and charges for the second quarter of 2014 was $91.3 million, down 8% from the prior year similar period; results were impacted by planned strategic investments to drive long-term growth.

On a GAAP basis, operating income for the second quarter of 2014 was $85.0 million, down 10% from the prior year similar period.

See attached Schedule 5 for additional detail.

Net income attributable to D&B before non-core gains and charges for the second quarter of 2014 was $54.4 million, down 11% from the prior year similar period. On a GAAP basis, net income attributable to D&B for the second quarter of 2014 was $49.9 million, down 13% from the prior year similar period.

See attached Schedule 5 for additional detail.

Free cash flow for the first six months of 2014 was $200.0 million, compared with $208.0 million in the prior year similar period. Net cash provided by operating activities for the first six months of 2014 was $221.7 million, compared with $234.7 million in the prior year similar period.

See attached Schedule 4 for additional detail.

Share repurchases during the second quarter of 2014 under the Company’s discretionary repurchase program totaled $60.0 million (approximately 0.6 million shares), while repurchases made to offset the dilutive effect of shares issued under employee benefit plans totaled an additional $12.0 million (approximately 0.1 million shares).

The Company ended the second quarter of 2014 with $285.9 million of cash and cash equivalents and total gross debt of $1,566.9 million.

Second Quarter 2014 Segment Results

North America

  • Core and total revenue were $284.6 million, up 2% year over year both before and after the effect of foreign exchange.
  • Operating income was $79.9 million, down 6% year over year.

Asia Pacific

  • Core revenue was $46.4 million, flat before the effect of foreign exchange compared to the prior year similar period (down 5% after the effect of foreign exchange).
  • Total revenue was $46.4 million, flat before the effect of foreign exchange compared to the prior year similar period (down 6% after the effect of foreign exchange).
  • Operating income before non-core gains and charges was $7.8 million, down 4% year over year. On a GAAP basis, operating income was $7.7 million, down 8% year over year.

Europe & Other International Markets

  • Core revenue was $62.0 million, flat before the effect of foreign exchange, as compared to the prior year similar period (up 6% after the effect of foreign exchange).
  • Total revenue was $62.0 million, down 1% year over year before the effect of foreign exchange (up 6% after the effect of foreign exchange).
  • Operating income was $18.2 million, up 16% year over year.

Share Repurchase Program

The Company announced today that its Board of Directors approved a new $100 million share repurchase program to mitigate the dilutive effect of shares issued under our stock incentive plans and Employee Stock Purchase program, and to be used for discretionary share repurchases from time to time.

Full Year 2014 Guidance

D&B today reaffirmed its financial guidance for the full year 2014:

  • Core revenue growth of flat to up 3%, before the effect of foreign exchange;
  • Operating income decline of 5% to 9%, before non-core gains and charges;
  • Diluted EPS decline of 1% to 5%, before non-core gains and charges; and
  • Free cash flow of $250 million to $280 million, which excludes the impact of legacy tax matters and any potential regulatory fines associated with our China operations.

D&B does not provide guidance on a GAAP basis because D&B is unable to predict, with reasonable certainty, the future movement of foreign exchange rates or the future impact of non-core gains and charges, such as restructuring charges, legacy tax matters, and the Company’s ongoing China investigation, which are a component of the most comparable financial measures calculated in accordance with GAAP. Non-core gains and charges are uncertain and will depend on several factors, including industry conditions, and could be material to D&B's results computed in accordance with GAAP.

Use of Non-GAAP Financial Measures

In addition to reporting GAAP results, the Company reports results before restructuring charges and other non-core gains and charges, such as legal and other professional expenses associated with the ongoing China investigation, because they do not reflect the Company's underlying business performance and they may have a disproportionate positive or negative impact on the results of its ongoing business operations.

D&B reports non-GAAP financial measures in this press release and the schedules attached. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – How We Manage Our Business” in the Company’s Annual Report on Form 10-K for the year ending December 31, 2013, filed February 28, 2014 with the SEC, for a discussion of how the Company defines these measures, why it uses them and why it believes they provide useful information to investors. Additionally, these measures are defined in Schedule 5 attached to this press release.

Second Quarter 2014 Teleconference

As previously announced, D&B will review its second quarter financial results in a conference call with the investment community on Thursday, August 7, 2014, at 8 a.m. ET. Live audio, as well as a replay of the conference call, will be accessible on D&B's Investor Relations Web site at http://investor.dnb.com.

About Dun & Bradstreet® (D&B)

The Dun & Bradstreet Corporation is the world's leading source of commercial data, analytics and insight on businesses. Our global commercial database contains more than 235 million business records. We transform commercial data into valuable insight which is the foundation of our global solutions that customers rely on to make critical business decisions.

D&B provides solution sets that meet a diverse set of customer needs globally. Customers use D&B Risk Management Solutions™ to mitigate credit and supplier risk, increase cash flow and drive increased profitability, and D&B Sales & Marketing Solutions™ to provide data management capabilities that provide effective and cost efficient marketing solutions to increase revenue from new and existing customers.

