ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 22-3725387 |
(State of incorporation) | (I.R.S. Employer Identification No.) |
103 JFK Parkway, Short Hills, NJ | 07078 |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ý | Accelerated filer | o | Non-accelerated filer | o | Smaller reporting company | o |
Title of Class | Shares Outstanding at June 30, 2013 | |
Common Stock, | 38,797,378 | |
par value $0.01 per share |
Page | ||
PART I. FINANCIAL INFORMATION | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II. OTHER INFORMATION | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 5. | ||
Item 6. | ||
Item 1. | Financial Statements |
The Dun & Bradstreet Corporation Consolidated Statements of Operations and Comprehensive Income (Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(Amounts in millions, except per share data) | |||||||||||||||
Revenue | $ | 386.4 | $ | 383.9 | $ | 767.4 | $ | 786.7 | |||||||
Operating Expenses | 130.1 | 126.4 | 256.3 | 271.0 | |||||||||||
Selling and Administrative Expenses | 142.3 | 139.2 | 288.7 | 293.7 | |||||||||||
Depreciation and Amortization | 17.9 | 19.7 | 36.2 | 39.9 | |||||||||||
Restructuring Charge | 2.2 | 9.3 | 4.5 | 18.4 | |||||||||||
Operating Costs | 292.5 | 294.6 | 585.7 | 623.0 | |||||||||||
Operating Income | 93.9 | 89.3 | 181.7 | 163.7 | |||||||||||
Interest Income | 0.4 | 0.2 | 0.6 | 0.3 | |||||||||||
Interest Expense | (10.0 | ) | (9.2 | ) | (19.9 | ) | (18.3 | ) | |||||||
Other Income (Expense) - Net | (0.1 | ) | — | (1.3 | ) | 6.6 | |||||||||
Non-Operating Income (Expense) - Net | (9.7 | ) | (9.0 | ) | (20.6 | ) | (11.4 | ) | |||||||
Income Before Provision for Income Taxes and Equity in Net Income of Affiliates | 84.2 | 80.3 | 161.1 | 152.3 | |||||||||||
Less: Provision for Income Taxes | 26.4 | 24.2 | 50.2 | 32.5 | |||||||||||
Equity in Net Income of Affiliates | 0.6 | 0.4 | 1.1 | 0.8 | |||||||||||
Net Income | 58.4 | 56.5 | 112.0 | 120.6 | |||||||||||
Less: Net (Income) Loss Attributable to the Noncontrolling Interest | (0.9 | ) | — | (1.6 | ) | (0.7 | ) | ||||||||
Net Income Attributable to D&B | $ | 57.5 | $ | 56.5 | $ | 110.4 | $ | 119.9 | |||||||
Basic Earnings Per Share of Common Stock Attributable to D&B Common Shareholders | $ | 1.46 | $ | 1.21 | $ | 2.76 | $ | 2.54 | |||||||
Diluted Earnings Per Share of Common Stock Attributable to D&B Common Shareholders | $ | 1.44 | $ | 1.20 | $ | 2.73 | $ | 2.52 | |||||||
Weighted Average Number of Shares Outstanding-Basic | 39.4 | 46.7 | 40.0 | 47.2 | |||||||||||
Weighted Average Number of Shares Outstanding-Diluted | 39.8 | 47.0 | 40.4 | 47.6 | |||||||||||
Cash Dividend Paid Per Common Share | $ | 0.40 | $ | 0.38 | $ | 0.80 | $ | 0.76 | |||||||
Other Comprehensive Income, Net of Tax | |||||||||||||||
Net Income (from above) | $ | 58.4 | $ | 56.5 | $ | 112.0 | $ | 120.6 | |||||||
Foreign Currency Translation Adjustments, no Tax Impact | (24.4 | ) | (37.3 | ) | (36.7 | ) | (7.7 | ) | |||||||
Defined Benefit Pension Plans: | |||||||||||||||
Prior Service Costs, Net of Tax Income (1) | (1.4 | ) | (2.0 | ) | (2.9 | ) | (3.5 | ) | |||||||
Actuarial Gain (Loss), Net of Tax Expense (2) | 6.9 | 6.7 | 13.9 | 12.1 | |||||||||||
Derivative Financial Instruments, No Tax Impact | — | 0.5 | — | 0.8 | |||||||||||
