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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 22, 2001.
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
THE DUN & BRADSTREET CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 7320 22-3725387
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
ONE DIAMOND HILL ROAD
MURRAY HILL, NJ 07974
(908) 665-5000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
ROXANNE E. PARKER
VICE PRESIDENT -- TREASURY AND INVESTOR RELATIONS
ONE DIAMOND HILL ROAD
MURRAY HILL, NJ 07974
(908) 665-5000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:
DEBORAH S. PRUTZMAN JOHN B. TEHAN
SENIOR VICE PRESIDENT AND GENERAL COUNSEL SIMPSON THACHER & BARTLETT
THE DUN & BRADSTREET CORPORATION 425 LEXINGTON AVENUE
ONE DIAMOND HILL ROAD NEW YORK, NY 10017
MURRAY HILL, NJ 07974 (212) 455-2675
(908) 665-5000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC as soon as
practicable after the effective date of the Registration Statement.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT PRICE REGISTRATION FEE
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6.625% Series B Senior Notes due 2006..... $300,000,000 100% $300,000,000 $75,000
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES OR ACCEPT ANY OFFER TO BUY THESE SECURITIES
UNTIL WE DELIVER THIS PROSPECTUS TO YOU IN FINAL FORM. WE ARE NOT USING
THIS PROSPECTUS TO OFFER TO SELL THESE SECURITIES OR TO SOLICIT OFFERS TO
BUY THESE SECURITIES IN ANY PLACE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT TO COMPLETION, DATED , 2001
PRELIMINARY PROSPECTUS
THE DUN & BRADSTREET CORPORATION
OFFER TO EXCHANGE UP TO
$300,000,000 OF ITS 6.625% SERIES B SENIOR NOTES DUE 2006
FOR ANY AND ALL OF ITS OUTSTANDING
$300,000,000 6.625% SENIOR NOTES DUE 2006
------------------------
THE EXCHANGE OFFER
- The Dun & Bradstreet Corporation will exchange all outstanding notes that are
validly tendered and not validly withdrawn for an equal principal amount of
exchange notes that are freely tradeable.
- You may withdraw tenders of outstanding notes at any time prior to the
expiration of the exchange offer.
- The exchange offer expires at 5:00 p.m., New York City time, on
, 2001. We do not currently intend to extend the expiration
date.
THE EXCHANGE NOTES
- The terms of the exchange notes to be issued in the exchange offer are
substantially identical to the outstanding notes, except that the exchange
notes will be freely tradeable.
- The exchange notes will mature on March 15, 2006.
- Interest on the exchange notes will be payable semi-annually on March 15 and
September 15 of each year, commencing September 15, 2001.
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YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 8 OF THIS
PROSPECTUS BEFORE PARTICIPATING IN THE EXCHANGE OFFER.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is , 2001.
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TABLE OF CONTENTS
Special Note Regarding Forward-Looking
Statements........................... i
Where You Can Find More Information.... ii
Summary................................ 1
Risk Factors........................... 8
Use of Proceeds........................ 9
Ratios of Earnings to Fixed Charges.... 10
Capitalization......................... 11
Selected Financial Data................ 12
Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................... 14
Business............................... 20
The Exchange Offer..................... 27
Description of the Exchange Notes...... 37
United States Federal Income Tax
Consequences......................... 44
Plan of Distribution................... 48
Legal Matters.......................... 48
Independent Public Accountants......... 48
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this prospectus are forward-looking. These may be
identified by the use of forward-looking words or phrases, such as "expect,"
"will," "can," "anticipate," and "plan," among others. All such forward-looking
statements are based on our reasonable expectations at the time they are made,
but are not guarantees of future performance. The Private Securities Litigation
Reform Act of 1995 provides a "safe harbor" for such forward-looking statements.
In order to comply with the terms of the safe harbor, we note that a variety of
factors could cause our actual results and experience to differ materially from
the anticipated results or other expectations expressed in such forward-looking
statements. The risks and uncertainties that may affect the operations,
performance, development and results of our business include: (1) complexity and
uncertainty regarding the development of new high-technology products, (2)
possible loss of market share through competition, (3) pricing pressures from
competitors and/or customers, (4) changes in the business information and risk
management industries and markets, including those driven by the Internet, (5)
our ability to protect proprietary information and technology or to obtain
necessary licenses on commercially reasonable terms, (6) our ability to complete
the implementation of our euro plans on a timely basis and the competitive
implications that the conversion to the euro may have on our pricing and
marketing strategies, (7) our ability to attract and retain key employees, (8)
risks associated with investments and operations in foreign countries, including
regulatory environment, exchange rate fluctuations and cultural factors, (9) the
outcome of any reviews by applicable tax authorities of our global tax planning
initiatives, (10) our ability to successfully implement our business strategy,
including the ability to consummate asset monetization transactions, changes in
the international business model and financial flexibility initiatives on terms
and conditions contemplated by us, (11) the loss of key customers due to
consolidations and mergers, (12) the impact of product rationalization
activities on revenues, (13) our ability to expand our database on commercially
reasonable terms and the possibility that data suppliers might withdraw data
from us, (14) the possibility that economic conditions might lead to a reduction
in the use of our products, and (15) the timing with which significant customer
contracts are executed. We undertake no obligations to publicly release any
revision to any forward-looking statement to reflect any future events or
circumstances.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. You can also request copies of the documents upon payment of
a duplicating fee, by writing to the Public Reference Section of the SEC. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference
rooms. These SEC filings are also available to the public from the SEC's web
site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with the SEC, which means that we can disclose important information to you by
referring to those documents. The information incorporated by reference is
considered to be a part of this prospectus. We incorporate by reference the
documents listed below:
- Annual Report on Form 10-K for the year ended December 31, 2000, filed
with the SEC on February 22, 2001;
- Quarterly Report on Form 10-Q for the three-month period ended March 31,
2001, filed with the SEC on May 15, 2001; and
- Current Report on Form 8-K, filed with the SEC on March 13, 2001.
You may request a copy of these filings, at no cost, by writing or
telephoning the Company at the following address:
The Dun & Bradstreet Corporation
One Diamond Hill Road
Murray Hill, New Jersey 07974
Attention: Corporate Secretary
Telephone: (908) 665-5000
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SUMMARY
The following summary highlights information contained elsewhere in this
prospectus. It may not contain all of the information that is important to you.
For a more complete understanding of the exchange offer, we encourage you to
read this entire prospectus and the documents we have referred you to which set
forth important factors that could affect the Company's business, operations,
prospects and financial results. Unless otherwise specifically indicated, "D&B,"
the "Company," "we," "our," "ours," and "us" each refers to The Dun & Bradstreet
Corporation and its consolidated subsidiaries.
THE DUN & BRADSTREET CORPORATION
GENERAL
The Dun & Bradstreet Corporation, a leading provider of business
information, has been enabling business-to-business commerce for 159 years.
D&B's information and technology solutions help businesses reduce credit risk,
find profitable customers and manage customer relationships more efficiently.
Businesses also use D&B's information and technology to authenticate and verify
potential trading partners online, increasing their trust and confidence in
e-commerce business transactions. At the core of D&B's business is its database,
containing information on more than 62 million public and private business
entities located in more than 200 countries, which D&B believes is the world's
largest and most comprehensive of its kind. The database is also the source from
which D&B offers a sophisticated array of products, services and applications to
its business information customers.
Until September 30, 2000, the business of the Company was operated as part
of the corporation now known as Moody's Corporation and previously known as "The
Dun & Bradstreet Corporation". Moody's Corporation is referred to herein as "Old
D&B" for periods prior to the 2000 Distribution and as "Moody's" for periods
thereafter. On September 30, 2000, Old D&B distributed to all holders of its
common stock the shares of D&B, which was a wholly-owned subsidiary and became
an independent public company (the "2000 Distribution"). As a result of the 2000
Distribution, the sole business of the Company is D&B. Because of the relative
significance of D&B's business to Old D&B, D&B was treated as the "accounting
successor" to Old D&B, and as such, D&B has been classified as a continuing
operation and the business associated with Moody's Corporation has been
classified as a discontinued operation.
Old D&B was incorporated under the laws of the State of Delaware on April
8, 1998. Old D&B began operating as an independent publicly-owned corporation on
July 1, 1998 as a result of its June 30, 1998 spinoff (the "1998 Distribution")
from the corporation now known as "R.H. Donnelley Corporation" and previously
known as "The Dun & Bradstreet Corporation" ("Donnelley"). Old D&B became the
accounting successor to Donnelley at the time of the 1998 Distribution.
Prior to the 1998 Distribution, Donnelley was the parent holding company
for subsidiaries then engaged in the businesses currently conducted by D&B,
Moody's and Donnelley. Prior to November 1, 1996, it also was the parent holding
company of subsidiaries conducting business under the names Cognizant
Corporation ("Cognizant") and ACNielsen Corporation ("ACNielsen"). On that date
Donnelley effected a spinoff of the capital stock of Cognizant and ACNielsen to
its stockholders (the "1996 Distribution"). Cognizant subsequently changed its
name to Nielsen Media Research, Inc. in connection with its 1998 spinoff of the
capital stock of IMS Health Incorporated ("IMS Health").
Our principal executive offices are located at One Diamond Hill Road,
Murray Hill, New Jersey 07974, and our telephone number is (908) 665-5000.
BUSINESS STRATEGY
D&B's strategic goal is to become a growth company with an important
presence on the Web. D&B has developed a five-part strategy to further its goal.
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- LEVERAGE THE BRAND: D&B's strategy begins by leveraging core brand
assets in a manner designed to assure that The Dun & Bradstreet name
continues to engender the same level of trust and confidence in
business-to-business e-commerce transactions, where issues of trust and
confidence are of paramount concern, that it does in the traditional
marketplace.
- CREATE FINANCIAL FLEXIBILITY: The implementation of the Company's
strategy will require significant investments which D&B plans to fund by
reallocating spending to areas representing growth opportunities.
- ENHANCE THE CURRENT BUSINESS: An important element of D&B's strategy is
capitalizing on opportunities in its current business to generate revenue
growth and increase profitability. D&B believes it can further develop
its relationships with its over 150,000 customers worldwide and expand
its customer base by making selected investments.
- BECOME AN IMPORTANT PLAYER IN BUSINESS-TO-BUSINESS E-COMMERCE: D&B
believes that business-to-business e-commerce is a potent opportunity. In
addition to creating value for customers through D&B products and
services, D&B expects to enter into strategic alliances that leverage
D&B's strengths along with those of other market leaders.
- BUILD A WINNING CULTURE: D&B recognizes that successfully achieving its
strategic goals will require talented, motivated and efficient associates
aligned around a common set of strategies and goals.
RECENT DEVELOPMENTS
In May 2001, we completed the sale of the operations of our Receivable
Management Services ("RMS") product lines in the U.S. and Hong Kong to the RMS
senior management team and our European RMS operations to Intrum Justitia, B.V.
for approximately $120 million in cash. Included in this amount is payment
related to a contract to provide the buyer of the U.S. and Hong Kong RMS
businesses with credit information products over several years. The portion of
the payment that is for products to be provided in the future will be recorded
in deferred revenue and recognized as products are delivered. We expect to
complete the sale of our Canadian RMS business by the end of May. During the
year 2000, these operations generated approximately $145 million in revenues and
approximately 6% of our earnings before interest, taxes, depreciation,
amortization and one-time non-recurring items.
Also, in May 2001, we completed the acquisition of iMarket, a provider of
business-to-business sales and marketing solutions for small and mid-sized
companies. We previously held a minority interest in iMarket and paid
approximately $19 million to acquire the remainder of the business we did not
already own. The acquisition will be accounted for using the purchase method of
accounting for business combinations.
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THE EXCHANGE OFFER
On March 22, 2001, The Dun & Bradstreet Corporation completed the private
offering of the outstanding notes. References to notes in this prospectus are
references to both the outstanding notes and the exchange notes.
D&B entered into an exchange and registration rights agreement with the
initial purchasers in the private offering in which we agreed to deliver to you
this prospectus and D&B agreed to complete the exchange offer within 180 days
after the date of original issuance of the outstanding notes. In the exchange
offer, you are entitled to exchange your outstanding notes for exchange notes
which are identical in all material respects to the outstanding notes except
that:
- the exchange notes have been registered under the Securities Act of 1933,
as amended (the "Securities Act");
- the exchange notes are not entitled to registration rights under the
registration rights agreement; and
- certain contingent interest rate provisions are no longer applicable.
The Exchange Offer............ We are offering to exchange up to $300,000,000
aggregate principal amount of its 6.625% Series
B Senior Notes due 2006 (the "exchange notes")
for like aggregate principal amount of our
outstanding 6.625% Senior Notes due 2006 (the
"outstanding notes"). Outstanding notes may
only be exchange in integral multiples of
$1,000.
Resales....................... Based on an interpretation by the staff of the
Securities and Exchange Commission set forth in
no-action letters issued to third parties, we
believe that the exchange notes issued pursuant
to the exchange offer in exchange for
outstanding notes may be offered for resale,
resold and otherwise transferred by you (unless
you are an "affiliate" of D&B within the
meaning of Rule 405 under the Act) without
compliance with the registration and prospectus
delivery provisions of the Securities Act,
provided that you are acquiring the exchange
notes in the ordinary course of your business
and that you have not engaged in, do not intend
to engage in, and have no arrangement or
understanding with any person to participate
in, a distribution of the exchange notes.
Each participating broker-dealer that receives
exchange notes for its own account pursuant to
the exchange offer in exchange for outstanding
notes that were acquired as a result of
market-making or other trading activity must
acknowledge that it will deliver a prospectus
in connection with any resale of the exchange
notes. See "Plan of Distribution."
Any holder of outstanding notes who:
- is an affiliate of D&B,
- does not acquire exchange notes in the
ordinary course of its business, or
- tenders in the exchange offer with the
intention to participate, or for the purpose
of participating, in a distribution of
exchange notes, cannot rely on the position
of the staff of the Commission enunciated in
Exxon Capital Holdings Corporation, Morgan
Stanley & Co. Incorporated or similar
no-action letters and, in the absence of an
exemption therefrom, must comply with the
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registration and prospectus delivery
requirements of the Securities Act in
connection with the resale of the exchange
notes.
Expiration Date; Withdrawal of
Tenders..................... The exchange offer will expire at 5:00 p.m.,
New York City time, on , 2001, or
such later date and time to which D&B
corporation extends the expiration date. A
tender of outstanding notes pursuant to the
exchange offer may be withdrawn at any time
prior to the expiration date. Any outstanding
notes not accepted for exchange for any reason
will be returned without expense to the
tendering holder promptly after the expiration
or termination of the exchange offer.
Certain Conditions to the
Exchange Offer................ The exchange offer is subject to customary
conditions, which D&B may waive. Please read
the section captioned "The Exchange
Offer -- Certain Conditions to the Exchange
Offer" of this prospectus for more information
regarding the conditions to the exchange offer.
Procedures for Tendering
Outstanding Notes............. If you wish to accept the exchange offer, you
must complete, sign and date the accompanying
letter of transmittal, or a facsimile of the
letter of transmittal, according to the
instructions contained in this prospectus and
the letter of transmittal. You must also mail
or otherwise deliver the letter of transmittal,
or a facsimile of the letter of transmittal,
together with the outstanding notes and any
other required documents, to the exchange agent
at the address set forth on the cover page of
the letter of transmittal. If you hold
outstanding notes through The Depository Trust
Company, DTC, and wish to participate in the
exchange offer, you must comply with the
Automated Tender Offer Program procedures of
DTC, by which you will agree to be bound by the
letter of transmittal. By signing, or agreeing
to be bound by, the letter of transmittal, you
will represent to us that, among other things:
- any exchange notes that you receive will be
acquired in the ordinary course of your
business;
- you have no arrangement or understanding with
any person or entity to participate in a
distribution of the exchange notes;
- if you are a broker-dealer that will receive
exchange notes for your own account in
exchange for outstanding notes that were
acquired as a result of market-making
activities, that you will deliver a
prospectus, as required by law, in connection
with any resale of such exchange notes; and
- you are not an "affiliate," as defined in
Rule 405 of the Securities Act, of D&B or, if
you are an affiliate, you will comply with
any applicable registration and prospectus
delivery requirements of the Securities Act.
Special Procedures for
Beneficial Owners............. If you are a beneficial owner of outstanding
notes which are not registered in your name,
and you wish to tender such outstanding notes
in the exchange offer, you should contact the
registered
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holder promptly and instruct such registered
holder to tender on your behalf. If you wish to
tender on your own behalf, you must, prior to
completing and executing the letter of
transmittal and delivering your outstanding
notes, either make appropriate arrangements to
register ownership of the outstanding notes in
your name or obtain a properly completed bond
power from the registered holder.
Guaranteed Delivery
Procedures.................... If you wish to tender your outstanding notes
and your outstanding notes are not immediately
available or you cannot deliver your
outstanding notes, the letter of transmittal or
any other documents required by the letter of
transmittal or comply with the applicable
procedures under DTC's Automated Tender Offer
Program prior to the expiration date, you must
tender your outstanding notes according to the
guaranteed delivery procedures set forth in
this prospectus under "The Exchange
Offer -- Guaranteed Delivery Procedures."
Effect on Holders of
Outstanding Notes............. As a result of the making and consummation of
the exchange offer, we will have fulfilled a
covenant contained in the registration rights
agreement and, accordingly, there will be no
increase in the interest rate on the
outstanding notes under the circumstances
described in the registration rights agreement.
If you are a holder of outstanding notes and
you do not tender your outstanding notes in the
exchange offer, you will continue to be
entitled to all the rights and limitations
applicable to the outstanding notes in the
indenture, except as noted above.
To the extent that outstanding notes are
tendered and accepted in the exchange offer,
the trading market for outstanding notes could
be adversely affected.
Consequences of Failure to
Exchange.................... All untendered outstanding notes will continue
to be subject to the restrictions on transfer
provided for in the outstanding notes and in
the indenture. In general, the outstanding
notes may not be offered or sold, unless
registered under the Securities Act, except
pursuant to an exemption from, or in a
transaction not subject to, the Securities Act
and applicable state securities laws. Other
than in connection with the exchange offer, D&B
does not currently anticipate that it will
register the outstanding notes under the
Securities Act.
U.S. Federal Income Tax
Considerations.............. The exchange of outstanding notes for exchange
notes in the exchange offer will not be a
taxable event for U.S. federal income tax
purposes. See "Certain United States Federal
Income Tax Consequences of the Exchange Offer."
Use of Proceeds............... We will not receive any cash proceeds from the
issuance of exchange notes pursuant to the
exchange offer.