For more information, please visit www.dnb.com.

Forward-Looking and Cautionary Statements

The statements in this press release that do not relate to historical facts may be forward-looking statements. These include, without limitation, any statements related to financial guidance or strategic goals. Forward-looking statements are inherently uncertain and are subject to a number of risks and uncertainties that could cause actual results and outcomes to be materially different from those indicated by the forward-looking statements. These risks and uncertainties include, among others, (i) reliance on third parties to support critical components of our business model; (ii) the level and effectiveness of our technology investments; (iii) our ability to protect our information technology infrastructure against cyber attack and unauthorized access; (iv) risks associated with potential violations of the Foreign Corrupt Practices Act and similar laws; (v) customer demand for our products; (vi) the successful implementation of our business strategy; (vii) the integrity and security of our global database and data centers; (viii) our ability to maintain the integrity of our brand and reputation; (ix) our ability to renew large contracts and the related revenue recognition and timing thereof; (x) the impact of macro-economic challenges on our customers and vendors; (xi) efforts to balance government deficits; (xii) future laws or regulations with respect to the collection, compilation, storage, use and/or publication of information and adverse publicity or litigation concerning the commercial use of such information; (xiii) our ability to acquire and successfully integrate other businesses, products and technologies; (xiv) adherence by third-party members of our D&B Worldwide Network, or other third parties who license and sell under the D&B name, to our quality standards and to the renewal of their agreements with D&B (xv) the effects of foreign and evolving economies, exchange rate fluctuations, legislative or regulatory requirements and the implementation or modification of fees or taxes to acquire, use and/or redistribute data; and (xvi) the other factors described under the headings “Risk Factors,” “Management’s Discussion and Analysis,” “Legal Proceedings” and elsewhere in the Company’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and the Company’s other reports or documents filed or furnished with the Securities and Exchange Commission. D&B cautions that the foregoing list of important risk factors is not complete and except as otherwise required by federal securities laws does not undertake any obligation to update any forward-looking statement.

The Dun & Bradstreet Corporation   Schedule 1

Consolidated Statement of Operations (unaudited) - GAAP Results

 
        Effects of         Effects of  
Quarter Ended AFX Foreign BFX Year-To-Date AFX Foreign BFX
June 30, % Change Exchange % Change June 30, % Change Exchange % Change
Dollar amounts in millions, except per share data 2014 2013 Fav (Unfav) Fav (Unfav) Fav (Unfav) 2014 2013

Fav (Unfav)

Fav (Unfav) Fav (Unfav)
 
Revenue:
 
North America $ 284.6 $ 278.7 2 % 0 % 2 % $ 563.6 $ 561.9 0.3 % (0.2 )% 0.5 %
 
Asia Pacific 46.4 49.0 (5 )% (5 )% 0 % 88.1 89.8 (2 )% (7 )% 5 %
Europe and Other International Markets   62.0     58.3   6 % 6 % 0 %   123.1     114.5   8 % 5 % 3 %
International 108.4 107.3 1 % 1 % 0 % 211.2 204.3 3 % (1 )% 4 %
         
Core Revenue $ 393.0 $ 386.0 2 % 0 % 2 % $ 774.8 $ 766.2 1 % 0 % 1 %
 
Divested and Other Business (1) - 0.4 N/M N/M N/M 0.1 1.2 (92 )% (1 )% (91 )%
         
Total Revenue $ 393.0   $ 386.4   2 % 0 % 2 % $ 774.9   $ 767.4   1 % 0 % 1 %
 
Operating Income (Loss):
 
North America $ 79.9 $ 84.5 (6 )% $ 157.9 $ 170.5 (7 )%
 
Asia Pacific (2) 7.7 8.4 (8 )% 13.9 10.8 29 %
Europe and Other International Markets   18.2     15.7   16 %   34.9     29.7   17 %
International 25.9 24.1 8 % 48.8 40.5 21 %
 
Corporate and Other (3) (20.8 ) (14.7 ) (42 )% (39.4 ) (29.3 ) (35 )%
         
Total Operating Income (4) 85.0 93.9 (10 )% 167.3 181.7 (8 )%
 
Interest Income 0.4 0.4 38 % 0.8 0.6 47 %
Interest Expense (10.8 ) (10.0 ) (8 )% (21.4 ) (19.9 ) (8 )%
Other Income (Expense) - Net (5) (0.2 ) (0.1 ) N/M (23.5 ) (1.3 ) N/M
         
Non-Operating Income (Expense) - Net (10.6 ) (9.7 ) (9 )% (44.1 ) (20.6 ) N/M
         
Income Before Provision for Income Taxes 74.4 84.2 (12 )% 123.2 161.1 (24 )%
 
Less: Provision for Income Taxes 24.6 26.4 7 % (12.1 ) 50.2 N/M
Equity in Net Income (Loss) of Affiliates 1.1 0.6 77 % 1.6 1.1 44 %
         