Comprehensive Income, Net of Tax | 39.5 | 24.4 | 86.3 | 122.3 | |||||||||||
Less: Comprehensive (Income) Loss Attributable to the Noncontrolling Interest | (0.8 | ) | 0.2 | (1.6 | ) | (0.6 | ) | ||||||||
Comprehensive Income Attributable to D&B | $ | 38.7 | $ | 24.6 | $ | 84.7 | $ | 121.7 |
(1) | Net of Tax Income of $0.8 million and $0.5 million during the three months ended June 30, 2013 and 2012, respectively. Net of Tax Income of $1.5 million and $1.3 million during the six months ended June 30, 2013 and 2012, respectively. |
(2) | Net of Tax Expense of $(3.5) million and $(1.6) million during the three months ended June 30, 2013 and 2012, respectively. Net of Tax Expense of $(7.0) million and $(4.5) million during the six months ended June 30, 2013 and 2012, respectively. |
The Dun & Bradstreet Corporation Consolidated Balance Sheets (Unaudited) | |||||||
June 30, 2013 | December 31, 2012 | ||||||
(Amounts in millions, except per share data) | |||||||
ASSETS | |||||||
Current Assets | |||||||
Cash and Cash Equivalents | $ | 196.5 | $ | 149.1 | |||
Accounts Receivable, Net of Allowance of $23.3 at June 30, 2013 and $27.3 at December 31, 2012 | 359.9 | 514.3 | |||||
Other Receivables | 9.5 | 6.5 | |||||
Prepaid Taxes | 7.9 | — | |||||
Deferred Income Tax | 21.9 | 26.3 | |||||
Other Prepaids | 25.1 | 46.8 | |||||
Other Current Assets | 7.8 | 4.4 | |||||
Total Current Assets | 628.6 | 747.4 | |||||
Non-Current Assets | |||||||
Property, Plant and Equipment, Net of Accumulated Depreciation of $82.5 at June 30, 2013 and $81.2 at December 31, 2012 | 39.1 | 40.6 | |||||
Computer Software, Net of Accumulated Amortization of $443.5 at June 30, 2013 and $431.9 at December 31, 2012 | 144.9 | 140.9 | |||||
Goodwill | 591.0 | 611.1 | |||||
Deferred Income Tax | 239.7 | 247.8 | |||||
Other Receivables | 45.3 | 47.1 | |||||
Other Intangibles | 86.8 | 99.3 | |||||
Other Non-Current Assets | 63.1 | 57.6 | |||||
Total Non-Current Assets | 1,209.9 | 1,244.4 | |||||
Total Assets | $ | 1,838.5 | $ | 1,991.8 | |||
LIABILITIES | |||||||
Current Liabilities | |||||||
Accounts Payable | $ | 41.8 | $ | 40.9 | |||
Accrued Payroll | 56.6 | 96.5 | |||||
Accrued Income Tax | 0.8 | 9.5 | |||||
Short-Term Debt | 0.1 | 0.2 | |||||
Other Accrued and Current Liabilities (Note 6) | 124.0 | 118.9 | |||||
Deferred Revenue | 579.6 | 610.7 | |||||
Total Current Liabilities | 802.9 | 876.7 | |||||
Pension and Postretirement Benefits | 646.1 | 668.3 | |||||
Long-Term Debt | 1,408.0 | 1,290.7 | |||||
Liabilities for Unrecognized Tax Benefits | 104.5 | 105.9 | |||||
Other Non-Current Liabilities | 65.4 | 64.5 | |||||
Total Liabilities | 3,026.9 | 3,006.1 | |||||
Contingencies (Note 7) | |||||||
EQUITY | |||||||
D&B SHAREHOLDERS’ EQUITY (DEFICIT) | |||||||
Series A Junior Participating Preferred Stock, $0.01 par value per share, authorized - 0.5 shares; outstanding - none | — | — | |||||
Preferred Stock, $0.01 par value per share, authorized - 9.5 shares; outstanding - none | — | — | |||||
Series Common Stock, $0.01 par value per share, authorized - 10.0 shares; outstanding - none | — | — | |||||
Common Stock, $0.01 par value per share, authorized - 200.0 shares; issued - 81.9 shares | 0.8 | 0.8 | |||||
Capital Surplus | 267.6 | 261.7 | |||||
Retained Earnings | 2,483.6 | 2,405.5 | |||||