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Exchange Agent................ The Bank of New York is the exchange agent for
the exchange offer. The address and telephone
number of the exchange agent are set forth in
the section captioned "Exchange
Offer -- Exchange Agent" of this prospectus.
SUMMARY OF TERMS OF THE EXCHANGE NOTES
Issuer........................ The Dun & Bradstreet Corporation.
Securities Offered............ $300,000,000 principal amount of 6.625% Series
B Senior Notes due 2006.
Maturity Date................. March 15, 2006.
Interest Payment Dates........ March 15 and September 15 of each year,
commencing September 15, 2001.
Optional Redemption........... The exchange notes will be redeemable at the
option of D&B, in whole or in part, prior to
their maturity at the redemption prices listed
in the section entitled "Description of the
Notes -- Optional Redemption."
Ranking....................... The exchange notes will be unsecured senior
obligations of the Company and will rank
equally and ratably with our existing and
future unsecured senior debt. The exchange
notes will be effectively subordinated to our
secured obligations.
Certain Covenants............. D&B issued the outstanding notes and will issue
the exchange notes under an indenture with The
Bank of New York, the trustee. The indenture,
among other things, restricts our ability to:
- permit certain liens securing debt;
- enter into sale and leaseback transactions;
and
- sell all or substantially all of our assets
or merge or consolidate with or into other
companies.
RISK FACTORS
You should consider carefully all of the information set forth in this
prospectus and, in particular, you should evaluate the specific factors
discussed under "Risk Factors."
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SUMMARY SELECTED FINANCIAL DATA
The following data are qualified in their entirety by the financial
statements of the Company and other information contained elsewhere in this
prospectus or incorporated by reference herein. The financial data as of and for
each of the years in the five-year period ended December 31, 2000 have been
derived from the audited financial statements of the Company. The financial data
as of and for the three-month periods ended March 31, 2000 and March 31, 2001
have been derived from unaudited consolidated financial statements. In the
opinion of management, the unaudited information reflects all adjustments
(consisting only of normal and recurring adjustments) necessary for a fair
presentation of the results for such period. Due to the relative significance of
D&B's business to Old D&B, D&B was treated as the "accounting successor" to Old
D&B, and as such, D&B has been classified as a continuing operation and the
business associated with Moody's Corporation has been classified as a
discontinued operation. See "Summary -- The Dun & Bradstreet Corporation." The
following financial data should be read in conjunction with the financial
statements and the related notes incorporated by reference in this prospectus.
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
---------------------------------------------------- -------------------
2000 1999 1998 1997 1996 2001 2000
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS)
RESULTS OF OPERATIONS:
Operating Revenues..................... $1,417.6 $1,407.7 $1,420.5 $1,353.6 $1,397.1 $ 357.6 $ 356.5
Costs and Expenses(1).................. 1,244.8 1,246.8 1,232.8 1,146.4 1,478.2 299.3 303.6
-------- -------- -------- -------- -------- -------- --------
Operating Income....................... 172.8 160.9 187.7 207.2 (81.1) 58.3 52.9
Non-Operating Expense -- Net(2)........ (21.1) (15.5) (30.4) (71.5) (70.8) (6.1) (6.7)
-------- -------- -------- -------- -------- -------- --------
Income (Loss) from Continuing
Operations before Provision for
Income Taxes......................... 151.7 145.4 157.3 135.7 (151.9) 52.2 46.2
Provision for Income Taxes............. 78.1 64.1 71.1 42.5 50.1 20.6 19.2
Equity in Net Losses of Affiliates..... -- -- -- -- -- (0.7) --
Income (Loss) from:
Continuing Operations................ 73.6 81.3 86.2 93.2 (202.0) 30.9 27.0
Discontinued Operations, Net of
Income Taxes(3).................... 133.0 174.7 193.9 217.8 158.2 -- 40.8
-------- -------- -------- -------- -------- -------- --------
Income (Loss) before Cumulative
Effect of Accounting Changes....... 206.6 256.0 280.1 311.0 (43.8) 30.9 67.8
Cumulative Effect of Accounting
Changes, Net of Income Tax
Benefit(4)......................... -- -- -- (127.0) -- -- --
-------- -------- -------- -------- -------- -------- --------
Net Income (Loss)...................... $ 206.6 $ 256.0 $ 280.1 $ 184.0 $ (43.8) $ 30.9 $ 67.8
======== ======== ======== ======== ======== ======== ========
EBITDA(5).............................. $ 290.0 $ 297.8 $ 311.7 $ 319.9 $ 35.0 $ 82.1 $ 82.2
======== ======== ======== ======== ======== ======== ========
Adjusted EBITDA(6)..................... $ 355.0 $ 330.0 $ 341.9 $ 323.0 $ 264.4 $ 83.1 $ 83.0
======== ======== ======== ======== ======== ======== ========
BALANCE SHEET:
Total Assets(7)........................ $1,423.6 $1,574.8 $1,574.7 $1,729.4 $1,992.9 $1,436.8 $1,423.6
======== ======== ======== ======== ======== ======== ========
Minority Interest Financing............ $ 300.0 $ 300.0 $ 300.0 $ 300.0 $ -- $ -- $ 300.0
======== ======== ======== ======== ======== ======== ========
Equity................................. $ (51.0) $ (416.6) $ (371.0) $ (527.7) $ (455.3) $ (14.0) $ (51.0)
======== ======== ======== ======== ======== ======== ========
---------------
(1) 2000 included charges of $41.5 million for restructuring in connection with
the Company's new business strategy and $29.5 million for reorganization
costs associated with the 2000 Distribution. 1999 included a charge of $41.2
million in conjunction with restructuring. 1998 included a charge of $28.0
million for reorganization costs associated with the 1998 Distribution. 1996
included charges of $161.2 million for reorganization costs associated with
the 1996 Distribution and a loss of $68.2 million on the sale of American
Credit Indemnity, a former subsidiary of Donnelley.
(2) 2000 and 1999 included gains related to the settlement of litigation of
$10.1 million and $11.9 million, respectively. See Note 5 to the
consolidated financial statements incorporated by reference herein.
(3) Income taxes on Discontinued Operations were $86.2 million, $114.8 million,
$104.7 million, $123.1 million and $197.1 million in 2000, 1999, 1998, 1997
and 1996, respectively.
(4) 1997 included the impact of a change in revenue recognition policies.
(5) EBITDA is defined as earnings before interest income, interest expense,
minority interest expense, income taxes, depreciation and amortization.
EBITDA is presented because it is commonly used by certain investors and
analysts to analyze a company's ability to service debt. However, EBITDA is
not a measure of financial performance under generally accepted accounting
principles and should not be considered an alternative to operating income
or net income as a measure of operating performance or to net cash provided
by operating activities as a measure of liquidity.
(6) Adjusted EBITDA is defined as operating income excluding the one-time items
described in footnote (1) plus depreciation and amortization. Adjusted
EBITDA for 1997 and 1998 are pro forma for the 1998 Distribution.
(7) Included Net Assets of Discontinued Operations of $162.3 million and $459.5
million in 1997 and 1996, respectively.
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RISK FACTORS
Before you participate in the exchange offer, you should be aware that
there are various risks, including those described below. You should carefully
consider these risk factors, together with the other information in this
prospectus, before deciding to participate in the exchange offer.
OUR GROWTH IS DEPENDENT IN PART ON OUR ABILITY TO PENETRATE THE E-COMMERCE
MARKET
Our growth depends in part upon our ability to penetrate the e-commerce
market and convince business information consumers to integrate our information
into their applications and to use such information in their transaction
decisions. There can be no assurance that a decision by us to focus on the
e-commerce marketplace will be successful. In addition, the e-commerce industry
is rapidly evolving and there can be no assurance that we will be able to adapt
to changing business conditions.
We expect increasingly to use the Internet as a distribution channel to
provide information-based products and services to our customers. Due to the
popularity of the Internet, it is possible that new laws and regulations might
increase our cost of using, or limit our ability to use, the Internet as a
distribution channel, which in turn could have an adverse effect on our
business.
RAPID TECHNOLOGICAL ADVANCES COULD RENDER OUR PRODUCTS OR SERVICES LESS
COMPETITIVE OR OBSOLETE
The business information industry is characterized by rapid technological
changes, evolving industry standards and the continuous introduction of new
products, services and applications. As a result, our growth and future
financial performance will continue to depend on our ability to develop
sophisticated applications and technologies to accommodate client preferences,
create new distribution channels, develop and market new products and services
and enhance existing products. There can be no guarantee that, as various
systems and technologies become outdated, we will be able to replace them, or to
replace them as quickly as our competitors. In addition, there can be no
assurance that products or technologies developed by others will not render our
products or services less competitive or obsolete.
WE FACE INCREASING COMPETITION IN THE BUSINESS INFORMATION INDUSTRY
Business information and related products and services are becoming
increasingly available as the use of the Internet expands and as new providers
of business-to-business information products and services emerge. Competition to
meet the growing demand for reliable, easily accessible commercial information
is intense. Our ability to compete effectively will be based on a number of
factors, including:
- our ability to attract clients to use the Internet to obtain business
information;
- the quality of the information we can provide;
- our brand perception; and
- our ability to deliver business information via various media and
distribution channels in formats tailored to client requirements.
We believe that we may experience pricing pressures in the future as some
of our competitors seek to obtain market share by reducing prices. Our revenues
in certain of our traditional product and service lines have declined as
customers migrate to free or lower-cost information services offered by us or
other Internet vendors. In addition, price competition in Europe has had and may
continue to have a negative impact on our results of operations.
TECHNOLOGY INFRASTRUCTURE AND PARTNERSHIPS ARE IMPORTANT TO OUR GROWTH STRATEGY
We rely on computer hardware, software and systems. If a material system
does not operate properly or is disabled, we could suffer financial loss or a
disruption to our business. The inability to maintain systems that will
accommodate an increasing volume of transactions also could affect our ability
to expand.
8
13
In the future, our reliance on partnerships with third parties as a way to
provide services to customers may increase. If we are unable to form these
partnerships on acceptable terms, or at all, our ability to execute our strategy
could be limited.
OUR RESULTS ARE SUBJECT TO FLUCTUATIONS IN INTEREST RATES AND EXCHANGE RATES
We expect to fund our operations primarily from our operating cash flows
supplemented, as necessary, through our commercial paper programs and/or other
capital market financings. In addition, we have offices in 33 countries and
conduct operations in six other countries and therefore are exposed to market
risk from changes in foreign exchange rates which could affect our results of
operations and financial condition. In order to reduce the risk from
fluctuations in interest rates and foreign currencies, we may enter into
interest rate swap agreements, forward foreign exchange contracts and/or foreign
currency options. These derivative financial instruments are viewed by us as
risk management tools that are entered into for hedging purposes only; we do not
intend to use derivative financial instruments for trading or speculative
purposes. However, we may not attempt to or be able to hedge all of our interest
rate and foreign exchange exposure at a satisfactory cost and rate fluctuations
may adversely affect our results of operations and financial condition.
OUR FINANCIAL RESULTS COULD VARY DUE TO OUR INVESTMENTS IN VARIOUS FOREIGN
OPERATIONS
We maintain offices and derive a significant portion of our revenues from
sources outside the U.S. Operations in several different countries expose us to
a number of legal, economic and regulatory risks such as:
- changes in legal and regulatory requirements;
- possible nationalization, expropriation, price controls and other
restrictive governmental actions;
- restrictions on the ability to convert local currency into U.S. dollars;
- export and import restrictions, tariffs and other trade barriers;
- difficulty in staffing and managing offices as a result of, among other
things, distance, travel, cultural differences and intense competition
for trained personnel;
- political and economic instability; and
- potentially adverse tax consequences.
Any of such factors could have a material adverse effect on our business,
financial condition and results of operations in the future.
USE OF PROCEEDS
D&B will not receive any cash proceeds from the issuance of the exchange
notes. In consideration for issuing the exchange notes as contemplated in this
prospectus, D&B will receive in exchange a like principal amount of outstanding
notes, the terms of which are identical to all material respects to the exchange
notes. The outstanding notes surrendered in exchange for the exchange notes will
be retired and cancelled and cannot be reissued. Accordingly, issuance of the
exchange notes will not result in any change in the capitalization of D&B.
9
14
RATIOS OF EARNINGS TO FIXED CHARGES
The following table shows D&B's ratios of earnings to fixed charges for the
periods indicated:
THREE MONTHS
YEARS ENDED DECEMBER 31, ENDED MARCH 31,
-------------------------------- ---------------
2000 1999 1998 1997 1996 2001 2000
---- ---- ---- ---- ---- ------ ------
5.9 6.3 5.6 2.9 * 8.9 7.9
---------------
* Due to non-recurring items for the year ended December 31, 1996 discussed
below, the ratio coverage was less than 1:1 and earnings were inadequate to
cover fixed charges. Additional earnings of $151.9 million would have been
required to cover fixed charges for such period.
For these ratios, "earnings" have been calculated by adding fixed charges
(i.e. interest expense and minority interest expense) to income from continuing
operations before income taxes and fixed charges.
Earnings for the year ended December 31, 2000 include non-recurring items
consisting of charges of $41.5 million for restructuring and $29.5 million for
reorganization costs associated with the 2000 Distribution and a gain of $10.1
million related to the settlement of litigation. Earnings for the year ended
December 31, 1999 include non-recurring items consisting of a $41.2 million
restructuring charge and a gain of $11.9 million relating to the settlement of
litigation. Earnings for the year ended December 31, 1998 include a
non-recurring charge consisting of $28.0 million for reorganization costs
associated with the 1998 Distribution. Earnings for the year ended December 31,
1996 include non-recurring items consisting of a $161.2 million charge for
reorganization costs associated with the 1996 Distribution and a loss of $68.2
million from the sale of American Credit Indemnity, a former subsidiary of
Donnelley. Excluding those non-recurring items, the ratios for the years ended
December 31, 2000, 1999, 1998 and 1996 would have been 7.9, 7.4, 6.4 and 2.1,
respectively.
10
15
CAPITALIZATION
The following table sets forth the capitalization of D&B at March 31, 2001
on a historical basis. You should read this table in conjunction with "Selected
Financial Data" included elsewhere in this prospectus and the financial
statements and the related notes incorporated by reference in this prospectus.
MARCH 31, 2001
ACTUAL
--------------
(DOLLARS IN
MILLIONS)
Cash and Cash Equivalents................................... $ 57.9
Short-Term Debt............................................. 0.1
Long-Term Debt
6.625% Senior Notes due 2006.............................. 299.6
Minority Interest........................................... 1.3
Shareholder's Equity
Preferred Stock, $.01 par value per share,
authorized -- 10,000 shares; outstanding -- none....... --
Series Common Stock, $.01 par value per share,
authorized -- 10,000,000 shares; outstanding -- none... --
Common Stock, $.01 par value per share,
authorized -- 200,000,000 shares;
issued -- 81,945,520 shares............................ 0.8
Unearned Compensation Restricted Stock.................... (2.6)
Capital Surplus........................................... 238.2
Retained Earnings......................................... 43.9
Treasury Stock, at cost, 1,715,872 shares................. (43.6)
Cumulative Translation Adjustment......................... (197.1)
Minimum Pension Liability................................. (53.6)
-------
Total Shareholders' Equity.................................. $ (14.0)
-------
Total Capitalization........................................ $ 287.0
=======
11
16
SELECTED FINANCIAL DATA
The following data are qualified in their entirety by the financial
statements of the Company and other information contained elsewhere in this
prospectus or incorporated by reference herein. The financial data as of and for
each of the years in the five-year period ended December 31, 2000 have been
derived from the audited financial statements of the Company. The financial data
as of and for the three-month periods ended March 31, 2000 and March 31, 2001
have been derived from unaudited consolidated financial statements. In the
opinion of management, the unaudited information reflects all adjustments
(consisting only of normal and recurring adjustments) necessary for a fair
presentation of the results for such period. Due to the relative significance of
D&B's business to Old D&B, D&B was treated as the "accounting successor" to Old
D&B, and as such, D&B has been classified as a continuing operation and the
business associated with Moody's Corporation has been classified as a
discontinued operation. See "Summary -- The Dun & Bradstreet Corporation." The
following financial data should be read in conjunction with the financial
statements and the related notes incorporated by reference in this prospectus.