Net Income 50.9 58.4 (13 )% 136.9 112.0 22 %
 
Less: Net (Income) Loss Attributable to the Noncontrolling Interest (1.0 ) (0.9 ) (16 )% (1.7 ) (1.6 ) (8 )%
         
Net Income Attributable to D&B (6)   49.9     57.5   (13 )%   135.2     110.4   22 %
 
Less: Allocation to Participating Securities - - 0 % - - 0 %
         
Net Income Attributable to D&B Common Shareholders $ 49.9   $ 57.5   (13 )% $ 135.2   $ 110.4   22 %
 

Basic Earnings Per Share of Common Stock Attributable to D&B Common Shareholders

  $ 1.36   $ 1.46   (7 )% $ 3.65   $ 2.76   32 %
 

Diluted Earnings Per Share of Common Stock Attributable to D&B Common Shareholders (7)

  $ 1.35   $ 1.44   (6 )% $ 3.62   $ 2.73   33 %
         
Weighted Average Number of Shares Outstanding:
Basic   36.7     39.4   7 %   37.0     40.0   8 %
Diluted   36.9     39.8   7 %   37.3     40.4   8 %
 
 
Operating Margins (Calculated on Total Revenue)
 
North America 28.0 % 30.3 % 28.0 % 30.3 %
Asia Pacific 16.7 % 17.0 % 15.8 % 11.9 %
Europe and Other International Markets 29.4 % 26.8 % 28.3 % 25.9 %
International 24.0 % 22.3 % 23.1 % 19.7 %
Total Company   21.6 %   24.3 %   21.6 %   23.7 %
 
Effective Tax Rate   33.1 %   31.4 %   N/M     31.2 %

AFX - After Effects of Foreign Exchange    BFX - Before Effects of Foreign Exchange    N/M - Not Meaningful

See Schedule 5 (Notes to Schedules), which is an integral part of the consolidated statement of operations.
This financial information should be read in conjunction with the consolidated financial statements and related notes of The Dun & Bradstreet Corporation contained in filings with the Securities and Exchange Commission.

 
The Dun & Bradstreet Corporation   Schedule 2

Consolidated Statement of Operations (unaudited) - Before Non-Core Gains and Charges

 
        Effects of         Effects of  
Quarter Ended AFX Foreign BFX Year-To-Date AFX Foreign BFX
June 30, % Change Exchange % Change June 30, % Change Exchange % Change
Dollar amounts in millions, except per share data 2014 2013 Fav (Unfav) Fav (Unfav) Fav (Unfav) 2014 2013 Fav (Unfav) Fav (Unfav) Fav (Unfav)
 
Revenue:
 
North America $ 284.6 $ 278.7 2 % 0 % 2 % $ 563.6 $ 561.9 0.3 % (0.2 )% 0.5 %
 
Asia Pacific 46.4 49.0 (5 )% (5 )% 0 % 88.1 89.8 (2 )% (7 )% 5 %
Europe and Other International Markets   62.0     58.3   6 % 6 % 0 %   123.1     114.5   8 % 5 % 3 %
International 108.4 107.3 1 % 1 % 0 % 211.2 204.3 3 % (1 )% 4 %
         
Core Revenue $ 393.0 $ 386.0 2 % 0 % 2 % $ 774.8 $ 766.2 1 % 0 % 1 %
 
Divested and Other Business (1) - 0.4 N/M N/M N/M 0.1 1.2 (92 )% (1 )% (91 )%
         
Total Revenue $ 393.0   $ 386.4   2 % 0 % 2 % $ 774.9   $ 767.4   1 % 0 % 1 %
 
Operating Income (Loss):
 
North America $ 79.9 $ 84.5 (6 )% $ 157.9 $ 170.5 (7 )%
 
Asia Pacific (2) 7.8 8.2 (4 )% 14.0 10.7 31 %
Europe and Other International Markets   18.2     15.7   16 %   34.9     29.7   17 %
International 26.0 23.9 9 % 48.9 40.4 21 %
 
Corporate and Other (3) (14.6 ) (8.8 ) (66 )% (28.0 ) (19.5 ) (44 )%
         
Total Operating Income (4) 91.3 99.6 (8 )% 178.8 191.4 (7 )%
 
Interest Income 0.4 0.4 38 % 0.8 0.6 47 %
Interest Expense (10.8 ) (10.0 ) (8 )% (21.4 ) (19.9 ) (8 )%
Other Income (Expense) - Net (5) (0.3 ) (0.4 ) (22 )% (2.0 ) (1.7 ) (20 )%
         