Treasury Stock, at cost, 43.1 shares at June 30, 2013 and 40.6 shares at December 31, 2012 | (3,067.3 | ) | (2,833.3 | ) | |||
Accumulated Other Comprehensive Income (Loss) | (877.8 | ) | (852.1 | ) | |||
Total D&B Shareholders’ Equity (Deficit) | (1,193.1 | ) | (1,017.4 | ) | |||
Noncontrolling Interest | 4.7 | 3.1 | |||||
Total Equity (Deficit) | (1,188.4 | ) | (1,014.3 | ) | |||
Total Liabilities and Shareholders’ Equity (Deficit) | $ | 1,838.5 | $ | 1,991.8 |
The Dun & Bradstreet Corporation Consolidated Statements of Cash Flows (Unaudited) | |||||||
Six Months Ended | |||||||
June 30, | |||||||
2013 | 2012 | ||||||
(Amounts in millions) | |||||||
Cash Flows from Operating Activities: | |||||||
Net Income | $ | 112.0 | $ | 120.6 | |||
Reconciliation of Net Income to Net Cash Provided by Operating Activities: | |||||||
Depreciation and Amortization | 36.2 | 39.9 | |||||
Amortization of Unrecognized Pension Loss | 16.5 | 11.9 | |||||
(Gain) Loss from Sales of Business / Investments | — | (6.0 | ) | ||||
Impairment of Assets | — | 16.1 | |||||
Income Tax Benefit from Stock-Based Awards | 6.4 | 3.7 | |||||
Excess Tax Benefit on Stock-Based Awards | (1.0 | ) | (0.6 | ) | |||
Equity Based Compensation | 6.8 | 5.8 | |||||
Restructuring Charge | 4.5 | 18.4 | |||||
Restructuring Payments | (7.4 | ) | (13.3 | ) | |||
Deferred Income Taxes, Net | 0.5 | 4.8 | |||||
Accrued Income Taxes, Net | (18.9 | ) | (28.5 | ) | |||
Changes in Current Assets and Liabilities: | |||||||
(Increase) Decrease in Accounts Receivable | 146.6 | 128.4 | |||||
(Increase) Decrease in Other Current Assets | 18.0 | 21.2 | |||||
Increase (Decrease) in Deferred Revenue | (25.4 | ) | (22.8 | ) | |||
Increase (Decrease) in Accounts Payable | (0.8 | ) | 12.7 | ||||
Increase (Decrease) in Accrued Liabilities | (37.9 | ) | (59.0 | ) | |||
Changes in Non-Current Assets and Liabilities: | |||||||
(Increase) Decrease in Other Long-Term Assets | (5.4 | ) | 3.3 | ||||
Net Increase (Decrease) in Long-Term Liabilities | (16.1 | ) | (12.9 | ) | |||
Net, Other Non-Cash Adjustments | 0.1 | (0.1 | ) | ||||
Net Cash Provided by Operating Activities | 234.7 | 243.6 | |||||
Cash Flows from Investing Activities: | |||||||
Proceeds from Sales of Businesses, Net of Cash Divested | — | 7.9 | |||||
Cash Settlements of Foreign Currency Contracts | (5.1 | ) | 1.8 | ||||
Capital Expenditures | (4.5 | ) | (1.1 | ) | |||
Additions to Computer Software and Other Intangibles | (22.2 | ) | (33.1 | ) | |||
Reimbursement of Proceeds Related to a Divested Business | (0.1 | ) | — | ||||
Net, Other | 0.1 | 0.1 | |||||
Net Cash Used in Investing Activities | (31.8 | ) | (24.4 | ) | |||
Cash Flows from Financing Activities: | |||||||
Payments for Purchases of Treasury Shares | (283.1 | ) | (204.0 | ) | |||
Net Proceeds from Stock-Based Awards | 47.2 | 8.5 | |||||
Payments of Dividends | (32.0 | ) | (35.7 | ) | |||
Proceeds from Borrowings on Credit Facilities | 350.2 | 376.7 | |||||
Payments of Borrowings on Credit Facilities | (232.4 | ) | (327.5 | ) | |||
Excess Tax Benefit on Stock-Based Awards | 1.0 | 0.6 | |||||
Capital Lease and Other Long-Term Financing Obligation Payment | (0.5 | ) | (1.5 | ) | |||
Net, Other | 2.6 | (0.3 | ) | ||||
Net Cash Used in Financing Activities | (147.0 | ) | (183.2 | ) | |||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | (8.5 | ) | (1.8 | ) | |||