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
---------------------------------------------------- -------------------
2000 1999 1998 1997 1996 2001 2000
-------- -------- -------- -------- -------- -------- --------
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE DATA)
RESULTS OF OPERATIONS:
Operating Revenues......................... $1,417.6 $1,407.7 $1,420.5 $1,353.6 $1,397.1 $ 357.6 $ 356.5
Costs and Expenses(1)...................... 1,244.8 1,246.8 1,232.8 1,146.4 1,478.2 299.3 303.6
-------- -------- -------- -------- -------- -------- --------
Operating Income........................... 172.8 160.9 187.7 207.2 (81.1) 58.3 52.9
Non-Operating Expense -- Net(2)............ (21.1) (15.5) (30.4) (71.5) (70.8) (6.1) (6.7)
-------- -------- -------- -------- -------- -------- --------
Income from Continuing Operations before
Provision for Income Taxes............... 151.7 145.4 157.3 135.7 (151.9) 52.2 46.2
Provision for Income Taxes................. 78.1 64.1 71.1 42.5 50.1 20.6 19.2
Equity in Net Losses of Affiliates......... -- -- -- -- -- (0.7) --
Income (Loss) from:
Continuing Operations.................... 73.6 81.3 86.2 93.2 (202.0) 30.9 27.0
Discontinued Operations, Net of Income
Taxes(3)............................... 133.0 174.7 193.9 217.8 158.2 -- 40.8
Income (Loss) before Cumulative Effect of
Accounting Changes....................... 206.6 256.0 280.1 311.0 (43.8) 30.9 67.8
Cumulative Effect of Accounting Changes,
Net of Income Tax Benefit(4)............. -- -- -- (127.0) -- -- --
-------- -------- -------- -------- -------- -------- --------
Net Income (Loss).......................... $ 206.6 $ 256.0 $ 280.1 $ 184.0 $ (43.8) $ 30.9 $ 67.8
-------- -------- -------- -------- -------- -------- --------
BASIC EARNINGS (LOSS) PER SHARE OF COMMON
STOCK:
Continuing Operations...................... $ .91 $ 1.00 $ 1.02 $ 1.09 $ (2.38) $ 0.38 $ 0.33
Discontinued Operations.................... 1.64 2.16 2.29 2.55 1.86 -- 0.51
-------- -------- -------- -------- -------- -------- --------
Before Cumulative Effect of Accounting
Changes.................................. 2.55 3.16 3.31 3.64 (.52) 0.38 0.84
Cumulative Effect of Accounting Changes,
Net of Income Tax Benefit(4)............. -- -- -- (1.49) -- -- --
-------- -------- -------- -------- -------- -------- --------
Basic Earnings (Loss) Per Share of Common
Stock.................................... $ 2.55 $ 3.16 $ 3.31 $ 2.15 $ (.52) $ 0.38 $ 0.84
======== ======== ======== ======== ======== ======== ========
DILUTED EARNINGS (LOSS) PER SHARE OF COMMON
STOCK:
Continuing Operations...................... $ .90 $ . 99 $ 1.00 $ 1.08 $ (2.38) 0.37 0.33
Discontinued Operations.................... 1.62 2.13 2.26 2.52 1.86 -- 0.50
-------- -------- -------- -------- -------- -------- --------
Before Cumulative Effect of Accounting
Changes.................................. 2.52 3.12 3.26 3.60 (.52) 0.37 0.83
Cumulative Effect of Accounting Changes,
Net of Income Tax Benefit(4)............. -- -- -- (1.47) -- -- --
-------- -------- -------- -------- -------- -------- --------
Diluted Earnings (Loss) Per Share of Common
Stock.................................... $ 2.52 $ 3.12 $ 3.26 $ 2.13 $ (.52) $ 0.37 $ 0.83
======== ======== ======== ======== ======== ======== ========
12
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THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
---------------------------------------------------- -------------------
2000 1999 1998 1997 1996 2001 2000
-------- -------- -------- -------- -------- -------- --------
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE DATA)
OTHER DATA:
Dividends Paid Per Share(5)................ $ .555 $ .74 $ .81 $ .88 $ 1.82 $ -- $ 0.185
======== ======== ======== ======== ======== ======== ========
Dividends Declared Per Share(5)............ $ .555 $ .74 $ .775 $ 1.10 $ 1.82 $ -- $ 0.185
======== ======== ======== ======== ======== ======== ========
Weighted Average Number of Shares
Outstanding -- Basic..................... 81.0 81.1 84.7 85.4 85.0 80.3 80.6
======== ======== ======== ======== ======== ======== ========
Weighted Average Number of Shares
Outstanding -- Diluted(6)................ 82.0 82.1 85.9 86.3 85.0 82.6 81.3
======== ======== ======== ======== ======== ======== ========
EBITDA(7).................................. $ 290.0 $ 297.8 $ 311.7 $ 319.9 $ 35.0 $ 82.1 $ 82.2
======== ======== ======== ======== ======== ======== ========
Adjusted EBITDA(8)......................... $ 355.0 $ 330.0 $ 341.9 $ 323.0 $ 264.4 $ 83.1 $ 83.0
======== ======== ======== ======== ======== ======== ========
BALANCE SHEET:
Total Assets(9)............................ $1,423.6 $1,574.8 $1,574.7 $1,729.4 $1,992.9 $1,436.8 $1,423.6
Minority Interest Financing................ $ 300.0 $ 300.0 $ 300.0 $ 300.0 -- -- $ 300.0
Equity..................................... $ (51.0) $ (416.6) $ (371.0) $ (527.7) $ (455.3) $ (14.0) $ (51.0)
======== ======== ======== ======== ======== ======== ========
---------------
(1) 2000 included charges of $41.5 million for restructuring in connection with
the Company's new business strategy and $29.5 million for reorganization
costs associated with the 2000 Distribution. 1999 included a charge of $41.2
million in conjunction with restructuring. 1998 included a charge of $28.0
million for reorganization costs associated with the 1998 Distribution. 1996
included charges of $161.2 million for reorganization costs associated with
the 1996 Distribution and a loss of $68.2 million on the sale of American
Credit Indemnity, a former subsidiary of Donnelley.
(2) 2000 and 1999 included gains related to the settlement of litigation of
$10.1 million and $11.9 million, respectively. See Note 5 to the
consolidated financial statements incorporated by reference herein.
(3) Income taxes on Discontinued Operations were $86.2 million, $114.8 million,
$104.7 million, $123.1 million and $197.1 million in 2000, 1999, 1998, 1997
and 1996, respectively.
(4) 1997 included the impact of a change in revenue recognition policies.
(5) 2000 included dividends paid and declared through the first three quarters
of the year.
(6) The exercise of dilutive shares has not been assumed for the year ended
December 31, 1996, since the result is antidilutive.
(7) EBITDA is defined as earnings before interest income, interest expense,
minority interest expense, income taxes, depreciation and amortization.
EBITDA is presented because it is commonly used by certain investors and
analysts to analyze a company's ability to service debt. However, EBITDA is
not a measure of financial performance under generally accepted accounting
principles and should not be considered an alternative to operating income
or net income as a measure of operating performance or to net cash provided
by operating activities as a measure of liquidity.
(8) Adjusted EBITDA is defined as operating income excluding the one-time items
described in footnote (1) plus depreciation and amortization. Adjusted
EBITDA for 1997 and 1998 are pro forma for the 1998 Distribution.
(9) Included Net Assets of Discontinued Operations of $162.3 million and $459.5
million in 1997 and 1996, respectively.
13
18
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion of D&B's financial condition and
results of operations in conjunction with the complete Management's Discussion
and Analysis of Financial Condition and Results of Operations and the financial
statements and the related notes included in D&B's Annual Report on Form 10-K
for the year ended December 31, 2000 incorporated by reference in this
prospectus.
OVERVIEW
Until September 30, 2000, the business of the Company was operated as part
of the corporation now known as Moody's Corporation and previously known as "The
Dun & Bradstreet Corporation". Moody's Corporation is referred to herein as "Old
D&B" for periods prior to the 2000 Distribution and as "Moody's" for periods
thereafter. On September 30, 2000, Old D&B distributed to all holders of its
common stock the shares of D&B, which was a wholly-owned subsidiary and became
an independent public company (the "2000 Distribution"). As a result of the 2000
Distribution, the sole business of the Company is D&B. Because of the relative
significance of D&B's business to Old D&B, D&B was treated as the "accounting
successor" to Old D&B, and as such, D&B has been classified as a continuing
operation and the business associated with Moody's Corporation has been
classified as a discontinued operation. References to D&B in the discussion
below, refer to D&B, as accounting successor to Old D&B.
RESULTS OF OPERATIONS
Operating Segments
D&B, which provides a comprehensive array of information-based products and
services, is managed on a geographical basis. In each of the three geographic
segments, North America, Europe/Africa/Middle East ("Europe") and Asia
Pacific/Latin America ("APLA"), D&B offers credit information solutions,
marketing information solutions, purchasing information solutions and receivable
management services. D&B evaluates performance and allocates resources based on
segment revenues and operating income. Effective January 1, 2000, responsibility
for the management of the Canadian business was moved from the Asia
Pacific/Latin America segment to its U.S. segment, which is presently called
"North America", to take advantage of marketing synergies.
Three Months Ended March 31, 2001 Compared with Three Months Ended March 31,
2000
For the first quarter of 2001, D&B reported net income of $30.9 million and
earnings per share of $.38 per share basic and $.37 per share diluted. This
compares to first quarter 2000 income from continuing operations of $27.0
million and earnings per share from continuing operations of $.33 basic and
diluted. In the first quarter of 2000, D&B reported net income of $67.8 million
and earnings per share of $.84 basic and $.83 diluted, which included income
from discontinued operations of $40.8 million and earnings per share from
discontinued operations of $.51 basic and $.50 diluted.
Operating revenues for the first quarter of 2001 of $357.6 million were
flat when compared to the same period in 2000. Revenue growth in North America
of 4% was offset by declines in Europe of 10% and APLA of 4%. Before the effect
of foreign exchange, operating revenues increased 3% in the first quarter of
2001 compared to 2000, with European revenues growing 1% and APLA's revenues
growing 4% from the prior year. D&B's results, before the effect of foreign
exchange, reflect a 3% decline in revenues from traditional credit information
solutions, offset by 16% growth in revenues from value added credit information
solutions such as decision-support tools and services, 8% growth in marketing
information solutions, 38% growth in purchasing information solutions and 12%
growth in receivable management services.
Operating expenses were down 3% to $131.5 million during the first quarter
of 2001 compared to $134.9 million in the same period in 2000, resulting from
cost savings achieved through the restructuring actions initiated during 2000 as
discussed below. Selling and administrative costs increased by 3% to $143.0
million during the first quarter of 2001 compared to the same period of 2000.
Administrative cost
14
19
savings achieved through the restructuring actions discussed above were offset
by transition costs incurred in implementing D&B's business strategy discussed
under "Business -- Business Strategy". Depreciation and amortization decreased
18% to $24.8 million in the first quarter of 2001 as compared to the same period
in 2000. Lower capitalization over the past two years and the write-off of
certain assets as a result of the restructuring actions implemented resulted in
lower depreciation and amortization.
Operating income for the first quarter of 2001 of $58.3 million was 10%
higher than 2000 first quarter operating income of $52.9 million.
Non-operating expense-net was $6.1 million for the first quarter of 2001
compared with non-operating expense-net of $6.7 million for the first quarter of
2000. The components of non-operating expense-net, including interest income and
expense, minority interest expense and other expense-net, remained relatively
level when comparing the first quarter of 2001 with the first quarter of 2000.
As discussed below, in March 2001, D&B repaid a $300 million obligation
resulting from the repurchase of an unrelated partner's interest in a limited
partnership using the proceeds from the issuance of the outstanding notes.
The effective tax rate was 39.5% for the first quarter of 2001 compared
with 41.6% in 2000. The decline in the rate resulted from state and global tax
planning initiatives implemented in 2001.
Year Ended December 31, 2000 Compared with Year Ended December 31, 1999
For the year ended December 31, 2000, D&B reported income from continuing
operations of $73.6 million, or $.91 per share basic and $.90 per share diluted.
This compares with 1999 income from continuing operations of $81.3 million and
earnings per share from continuing operations of $1.00 basic and $.99 diluted.
2000 results included a $41.5 million pre-tax restructuring charge ($30.3
million after-tax, $.37 per share basic and diluted), pre-tax reorganization
costs in connection with the 2000 Distribution of $29.5 million ($25.6 million
after-tax, $.32 per share basic and $.31 per share diluted) and a $10.1 million
pre-tax gain on the settlement of litigation ($6.2 million after-tax, $.08 per
share basic and diluted). 1999 results included the $41.2 million pre-tax
restructuring charge discussed above ($27.9 million after-tax, $.34 per share
basic and diluted), and an $11.9 million pre-tax gain relating to the settlement
of litigation ($6.6 million after-tax, $.08 per share basic and diluted).
Excluding these items, income from continuing operations would have increased
20% and earnings per share from continuing operations would have increased 21%
for basic earnings and 20% for diluted earnings. 2000 net income of $206.6
million included income from discontinued operations of $133.0 million, while
1999 net income of $256.0 million included income from discontinued operations
of $174.7 million. For the year ended December 31, 2000, earnings per share of
$2.55 basic and $2.52 diluted included earnings per share from discontinued
operations of $1.64 basic and $1.62 diluted. For the year ended December 31,
1999, earnings per share of $3.16 basic and $3.12 diluted included earnings per
share from discontinued operations of $2.16 basic and $2.13 diluted.
Operating revenues grew 1% to $1,417.6 million in 2000, compared with
$1,407.7 million in 1999. Revenue growth in North America of 5% was offset by a
decline in Europe of 9%, while revenue growth was flat in APLA. Before the
effect of foreign exchange, operating revenues increased 4% in 2000 compared to
1999, with European revenues growing 3% and APLA's revenues growing 1% from the
prior year. D&B's results, before the effect of foreign exchange, reflect a 2%
decline in revenues from traditional credit information solutions, offset by 9%
growth in revenues from value added credit information solutions such as
decision-support tools and services, 11% growth in marketing information
solutions and 16% growth in receivable management services. D&B intends to
expand its customer base by targeting the small business market and deepening
the penetration of global accounts in order to sustain revenue growth.
Operating expenses decreased 4% to $515.9 million in 2000 compared with
$538.3 million in 1999, as a result of cost reductions attributable to the
restructuring actions initiated in the fourth quarters of 1999 and 2000 and the
positive effect of foreign exchange on expenses. Selling and administrative
expenses increased by 1% to $546.7 million in 2000 compared with $539.4 million
in 1999, as a result of costs incurred in order to offer new products and
services, which offset cost reductions and the positive effect of foreign
exchange. Depreciation and amortization decreased 13% to $111.2 million in 2000
as compared to 1999 as a result of lower capitalization over the past two years,
the write-off of certain assets as a result of the restructuring
15
20
actions and the positive effect of foreign exchange on expenses. Operating costs
in 2000 also included a $41.5 million charge for restructuring actions, while
1999 operating costs included a $41.2 million restructuring charge. In 2000,
operating costs included $29.5 million in reorganization costs incurred in
connection with the 2000 Distribution.
Operating income increased 7% in 2000 to $172.8 million from $160.9 million
in 1999. Excluding the restructuring charges in 2000 and 1999 and the
reorganization costs incurred in 2000, operating income would have grown 21% in
2000, as a result of revenue growth and lower operating costs.
Non-operating expense-net was $21.1 million in 2000 compared with $15.5
million in 1999. Included in non-operating expense-net is interest income and
expense, minority interest expense (which remained level at $22.4 million in
both 2000 and 1999) and other income (expense)-net. Interest income of $3.9
million in 2000 was higher than 1999 due to higher cash levels, while interest
expense of $8.6 million in 2000 was also higher than in 1999 as a result of the
higher debt levels in 2000 compared with 1999. Other income (expense)-net was
$6.0 million in 2000 compared with $9.0 million in 1999. 2000 other income
(expense)-net included a gain of $10.1 million on the settlement of litigation,
while 1999 other income (expense)-net included a gain of $11.9 million on the
settlement of litigation. These gains were offset by other miscellaneous
non-operating income and expense items, which were generally unchanged in 2000
and 1999.
D&B's effective tax rate was 51.4% in 2000 compared with 44.1% in 1999,
while the underlying tax rate was 42.0% in 2000 and 41.3% in 1999. The
difference between the effective and underlying rates resulted from several
factors in both 2000 and 1999, including taxes imposed on the proceeds from the
settlement of litigation and the non-deductibility of certain restructuring
expenses. Additionally in 2000, the non-deductibility of certain reorganization
expenses and interest incurred impacted the effective tax rate.
Income from discontinued operations, net of income taxes, was $133.0
million for the year ended December 31, 2000 and $174.7 million for the year
ended December 31, 1999. 2000 results include nine months of income from
discontinued operations, while 1999 included the income from discontinued
operations for a full year.
Year Ended December 31, 1999 Compared with Year Ended December 31, 1998
For the year ended December 31, 1999, D&B reported income from continuing
operations of $81.3 million, or $1.00 per share basic and $.99 per share
diluted. This compares with 1998 income from continuing operations of $86.2
million and earnings per share from continuing operations of $1.02 basic and
$1.00 diluted. 1999 results included a $41.2 million pre-tax restructuring
charge ($27.9 million after-tax, $.34 per share basic and diluted), and an $11.9
million pre-tax gain relating to the settlement of outstanding litigation ($6.6
million after-tax, $.08 per share basic and diluted). Results for 1998 included
reorganization costs associated with the 1998 Distribution of $28.0 million
($23.2 million after-tax, $.27 per share basic and diluted). 1999 net income of
$256.0 million included income from discontinued operations of $174.7 million,
while 1998 net income of $280.1 million included income from discontinued
operations of $193.9 million. For the year ended December 31, 1999, earnings per
share of $3.16 basic and $3.12 diluted included earnings per share from
discontinued operations of $2.16 basic and $2.13 diluted. For the year ended
December 31, 1998, earnings per share of $3.31 basic and $3.26 diluted included
earnings per share from discontinued operations of $2.29 basic and $2.26
diluted.
Operating revenues were $1,407.7 million in 1999 compared with $1,420.5
million in 1998. Before the effect of foreign currency translation, D&B revenues
were flat. These results reflect decreased demand for traditional credit
information solutions, offset by growth in value added products such as
decision-support tools and services.
Operating expenses were flat at $538.3 million in 1999 compared with $536.2
million in 1998. Selling and administrative expenses decreased by 1% to $539.4
million in 1999 compared with $542.4 million in 1998. Costs saved as a result of
D&B's worldwide expense control initiatives were offset by D&B's investment in
value added products.
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Operating costs in 1999 also included the $41.2 million restructuring
charge referred to above. In 1998, operating costs included $28.0 million in
reorganization costs incurred in connection with the 1998 Distribution.
Operating income decreased 14% in 1999 to $160.9 million from $187.7
million in 1998. Excluding the $41.2 million restructuring charge in 1999 and
the $28.0 million of reorganization costs in 1998, operating income in 1999
declined 6% compared with 1998.
Non-operating expense-net was $15.5 million in 1999 compared with $30.4
million in 1998. Included in non -- operating expense-net is interest income and
expense, minority interest expense (which remained relatively level when
comparing 1999 and 1998) and other income (expense)-net. Interest income of $2.9
million in 1999 was lower than 1998 due to lower cash levels, while interest
expense of $5.0 million in 1999 was significantly lower than in 1998 as a result
of the lower debt levels in 1999 compared with 1998. Other income (expense)-net
was income of $9.0 million in 1999 compared with an expense of $2.2 million in
1998. 1999 other income (expense)-net included a gain of $11.9 million on the
settlement of litigation. This gain was offset by other miscellaneous
non-operating income and expense items, which were generally unchanged in 1999
and 1998.
D&B's effective tax rate was 44.1% in 1999 compared with 45.2% in 1998,
while the underlying tax rate was 41.3% in 1999 and 41.0% in 1998. The
difference between the effective and underlying rates resulted from a number of
factors, including taxes imposed on the proceeds from the settlement of
litigation, the non-deductibility of certain restructuring expenses and
refinements of certain estimates.
Income from discontinued operations, net of income taxes, was $174.7
million for the year ended December 31, 1999 and $193.9 million for the year
ended December 31, 1998, with Moody's representing all of such income in 1999
and $160.2 million of such income in 1998. In 1998, the balance of the income
from discontinued operations, net of income taxes, of $33.7 million reflects the
results of Donnelley. Moody's net income of $174.7 million in 1999 grew 9% from
$160.2 million in 1998, principally as a result of strong revenue growth.
LIQUIDITY AND FINANCIAL POSITION
Management believes that cash flows generated from its operations are
sufficient to fund its operating needs and service debt. D&B accesses the
commercial paper market from time to time to fund working capital needs and
share repurchases. Such borrowings have been supported by D&B's bank credit
facilities. It is expected that operating cash flows, supplemented as needed
with financing arrangements, will be sufficient to meet the needs of D&B.
D&B is considering the monetization of certain non-strategic assets and
businesses, and intends to complete this review in the first half of 2001.