Non-Operating Income (Expense) - Net (10.7 ) (10.0 ) (7 )% (22.6 ) (21.0 ) (7 )%
         
Income Before Provision for Income Taxes 80.6 89.6 (10 )% 156.2 170.4 (8 )%
 
Less: Provision for Income Taxes 26.3 28.3 7 % 43.5 53.2 18 %
Equity in Net Income (Loss) of Affiliates 1.1 0.6 77 % 1.6 1.1 44 %
         
Net Income 55.4 61.9 (11 )% 114.3 118.3 (3 )%
 
Less: Net (Income) Loss Attributable to the Noncontrolling Interest (1.0 ) (0.9 ) (16 )% (1.7 ) (1.6 ) (8 )%
         
Net Income Attributable to D&B (6)   54.4     61.0   (11 )%   112.6     116.7   (4 )%
 
Less: Allocation to Participating Securities - - 0 % - - 0 %
         
Net Income Attributable to D&B Common Shareholders $ 54.4   $ 61.0   (11 )% $ 112.6   $ 116.7   (4 )%
 

Basic Earnings Per Share of Common Stock Attributable to D&B Common Shareholders

  $ 1.48   $ 1.55   (5 )% $ 3.04   $ 2.92   4 %
 

Diluted Earnings Per Share of Common Stock Attributable to D&B Common Shareholders (7)

  $ 1.47   $ 1.53   (4 )% $ 3.02   $ 2.89   5 %
         
Weighted Average Number of Shares Outstanding:
Basic   36.7     39.4   7 %   37.0     40.0   8 %
Diluted   36.9     39.8   7 %   37.3     40.4   8 %
 
 
Operating Margins (Calculated on Total Revenue)
 
North America 28.0 % 30.3 % 28.0 % 30.3 %
Asia Pacific 17.0 % 16.6 % 16.0 % 11.8 %
Europe and Other International Markets 29.4 % 26.8 % 28.3 % 25.9 %
International 24.1 % 22.1 % 23.2 % 19.7 %
Total Company   23.2 %   25.8 %   23.1 %   24.9 %
 
Effective Tax Rate   32.8 %   31.6 %   27.9 %   31.2 %

AFX - After Effects of Foreign Exchange    BFX - Before Effects of Foreign Exchange    N/M - Not Meaningful

See Schedule 5 (Notes to Schedules), which is an integral part of the consolidated statement of operations.
This financial information should be read in conjunction with the consolidated financial statements and related notes of The Dun & Bradstreet Corporation contained in filings with the Securities and Exchange Commission.

 
The Dun & Bradstreet Corporation   Schedule 3
Supplemental Revenue Detail (unaudited)
 
  Quarter Ended     Effects of     Year-To-Date   Effects of  
June 30, AFX Foreign BFX June 30, AFX Foreign BFX
  % Change Exchange % Change   % Change Exchange % Change
Amounts in millions 2014 2013 Fav/(Unfav) Fav/(Unfav) Fav/(Unfav) 2014 2013 Fav/(Unfav) Fav/(Unfav) Fav/(Unfav)
 
Geographic and Customer Solution Set Revenue:
North America:
Risk Management Solutions $ 164.0 $ 168.1 (2 )% 0 % (2 )% $ 327.3 $ 334.1 (2.0 )% (0.3 )% (1.7 )%
Sales & Marketing Solutions 120.6 110.6 9 % 0 % 9 % 236.3 227.8 3.7 % (0.1 )% 3.8 %
       
Subtotal Core Revenue 284.6 278.7 2 % 0 % 2 % 563.6 561.9 0.3 % (0.2 )% 0.5 %
 
Divested and Other Business 1 - - N/M N/M N/M - - N/M N/M N/M
       
Total North America Revenue $ 284.6 $ 278.7 2 % 0 % 2 % $ 563.6 $ 561.9 0.3 % (0.2 )% 0.5 %
 
Asia Pacific:
Risk Management Solutions $ 40.6 $ 42.6 (5 )% (6 )% 1 % $ 77.3 $ 78.2 (1 )% (7 )% 6 %
Sales & Marketing Solutions 5.8 6.4 (9 )% (5 )% (4 )% 10.8 11.6 (7 )% (6 )% (1 )%
       
Subtotal Core Revenue 46.4 49.0 (5 )% (5 )% 0 % 88.1 89.8 (2 )% (7 )% 5 %
 
Divested and Other Business 1 - 0.3 N/M N/M N/M - 0.9 N/M N/M N/M
       
Total Asia Pacific Revenue $ 46.4 $ 49.3 (6 )% (6 )% 0 % $ 88.1 $ 90.7 (3 )% (7 )% 4 %
 
Europe and Other International Markets:
Risk Management Solutions $ 51.3 $ 48.5 6 % 6 % 0 % $ 101.0 $ 94.6 7 % 5 % 2 %
Sales & Marketing Solutions 10.7 9.8 8 % 8 % 0 % 22.1 19.9 11 % 6 % 5 %
       