Increase in Cash and Cash Equivalents | 47.4 | 34.2 | |||||
Cash and Cash Equivalents, Beginning of Period | 149.1 | 84.4 | |||||
Cash and Cash Equivalents, End of Period | $ | 196.5 | $ | 118.6 | |||
Supplemental Disclosure of Cash Flow Information: | |||||||
Cash Paid for: | |||||||
Income Taxes, Net of Refunds | $ | 62.3 | $ | 52.5 | |||
Interest | $ | 19.5 | $ | 12.4 |
The Dun & Bradstreet Corporation Consolidated Statements of Shareholders’ Equity (Deficit) (Unaudited) | |||||||||||||||||||||||||||||||||||||||
For the Six Months Ended June 30, 2013 and 2012 | |||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | |||||||||||||||||||||||||||||||||||||||
Common Stock ($0.01 Par Value) | Capital Surplus | Retained Earnings | Treasury Stock | Cumulative Translation Adjustment | Minimum Pension Liability Adjustment | Derivative Financial Instrument | Total D&B Shareholders’ Equity (Deficit) | Noncontrolling Interest | Total Equity (Deficit) | ||||||||||||||||||||||||||||||
Balance, December 31, 2011 | $ | 0.8 | $ | 239.0 | $ | 2,179.3 | $ | (2,356.3 | ) | $ | (168.3 | ) | $ | (638.4 | ) | $ | — | $ | (743.9 | ) | $ | 3.7 | $ | (740.2 | ) | ||||||||||||||
Net Income | — | — | 119.9 | — | — | — | — | 119.9 | 0.7 | 120.6 | |||||||||||||||||||||||||||||
Payment to Noncontrolling Interest | — | — | — | — | — | — | — | — | (0.2 | ) | (0.2 | ) | |||||||||||||||||||||||||||
Sale of Noncontrolling Interest | — | — | — | — | — | — | — | — | (0.3 | ) | (0.3 | ) | |||||||||||||||||||||||||||
Equity-Based Plans | — | 20.8 | — | 14.0 | — | — | — | 34.8 | — | 34.8 | |||||||||||||||||||||||||||||
Treasury Shares Acquired | — | — | — | (204.0 | ) | — | — | — | (204.0 | ) | — | (204.0 | ) | ||||||||||||||||||||||||||
Pension Adjustments, net of tax of $3.2 | — | — | — | — | — | 8.6 | — | 8.6 | — | 8.6 | |||||||||||||||||||||||||||||
Dividend Declared | — | — | (35.9 | ) | — | — | — | — | (35.9 | ) | — | (35.9 | ) | ||||||||||||||||||||||||||
Adjustments to Legacy Tax Matters | — | 1.6 | — | — | — | — | — | 1.6 | — | 1.6 | |||||||||||||||||||||||||||||
Change in Cumulative Translation Adjustment | — | — | — | — | (7.6 | ) | — | — | (7.6 | ) | (0.1 | ) | (7.7 | ) | |||||||||||||||||||||||||
Derivative Financial Instruments, no tax impact | — | — | — | — | — | — | 0.8 | 0.8 | — | 0.8 | |||||||||||||||||||||||||||||
Balance, June 30, 2012 | $ | 0.8 | $ | 261.4 | $ | 2,263.3 | $ | (2,546.3 | ) | $ | (175.9 | ) | $ | (629.8 | ) | $ | 0.8 | $ | (825.7 | ) | $ | 3.8 | $ | (821.9 | ) | ||||||||||||||
Balance, December 31, 2012 | $ | 0.8 | $ | 261.7 | $ | 2,405.5 | $ | (2,833.3 | ) | $ | (151.2 | ) | $ | (701.0 | ) | $ | 0.1 | $ | (1,017.4 | ) | $ | 3.1 | $ | (1,014.3 | ) | ||||||||||||||
Net Income | — | — | 110.4 | — | — | — | — | 110.4 | 1.6 | 112.0 | |||||||||||||||||||||||||||||
Equity-Based Plans | — | 5.9 | — | 49.1 | — | — | — | 55.0 | — | 55.0 | |||||||||||||||||||||||||||||
Treasury Shares Acquired | — | — | — | (283.1 | ) | — | — | — | (283.1 | ) | — | (283.1 | ) | ||||||||||||||||||||||||||
Pension Adjustments, net of tax of $5.5 | — | — | — | — | — | 11.0 | — | 11.0 | — | 11.0 | |||||||||||||||||||||||||||||
Dividend Declared | — | — | (32.3 | ) | — | — | — | — | (32.3 | ) | — | (32.3 | ) | ||||||||||||||||||||||||||