Certain asset monetization transactions may be announced and/or completed prior
to that date. Funds generated from these transactions may be utilized to invest
in the current business, invest in the business-to-business strategy, or to
repurchase stock.
Three Months Ended March 31, 2001 Compared with Three Months Ended March 31,
2000
At March 31, 2001, cash and cash equivalents totaled $57.9 million, a
decrease of $12.2 million from $70.1 million held at December 31, 2000.
Operating activities generated net cash of $54.5 million during the first
quarter of 2001 compared with $70.3 million from continuing operations in the
first quarter of 2000. Timing of certain working capital items resulted in the
decline in cash generated from operating activities when comparing the first
quarter of 2001 to the same period in the prior year.
Net cash used in investing activities was $13.6 million for the first
quarter of 2001 compared to $17.8 million in 2000. In the first quarter of 2001
capital expenditures and additions to computer software and other intangibles
totaled $10.7 million compared with $21.8 million in the first quarter of 2000.
D&B has decreased its spending on capital expenditures and computer software and
other intangibles and redirected
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investment in conjunction with its business strategy outlined under
"Business -- Business Strategy". During the first quarter of 2001, D&B invested
$8.9 million in a joint venture with American International Group, Inc. called
Avantrust LLC. Over the next 22 months D&B has committed to invest an additional
$10.6 million in Avantrust LLC.
In May 2001, D&B completed the acquisition of iMarket, a provider of
business-to-business sales and marketing solutions for small and mid-sized
companies. D&B previously held a minority interest in iMarket and paid
approximately $19 million to acquire the remainder of the business it did not
already own.
Net cash used in financing activities was $52.7 million during the first
quarter of 2001 compared with $106.5 million in the first quarter of 2000.
Payments of dividends by Old D&B accounted for $29.9 million of cash used in the
first quarter of 2000. D&B no longer pays dividends.
Year Ended December 31, 2000 Compared with Year Ended December 31, 1999
At December 31, 2000, cash and cash equivalents totaled $70.1 million,
compared to $109.4 million at December 31, 1999. D&B's payment of $349.3 million
to the IRS, as discussed in the notes to the consolidated financial statements,
and the impact of the 2000 Distribution with respect to the allocation of net
indebtedness, impacted the cash balance.
Operating activities provided net cash of $23.8 million during 2000. The
$349.3 million payment to the IRS is reflected as a reduction in continuing
operations' accrued income taxes of $174.7 million and as a $174.6 million
offset to net cash used in operating activities of discontinued operations.
Excluding the impact of the payment, cash generated by operating activities in
2000 would have been $373.1 million, with continuing operations providing $202.6
million and discontinued operations providing $170.5 million (representing nine
months of activity). Cash generated by operating activities in 1999 was $350.0
million, with continuing operations providing $135.2 million and discontinued
operations providing $214.8 million. The improvement in cash generated by
operating activities of continuing operations results from increased operating
income and an improvement in working capital.
During 2000, D&B made payments of $21.0 million related to the
restructuring actions implemented during the fourth quarter of 1999 and $.8
million related to the restructuring actions implemented during the fourth
quarter of 2000.
Net cash used in investing activities totaled $84.5 million in 2000,
compared with $116.7 million in 1999. Net cash used in investing activities of
discontinued operations in 2000 was $26.2 million and in 1999 was $12.1 million.
Net cash used by discontinued operations in 2000 included an acquisition by
Moody's of a financial software products company for $17.4 million. In 2000,
spending for capital expenditures, computer software and other intangibles by
continuing operations totaled $67.1 million, compared with $109.6 million in
1999. During 2000, D&B reduced its spending for capital expenditures, computer
software and other intangibles, while formulating its growth strategy.
Currently, D&B has no material commitments for capital expenditures.
Net cash provided by financing activities was $25.0 million in 2000,
compared with net cash used in financing activities of $210.3 million during
1999. Payments of dividends by Old D&B accounted for $89.8 million in 2000,
compared with $120.1 million in 1999. D&B does not intend to pay dividends in
the future. As discussed below, D&B's financing arrangements and stock
repurchases also affected the net cash provided by or used in financing
activities.
Financing Arrangements
In connection with the 2000 Distribution, Old D&B borrowed funds in order
to repay in full Old D&B's commercial paper obligations. Also in connection with
the 2000 Distribution, immediately prior to the 2000 Distribution, a portion of
Old D&B's indebtedness (plus certain minority interest obligations) and a
portion of Old D&B's cash was allocated to D&B in amounts such that, at the time
of the 2000 Distribution and before giving effect to certain adjustments and
other factors described in the notes to the consolidated financial statements,
the net indebtedness of D&B (plus the minority interest obligations)
approximated the net
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indebtedness of Moody's. The indebtedness that was assumed by D&B upon the 2000
Distribution amounted to $24.1 million. D&B also assumed $300 million in
minority interest obligations and was allocated $39.4 million in cash. The debt
that was assumed by Moody's at the 2000 Distribution amounted to $195.5 million.
In September 2000, D&B established two committed bank facilities, which
remained in effect after the 2000 Distribution. One of the facilities permits
borrowings of up to $175 million and matures in September 2001. The second
facility permits borrowings of up to $175 million and matures in September 2005.
Under these facilities D&B has the ability to borrow at prevailing short-term
interest rates. D&B has not drawn on these facilities since their inception and
has no borrowings outstanding under these facilities at March 31, 2001. These
facilities are available for general corporate purposes, including to support
D&B's commercial paper program.
During the first quarter of 2001, D&B repaid the commercial paper
outstanding at December 31, 2000 of $49.5 million, while during the first
quarter of 2000, Old D&B decreased its net commercial paper borrowings by $86.7
million. At March 31, 2001, D&B did not have any commercial paper outstanding.
In 1997, $300 million in minority interest financing was raised by
Donnelley when an unrelated investor contributed cash to a Donnelley partnership
in exchange for a limited partner interest. This transaction was assumed by Old
D&B in connection with the 1998 Distribution and thereafter by D&B in the 2000
Distribution. Under the terms of the limited partnership agreement that governs
the minority interest financing, the unrelated partner was entitled to receive
an amount per annum equal to 7.47% of its initial investment payable quarterly
in arrears, provided that there are sufficient partnership profits.
Pursuant to the terms of the partnership agreement, on December 15, 2000,
the unrelated partner initiated a process that could have resulted in
dissolution and liquidation of the partnership as early as February 25, 2001.
Such dissolution was prevented, however, through the D&B partner having elected
on December 27, 2000, to exercise its right to purchase the unrelated partner's
interest in the partnership. On March 23, 2001, the unrelated partner's interest
was purchased with the proceeds of the outstanding notes and the issuance of
commercial paper.
During the first quarter of 2001, D&B repurchased 345,900 of its common
shares for $9.0 million in connection with its Employee Stock Purchase Plan and
to offset a portion of the shares issued under its stock incentive plans.
Proceeds received in connection with D&B's stock plans were $5.1 million in the
first quarter of 2001.
During the first quarter of 2000, Old D&B repurchased 125,000 shares for
$3.5 million in connection with Old D&B's Employee Stock Purchase Plan and to
offset a portion of the shares issued under incentive plans. Proceeds received
in connection with Old D&B stock plans were $16.0 million for the first quarter
of 2000.
In May 2001, D&B announced that its board of directors authorized a
one-year share repurchase program of up to $100 million, funded with the
proceeds from the RMS sale. The program is in addition to D&B's existing share
repurchase program announced in September 2000 to offset the dilutive effect of
shares issued under employee benefit arrangements.
NEW EUROPEAN CURRENCY
On January 1, 1999, 11 of the countries in the European Union began a
three-year transition to the euro to replace the national currency of each
participating country. D&B intends to phase in its transition to the euro during
such period. D&B has established a task force to address issues related to the
euro. D&B believes that the euro conversion may have a material impact on its
operations and financial condition if it fails to successfully address such
issues. The task force has prepared a project plan and is proceeding with the
implementation of that plan.
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BUSINESS
BUSINESS STRATEGY
D&B's strategic goal is to become a growth company with an important
presence on the Web. D&B has developed a five-part strategy to further its goal.
- LEVERAGE THE BRAND: In its traditional operating environments, D&B
believes that The Dun & Bradstreet brand name has come to represent trust
and confidence in products and services that help customers reduce risk
in decision-making and improve financial performance. Key attributes of
the brand include: (i) D&B's 159-year operating history in
business-to-business commerce, (ii) its base of over 150,000 customers,
including 92% of the Business Week Global 1000, (iii) its database on
over 62 million business entities covering 200 countries, which D&B
updates over a million times each day, (iv) its D-U-N-S(R) numbering
system, which is widely recognized as the global standard for identifying
businesses and establishing linkages between related entities, (v) its
trade data on how businesses pay their suppliers, (vi) its
decision-support tools, scoring models and other actionable information
that enable businesses to make better decisions, and (vii) its software
integration tools to enable D&B information to be integrated into
customers' systems or combined with customer information. D&B's strategy
begins by leveraging these core brand assets in a manner designed to
assure that The Dun & Bradstreet name continues to engender the same
level of trust and confidence in business-to-business e-commerce
transactions, where issues of trust and confidence are of paramount
concern, that it does in the traditional marketplace. In sum, D&B's brand
mission is to be "The most trusted source for information you need to
make your business a success."
- CREATE FINANCIAL FLEXIBILITY: The implementation of the Company's
strategy will require significant investments. In order to fund these
investments, D&B has identified opportunities to reallocate spending to
areas representing growth opportunities, and to support shareholder value
through sustained growth in earnings per share. In addition to the
foregoing initiatives, D&B is reviewing its business and prospects in
each country to determine where it should maintain, increase or scale
down its presence and where it should leverage partnerships to fulfill
basic requirements (e.g., information collection). D&B is also
considering the monetization of certain non-strategic assets and
businesses, and intends to complete this review in the first half of
2001. Certain asset monetization transactions may be announced and/or
completed prior to that date. Funds generated from these transactions may
be utilized to invest in the current business, invest in the
business-to-business strategy, or to repurchase stock.
- ENHANCE THE CURRENT BUSINESS: An important element of D&B's strategy is
D&B's belief that there continue to be opportunities in its current
business to generate revenue growth and increase profitability. D&B
believes it can further develop its relationships with its over 150,000
customers worldwide and expand its customer base by making selected
investments. For example, an analysis of D&B's current business has
identified opportunities for up to $75 million in revenue growth over the
next three years through increasing the penetration of the small business
market and deepening its existing relationships with global businesses.
D&B also intends to accelerate the utilization of the Web as a
distribution channel for its products and services.
- BECOME AN IMPORTANT PLAYER IN BUSINESS-TO-BUSINESS E-COMMERCE: D&B
believes that business-to-business e-commerce is a potent opportunity,
though it will likely take at least three years to begin realizing its
potential in any significant way. Such time will be necessary to permit
the integration of all of the related systems on both the vendor and
purchaser sides, including purchasing, order entry, accounting, financing
and others. In addition to the integration challenge, the development of
e-commerce has created a number of new challenges in business-to-business
transactions, relating in substantial part to issues of trust and
confidence. D&B believes that the company, with its brand, actionable
information and analytical capabilities, is well positioned to address
such concerns, and several of its current products and services are
already doing so. Potential roles for D&B include, but are not limited
to, providing e-commerce marketplaces and participants with: (i)
identification,
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authentication and verification services for buyers and sellers, (ii)
credit decisioning, (iii) internal performance assessment and enterprise
resource planning refinement, (iv) directory, sourcing and prospecting
services and (v) market sizing and modeling. In addition to creating
value for customers through D&B products and services, D&B expects to
enter into strategic alliances that leverage D&B's strengths along with
those of other market leaders.
- BUILD A WINNING CULTURE: D&B recognizes that successfully achieving its
strategic goals will require talented, motivated and efficient associates
aligned around a common set of strategies and goals. The program's
winning culture initiatives include: (i) aligning goals and compensation
programs company-wide with the strategy and the drivers of shareholder
value creation, (ii) changing the organizational structure to foster
leadership, accountability and efficiency, (iii) defining and training
associates in the use of guiding principles and rules of engagement to
guide their behavior toward the creation of a winning culture, (iv) more
clearly defining and prioritizing operating goals and the means of
achieving them and (v) recruiting and developing talent from inside and
outside the organization.
PRODUCTS AND SERVICES
D&B's product lines and their respective contributions to D&B's 2000
revenues are set forth below:
PERCENTAGE
OF 2000
PRODUCT LINE REVENUE*
------------ ----------
Credit Information Solutions................................ 63%
Marketing Information Solutions............................. 24%
Purchasing Information Solutions............................ 2%
Receivable Management Services*............................. 11%
---------------
* In May 2001, we sold our receivable management services operations in the
United States, Hong Kong and Europe. See "Summary -- Recent Developments."
Credit Information Solutions
Customers use D&B's credit information solutions to help them extend
commercial credit, approve loans and leases, underwrite insurance, evaluate
clients, mitigate fraud risk and make other financial and risk assessment
decisions. D&B's largest customers for these solutions are major manufacturers
and wholesalers, insurance companies, banks and other credit and financial
institutions. Its core credit solutions are available through a variety of
products, including the D&B Business Information Report, which contains
commercial credit information that may include basic background information,
financial and public records data and information on financial strength and
payment history, and value added products like D&B Risk Assessment Manager(TM),
a software package that gives D&B customers the ability to run automated credit
decisions, customized scoring models and portfolio analysis from their own PCs.
D&B's credit information solutions are delivered primarily through electronic
methods, including desktop and enterprise application software, the Internet and
XML integration capabilities. D&B's credit information solutions are also
distributed by a number of other firms, including leading vendors of online and
Internet information services, such as OneSource and Lexis-Nexis, and through
enterprise software vendors such as Oracle, Siebel and SAP.
Marketing Information Solutions
Using information from D&B's global database, D&B's marketing information
solutions are designed to help customers conduct market segmentation, client
profiling, prospect selection and marketing list development, and maintain
updated customer relationship management systems. D&B Market Spectrum(TM), a
suite of marketing information products and services, enhances internal customer
data with information from D&B's global database and other third party data, and
provides analysis that can help customers target their most profitable clients
and prospects, analyze market penetration and market segmentation, determine
territory alignment and estimate demand. D&B Connect(TM) enables D&B and
customer data to be integrated in either
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an online or offline environment. D&B also sells various directories, list/label
services and other marketing solutions, which are delivered in hard copy, on
diskette or CD ROM or via the Internet. D&B's marketing information solutions
are also available through enterprise software vendors such as Siebel and
through an alliance between D&B and Acxiom Corporation.
Purchasing Information Solutions
D&B's purchasing information solutions help customers understand their
supplier base, rationalize their supplier rosters, leverage buying power,
minimize supply-related risks and identify and evaluate new sources of supply.
Purchasing information solutions, which leverage information from D&B's global
database, include D&B Spend Analysis(TM), which integrates customers' supplier
data with information from D&B's global database and from third parties and then
applies analytical and benchmarking techniques designed to identify
opportunities for reducing purchasing costs and risks; D&B Supplier Assessment
Manager(TM), which uses decision-support software to automate the scoring and
monitoring of supplier performance, capabilities and risks using internal and
external information; Standard Product and Service Codes, which were developed
jointly by D&B and the United Nations and which help companies determine the
specific types of products and services comprising the supply base of their firm
and allow them to identify further vendor consolidation opportunities; and a
joint purchasing solution offered through an alliance with SAS Institute, which
includes D&B's purchasing information solutions and SAS's analytical products.
Receivable Management Services
D&B offers its customers certain accounts receivable management services,
including third party collection of accounts, letter demand services and
receivable outsourcing programs. These services substitute and/or enhance the
customer's own internal management of accounts receivable.
D&B's receivable management services ("RMS") business collects and services
delinquent commercial receivables on behalf of approximately 30,000 customers,
primarily in the business-to-business market. Principal markets include
insurance, telecommunications and transportation industries. RMS also provides
cross-border commercial receivables services in which the RMS worldwide offices
service cross-border claims.
RMS also provides commercial accounts receivable servicing in the ordinary
course for customers who wish to outsource this function. Services provided in
the RMS business include debt verification and collection, customer service
functions and analytical reporting.
Certain jurisdictions require licensing for consumer and commercial debt
collection. RMS and, in some instances, the individual collectors, must be
licensed in order to conduct business in these jurisdictions. The laws under
which such licenses are granted generally require annual license renewal and
provide for denial, suspension or revocation for improper actions or other
reasons.
In May, 2001, we sold our receivable management services operations in the
United States and Hong Kong to its senior management team. In addition, we sold
our European receivable management services operations to a third party. During
the fiscal year 2000, these operations generated approximately $145 million in
revenues and approximately 6% of our earnings before interest, taxes,
depreciation, amortization and one-time non-recurring items.
COMPETITION
All of D&B's businesses are highly competitive. D&B believes that it is the
market leader in credit information in North America in terms of market share
and revenue. The competitive environment varies by country in Europe, Asia and
Latin America. In some countries, leadership positions exist, whereas in others
the markets are highly fragmented. The competition is primarily local, and,
because of D&B's global database, D&B believes that it has a competitive edge
with respect to customers seeking worldwide information coverage. In certain
markets (such as Europe), D&B has experienced pricing pressures and may continue
to experience pricing pressure in the future as some of its competitors seek to
obtain market share by reducing prices.
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D&B competes directly with a broad range of companies offering information
services to business customers. In addition, business information and related
products and services are becoming increasingly available, principally as a
result of the expansion of the Internet and as new providers of
business-to-business information products and services emerge. D&B's ability to
compete effectively will be based on a number of factors, including: the ability
to attract local customers to the worldwide information services offered by
D&B's unique database; the ability to demonstrate value through its decisioning
and integration capabilities, including the power of the D-U-N-S(R) Number and
related linkages; reliability of information; brand perception; and the ability
to deliver business information via various media and distribution channels in
formats tailored to customer requirements. In its information services
businesses, D&B also faces competition from in-house operations of the
businesses it seeks as customers, from other general and specialized credit
reporting and other business information services, other information and
professional services providers, banks, credit insurers and the Internet.
GEOGRAPHIC BUSINESS SEGMENTS
D&B manages its business globally through three geographic segments: United
States and Canada ("North America"), Europe/Africa/Middle East ("Europe"), and
Asia Pacific/Latin America ("APLA"). Prior to January 1, 2000, D&B's Canadian
business was managed by its Asia Pacific/Latin America geographic segment.
Effective January 1, 2000, management of D&B's Canadian business was moved to
its U.S. geographic segment to take advantage of marketing synergies between the
U.S. and Canada. Revenues for the 1999 fiscal year have been restated to reflect
such change. None of D&B's business segments is dependent on a single customer
or a few customers, such that a loss of any one would have a material adverse
effect on that business segment.