Subtotal Core Revenue 62.0 58.3 6 % 6 % 0 % 123.1 114.5 8 % 5 % 3 %
 
Divested and Other Business 1 - 0.1 N/M N/M N/M 0.1 0.3 (70 )% 1 % (71 )%
       
Total Europe and Other International Markets Revenue $ 62.0 $ 58.4 6 % 7 % (1 )% $ 123.2 $ 114.8 7 % 5 % 2 %
 
International
Risk Management Solutions $ 91.9 $ 91.1 1 % 1 % 0 % $ 178.3 $ 172.8 3 % (1 )% 4 %
Sales & Marketing Solutions 16.5 16.2 2 % 4 % (2 )% 32.9 31.5 5 % 2 % 3 %
       
Subtotal Core Revenue 108.4 107.3 1 % 1 % 0 % 211.2 204.3 3 % (1 )% 4 %
 
Divested and Other Business 1 - 0.4 N/M N/M N/M 0.1 1.2 (92 )% (1 )% (91 )%
       
Total International Revenue $ 108.4 $ 107.7 1 % 1 % 0 % $ 211.3 $ 205.5 3 % 0 % 3 %
 
Total Corporation:
Risk Management Solutions $ 255.9 $ 259.2 (1 )% 0 % (1 )% $ 505.6 $ 506.9 0 % 0 % 0 %
Sales & Marketing Solutions 137.1 126.8 8 % 0 % 8 % 269.2 259.3 4 % 0 % 4 %
       
Subtotal Core Revenue 393.0 386.0 2 % 0 % 2 % 774.8 766.2 1 % 0 % 1 %
 
Divested and Other Business 1 - 0.4 N/M N/M N/M 0.1 1.2 (92 )% (1 )% (91 )%
       
Total Corporation Revenue $ 393.0 $ 386.4 2 % 0 % 2 % $ 774.9 $ 767.4 1 % 0 % 1 %
 
Amounts in millions
 
North America Risk Management Solutions (Core):

DNBi Subscription Plans 2,6

$ 100.0 $ 104.5 (4 )% 0 % (4 )% $ 199.5 $ 208.6 (4 )% 0 % (4 )%

Non-DNBi Subscription Plans 3

13.0 14.4 (10 )% (1 )% (9 )% 25.8 28.5 (9 )% 0 % (9 )%
       
Total RMS Subscription Plans 113.0 118.9 (5 )% 0 % (5 )% 225.3 237.1 (5 )% 0 % (5 )%

Projects and Other Risk Management Solutions 4,6

51.0 49.2 4 % 0 % 4 % 102.0 97.0 5 % (1 )% 6 %
       
Total North America Risk Management Solutions (Core) $ 164.0 $ 168.1 (2 )% 0 % (2 )% $ 327.3 $ 334.1 (2 )% 0 % (2 )%
 
North America Sales & Marketing Solutions (Core):
Traditional 5 $ 39.2 $ 41.1 (5 )% 0 % (5 )% $ 82.8 $ 87.4 (5 )% 0 % (5 )%
VAPS 81.4 69.5 17 % 0 % 17 % 153.5 140.4 9 % 0 % 9 %
       
Total North America Sales & Marketing Solutions (Core) $ 120.6 $ 110.6 9 % 0 % 9 % $ 236.3 $ 227.8 4 % 0 % 4 %
 
 
Quarter Ended
 
Amounts in millions Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013
 
North America Risk Management Solutions (Core):

DNBi Subscription Plans 2,6

$ 100.0 $ 99.5 $ 103.9 $ 105.5 $ 104.5 $ 104.1

Non-DNBi Subscription Plans 3

13.0 12.8 12.9 13.9 14.4 14.1
           
Total RMS Subscription Plans 113.0 112.3 116.8 119.4 118.9 118.2

Projects and Other Risk Management Solutions 4,6

51.0 51.0 65.6 57.3 49.2 47.8
           
Total North America Risk Management Solutions (Core) $ 164.0 $ 163.3 $ 182.4 $ 176.7 $ 168.1 $ 166.0
           
 
North America Sales & Marketing Solutions (Core):
Traditional 5 $ 39.2 $ 43.6 $ 63.1 $ 53.2 $ 41.1 $ 46.3
VAPS 81.4 72.1 120.7 75.9 69.5 70.9
           
Total North America Sales & Marketing Solutions (Core) $ 120.6 $ 115.7 $ 183.8 $ 129.1 $ 110.6 $ 117.2
           
 
 
Notes:
Quarter Ended Year-To-Date
June 30, June 30,
 
2014 2013 2014 2013
1 Divested and Other Business:
North America:
Risk Management Solutions $ - $ - $ - $ -

 