Change in Cumulative Translation Adjustment | — | — | — | — | (36.7 | ) | — | — | (36.7 | ) | — | (36.7 | ) | ||||||||||||||||||||||||||
Balance, June 30, 2013 | $ | 0.8 | $ | 267.6 | $ | 2,483.6 | $ | (3,067.3 | ) | $ | (187.9 | ) | $ | (690.0 | ) | $ | 0.1 | $ | (1,193.1 | ) | $ | 4.7 | $ | (1,188.4 | ) |
Note 1 -- | Basis of Presentation |
• | DNBi subscription plans - interactive, customizable online application that offers our customers real time access to our most complete and up-to-date global DUNSRight information, comprehensive monitoring and portfolio analysis. DNBi subscription plans are contracts that allow customers' unlimited use, within pre-defined ranges; |
• | Non-DNBi subscription plans - subscription contracts which provide increased access to our risk management reports and data to help customers increase their profitability while mitigating their risk. The non-DNBi subscription plans allow customers' unlimited use, within pre-defined ranges; and |
• | Projects and other risk management solutions - all other revenue streams. This includes, for example, our Business Information Report, our Comprehensive Report, our International Report, and D&B Direct. |
Note 2 -- | Recent Accounting Pronouncements |
• | Severance and termination costs of $2.1 million in accordance with the provisions of ASC 712-10 were recorded. Approximately 20 employees were impacted. Of these 20 employees, approximately 15 employees exited the Company in the second quarter of 2013, with the remaining primarily to exit in the third quarter of 2013. The cash payments for these employees will be substantially completed by the fourth quarter of 2013; and |
• | Lease termination obligations, other exit costs including those to consolidate or close facilities and asset impairments of $0.1 million. |
• | Severance and termination costs of $8.1 million and $1.1 million in accordance with the provisions of ASC 712-10 and ASC 420-10, respectively, were recorded. Approximately 500 employees were impacted. Of these 500 employees, approximately 435 employees exited the Company in the second quarter of 2012, with the remaining primarily having exited in the second half of 2012. The cash payments for these employees were substantially completed by the fourth quarter of 2012; and |
• | Lease termination obligations, other costs to consolidate or close facilities and other exit costs of $0.1 million. |
• | Severance and termination costs of $2.7 million in accordance with the provisions of ASC 712-10 were recorded. Approximately 65 employees were impacted. Of these 65 employees, approximately 50 employees exited the Company in the first half of 2013, with the remaining to exit in the second half of 2013. The cash payments for these employees will be substantially completed by the fourth quarter of 2013; and |
• | Lease termination obligations, other costs to consolidate or close facilities and other exit costs of $1.8 million. |
• | Severance and termination costs of $11.2 million and $4.7 million in accordance with the provisions of ASC 712-10 and ASC 420-10, respectively, were recorded. Approximately 620 employees were impacted. Of these 620 employees, approximately 555 employees exited the Company in the first half of 2012, with the remaining primarily having exited in the second half of 2012. The cash payments for these employees were substantially completed by the fourth quarter of 2012; and |