The operations of Europe and APLA are subject to the usual risks inherent
in doing business in certain countries outside of the U.S., including currency
fluctuations and possible nationalization, expropriation, price controls, as
well as possible changes in the availability of data from public sector sources,
limits on collecting certain types of personal information or on providing
information across borders or other restrictive governmental actions. Management
of D&B believes that the risks of nationalization or expropriation are reduced
because its basic service is the delivery of information rather than the
production of products that require manufacturing facilities or the use of
natural resources.
North America
North America had 2000 revenue of $968.3 million, comprised of credit
information solutions (60%), marketing information solutions (27%), purchasing
information solutions (3%) and receivable management services (10%). North
America had 1999 revenue of $920.0 million, comprised of credit information
solutions (63%), marketing information solutions (25%), purchasing information
solutions (3%) and receivable management services (9%).
Europe/Africa/Middle East
Europe had 2000 revenue of $382.1 million, comprised of credit information
solutions (70%), marketing information solutions (18%), purchasing information
solutions (less than 1%) and receivable management services (12%). Europe had
1999 revenue of $420.6 million, comprised of credit information solutions (71%),
marketing information solutions (17%), purchasing information solutions (less
than 1%) and receivable management services (12%). Europe began offering
purchasing information services in 1999.
Europe has operations in 19 countries and conducts operations in three
other countries through minority interests in joint venture companies. D&B is
believed to be the largest single supplier of commercial credit information
services in Europe.
Asia Pacific/Latin America
APLA had 2000 revenue of $67.2 million, comprised of credit information
solutions (59%), marketing information solutions (18%), purchasing information
solutions (less than 1%) and receivable management
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services (23%). APLA had 1999 revenue of $67.1 million, comprised of credit
information solutions (65%), marketing information solutions (15%), purchasing
information solutions (less than 1%) and receivable management services (20%).
APLA began offering purchasing information solutions in 1999.
APLA has operations in 12 countries and conducts operations in three other
countries through minority interests in joint venture companies. APLA provides
cross-border services originating in Latin America through local affiliates,
small local operations centers and an operations center in Florida. In the Asia
Pacific region, APLA has entered into joint venture and distribution
arrangements to leverage its staff and data sourcing and distribution
capabilities and is exploring additional such opportunities.
INTELLECTUAL PROPERTY
D&B owns and controls a number of trade secrets, confidential information,
trademarks, trade names, copyrights, patents and other intellectual property
rights that, in the aggregate, are of material importance to D&B's business.
Management of D&B believes that each of the "Dun & Bradstreet" name and related
names, marks and logos are of material importance to D&B. D&B is licensed to use
certain technology and other intellectual property rights owned and controlled
by others, and, similarly, other companies are licensed to use certain
technology and other intellectual property rights owned and controlled by D&B.
D&B considers its trademarks, service marks, databases, software and other
intellectual property to be proprietary, and D&B relies on a combination of
copyright, trademark, trade secret, patent, non-disclosure and contract
safeguards for protection.
The names of D&B's products and services referred to herein are trademarks,
service marks or registered trademarks or service marks owned by or licensed to
D&B or one or more of its subsidiaries.
LEGAL PROCEEDINGS
D&B is involved in legal proceedings of a nature considered normal to its
business. In the opinion of management, although the outcome of such legal
proceedings cannot be predicted with certainty, the ultimate liability of D&B in
connection with such legal proceedings will not have a material adverse effect
on D&B's financial position, results of operations and cash flows.
In addition to the matters referred to above, on July 29, 1996, Information
Resources, Inc. ("IRI") filed a complaint in the United States District Court
for the Southern District of New York, naming as defendants the corporation then
known as "The Dun & Bradstreet Corporation" (which corporation subsequently was
renamed R.H. Donnelley Corporation and herein is referred to as "Donnelley"),
ACNielsen Company (a subsidiary of AC Nielsen Corporation) and I.M.S.
International, Inc. (a subsidiary of Cognizant Corporation). At the time of the
filing of the complaint, each of the other defendants was a subsidiary of
Donnelley. The complaint alleges various violations of United States antitrust
laws, including purported violations of Sections 1 and 2 of the Sherman Act
arising from tying arrangements, agreements with retailers and other customers,
predatory pricing practices and other matters alleged by IRI. In addition to the
foregoing claims, the complaint alleges a claim of tortious interference with a
contract and a claim of tortious interference with a prospective business
relationship. These claims relate to the acquisition by the defendants of Survey
Research Group Limited ("SRG"). IRI alleges SRG violated an alleged agreement
with IRI when it agreed to be acquired by the defendants, and that the
defendants induced SRG to breach that agreement. IRI's complaint alleges damages
in excess of $350 million, which amount IRI has asked to be trebled under
antitrust laws. IRI also seeks punitive damages in an unspecified amount.
On October 15, 1996, defendants moved for an order dismissing all claims in
the complaint. On May 6, 1997, the United States District Court for the Southern
District of New York issued a decision dismissing IRI's claim of attempted
monopolization in the United States, with leave to replead within 60 days. The
Court denied defendants' motion with respect to the remaining claims in the
complaint. On June 3, 1997, defendants filed an answer denying the material
allegations in IRI's complaint, and ACNielsen filed a counterclaim alleging that
IRI had made false and misleading statements about its services and commercial
activities. On July 7, 1997, IRI filed an Amended and Restated Complaint
repleading its alleged claim of monopolization in the United States and
realleging its other claims. By notice of motion dated August 18, 1997,
defendants
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moved for an order dismissing the amended claim. On December 1, 1997, the Court
denied the motion. On December 22, 1999, defendants filed a motion for partial
summary judgment seeking to dismiss IRI's non-U.S. antitrust claims. On July 12,
2000, the Court granted the motion dismissing claims of injury suffered from
activities in foreign markets where IRI operates through subsidiaries or
companies owned by joint ventures or "relationships" with local companies.
Discovery in this case is ongoing.
In November 1996, Donnelley completed a distribution to its shareholders
(the "1996 Distribution") of capital stock of ACNielsen Corporation
("ACNielsen") and Cognizant Corporation ("Cognizant"). On October 28, 1996, in
connection with the 1996 Distribution, Cognizant, ACNielsen and Donnelley
entered into an Indemnity and Joint Defense Agreement (the "Indemnity and Joint
Defense Agreement"). For a description of the agreement, see the notes to the
financial statements incorporated by reference in this prospectus.
In June 1998, Donnelley completed a distribution to its shareholders (the
"1998 Distribution") of the capital stock of D&B and changed Donnelley's name to
R.H. Donnelley Corporation. In connection with the 1998 Distribution, Old D&B
and Donnelley entered into an agreement whereby Old D&B has assumed all
potential liabilities of Donnelley arising from the IRI action and agreed to
indemnify Donnelley in connection with such potential liabilities.
During 1998, Cognizant separated into two new companies, IMS Health
Incorporated ("IMS Health") and Nielsen Media Research, Inc. ("Nielsen Media
Research"). IMS Health and Nielsen Media Research are each jointly and severally
liable for all Cognizant liabilities under the Indemnity and Joint Defense
Agreement.
Under the terms of the 1996 Distribution Agreement entered into by
Donnelley, ACNielsen and Cognizant to effect the 1996 Distribution, as a
condition to the 1998 Distribution, Old D&B undertook to be jointly and
severally liable with Donnelley to Cognizant and ACNielsen. Under the terms of
the 1998 Distribution Agreement entered into by Old D&B and Donnelley to effect
the 1998 Distribution (the "1998 Distribution Agreement"), as a condition to the
2000 Distribution entered into by D&B and Moody's to effect the 2000
Distribution (the "2000 Distribution Agreement"), D&B was required to undertake
to be jointly and severally liable with Moody's to Donnelley for Old D&B's
obligations under the 1998 Distribution Agreement, including the liabilities
relating to the IRI action. However, under the 2000 Distribution Agreement, as
between themselves, each of D&B and Moody's have agreed to be responsible for
50% of any payments to be made in respect of the IRI action under the 1998
Distribution Agreement or otherwise, including any legal fees or expenses
related thereto.
Management is unable to predict at this time the final outcome of the IRI
action or whether the resolution of such matter could materially affect D&B's
results of operations, cash flows or financial position.
Old D&B and its predecessors have entered into global tax planning
initiatives in the normal course of business, principally through tax free
restructurings of both their foreign and domestic operations. These initiatives
are subject to normal review by tax authorities. It is possible that additional
liabilities may be proposed by tax authorities as a result of these reviews and
that some of the reviews could be resolved unfavorably. At this time, management
is unable to predict the extent of such reviews, the outcome thereof or whether
the resolution of these matters could materially affect D&B's results of
operations, cash flows or financial position.
Pursuant to the 2000 Distribution Agreement, D&B and Moody's agreed to each
be financially responsible for 50% of any potential liabilities that may arise
with respect to the reviews described above, to the extent such potential
liabilities are not directly attributable to their respective business
operations.
The Internal Revenue Service (the "IRS") has completed its review of the
utilization of certain capital losses generated during 1989 and 1990. On June
26, 2000, the IRS, as part of its audit process, issued a formal assessment with
respect to the utilization of these capital losses and Old D&B responded by
filing a petition for a refund in the U.S. District Court for the District of
Columbia on September 21, 2000. Pursuant to a series of agreements, IMS Health
and Nielsen Media Research are jointly and severally liable to pay one-half, and
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Donnelley the other half, of any payments for taxes and accrued interest arising
from this matter and certain other potential tax liabilities after Donnelley
pays the first $137 million.
In connection with the 1998 Distribution, Old D&B and Donnelley entered
into an agreement whereby Old D&B has assumed all potential liabilities of
Donnelley arising from these tax matters and has agreed to indemnity Donnelley
in connection with such potential liabilities.
On May 12, 2000, an amended tax return was filed for the 1989 and 1990 tax
periods, which reflects $561.6 million of tax and interest due. Old D&B paid the
IRS $349.3 million of this amount on May 12, 2000, which Old D&B funded with
short-term borrowings. IMS Health has informed Old D&B that it paid to the IRS
$212.3 million on May 17, 2000. The payments were made to the IRS to stop
further interest from accruing. Notwithstanding the filing and payment, D&B is
contesting the IRS's formal assessment and would also contest the assessment of
amounts, if any, in excess of the amounts paid. Old D&B and D&B have accrued
their anticipated share of the probable liability arising from the utilization
of these capital losses.
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THE EXCHANGE OFFER
GENERAL
We hereby offer, upon the terms and subject to the conditions set forth in
this prospectus and in the accompanying letter of transmittal (which together
constitute the exchange offer), to exchange up to $300,000,000 aggregate
principal amount of exchange notes for a like aggregate principal amount of
outstanding notes, properly tendered on or prior to the Expiration Date and not
properly withdrawn. The exchange offer is being made with respect to all of the
outstanding notes.
As of the date of this prospectus, the aggregate principal amount of the
outstanding notes is $300,000,000. This prospectus, together with the letter of
transmittal, is first being sent on or about , 2001, to all
registered holders of outstanding notes. Our obligation to accept outstanding
notes for exchange is subject to certain conditions set forth under "-- Certain
Conditions to the Exchange Offer" below. We currently expect that each of the
conditions will be satisfied and that no waivers will be necessary.
PURPOSE OF THE EXCHANGE OFFER
The outstanding notes were issued on March 22, 2001 in a transaction exempt
from the registration requirements of the Securities Act. Accordingly, the
outstanding notes may not be reoffered, resold, or otherwise transferred unless
registered under the Securities Act or any applicable securities law or unless
an applicable exemption from the registration and prospectus delivery
requirements of the Securities Act is available.
In connection with the issuance and sale of the outstanding notes, we
entered into a registration rights agreement with the initial purchases of the
outstanding notes in which we agreed, under certain circumstances, to file a
registration statement relating to an offer to exchange the outstanding notes
for exchange notes. We also agreed to use our reasonable best efforts to cause
such offer to be consummated not later than 180 days after the date of issuance
of the outstanding notes.
Under the circumstances set forth below, we will use our reasonable best
efforts to cause the Securities and Exchange Commission to declare effective a
shelf registration statement with respect to the resale of the outstanding notes
and keep the statement effective for up to two years after the effective date of
the shelf registration statement. These circumstances include:
- if any changes in law, Commission rules or regulations or applicable
interpretations thereof by the staff of the Commission do not permit us
to effect the exchange offer as contemplated by the registration rights
agreement;
- if any outstanding notes validly tendered in the exchange offer are not
exchanged for exchange notes within 180 days after the original issue of
the outstanding notes;
- if any initial purchaser of the outstanding notes so requests, but only
with respect to any outstanding notes not eligible to be exchanged for
exchange notes in the exchange offer; or
- if any holder of the outstanding notes notifies us that it is not
permitted to participate in the exchange offer or would not receive fully
tradable exchange notes pursuant to the exchange offer.
If we fail to comply with certain obligations under the registration rights
agreement, we will be required to pay additional interest to holders of the
outstanding notes. Please read the section captioned "Registration Rights
Agreement" for more details regarding the registration rights agreement.
Each holder of outstanding notes that wishes to exchange such outstanding
notes for transferable exchange notes in the exchange offer will be required to
make the following representations:
- any exchange note will be acquired in the ordinary course of its
business;
- such holder has no arrangement with any person to participate in the
distribution of the exchange notes; and
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- such holder is not our "affiliate," as defined in Rule 405 of the
Securities Act, or if it is our affiliate, that it will comply with
applicable registration and prospectus delivery requirements of the
Securities Act.
RESALE OF EXCHANGE NOTES
Based on interpretations of the Commission staff set forth in no action
letters issued to unrelated third parties, we believe that exchange notes issued
under the exchange offer in exchange for outstanding notes may be offered for
resale, resold and otherwise transferred by any exchange note holder without
compliance with the registration and prospectus delivery provisions of the
Securities Act, if:
- such holder is not an "affiliate" of D&B within the meaning of Rule 405
under the Securities Act;
- such exchange notes are acquired in the ordinary course of the holder's
business; and
- the holder does not intend to participate in the distribution of such
exchange notes.
Any holder who tenders in the exchange offer with the intention of
participating in any matter in a distribution of the exchange notes:
- cannot rely on the position of the staff of the Commission enunciated in
"Exxon Capital Holdings Corporation" or similar interpretive letters; and
- must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale transaction.
This prospectus may be used for an offer to resell, resale or other
retransfer of exchange notes only as specifically set forth in this prospectus.
With regard to broker-dealers, only broker-dealers that acquired the outstanding
notes as a result of market-making activities or other trading activities may
participate in the exchange offer. Each broker-dealer that receives exchange
notes for its own account in exchange for outstanding notes, where such
outstanding notes were acquired by such broker-dealer as a result of market-
making activities or other trading activities, must acknowledge that it will
deliver a prospectus in connection with any resale of the exchange notes. Please
read the section captioned "Plan of Distribution" for more details regarding the
transfer of exchange notes.
The Exchange Offer is being made by the Company to satisfy certain of its
obligations under the Registration Rights Agreement. The term "holder," with
respect to the Exchange Offer, means any person in whose name outstanding notes
are registered on the books of the Company or any other person who has obtained
a properly completed bond power from the registered holder, or any person whose
outstanding notes are held of record by The Depository Trust Company. Other than
pursuant to the Registration Rights Agreement, the Company is not required to
file any registration statement to register any outstanding notes. Holders of
outstanding notes who do not tender their outstanding notes or whose outstanding
notes are tendered but not accepted would have to rely on exemptions to
registration requirements under the securities laws, including the Securities
Act, if they wish to sell their outstanding notes.
TERMS OF THE EXCHANGE OFFER
Subject to the terms and conditions set forth in this prospectus and the
letter of transmittal D&B will accept for exchange any outstanding notes
properly tendered and not withdrawn prior to the expiration date. D&B will issue
$1,000 principal amount of exchange notes in exchange for each $1,000 principal
amount of outstanding notes surrendered upon the exchange offer. Outstanding
notes may be tendered only in integral multiples of $1,000.
The form and terms of the exchange notes will be substantially identical to
the forms and terms of the outstanding notes except the exchange notes will be
registered under the Securities Act, will not bear legends restricting their
transfer and will not provide for any additional interest upon failure of D&B to
fulfill our obligation under the registration rights agreement to file, and
cause to be effective, a registration statement. The exchange notes will
evidence the same debt as the outstanding notes. The exchange notes will be
issued
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under and entitled to the benefits of the same indenture that authorized the
issuance of the outstanding notes. Consequently, both series will be treated as
a single class of debt securities under the indenture. For a description of the
indenture, see "Description of Notes" below.
The exchange offer is not conditioned upon any minimum aggregate principal
amount of outstanding notes being tendered for exchange.
As of the date of this prospectus, $300 million aggregate principal amount
of the outstanding notes are outstanding. This prospectus and the letter of
transmittal are being sent to all registered holders of outstanding notes. There
will be no fixed record date for determining registered holders of outstanding
notes entitled to participate in the exchange offer.
D&B intends to conduct the exchange offer in accordance with the provisions
of the registration rights agreement, the applicable requirements of the
Securities Act and the Securities Exchange Act of 1934 and the rules and
regulations of the Commission. Outstanding notes that are not tendered for
exchange in the exchange offer will remain outstanding and continue to accrue
interest and will be entitled to the rights and benefits such holders have under
the indenture relating to the outstanding notes and the registration rights
agreement.
D&B will be deemed to have accepted for exchange properly tendered
outstanding notes when we have given oral or written notice of the acceptance to
the exchange agent. The exchange agent will act as agent for the tendering
holders for the purposes of receiving the exchange notes from us and delivering
the exchange notes to such holders. Subject to the terms of the registration
rights agreement. D&B expressly reserves the right to amend or terminate the
exchange offer, and not to accept for exchange any outstanding notes not
previously accepted for exchange, upon the occurrence of any of the conditions
specified below under the caption "-- Certain Conditions to the Exchange Offer."
Holders who tender outstanding notes in the exchange offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the letter of transmittal, transfer taxes with respect to the exchange of
outstanding notes. We will pay all charges and expenses, other than certain
applicable taxes described below, in connection with the exchange offer. It is
important that you read the section labeled "-- Fees and Expenses" below for
more details regarding fees and expenses incurred in the exchange offer.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The exchange offer will expire at 5:00 p.m., New York City time on
, 2001, unless in its sole discretion, D&B extends it.
In order to extend the exchange offer, D&B will notify the exchange agent
orally or in writing of any extension. D&B will notify the registered holders of
outstanding notes of the extension no later than 9:00 a.m., New York City time,
on the business day after the previously scheduled expiration date.