Sales & Marketing Solutions   -   -   -   -
Total Divested and Other Business $ - $ - $ - $ -
Asia Pacific:
Risk Management Solutions $ - $ - $ - $ -
Sales & Marketing Solutions   -   0.3   -   0.9
Total Divested and Other Business $ - $ 0.3 $ - $ 0.9
Europe and Other International Markets:
Risk Management Solutions $ - $ 0.1 $ 0.1 $ 0.3
Sales & Marketing Solutions   -   -   -   -
Total Divested and Other Business $ - $ 0.1 $ 0.1 $ 0.3
Total Corporation:
Risk Management Solutions $ - $ 0.1 $ 0.1 $ 0.3
Sales & Marketing Solutions   -   0.3   -   0.9
Total Divested and Other Business $ - $ 0.4 $ 0.1 $ 1.2
 
 
2

DNBi subscription plans - interactive, customizable online application that offers our customers real time access to our most complete and up-to-date global DUNSRight information, comprehensive monitoring and portfolio analysis. DNBi subscription plans are contracts that allow customers unlimited use. In these instances, we recognize revenue ratably over the term of the contract.

 
3

Non-DNBi subscription plans - subscription contracts which provide increased access to our risk management reports and data to help customers increase their profitability while mitigating their risk. The non-DNBi subscription plans allow customers unlimited use. In these instances, we recognize revenue ratably over the term of the contract.

 
4 Projects and other risk management solutions - all other revenue streams. This includes, for example, our Business Information Report, our Comprehensive Report, our International Report, and D&B Direct.
 
5 Sales & Marketing Solutions traditional - includes the former Internet Solutions.
 
6 Within North America, we have reclassified prior year amounts for “DNBi Subscription Plans” and “Projects and Other Risk Management Solutions” to conform to the current year presentation.

Total North America Risk Management Solutions remains unchanged. The reclassifications primarily relate to certain adjustments for large customers who have bundled contracts which were previously captured in “Projects and Other Risk Management Solutions” which are now allocated down to the specific product level. This change was done to more precisely reflect all revenue adjustments at the product level.

This financial information should be read in conjunction with the consolidated financial statements and related notes of The Dun & Bradstreet Corporation contained in filings with the Securities and Exchange Commission.

 
The Dun & Bradstreet Corporation   Schedule 4
Supplemental Financial Data (unaudited)
  Quarter Ended     Year-To-Date  
June 30, AFX June 30, AFX
  % Change   % Change
Amounts in millions 2014 2013 Fav/(Unfav) 2014 2013 Fav/(Unfav)
 
Operating Costs - GAAP Results:
Operating Expenses $ 131.7 $ 130.1 (1 )% $ 260.0 $ 256.3 (1 )%
Selling and Administrative Expenses 155.2 142.3 (9 )% 305.7 288.7 (6 )%
Depreciation and Amortization 16.1 17.9 10 % 32.0 36.2 12 %
Restructuring Expense   5.0     2.2   N/M   9.9     4.5   N/M
 
Total Operating Costs - GAAP Results $ 308.0   $ 292.5   (5 )% $ 607.6   $ 585.7   (4 )%
 
Capital Expenditures - GAAP Results $ 1.6   $ 1.5   (5 )% $ 3.9   $ 4.5   14 %
 

Additions to Computer Software & Other Intangibles - GAAP Results

$ 8.1   $ 8.8   9 % $ 17.8   $ 22.2   20 %
 
Operating Costs - Before Non-Core Gains and Charges:
Operating Expenses $ 131.6 $ 130.1 (1 )% $ 259.9 $ 256.2 (1 )%
Selling and Administrative Expenses 154.0 138.8 (11 )% 304.2 283.6 (7 )%
Depreciation and Amortization 16.1 17.9 10 % 32.0 36.2 12 %
Restructuring Expense   -     -   N/M   -     -   N/M
 
Total Operating Costs - Before Non-Core Gains and Charges $ 301.7   $ 286.8   (6 )% $ 596.1   $ 576.0   (4 )%
 
 
Quarter Ended Year-To-Date
June 30, June 30,
 
Amounts in millions 2014 2013 2014 2013
 
Operating Expenses - GAAP Results $ 131.7 $ 130.1 $ 260.0 $ 256.3

Legal and Other Professional Fees and Shut-Down (Costs) Recoveries Related to Matters In China

(0.1 ) - (0.1 ) (0.1 )
       
Operating Expenses -
Before Non-Core Gains and (Charges) $ 131.6   $ 130.1   $ 259.9   $ 256.2  
 
Selling and Admin - GAAP Results $ 155.2 $ 142.3 $ 305.7 $ 288.7

Legal and Other Professional Fees and Shut-Down (Costs) Recoveries Related to Matters In China

(1.2 ) (3.5 ) (1.5 ) (5.1 )
       
Selling and Admin -
Before Non-Core Gains and (Charges) $ 154.0   $ 138.8   $ 304.2   $ 283.6  
 
Depreciation and Amortization - GAAP Results $ 16.1 $ 17.9 $ 32.0 $ 36.2
None - - - -
       
Depreciation and Amortization -
Before Non-Core Gains and (Charges) $ 16.1   $ 17.9   $ 32.0   $ 36.2  
 