• | Lease termination obligations, other costs to consolidate or close facilities and other exit costs of $2.5 million. |
Severance and Termination | Lease Termination Obligations and Other Exit Costs | Total | |||||||||
Restructuring Charges: | |||||||||||
Balance Remaining as of December 31, 2012 | $ | 9.4 | $ | 2.3 | $ | 11.7 | |||||
Charge Taken during First Quarter 2013 | 0.6 | 1.7 | 2.3 | ||||||||
Payments/Asset Impairment during First Quarter 2013 (1) | (3.7 | ) | (0.8 | ) | (4.5 | ) | |||||
Balance Remaining as of March 31, 2013 | $ | 6.3 | $ | 3.2 | $ | 9.5 | |||||
Charge Taken during Second Quarter 2013 | 2.1 | 0.1 | 2.2 | ||||||||
Payments during Second Quarter 2013 | (3.0 | ) | (0.4 | ) | (3.4 | ) | |||||
Balance Remaining as of June 30, 2013 | $ | 5.4 | $ | 2.9 | $ | 8.3 |
Severance and Termination | Lease Termination Obligations and Other Exit Costs | Total | |||||||||
Restructuring Charges: | |||||||||||
Balance Remaining as of December 31, 2011 | $ | 8.3 | $ | 2.2 | $ | 10.5 | |||||
Charge Taken during First Quarter 2012 | 6.7 | 2.4 | 9.1 | ||||||||
Payments during First Quarter 2012 | (4.0 | ) | (1.0 | ) | (5.0 | ) | |||||
Balance Remaining as of March 31, 2012 | $ | 11.0 | $ | 3.6 | $ | 14.6 | |||||
Charge Taken during Second Quarter 2012 | 9.2 | 0.1 | 9.3 | ||||||||
Payments during Second Quarter 2012 | (7.5 | ) | (0.8 | ) | (8.3 | ) | |||||
Balance Remaining as of June 30, 2012 | $ | 12.7 | $ | 2.9 | $ | 15.6 |
Note 4 -- | Notes Payable and Indebtedness |
June 30, 2013 | December 31, 2012 | ||||||
Debt Maturing Within One Year: | |||||||
Other | 0.1 | 0.2 | |||||
Total Debt Maturing Within One Year | $ | 0.1 | $ | 0.2 | |||
Debt Maturing After One Year: | |||||||
Long-Term Fixed-Rate Notes (Net of a $3.3 million and $3.5 million discount as of June 30, 2013 and December 31, 2012, respectively) | $ | 1,046.7 | $ | 1,046.5 | |||
Fair Value Adjustment Related to Hedged Debt | 3.2 | 3.8 | |||||
Credit Facility | 358.0 | 240.2 | |||||
Other | 0.1 | 0.2 | |||||
Total Debt Maturing After One Year | $ | 1,408.0 | $ | 1,290.7 |
Note 5 -- | Earnings Per Share |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net Income Attributable to D&B | $ | 57.5 | $ | 56.5 | $ | 110.4 | $ | 119.9 | |||||||
Less: Allocation to Participating Securities | — | — | — | — | |||||||||||
Net Income Attributable to D&B Common Shareholders – Basic and Diluted | $ | 57.5 | $ | 56.5 | $ | 110.4 | $ | 119.9 | |||||||
Weighted Average Number of Shares Outstanding – Basic | 39.4 | 46.7 | 40.0 | 47.2 | |||||||||||
Dilutive Effect of Our Stock Incentive Plans | 0.4 | 0.3 | 0.4 | 0.4 | |||||||||||
Weighted Average Number of Shares Outstanding – Diluted | 39.8 | 47.0 | 40.4 | 47.6 | |||||||||||
Basic Earnings Per Share of Common Stock Attributable to D&B Common Shareholders | $ | 1.46 | $ | 1.21 | $ | 2.76 | $ | 2.54 | |||||||
Diluted Earnings Per Share of Common Stock Attributable to D&B Common Shareholders | $ | 1.44 | $ | 1.20 | $ | 2.73 | $ | 2.52 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||||||||||
Program | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||