D&B reserves the right, in its sole discretion:
- to delay accepting for exchange any outstanding notes;
- to extend the exchange offer or to terminate the exchange offer and to
refuse to accept outstanding notes not previously accepted if any of the
conditions set forth below under "-- Certain Conditions to the Exchange
Offer" have not been satisfied, by giving oral or written notice of such
delay, extension or termination to the exchange agent; or
- subject to the terms of the registration rights agreement, to amend the
terms of the exchange offer in any manner.
Any such delay in acceptance, extension, termination or amendment will be
followed as promptly as practicable by oral or written notice thereof to the
registered holders of outstanding notes. If D&B amends the exchange offer in a
manner that it determines to constitute a material change, D&B will promptly
disclose such amendment in a manner reasonably calculated to inform the holders
of outstanding notes of such amendment.
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Without limiting the manner in which the it may choose to make public
announcements of any delay in acceptance, extension, termination or amendment of
the exchange offer, D&B shall have no obligation to publish, advertise, or
otherwise communicate any such public announcement, other than by making a
timely release to a financial news service.
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
Despite any other term of the exchange offer, D&B will not be required to
accept for exchange, or exchange any exchange notes for, any outstanding notes,
and D&B may terminate the exchange offer as provided in this prospectus before
accepting any outstanding notes for exchange if in its reasonable judgment:
- the exchange notes to be received will not be tradeable by the holder,
without restriction under the Securities Act, the Securities Exchange Act
of 1934 and without material restrictions under the blue sky or
securities laws of substantially all of the states of the United States;
- the exchange offer, or the making of any exchange by a holder of
outstanding notes, would violate applicable law or any applicable
interpretation of the staff of the Commission; or
- any action or proceeding has been instituted or threatened in any court
or by or before any governmental agency with respect to the exchange
offer that, in our judgment, would reasonably be expected to impair the
ability of D&B to proceed with the exchange offer.
In addition, D&B will not be obligated to accept for exchange the
outstanding notes of any holder that has not made to it
- the representations described under "-- Purpose and Effect of the
Exchange Offer," "-- Procedures for Tendering" and "Plan of Distribution"
and
- such other representations as may be reasonably necessary under
applicable Commission rules, regulations or interpretations to make
available to D&B an appropriate form for registration of the exchange
notes under the Securities Act.
D&B expressly reserves the right, at any time or at various times, to
extend the period of time during which the exchange offer is open. Consequently,
it may delay acceptance of any outstanding notes by giving oral or written
notice of such extension to their holders. During any such extensions, all
outstanding notes previously tendered will remain subject to the exchange offer,
and D&B may accept them for exchange. D&B will return any outstanding notes that
it does not accept for exchange for any reason without expense to their
tendering holder as promptly as practicable after the expiration or termination
of the exchange offer.
D&B expressly reserves the right to amend or terminate the exchange offer,
and to reject for exchange any outstanding notes not previously accepted for
exchange, upon the occurrence of any of the conditions of the exchange offer
specified above. D&B will give oral or written notice of any extension,
amendment, non-acceptance or termination to the holders of the outstanding notes
as promptly as practicable. In the case of any extension, such notice will be
issued no later than 9:00 a.m., New York City time, on the business day after
the previously scheduled expiration date.
These conditions are for the sole benefit of D&B and D&B may assert them
regardless of the circumstances that may give rise to them or waive them in
whole or in part at any or at various times in its sole discretion. If D&B fails
at any time to exercise any of the foregoing rights, this failure will not
constitute a waiver of such right. Each such right will be deemed an ongoing
right that D&B may assert at any time or at various times.
In addition, D&B will not accept for exchange any outstanding notes
tendered, and will not issue exchange notes in exchange for any such outstanding
notes, if at such time any stop order will be threatened or in effect with
respect to the registration statement of which this prospectus constitutes a
part or the qualification of the indenture under the Trust Indenture Act of
1939.
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PROCEDURES FOR TENDERING
Only a holder of outstanding notes may tender such outstanding notes in the
exchange offer. To tender in the exchange offer, a holder must:
- complete, sign and date the letter of transmittal, or a facsimile of the
letter of transmittal; have the signature on the letter of transmittal
guaranteed if the letter of transmittal so requires; and mail or deliver
such letter of transmittal or facsimile to the exchange agent prior to
the expiration date; or
- comply with DTC's Automated Tender Offer Program procedures described
below.
In addition, either:
- the exchange agent must receive outstanding notes along with the letter
of transmittal; or
- the exchange agent must receive, prior to the expiration date, a timely
confirmation of book-entry transfer of such outstanding notes into the
exchange agent's account at DTC according to the procedure for book-entry
transfer described below or a properly transmitted agent's message; or
- the holder must comply with the guaranteed delivery procedures described
below.
To be tendered effectively, the exchange agent must receive any physical
delivery of the letter of transmittal and other required documents at the
address set forth below under "-- Exchange Agent" prior to the expiration date.
The tender by a holder that is not withdrawn prior to the expiration date
will constitute an agreement between such holder and D&B in accordance with the
terms and subject to the conditions set forth in this prospectus and in the
letter of transmittal.
The method of delivery of outstanding notes, the letter of transmittal and
all other required documents to the exchange agent is at the holder's election
and risk. Rather than mail these items, D&B recommends that holders use an
overnight or hand delivery service . In all cases, holders should allow
sufficient time to assure delivery to the exchange agent before the expiration
date. Holders should not send the letter of transmittal or outstanding notes to
D&B. Holders may request their respective brokers, dealers, commercial banks,
trust companies or other nominees to effect the above transactions for them.
Any beneficial owner whose outstanding notes are registered in the name of
a broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact the registered holder promptly and instruct it to
tender on the owner's behalf. If such beneficial owner wishes to tender on its
own behalf, it must, prior to completing and executing the letter of transmittal
and delivering its outstanding notes, either:
- make appropriate arrangements to register ownership of the outstanding
notes in such owner's name; or
- obtain a properly completed bond power from the registered holder of
outstanding notes.
The transfer of registered ownership may take considerable time and may not
be completed prior to the expiration date.
Signatures on a letter of transmittal or a notice of withdrawal described
below must be guaranteed by a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or another "eligible guarantor institution" within the meaning of Rule
17Ad-1 5 under the Exchange Act, unless the outstanding notes tendered pursuant
thereto are tendered:
- by a registered holder who has not completed the box entitled "Special
Issuance Instructions" or "Special Delivery Instructions" on the letter
of transmittal; or
- for the account of an eligible guarantor institution.
If the letter of transmittal is signed by a person other than the
registered holder of any outstanding notes listed on the outstanding notes, such
outstanding notes must be endorsed or accompanied by a properly completed bond
power. The bond power must be signed by the registered holder as the registered
holder's
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name appears on the outstanding notes and an eligible guarantor institution must
guarantee the signature on the bond power.
If the letter of transmittal or any outstanding notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing. Unless waived by us,
they should also submit evidence satisfactory to us of their authority to
deliver the letter of transmittal.
The exchange agent and DTC have confirmed that any financial institution
that is a participant in DTC's system may use DTC's Automated Tender Offer
Program to tender. Participants in the program may, instead of physically
completing and signing the letter of transmittal and delivering it to the
exchange agent, transmit their acceptance of the exchange offer electronically.
They may do so by causing DTC to transfer the outstanding notes to the exchange
agent in accordance with its procedures for transfer. DTC will then send an
agent's message to the exchange agent. The term "agent's message" means a
message transmitted by DTC, received by the exchange agent and forming part of
the book-entry confirmation, to the effect that:
- DTC has received an express acknowledgment from a participant in its
Automated Tender Offer Program that is tendering outstanding notes that
are the subject of such book-entry confirmation;
- such participant has received and agrees to be bound by the terms of the
letter of transmittal, or, in the case of an agent's message relating to
guaranteed delivery, that such participant has received and agrees to be
bound by the applicable notice of guaranteed delivery; and
- the agreement may be enforced against such participant.
D&B will determine in its sole discretion all questions as to the validity,
form, eligibility (including time of receipt), acceptance of tendered
outstanding notes and withdrawal of tendered outstanding notes. Our
determination will be final and binding. D&B reserves the absolute right to
reject any outstanding notes not properly tendered or any outstanding notes the
acceptance of which would, in the opinion of our counsel, be unlawful. D&B also
reserves the right to waive any defects, irregularities or conditions of tender
as to particular outstanding notes interpretation of the terms and conditions of
the exchange offer, including the instructions in the letter of transmittal,
will be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of outstanding notes must be cured
within such time as we shall determine. Although D&B intends to notify holders
of defects or irregularities with respect to tenders of outstanding notes
neither we, the exchange agent nor any other person will incur any liability for
failure to give such satisfaction. Tenders of outstanding notes will not be
deemed made until such defects or irregularities have been cured or waived. Any
outstanding notes received by the exchange agent that are not properly tendered
and as to which the defects or irregularities have not been cured or waived will
be returned to the exchange agent without cost to the tendering holder, unless
otherwise provided in the letter of transmittal, s soon as practicable following
the expiration date.
In all cases, D&B will issue exchange notes for outstanding notes that we
have accepted for exchange under the exchange offer only after the exchange
agent timely receives:
- outstanding notes or a timely book-entry confirmation of such outstanding
notes into the exchange agent's account at DTC; and
- a properly completed and duly executed letter of transmittal and all
other required documents or a properly transmitted agent's message.
By signing the letter of transmittal, each tendering holder of outstanding
notes will represent to D&B that, among other things:
- any exchange notes that the holder receives will be acquired in the
ordinary course of its business;
- the holder has no arrangement or understanding with any person or entity
to participate in the distribution of the exchange notes;
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- if the holder is not a broker-dealer, that it is not engaged in and does
not intend to engage in the distribution of the exchange notes;
- if the holder is a broker-dealer that will receive exchange notes for its
own account in exchange for outstanding notes that were acquired as a
result of market-making activities, that it will deliver a prospectus, as
required by law, in connection with any resale of such exchange notes;
and
- the holder is not an "affiliate," as defined in Rule 405 of the
Securities Act, of D&B or, if the holder is an affiliate, it will comply
with any applicable registration and prospectus delivery requirements of
the Securities Act.
BOOK-ENTRY TRANSFER
The exchange agent will make a request to establish an account with respect
to the outstanding notes at DTC for purposes of the exchange offer promptly
after the date of this prospectus; and any financial institution participating
in DTC's system may make book-entry delivery of outstanding notes by causing DTC
to transfer such outstanding notes into the exchange agent's account at DTC in
accordance with DTC's procedures for transfer. Holders of outstanding notes who
are unable to deliver confirmation of the book-entry tender of their outstanding
notes into the exchange agent's account at DTC or all other documents required
by the letter of transmittal to the exchange agent on or prior to the expiration
date must tender their outstanding notes according to the guaranteed delivery
procedures described below.
GUARANTEED DELIVERY PROCEDURES
Holders wishing to tender their outstanding notes but whose outstanding
notes are not immediately available or who cannot deliver their outstanding
notes, the letter of transmittal or any other required documents to the exchange
agent or comply with the applicable procedures under DTC's Automated Tender
Offer Program prior to the expiration date may tender if:
- the tender is made through an eligible guarantor institution;
- prior to the expiration date, the exchange agent receives from such
eligible guarantor institution either a properly completed and duly
executed notice of guaranteed delivery (by facsimile transmission, mail
or hand delivery) or a properly transmitted agent's message and notice of
guaranteed delivery:
- setting forth the name and address of the holder, the registered
number(s) of such outstanding notes and the principal amount of
outstanding notes tendered;
- stating that the tender is being made thereby; and
- guaranteeing that, within three (3) New York Stock Exchange trading
days after the expiration date, the letter of transmittal, or a
facsimile of the letter of transmittal, together with the outstanding
notes or a book-entry confirmation, and any other documents required by
the letter of transmittal will be deposited by the eligible guarantor
institution with the exchange agent; and
- the exchange agent receives such properly completed and executed letter
of transmittal, or a facsimile of the letter of transmittal, as well as
all tendered outstanding notes in proper form for transfer or a
book-entry confirmation, and all other documents required by the letter
of transmittal, within three (3) New York Stock Exchange trading days
after the expiration date.
Upon request to the exchange agent, a notice of guaranteed delivery will be
sent to holders who wish to tender their outstanding notes according to the
guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided in this prospectus, holders of outstanding
notes may withdraw their tenders at any time prior to the expiration date.
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For a withdrawal to be effective:
- the exchange agent must receive a written notice, which may be by
facsimile transmission or letter, of withdrawal at one of the addresses
set forth below under "-- Exchange Agent;" or
- holders must comply with the appropriate procedures of DTC's Automated
Tender Offer Program system.
Any such notice of withdrawal must:
- specify the name of the person who tendered the outstanding notes to be
withdrawn;
- identify the outstanding notes to be withdrawn (including the principal
amount of such outstanding notes); and
- where certificates for outstanding notes have been transmitted, specify
the name in which such outstanding notes were registered, if different
from that of the withdrawing holder.
If certificates for outstanding notes have been delivered or otherwise
identified to the exchange agent, then, prior to the release of such
certificates, the withdrawing holder must also submit:
- the serial numbers of the particular certificates to be withdrawn; and
- a signed notice of withdrawal with signatures guaranteed by an eligible
guarantor institution unless such holder is an eligible guarantor
institution.
If outstanding notes have been tendered pursuant to the procedure for
book-entry transfer described above, any notice of withdrawal must specify the
name and number of the account at DTC to be credited with the withdrawn
outstanding notes and otherwise comply with the procedures of such facility. D&B
will determine all questions as to the validity, form and eligibility, including
time of receipt, of such notices, and our determination shall be final and
binding on all parties. D&B will deem any outstanding notes so withdrawn not to
have validity tendered for exchange for purposes of the exchange offer. Any
outstanding notes that have been tendered for exchange but that are not
exchanged for any reason will be returned to their holder without cost to the
holder, or, in the case of outstanding notes tendered by book-entry transfer
into the exchange agent's account at DTC according to the procedures described
above, such outstanding notes will be credited to an account maintained with DTC
for outstanding notes, as soon as practicable after withdrawal, rejection of
tender or termination of the exchange offer. Properly withdrawn outstanding
notes may be retendered by following one of the procedures described under
"-- Procedures for Tendering" above at any time on or prior to the expiration
date.
EXCHANGE AGENT
The Bank of New York has been appointed as the Exchange Agent for the
Exchange Offer. You should direct questions and requests for assistance,
requests for additional copies of this prospectus or of the letter of
transmittal and requests for the notice of guaranteed delivery to the exchange
agent at one of the addresses set forth below:
By Hand/Overnight Courier: By Mail: By Facsimile:
The Bank of New York The Bank of New York The Bank of New York
101 Barclay Street 101 Barclay Street, 7E (212) 815-6339
Corporate Trust Services Window New York, New York 10286 Attn: Reorganization Section
Ground Level Attn: Reorganization
Section
New York, New York 10286
Attn: Reorganization Section
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF SUCH LETTER OF TRANSMITTAL VIA FACSIMILE OTHER THAN AS
SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY OF SUCH LETTER OF
TRANSMITTAL.
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FEES AND EXPENSES
D&B will bear the expenses of soliciting tenders. The principal
solicitation is being made by mail; however, we may make additional solicitation
by telegraph, telephone or in person by our officers and regular employees and
those of our affiliates.
We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to broker-dealers or others soliciting
acceptances of the exchange offer. D&B will, however, pay the exchange agent
reasonable and customary fees for services and reimburse it for its related
reasonable out-of-pocket expenses.
D&B will pay the cash expenses to be incurred in connection with the
exchange offer. The expenses are estimated in the aggregate to be approximately
$ . They include:
- Commission registration fees;
- fees and expenses of the exchange agent and trustee;
- accounting and legal fees and printing costs; and
- related fees and expenses.
TRANSFER TAXES
D&B will pay all transfer taxes, if any, applicable to the exchange of
outstanding notes under the exchange offer. The tendering holder, however, will
be required to pay any transfer taxes (whether imposed on the registered holder
or any other person) if:
- certificates representing outstanding notes for principal amounts not
tendered or accepted for exchange are to be delivered to, or are to be
issued in the name of, any person other than the registered holder of
outstanding notes tendered;
- tendered outstanding notes are registered in the name of any person other
than the person signing the letter of transmittal; or
- a transfer tax is imposed for any reason other than the exchange of
outstanding notes under the exchange offer.
If satisfactory evidence of payment of such taxes is not submitted with the
letter of transmittal, the amount of such transfer taxes will be billed to that
tendering holder.
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of outstanding notes who do not exchange their outstanding notes
for exchange notes under the exchange offer will remain subject to the
restrictions on transfer of such outstanding notes:
- as set forth in the legend printed on the notes as a consequence of the
issuance of the outstanding notes pursuant to the exemptions from, or in
transactions not subject to, the registration requirements of the
Securities Act and applicable state securities laws; and
- otherwise set forth in the offering memorandum distributed in connection
with the private offering of the outstanding notes.
In general, you may not offer or sell the outstanding notes unless they are
registered under the Securities Act or the offer or sale is exempt from
registration under the Securities Act and applicable state securities laws.
Except as required by the registration rights agreement, we do not intend to
register resales of the outstanding notes under the Securities Act. Based on
interpretations of the Commission staff, exchange notes issued pursuant to the
exchange offer may be offered for resale, resold or otherwise transferred by
their holders, other than any such holder that is our "affiliate" within the
meaning of Rule 405 under the Securities Act, without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that the holders acquired the exchange notes in the ordinary course of the
holders' business and the
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holders have no arrangement or understanding with respect to the distribution of
the exchange notes to be acquired in the exchange offer. Any holder who tenders
in the exchange offer for the purpose of participating in a distribution of the
exchange notes:
- cannot rely on the applicable interpretations of the Commission; and
- must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale transaction.
ACCOUNTING TREATMENT
D&B will record the exchange notes in our accounting records at the same
carrying value as the outstanding notes, which is the aggregate principal amount
as reflected in D&B's accounting records on the date of exchange. Accordingly,
D&B will not recognize any gain or loss for accounting purposes in connection
with the exchange offer. D&B will record the expenses of the exchange offer as
incurred.
OTHER
Participation in the exchange offer is voluntary, and you should carefully
consider whether to accept. You are urged to consult your financial and tax
advisors in making your own decision on what action to take.
D&B may in the future seek to acquire untendered outstanding notes in open
market or privately negotiated transactions, through subsequent exchange offers
or otherwise. D&B has no present plans to acquire any outstanding notes that are
not tendered in the exchange offer or to file a registration statement to permit
resales of any untendered outstanding notes.