Restructuring - GAAP Results $ 5.0 $ 2.2 $ 9.9 $ 4.5
Restructuring (5.0 ) (2.2 ) (9.9 ) (4.5 )
       
Restructuring - Before Non-Core Gains and (Charges) $ -   $ -   $ -   $ -  
 
 
Quarter Ended
 
Amounts in millions Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013 Dec 31, 2012
 
Net Debt Position:
Cash and Cash Equivalents $ 285.9 $ 268.3 $ 235.9 $ 214.3 $ 196.5 $ 172.8 $ 149.1
Short-Term Debt (0.1 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) (0.2 )
Long-Term Debt   (1,566.8 )   (1,513.8 )   (1,516.0 )   (1,455.9 )   (1,408.0 )   (1,302.7 )   (1,290.7 )
 
Net Debt $ (1,281.0 ) $ (1,245.6 ) $ (1,280.2 ) $ (1,241.7 ) $ (1,211.6 ) $ (1,130.0 ) $ (1,141.8 )
 
 
Year-To-Date
 

% Change

Amounts in millions Jun 30, 2014 Jun 30, 2013

Fav/(Unfav)

 
Free Cash Flow:
Net Cash Provided By Operating Activities - GAAP Results $ 221.7 $ 234.7 (6 )%
Less:
Capital Expenditures - GAAP Results 3.9 4.5 14 %
Additions to Computer Software & Other Intangibles - GAAP Results   17.8     22.2   20 %
 
Free Cash Flow $ 200.0 $ 208.0 (4 )%
Legacy Tax Matters (Refund) Payment   -     -   N/M
Free Cash Flow Excluding Legacy Tax Matters $ 200.0   $ 208.0   (4 )%
 
 
Year-To-Date
 

% Change

Amounts in millions Jun 30, 2014 Jun 30, 2013

Fav/(Unfav)

 
Net Cash Provided By Operating Activities excluding Legacy Tax Matters:
Net Cash Provided By Operating Activities - GAAP Results $ 221.7 $ 234.7 (6 )%
Legacy Tax Matters (Refund) Payment   -     -   N/M
 
Net Cash Provided By Operating Activities Excluding Legacy Tax Matters $ 221.7   $ 234.7   (6 )%

This financial information should be read in conjunction with the consolidated financial statements and related notes of The Dun & Bradstreet Corporation contained in filings with the Securities and Exchange Commission.

 
The Dun & Bradstreet Corporation   Schedule 5
Notes to Schedules 1 and 2 (unaudited) and Definitions of Non-GAAP Measures
 
(1)   The following table reconciles Divested and Other Business included in Schedule 1 and Schedule 2:
  Quarter Ended   Year-To-Date
June 30, June 30,
Amounts in millions 2014   2013 2014   2013
 
Divested and Other Business:
India Event Planning/Rural Marketing Businesses $ - $ 0.3 $ - $ 0.9
Ireland Small Corporate Registry Business   -     0.1     0.1     0.3  
 
Total Divested and Other Business $ -   $ 0.4   $ 0.1   $ 1.2  
 
 
(2) The following table reconciles Asia Pacific Operating Income included in Schedule 1 and Schedule 2:
Quarter Ended Year-To-Date
June 30, June 30,
Amounts in millions 2014 2013 2014 2013
 
Asia Pacific Operating Income - GAAP Results (Schedule 1) $ 7.7 $ 8.4 $ 13.9 $ 10.8
 
Legal and Other Professional Fees and Shut-Down (Costs) Recoveries Related to Matters In China   (0.1 )   0.2     (0.1 )   0.1  
 
Asia Pacific Operating Income - Before Non-Core Gains and (Charges) (Schedule 2) $ 7.8   $ 8.2   $ 14.0   $ 10.7  
 
 
(3) The following table reconciles Corporate and Other expenses included in Schedule 1 and Schedule 2:
Quarter Ended Year-To-Date
June 30, June 30,
Amounts in millions 2014 2013 2014 2013
 
Corporate and Other - GAAP Results (Schedule 1) $ (20.8 ) $ (14.7 ) $ (39.4 ) $ (29.3 )
 
Restructuring Charges (5.0 ) (2.2 ) (9.9 ) (4.5 )
Legal and Other Professional Fees and Shut-Down (Costs) Recoveries Related to Matters In China   (1.2 )   (3.7 )   (1.5 )   (5.3 )
 
Corporate and Other - Before Non-Core Gains and (Charges) (Schedule 2) $ (14.6 ) $ (8.8 ) $ (28.0 ) $ (19.5 )
 
 
(4) The following table reconciles Total Operating Income included in Schedule 1 and Schedule 2:
Quarter Ended Year-To-Date
June 30, June 30,
Amounts in millions 2014 2013 2014 2013
 
Total Operating Income - GAAP Results $ 85.0 $ 93.9 $ 167.3 $ 181.7
 
Restructuring Charges (5.0 ) (2.2 ) (9.9 ) (4.5 )
Legal and Other Professional Fees and Shut-Down (Costs) Recoveries Related to Matters In China   (1.3 )   (3.5 )   (1.6 )   (5.2 )
 
Total Operating Income - Before Non-Core Gains and (Charges) $ 91.3   $ 99.6   $ 178.8   $ 191.4  
 
 
(5) The following table reconciles Other Income (Expense)-Net included in Schedule 1 and Schedule 2:
Quarter Ended Year-To-Date
June 30, June 30,
Amounts in millions 2014 2013 2014 2013
 
Other Income (Expense)-Net - GAAP Results (Schedule 1) $ (0.2 ) $ (0.1 ) $ (23.5 ) $ (1.3 )
Effect of Legacy Tax Matters 0.1 0.3 (21.5 ) 0.4
       
Other Income (Expense)-Net - Before Non-Core Gains and (Charges) (Schedule 2) $ (0.3 ) $ (0.4 ) $ (2.0 ) $ (1.7 )
 
 
Total Pre-Tax Impacts:
(Summarizes the Effects on Operating Income and Other Income (Expense) - Net)
Quarter Ended Year-To-Date
June 30, June 30,
Amounts in millions 2014 2013 2014 2013
 
Restructuring Charges $ (5.0 ) $ (2.2 ) $ (9.9 ) $ (4.5 )
Legal and Other Professional Fees and Shut-Down (Costs) Recoveries Related to Matters In China (1.3 ) (3.5 ) (1.6 ) (5.2 )
Effect of Legacy Tax Matters 0.1 0.3 (21.5 ) 0.4
       
Total Pre-Tax Impacts $ (6.2 ) $ (5.4 ) $ (33.0 ) $ (9.3 )
 
 
(6) The following table reconciles Net Income Attributable to D&B included in Schedule 1 and Schedule 2:
Quarter Ended Year-To-Date
June 30, June 30,
Amounts in millions 2014 2013 2014 2013
 
Net Income Attributable to D&B - GAAP Results (Schedule 1) $ 49.9 $ 57.5 $ 135.2 $ 110.4
 
Restructuring Charges (3.6 ) (1.4 ) (7.0 ) (3.1 )
Legal and Other Professional Fees and Shut-Down (Costs) Recoveries Related to Matters In China (0.9 ) (2.1 ) (1.1 ) (3.2 )
Effect of Legacy Tax Matters - - 30.7 -
       
After-Tax Impact (4.5 ) (3.5 ) 22.6 (6.3 )
       
Net Income Attributable to D&B - Before Non-Core Gains and (Charges) (Schedule 2) $ 54.4   $ 61.0   $ 112.6   $ 116.7  
 
 
(7) The following table reconciles Diluted Earnings Per Share Attributable to D&B included in Schedule 1 and Schedule 2:
Quarter Ended Year-To-Date
June 30, June 30,
  2014 2013 2014 2013
 
Diluted EPS Attributable to D&B - GAAP Results (Schedule 1) $ 1.35 $ 1.44 $ 3.62 $ 2.73
 
Restructuring Charges (0.10 ) (0.04 ) (0.19 ) (0.09 )
Legal and Other Professional Fees and Shut-Down (Costs) Recoveries Related to Matters In China (0.02 ) (0.05 ) (0.03 ) (0.07 )
Effect of Legacy Tax Matters - - 0.82 -
       
Diluted EPS Attributable to D&B - Before Non-Core Gains and (Charges) (Schedule 2) $ 1.47   $ 1.53   $ 3.02   $ 2.89  

N/M - Not Meaningful

The following defines the non-GAAP measures used to evaluate performance:

*Total revenue excluding the revenue of divested and shut-down businesses is referred to as “core revenue.” Core revenue includes the revenue from acquired businesses from the date of acquisition
*Core revenue growth, excluding the effects of foreign exchange, is referred to as “core revenue growth before the effects of foreign exchange.” We also separately, from time to time, analyze core revenue growth before the effects of foreign exchange among two components, “organic core revenue growth” and “core revenue growth from acquisitions”
*Results (such as operating income, operating income growth, operating margin, net income, tax rate and diluted earnings per share) exclude Restructuring Charges (whether recurring or non-recurring) and certain other items that we consider do not reflect our underlying business performance. We refer to these Restructuring Charges and other items as “non-core gains and (charges)”

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.

Contacts

D&B
Media
Michele Caselnova, 973-921-5196
caselnovam@dnb.com
or
Investors/Analysts
Kathy Guinnessey, 973-921-5892
Kathy.Guinnessey@dnb.com

Contacts

D&B
Media
Michele Caselnova, 973-921-5196
caselnovam@dnb.com
or
Investors/Analysts
Kathy Guinnessey, 973-921-5892
Kathy.Guinnessey@dnb.com