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DESCRIPTION OF THE EXCHANGE NOTES
The outstanding notes were issued and the exchange notes will be issued
under an indenture dated as of March 22, 2001 between D&B and The Bank of New
York, as trustee. The following summary of the material provisions of the
indenture does not purport to be complete and is qualified in its entirety by
reference to, the provisions of the indenture, including the definitions of
certain terms contained therein and those terms made part of the indenture by
reference to the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"). As used in this "Description of the Exchange Notes," D&B refers to The
Dun & Bradstreet Corporation and does not, unless the context otherwise
indicates, include its subsidiaries. The indenture is an exhibit to the
registration statement of which this prospectus is part.
The exchange notes will be issued only in registered form, without coupons,
in denominations of $1,000 and integral multiples of $1,000. The exchange notes
will be unsecured senior obligations of D&B and, as such, will rank pari passu
in right of payment with all other existing and future senior indebtedness of
D&B and senior in right of payment to all existing and future subordinated
indebtedness of D&B. As of December 31, 2000, on a pro forma basis after giving
effect to the offering of the notes and the application of the estimated gross
proceeds therefrom, we would have had approximately $49.6 million in aggregate
principal amount of indebtedness outstanding which would have ranked pari passu
in right of payment with the notes. See "Capitalization" in this prospectus.
GENERAL
The specific terms of the exchange notes are set forth below:
- Title: 6.625% Series B Senior Notes due 2006
- Maturity date: March 15, 2006
- Interest rate: 6.625% per annum
- Date interest starts accruing: March 22, 2001
- Interest payment dates: March 15 and September 15
- First interest payment date: September 15, 2001
- Regular record dates for interest: March 1 and September 1
- Computation of interest: Interest will be computed on the basis of a
360-day year consisting of twelve 30-day months.
- Form of exchange notes: The exchange notes will be in the form of one or
more global notes that we will deposit with or on behalf of DTC.
- Sinking fund: The exchange notes will not be subject to any sinking fund.
- Status: The exchange notes will constitute a series of our unsecured
senior debt securities.
OPTIONAL REDEMPTION
We may, at our option, redeem the notes, in whole or in part, at any time
at a redemption price equal to the greater of (i) 100% of the principal amount
of the notes to be redeemed, and (ii) as determined by the Quotation Agent, the
sum of the present values of the remaining scheduled payments of principal and
interest in respect of the notes to be redeemed (not including any portion of
such payments of interest accrued as of the date of redemption) discounted to
the date of redemption on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate plus 25 basis points
plus, in each case, accrued interest to the date of redemption.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the notes to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of the notes.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the Reference Treasury Dealer Quotations for that redemption
date, after excluding the highest and lowest of the
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Reference Treasury Dealer Quotations, or (ii) if the Quotation Agent obtains
fewer than three such Reference Treasury Dealer Quotations, the average of all
Reference Treasury Dealer Quotations so received.
"Quotation Agent" means the Reference Treasury Dealer appointed by us.
"Reference Treasury Dealer" means (i) each of Bear, Stearns & Co. Inc.,
Chase Securities Inc., Salomon Smith Barney Inc. and BNY Capital Markets, Inc.
and their respective successors unless any of them ceases to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), in
which case we shall substitute another Primary Treasury Dealer, and (ii) any
other Primary Treasury Dealer selected by us.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
us, of the bid and asked prices for the Comparable Treasury Issue (expressed in
each case as a percentage of its principal amount) quoted in writing to the
trustee by that Reference Treasury Dealer at 5:00 p.m., New York City time, on
the third business day preceding that redemption date.
"Treasury Rate" means, with respect to any redemption date, (1) the yield,
under the heading which represents the average for the immediately preceding
week, appearing in the most recently published statistical release designated
"H.15(519)" or any successor publication which is published weekly by the Board
of Governors of the Federal Reserve System and which establishes yields on
actively traded United States Treasury securities adjusted to constant maturity
under the caption "Treasury Constant Maturities," for the maturity corresponding
to the Comparable Treasury Issue (if no maturity is within three months before
or after the term of the notes, yields for the two published maturities most
closely corresponding to the Comparable Treasury Issue will be determined and
the Treasury Rate will be interpolated or extrapolated from the yields on a
straight line basis, rounding to the nearest month) or (2) if that release (or
any successor release) is not published during the week preceding the
calculation date or does not contain those yields, the rate per year equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
assuming a price for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for that redemption
date. The Treasury Rate will be calculated on the third business day preceding
the redemption date.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of the notes to be redeemed.
If less than all of the notes are being redeemed, the trustee will select the
notes to be redeemed using a method it considers fair. Unless we default in
payment of the redemption price, on and after the redemption date, interest will
cease to accrue on the notes or portions of the notes called for redemption.
CERTAIN COVENANTS
Other than as described below, the indenture does not contain any
provisions that would limit our ability to incur indebtedness or that would
afford holders of notes protection in the event of a sudden and significant
decline in the credit quality of D&B or a takeover, recapitalization or highly
leveraged or similar transaction involving D&B.
Limitation on Liens
D&B will not, and will not permit any subsidiary to, create, incur, assume
or permit to exist any lien on any property or asset, to secure any debt of D&B,
any subsidiary or any other person, or permit any subsidiary so to do, without
securing the notes equally and ratably with such debt for so long as such debt
shall be so secured, subject to certain exceptions. Exceptions include:
- existing liens;
- liens on assets or property of corporations at the time they become
subsidiaries;
- liens existing on facilities when acquired, or incurred to finance the
purchase price or construction thereof;
- liens to extend, renew or replace any liens referred to above;
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- liens arising in connection with the financing of accounts receivable by
D&B or any of its subsidiaries which do not exceed $125,000,000;
- certain liens relating to certain permitted sale and leaseback
transactions;
- liens in favor of D&B or one or more subsidiaries granted by D&B or a
subsidiary to secure any intercompany obligations;
- mechanics', landlords' and similar liens;
- liens arising out of legal proceedings being contested;
- liens for taxes not yet due, or being contested;
- easements and similar liens not impairing the use or value of the
property involved; and
- liens otherwise prohibited by this covenant, securing indebtedness which,
together with the value of certain sale and leaseback transactions
described under "-- Limitation on Sale and Leasebacks", does not exceed
the greater of 10% of shareholders equity or an aggregate amount of
$450,000,000.
Limitation on Sale and Leasebacks
D&B shall not, and will not permit any subsidiary to, enter into any
arrangement with any person pursuant to which D&B or any subsidiary leases any
property that has been or is to be sold or transferred by D&B or the subsidiary
to such person (a "sale and leaseback transaction"), except that a sale and
leaseback transaction is permitted if D&B or such subsidiary would be entitled
to secure the property to be leased (without equally and ratably securing the
outstanding notes) in an amount equal to the present value of the lease payments
with respect to the term of the lease remaining on the date as of which the
amount is being determined under the provisions described in "-- Limitation on
Liens" above.
In addition, permitted sale and leaseback transactions not subject to the
limitation above and the provisions described in "-- Limitations on Liens" above
include:
- temporary leases for a term, including renewals at the option of the
lessee, of not more than three years;
- leases between D&B and a subsidiary or between subsidiaries;
- leases of property executed by the time of, or within 12 months after the
latest of, the acquisition, the completion of construction or
improvement, or the commencement of commercial operation of the property;
and
- arrangements pursuant to any provision of law with an effect similar to
the former Section 168(f)(8) of the Internal Revenue Code of 1954.
Consolidation, Merger and Sale of Assets
D&B may, without the consent of the holders of the notes, consolidate with,
merge into or be merged into, or transfer or lease our property and assets
substantially as an entirety to another entity. However, D&B may only do this
if:
- the successor entity is a U.S. corporation, partnership, limited
liability company or trust and assumes by supplemental indenture all of
our obligations under the notes and the indenture;
- after giving effect to the transaction, no default or Event of Default
(as defined below) has occurred and is continuing; and
- if, as a result of any consolidation, merger, transfer or lease described
in this covenant, properties or assets of D&B would become subject to any
lien which could not be permitted by the asset lien restriction described
above without equally and ratably securing the notes, D&B or such
successor person, as the case may be, will take the steps as are
necessary to secure effectively the notes equally and ratably with, or
prior to, all indebtedness secured by those liens as described above.
After that time, all of our obligations under the notes and the indenture
terminate.
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EVENTS OF DEFAULT
Any one of the following is an "Event of Default":
- if we default in the payment of interest on the notes, and such default
continues for 90 days;
- if we default in the payment of the principal or any premium on the notes
when due by declaration, when called for redemption or otherwise;
- if we fail to perform or if we breach any covenant or warranty in the
notes or in the indenture and applicable to the notes for 90 days after
notice to us by the trustee or by holders of at least 25% in principal
amount of the outstanding notes; and
- if certain events of bankruptcy or insolvency occur with respect to D&B.
If an Event of Default with respect to the notes occurs and is continuing,
the trustee or the holders of at least 25% in principal amount of all of the
outstanding notes may declare the principal of all the notes to be due and
payable. When such declaration is made, such principal will be immediately due
and payable. The holders of a majority in principal amount of notes may rescind
such declaration and its consequences if the rescission would not conflict with
any judgment or decree and if all existing events of default have been cured or
waived (other than nonpayment of principal or interest that has become due
solely as a result of acceleration).
Holders of notes may not enforce the indenture, or the notes except as
provided in the indenture. The trustee may require indemnity satisfactory to it
before it enforces the indenture or the notes. Subject to certain limitations,
the holders of more than 50% in principal amount of the notes may direct the
time, method and place of conducting any proceeding for any remedy available to
the trustee or exercising any trust or power of the trustee. The trustee may
withhold from holders notice of any continuing default (except a default in the
payment of principal or interest) if it determines that withholding notice is in
their interests.
AMENDMENT AND WAIVER
With the consent of the holders of more than 50% of the principal amount of
the outstanding notes, we and the trustee may amend or supplement the indenture
or modify the rights of the holders. Such majority holders may also waive
compliance by us with any provision of the Indenture, any supplemental indenture
or the notes except a default in the payment of principal or interest. However,
without the consent of the holder of each note affected, an amendment or waiver
may not:
- reduce the principal amount of outstanding notes whose holders must
consent to an amendment or waiver;
- change the rate or the time for payment of interest;
- change the principal or the fixed maturity;
- waive a default in the payment of principal or interest;
- make any note payable in a different currency other than that stated in
the note or change the place of payment; or
- make any change in the provisions of the indenture concerning (i) waiver
of existing defaults; (ii) rights of holders of the notes to receive
payment; or (iii) amendments and waivers with consent of holders of the
notes.
We and the trustee may amend or supplement the indenture without the
consent of any holder to cure any ambiguity, defect or inconsistency in the
indenture, the notes or for certain other limited purposes, including to make
any change that does not adversely affect the rights of any holder of the notes.
DEFEASANCE AND COVENANT DEFEASANCE
The indenture provides that we (a) may be discharged from its obligations
in respect of the notes ("defeasance and discharge"), or (b) may cease to comply
with certain restrictive covenants ("covenant defeasance") including those
described under "Certain Covenants -- Limitation on Liens," "Certain
Covenants -- Limitations on Sale and Leasebacks" and "Certain
Covenants -- Consolidation, Merger and Sale of
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Assets", when the Company has irrevocably deposited with the trustee, in trust,
(i) sufficient funds to pay the principal of (and premium, if any) and interest
to stated maturity (or redemption) on, the notes, or (ii) such amount of direct
obligations of, or obligations guaranteed by, the government of the United
States, as will, together with the predetermined and certain income to accrue
thereon without consideration of any reinvestment, be sufficient to pay when due
the principal of (and premium, if any) and interest to stated maturity (or
redemption) on, the notes. Such defeasance and discharge and covenant defeasance
are conditioned upon, among other things, our delivery of an opinion of counsel
that the holders of the notes will not recognize income, gain or loss for United
States Federal income tax purposes as a result of such defeasance, and will be
subject to tax in the same manner as if no defeasance and discharge or covenant
defeasance, as the case may be, had occurred.
THE TRUSTEE
The indenture provides that, except during the continuance of an Event of
Default, the trustee will perform only such duties as are specifically set forth
in such Indenture. If an Event of Default has occurred and is continuing, the
trustee will exercise such rights and powers vested in it under the indenture
and use the same degree of care and skill in its exercise as a prudent person
would exercise under the circumstances in the conduct of such person's own
affairs.
The indenture and the provisions of the Trust Indenture Act, incorporated
by reference therein, contains limitations on the rights of the trustee
thereunder should it become a creditor of D&B, to obtain payment of claims in
certain cases or to realize on certain property received by it in respect of any
such claims, as security or otherwise. The trustee is permitted to engage in
other transactions; provided, however, that if it acquires any conflicting
interest (as defined), it must eliminate such conflict or resign.
GOVERNING LAW
The indenture is, and the exchange notes will be, governed by and construed
in accordance with, the laws of the State of New York.
BOOK ENTRY; DELIVERY AND FORM
The certificates representing the exchange notes will be issued in fully
registered form. Except as described in the next paragraph, the exchange notes
initially will be represented by a single, permanent global exchange note, in
definitive, fully registered form without interest coupons and will be deposited
with the Trustee as custodian for DTC and registered in the name of a nominee of
DTC.
Owners of book-entry interests in the global notes will receive individual
certificated notes in fully registered form, or definitive registered notes,
only in the following circumstances:
- if DTC notifies us or the book-entry depositary in writing that it (or
its nominee) is unwilling or unable to continue to act as a depositary
registered under the Securities and Exchange Act of 1934 (the "Exchange
Act") and a successor depository registered as a clearing agency under
the Exchange Act (in the case of DTC or successor registered as a
clearing agency under the Exchange Act) is not appointed by us within 90
days; or
- at any time if we determine that the global notes should be exchanged for
definitive registered notes (in whole but not in part).
Any definitive registered notes will be issued in fully registered form in
denomination of $1,000 principal amount and integral multiples of $1,000. To the
extent permitted by law, we, the trustee and any paying agent shall be entitled
to treat the person in whose name any definitive registered note is registered
as the absolute owner thereof. While any global note is outstanding, holders of
definitive registered notes may exchange their definitive registered notes for a
corresponding book-entry interest in that global note by surrendering their
definitive registered notes to the trustee and providing the certificates and
opinions required by the indenture. The trustee will make the appropriate
adjustments to the global note underlying that book-entry interest to reflect
any issue or surrender of definitive registered notes. The indenture contains
provisions relating to the maintenance by a registrar of registers reflecting
ownership of definitive registered notes, if any, and other provisions customary
for a debt security listed on the register maintained by the registrar.
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PAYMENTS ON THE NOTES
Payments of any amounts owing in respect of the global notes will be made
through one or more paying agents appointed under the indenture to DTC as the
holder of the global notes. Initially, the paying agent for the notes will be
The Bank of New York, as trustee. We may change the paying agent or registrar
without prior notice to the holders of the notes, and we may act as paying agent
or registrar.
Payments of principal or any premium owing in respect of the definitive
registered notes will be made at the maturity of each note in immediately
available funds upon presentation of the note at the corporate trust office of
the trustee in the Borough of Manhattan, The City of New York, or at any other
place as we may designate. Payment of interest due on the definitive registered
notes at maturity will be made to the person to whom payment of the principal of
the note will be made. Payment of interest due on the definitive registered
notes other than at maturity will be made at the corporate trust office of the
trustee or, at our option, may be made by check mailed to the address of the
person entitled to receive payment as the address appears in the security
register, except that a holder of $1,000,000 or more in aggregate principal
amount of notes in certificated form may, at our option, be entitled to receive
interest payments on any interest payment date other than at maturity by wire
transfer of immediately available funds if appropriate wire transfer
instructions have been received in writing by the trustee at least 15 days prior
to the interest payment date. Any wire instructions received by the trustee will
remain in effect until revoked by the holder.
We expect that DTC or its nominee, upon receipt of any payment made in
respect of the global notes, will credit its participants' accounts with such
payments in amounts proportionate to their respective interest in the principal
amount of such global note as shown on the records of DTC or its nominee.
Payments by participants to owners of interests held through such participants
will be governed by standing customer instructions and the customary practices
of the participants. Payments on interest held through Euroclear or Clearstream
will be credited to the cash accounts of Euroclear participants or Clearstream
participants in accordance with the relevant system's rules and procedures.
None of D&B, the trustee or any paying agent will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of book-entry interests or for maintaining, supervising or reviewing any
records relating to such book-entry interests or beneficial ownership interests.
FURTHER ISSUES
We may from time to time, without notice to or the consent of the
registered holders of the notes, create and issue further notes ranking equally
and ratably with the notes in all respects (or in all respects except for the
payment of interest accruing prior to the issue date of such further notes or
except for the first payment of interest following the issue date of such
further notes), so that such further notes shall be consolidated and form a
single series with the notes and shall have the same terms as to status,
redemption or otherwise as the notes.
DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a "banking
organization" within the meaning of the New York Banking law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "Clearing Agency" registered pursuant to the
provision of Section 17A of the Exchange Act. DTC was created to hold securities
for its participants and facilitate the clearance and settlement of securities
transactions between participants through electronic book-entry changes in
accounts of its participants, thereby eliminating the need for physical movement
of certificates. Participants include securities brokers and dealers, banks,
trust companies and clearing corporations and certain other organizations.
Indirect access to the DTC system is available to others such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly ("indirect
participants").
Upon the issuance of the global exchange notes, DTC or its custodian will
credit, on its internal system, the respective principal amount of the
individual beneficial interests represented by such global exchange notes to the
accounts of persons who have accounts with such depositary. Ownership of
beneficial interests in the global exchange notes will be limited to persons who
have accounts with DTC ("participants") or persons who hold interests through
participants. Ownership of beneficial interests in the global exchange notes
will be
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shown on, and the transfer of that ownership will be effected only through,
records maintained by DTC or its nominee (with respect to interests of
participants) and the records of participants (with respect to interests of
persons other than participants).
So long as DTC or its nominee is the registered owner or holder of the
global exchange notes, DTC or such nominee, as the case may be, will be
considered the sole record owner or holder of the exchange notes represented by
such global exchange notes for all purposes under the Indenture and the exchange
notes. No beneficial owners of an interest in the global exchange notes will be
able to transfer that interest except in accordance with DTC's applicable
procedures.
D&B understands that, under existing industry practices, in the event that
we request any action of holders, or an owner of a beneficial interest in such
permanent global exchange note desires to give or take any action (including a
suit for repayment of principal, premium or interest) that a holder is entitled
to give or take under the notes, DTC would authorize the participants holding
the relevant beneficial interests to give or take such action or would otherwise
act upon the instruction of beneficial owners owning through them.
Payments of the principal of, premium, if any, and interest on the global
exchange notes will be made to DTC or its nominee, as the case may be, as the
registered owner thereof. Neither D&B, the trustee, nor any paying agent will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests in the global
exchange notes or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests.
The Company expects that DTC or its nominee, upon receipt of any payment of
principal, premium, if any, or interest in respect of the global exchange notes,
will credit participants' accounts with payments in amounts proportionate to
their respective beneficial ownership interests in the principal amount of such
global exchange notes, as shown on the records of DTC or its nominee. D&B also
expects that payments by participants to owners of beneficial interests in such
global exchange notes held through such participants will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers registered in the names of
nominees for such customers. Such payments will be the responsibility of such
participants.
Transfers between participants in DTC will be effected in the ordinary way
in accordance with DTC rules and will be settled in immediately available funds.
Neither we nor the trustee will have any responsibility for the performance
by DTC or its participants or indirect participants of their respective
obligations under the rules and procedures governing their operations.
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UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES
The following is a summary of certain U.S. federal income tax consequences
of the acquisition, ownership and disposition of exchange notes as of the date
hereof. Except where noted, this summary deals only with exchange notes that are
acquired in connection with this exchange offer and held as capital assets and
does not deal with taxpayers subject to special treatment under the U.S. federal
income tax laws, including if you are one of the following:
- a dealer in securities or currencies;
- a financial institution;
- an insurance company;
- a tax-exempt organization;
- a person holding the exchange notes as part of a hedging, integrated or
conversion transaction, a constructive sale or straddle;
- a trader in securities that has elected the mark-to-market method of
accounting for your securities;
- a person liable for alternative minimum tax; or
- a U.S. person whose "functional currency" is not the U.S. dollar.
If a partnership holds the exchange notes, the tax treatment of a partner
will generally depend upon the status of the partner and the activities of the
partnership. If you are a partner of a partnership holding the exchange notes,
you should consult your own tax advisors.
The discussion below is based upon the provisions of the Internal Revenue
Code of 1986, as amended (which we refer to as the Code), and regulations,
rulings and judicial decisions as of the date of this prospectus. Those
authorities may be changed, perhaps retroactively, so as to result in U.S.
federal income tax consequences different from those discussed below. We cannot
assure you that a change in law will not significantly alter the tax
considerations that we describe in this summary.
IF YOU ARE CONSIDERING THE ACQUISITION OF EXCHANGE NOTES, YOU SHOULD
CONSULT YOUR OWN TAX ADVISORS CONCERNING THE FEDERAL INCOME TAX CONSEQUENCES TO
YOU AND ANY CONSEQUENCES ARISING UNDER THE LAWS OF ANY FOREIGN, STATE, LOCAL OR
OTHER TAXING JURISDICTION.
CONSEQUENCES OF THE EXCHANGE
The exchange of the outstanding notes for the exchange notes in the
exchange offer, see "The Exchange Offer", will not constitute a taxable event to
you. Consequently, (1) you will not realize any gain or loss upon receipt of an
exchange note; (2) the holding period of the exchange note will include the
holding period of the outstanding note exchanged for the exchange note; and (3)
the adjusted basis of the exchange note will be the same as the adjusted tax
basis of the outstanding note exchanged for the exchange note immediately before
the exchange.
CONSEQUENCES TO U.S. HOLDERS
The following is a summary of certain U.S. federal tax consequences that
will apply to you if you are a U.S. holder of exchange notes.
Certain consequences to "non-U.S. holders" of exchange notes, who are
beneficial owners of exchange notes that are not U.S. holders, are described
below under "Consequences to Non-U.S. Holders."
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A "U.S. holder" means a beneficial owner of an exchange note that is:
- a citizen or resident of the United States;
- a corporation or partnership created or organized in or under the laws of
the United States or any political subdivision of the U.S.;
- an estate the income of which is subject to U.S. federal income taxation
regardless of its source; or
- a trust that (1) is subject to the primary supervision of a court within
the United States and the control of one or more U.S. persons or (2) has
a valid election in effect under applicable U.S. Treasury regulations to
be treated as a U.S. person.
Payments of Interest
Except as set forth below, interest on an exchange note will generally be
taxable to you as ordinary income from domestic sources at the time it is paid
or accrued in accordance with your method of accounting for tax purposes.
Amortizable Bond Premium
If you purchased an outstanding note for an amount in excess of the sum of
all amounts payable on the note after the purchase date other than stated
interest, you will be considered to have purchased the note at a "premium". You
generally may elect to amortize the premium over the remaining term of the
exchange note on a constant yield method as an offset to interest when
includible in income under your regular method of accounting. If you do not
elect to amortize bond premium, that premium will decrease the gain or increase
the loss you would otherwise recognize on disposition of the exchange note. Your
election to amortize premium on a constant yield method will also apply to all
debt obligations held or subsequently acquired by you on or after the first day
of the first taxable year to which the election applies. You may not revoke the
election without the consent of the Internal Revenue Service. You should consult
your own tax advisor before making this election.
Market Discount
If you purchased an outstanding note for an amount that is less than its
stated redemption price at maturity, the amount will be treated as "market
discount" for United States federal income tax purposes, unless that difference
is less than a specified de minimis amount. Under the market discount rules, you
will be required to treat any payment, other than stated interest, on, or any
gain on the sale, exchange, retirement or other disposition of, an exchange note
as ordinary income to the extent of the market discount that you have not
previously included in income and are treated as having accrued on the exchange
note at the time of its payment or disposition. In addition, you may be required
to defer, until the maturity of the exchange note or its earlier disposition in
a taxable transaction, the deduction of all or a portion of the interest expense
on any indebtedness attributable to the exchange note.
Any market discount will be considered to accrue ratably during the period
from the date of acquisition to the maturity date of the exchange note, unless
you elect to accrue on a constant yield interest method. You may elect to
include market discount in income currently as it accrues, on either a ratable
or constant yield interest method, in which case the rule described above
regarding deferral of interest deductions will not apply. Your election to
include market discount in income currently, once made, applies to all market
discount obligations acquired by you on or after the first taxable year to which
your election applies and may not be revoked without the consent of the Internal
Revenue Service. You should consult your own tax advisor before making this
election.
Sale, Exchange and Retirement of Notes
When you sell, exchange or retire an exchange note, you will recognize gain
or loss equal to the difference between the amount you receive (less an amount
equal to any accrued interest you have not previously included in income, which
will be taxable as interest income) and your adjusted basis in the exchange
note.
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Except as described above with respect to market discount, your gain or loss
realized on the sale, exchange or retirement of an exchange note will generally
be treated as capital gain or loss, and will be long-term capital gain or loss
if at the time of the sale, exchange or retirement of an exchange note, you have
held the exchange note for more than one year. Long-term capital gains of
individuals are eligible for reduced rates of taxation. The deductibility of
capital losses is subject to limitations.
CONSEQUENCES TO NON-U.S. HOLDERS
The following is a summary of certain U.S. federal income tax consequences
that will apply to you if you are a non-U.S. holder of exchange notes. This
summary does not represent a detailed description of the federal income tax
consequences to you in light of your particular circumstances. In addition, it
does not deal with non-U.S. holders that are subject to special treatment under
the U.S. federal income tax laws (including if you are a controlled foreign
corporation, passive foreign investment company, foreign personal holding
company, a corporation that accumulates earnings to avoid federal income tax, or
in certain circumstances, a United States expatriate).
U.S. Federal Withholding Tax
The 30% U.S. federal withholding tax will not apply to any payment of
principal or interest on the exchange notes provided that:
- you do not actually, or constructively, own 10% or more of the total
combined voting power of all classes of our voting stock within the
meaning of the Code and applicable U.S. Treasury regulations;
- you are not a controlled foreign corporation that is related to us
through stock ownership;
- you are not a bank whose receipt of interest on the exchange notes is
described in section 881(c)(3)(A) of the Code; and
- (a) you provide your name and address on an Internal Revenue Service Form
W-BEN (or other applicable form), and certify, under penalties of
perjury, that you are not a United States person or (b) you hold the
exchange notes through certain foreign intermediaries and you satisfy the
certification requirements of applicable U.S. Treasury regulations.
Special certification rules apply to certain non-U.S. holders that are
entities rather than individuals.
If you cannot satisfy the requirements described above, payments of
interest made to you will be subject to the 30% U.S. federal withholding tax,
unless you provide us with a properly executed (1) Internal Revenue Service Form
W8-BEN (or other applicable form) claiming an exemption from, or reduction in,
withholding under the benefit of an applicable tax treaty; or (2) Internal
Revenue Service Form W-8ECI (or successor form) stating that interest paid on an
exchange note is not subject to withholding tax because it is effectively
connected with your conduct of a trade or business in the United States, as
described below under "U.S. Federal Income Tax."
The 30% U.S. federal withholding tax will not generally apply to any gain
that you realize on the sale, exchange, retirement or other disposition of the
exchange notes.
U.S. Federal Estate Tax
Your estate will not be subject to U.S. federal estate tax on exchange
notes beneficially owned by you at the time of your death, provided that you are
not a U.S. citizen or resident (as specifically defined for U.S. federal estate
tax purposes) and (1) you do not own 10% or more of the total combined voting
power of all classes of our voting stock (within the meaning of the Code and the
U.S. Treasury regulations) and (2) interest on the exchange note would not have
been, if received at the time of your death, effectively connected with the
conduct by you of a trade or business in the United States.
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U.S. Federal Income Tax
If you are engaged in a trade or business in the United States and interest
on the exchange notes is effectively connected with the conduct of that trade or
business, you will be subject to U.S. income tax on that interest on a net
income basis in the same manner as if you were a U.S. person as defined under
the Code, although that interest income will be exempt from the 30% U.S. federal
withholding tax. In addition, if you are a foreign corporation, you may be
subject to a branch profits tax equal to 30% (or lower applicable treaty rate)
of your earnings and profits for the taxable year, subject to certain
adjustments. For this purpose, interest on the exchange notes will be included
in earnings and profits.
Any gain realized on the disposition of an exchange note generally will not
be subject to U.S. federal income tax unless:
- the gain is effectively connected with the conduct by you of a trade or
business in the United States, or
- you are an individual who is present in the United States for 183 days or
more in the taxable year of that disposition, and other conditions are
met.
INFORMATION REPORTING AND BACKUP WITHHOLDING
U.S. Holders
In general, information reporting requirements will apply to certain
payments of principal and interest paid on the exchange notes and to the
proceeds of sale of an exchange note made to you, unless you are an exempt
recipient, such as a corporation. A 31% backup withholding tax will apply to
those payments if you fail to provide a taxpayer identification number, a
certification of exempt status, or fail to report in full dividend and interest
income.
Any amounts withheld under the backup withholding rules will be allowed as
a refund or a credit against your United States federal income tax liability
provided the required information is furnished to the Internal Revenue Service.
Non-U.S. Holders
In general, you will not be subject to backup withholding and information
reporting with respect to payments that we make to you provided that we do not
have actual knowledge that you are a United States person and we have received
from you the statement described above in the fourth bullet point under
"Consequences to Non-U.S. Holders -- U.S. Federal Withholding Tax."
In addition, you will not be subject to backup withholding or information
reporting with respect to the proceeds of the sale of an exchange note within
the United States or conducted through U.S.-related financial intermediaries, if
the payor receives the statement described above and does not have actual
knowledge that you are a United States person, as defined under the Code, or you
otherwise establish an exemption.
Any amounts withheld under the backup withholding rules will be allowed as
a refund or a credit against your United States federal income tax liability
provided the required information is furnished to the Internal Revenue Service.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange notes for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such exchange notes. This
prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of exchange notes received in
exchange for outstanding notes where such outstanding notes were acquired as a
result of market-making activities or other trading activities. To the extent
any such broker-dealer participates in the exchange offer, D&B has agreed that
for a period of 90 days after the expiration date of the exchange offer, they
will make this prospectus, as amended or supplemented, available to such
broker-dealer for use in connection with any such resale, and will promptly send
additional copies of this prospectus and any amendment or supplement to this
prospectus to any broker-dealer that requests such documents.
D&B will not receive any proceeds from any sale of exchange notes by
broker-dealers. Exchange notes received by broker-dealers for their own account
pursuant to the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the exchange notes or a combination of such methods of
resale, at prevailing market prices at the time of resale, at prices related to
such prevailing market prices or at negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer or the purchasers or any such exchange notes. Any broker-dealer
that resells exchange notes that were received by it for its own account
pursuant to the exchange offer and any broker or dealer that participates in a
distribution of such exchange notes may be deemed to be an "underwriter" within
the meaning of the Securities Act and any profit on any such resale of exchange
notes and any commissions or concessions received by any such persons may be
deemed to be underwriting compensation under the Securities Act. The letter of
transmittal states that, by acknowledging that it will deliver and by delivering
a prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 90 days from the date on which the exchange offer is
consummated, or such shorter period as will terminate when all outstanding notes
acquired by broker-dealers for their own accounts as a result of market-making
activities or other trading activities have been exchanged for exchange notes
and such exchange notes have been resold by such broker-dealers, D&B will
promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests such documents
in the letter of transmittal. D&B has agreed to pay certain expenses incident to
the exchange offer (including the expenses of one counsel for the holders of the
outstanding securities) other than commissions or concessions of any
broker-dealers and will indemnify the holders of the outstanding notes against
certain liabilities, including certain liabilities that may arise under the
Securities Act.
LEGAL MATTERS
The validity of the exchange notes being offered hereby and certain other
legal matters in connection with the Exchange Offer are being passed upon for
D&B by Simpson Thacher & Bartlett, New York, New York.
INDEPENDENT PUBLIC ACCOUNTANTS
The financial statements as of December 31, 2000 and 1999 and for each of
the three years in the period ended December 31, 2000 incorporated in this
prospectus by reference to the Annual Report on Form 10-K for the year ended
December 31, 2000, have been audited by PricewaterhouseCoopers LLP, independent
accountants, as stated in their report appearing therein.
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$300,000,000
THE DUN & BRADSTREET CORPORATION
OFFER TO EXCHANGE UP TO
$300,000,000 OF ITS
6.625% SERIES B SENIOR NOTES DUE 2006
FOR ANY AND ALL OF ITS OUTSTANDING
$300,000,000
6.625% SENIOR NOTES DUE 2006
UNTIL , 2001 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE EXCHANGE NOTES, WHETHER OR NOT
PARTICIPATING IN THEIR DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Restated Certificate of Incorporation provides that the
Company shall indemnify and advance expenses to its currently acting and its
former directors, officers, employees or agents to the fullest extent permitted
by the Delaware General Corporation Law (the "Delaware Law"), as amended from
time to time.
Section 145 of the Delaware Law provides that a corporation may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. A similar standard of care
is applicable in the case of derivative actions, except that Delaware law
restricts indemnification to expenses (including attorneys' fees) actually and
reasonably incurred in connection with the defense or settlement of such an
action or suit and then, where such person is adjudged to be liable to the
corporation, only if and to the extent that the Court of Chancery of the State
of Delaware or the court in which such action was brought determines that he is
fairly and reasonably entitled to such indemnity, and then only for such
expenses as the court shall deem proper.
The Delaware Law also permits a Delaware corporation to limit each
director's liability to the Company or its stockholders for monetary damages
except (i) for any breach of the director's duty of loyalty to the corporation
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware Law providing for liability of directors for
unlawful payment of dividends or unlawful stock purchases or redemption, or (iv)
for any transaction from which a director derived an improper personal benefit.
The Restated Certificate of Incorporation provides for the limitation of the
personal liability of the directors of the Company for monetary damages to the
fullest extent permitted by the Delaware Law, as amended from time to time. The
effect of this provision is to eliminate the personal liability of directors for
monetary damages for actions involving a breach of their fiduciary duty of care,
including any such actions involving gross negligence.
For information concerning the Company's undertaking to submit to
adjudication the issue of indemnification for violation of the securities laws,
see Item 22 hereof.
The Company maintains insurance, at its expense, to protect any director or
officer of the Company against certain expenses, liabilities or losses.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) See the Exhibit Index included immediately preceding the exhibits to
this Registration Statement.
ITEM 22. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
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(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof), which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual reports pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, The
Dun & Bradstreet Corporation has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in The City
of Murray Hill, State of New Jersey, on May 22, 2001.
THE DUN & BRADSTREET CORPORATION
BY: /s/ R. E. PARKER
------------------------------------
Roxanne E. Parker
Vice President -- Treasury and
Investor Relations
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENT, that each person whose signature appears
below constitutes and appoints Roxanne E. Parker, David J. Lewinter and Robert
J. Levin and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments to
the within registration statement on Form S-4 and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, and grants unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might and could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registrant Statement has been signed by the following persons in the
capacities indicated and on the dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
/s/ ALLAN Z. LOREN Chairman of the Board, Chief May 22, 2001
--------------------------------------------------- Executive Officer and President
Allan Z. Loren (Principal Executive Officer)
/s/ CHESTER J. GEVEDA, JR. Vice President and Controller and May 22, 2001
--------------------------------------------------- Acting Chief Financial Officer
Chester J. Geveda, Jr. (Principal Financial Officer and
Principal Accounting Officer)
/s/ VICTOR A. PELSON Director May 22, 2001
---------------------------------------------------
Victor A. Pelson
/s/ RONALD L. KUEHN, JR. Director May 22, 2001
---------------------------------------------------
Ronald L. Kuehn, Jr.
/s/ MICHAEL R. QUINLAN Director May 22, 2001
---------------------------------------------------
Michael R. Quinlan
/s/ NAOMI D. SELIGMAN Director May 22, 2001
---------------------------------------------------
Naomi D. Seligman
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
4.1 Indenture dated as of March 22, 2001 (the "Indenture")
between The Dun & Bradstreet Corporation and The Bank of New
York, as Trustee
4.2 Registration Rights Agreement dated March 22, 2001 among The
Dun & Bradstreet Corporation, Chase Securities Inc., Bear,
Stearns & Co. Inc., BNY Capital Markets, Inc. and Salomon
Smith Barney Inc.
4.3 Form of 6.625% Senior Notes due 2006 (the "Outstanding
Notes")
4.4 Form of 6.625% Series B Senior Notes due 2006 (the "Exchange
Notes")
5 Opinion of Simpson Thacher & Bartlett
23.1 Consent of Simpson Thacher & Bartlett (included as part of
its opinion filed as Exhibit 5 hereto)
23.2 Consent of PricewaterhouseCoopers LLP, independent certified
public accountants
24 Powers of Attorney (included on pages immediately preceding
this Exhibit Index)
25 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of The Bank of New York as Trustee for the
Indenture
99.1 Form of Letter of Transmittal for the Outstanding Notes
99.2 Form of Notice of Guaranteed Delivery for the Outstanding
Notes