Shares | $ Amount | Shares | $ Amount | Shares | $ Amount | Shares | $ Amount | |||||||||||||||||||||
(Dollar amounts in millions) | (Dollar amounts in millions) | |||||||||||||||||||||||||||
Share Repurchase Programs (a) | 1,093,594 | $ | 100.1 | 2,968,703 | $ | 200.0 | 2,517,131 | $ | 215.1 | 2,968,703 | $ | 200.0 | ||||||||||||||||
Repurchases to Mitigate the Dilutive Effect of the Shares Issued Under Our Stock Incentive Plans and Employee Stock Purchase Plan (“ESPP”) (b) | 632,322 | 62.0 | 59,563 | 4.0 | 706,637 | 68.0 | 59,563 | 4.0 | ||||||||||||||||||||
Total Repurchases | 1,725,916 | $ | 162.1 | 3,028,266 | $ | 204.0 | 3,223,768 | $ | 283.1 | 3,028,266 | $ | 204.0 |
(a) | In August 2012, our Board of Directors approved a $500 million increase to our existing $500 million share repurchase program, for a total program authorization of $1 billion. The then existing $500 million program was announced in October 2011 and commenced in November 2011 upon completion of our then existing $200 million share repurchase program. We anticipate that this program will be completed by mid-2014. |
(b) | In May 2010, our Board of Directors approved a four-year, five million share repurchase program to mitigate the dilutive effect of the shares issued under our stock incentive plans and ESPP. This program commenced in October 2010 and expires in October 2014. |
June 30, 2013 | December 31, 2012 | ||||||
Restructuring Accruals | $ | 8.3 | $ | 11.7 | |||
Professional Fees | 36.4 | 37.4 | |||||
Operating Expenses | 26.0 | 28.9 | |||||
Other Accrued Liabilities (1) | 53.3 | 40.9 | |||||
$ | 124.0 | $ | 118.9 |
(1) | The increase in Other Accrued Liabilities was primarily attributed to the purchase of perpetual licenses of third party software. |
Pension Plans | Postretirement Benefit Obligations | ||||||||||||||||||||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||
Components of Net Periodic Cost (Income): | |||||||||||||||||||||||||||||||
Service Cost | $ | 1.3 | $ | 1.5 | $ | 2.6 | $ | 3.1 | $ | 0.2 | $ | 0.1 | $ | 0.4 | $ | 0.2 | |||||||||||||||
Interest Cost | 17.4 | 18.8 | 34.9 | 37.5 | 0.1 | 0.2 | 0.3 | 0.4 | |||||||||||||||||||||||
Expected Return on Plan Assets | (23.4 | ) | (24.9 | ) | (46.9 | ) | (49.7 | ) | — | — | — | — | |||||||||||||||||||
Amortization of Prior Service Cost (Credit) | 0.1 | 0.1 | 0.2 | 0.2 | (2.3 | ) | (2.5 | ) | (4.6 | ) | (5.0 | ) | |||||||||||||||||||
Recognized Actuarial Loss (Gain) | 10.8 | 8.9 | 21.7 | 17.7 | (0.4 | ) | (0.5 | ) | (0.8 | ) | (1.0 | ) | |||||||||||||||||||
Net Periodic Cost (Income) | $ | 6.2 | $ | 4.4 | $ | 12.5 | $ | 8.8 | $ | (2.4 | ) | $ | (2.7 | ) | $ | (4.7 | ) | $ | (5.4 | ) |
• | North America (which consists of our operations in the U.S. and Canada); |
• | Asia Pacific (which primarily consists of our operations in Australia, Greater China, India and Asia Pacific Worldwide Network); and |
• | Europe and Other International Markets (which primarily consists of operations in the UK, the Netherlands, Belgium, Latin America and European Worldwide Network). |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Revenue: | |||||||||||||||
North America | $ | 278.7 | $ | 279.0 | $ | 561.9 | $ | 564.5 | |||||||
Asia Pacific | 49.3 | 46.4 | 90.7 | 87.9 | |||||||||||
Europe and Other International Markets | 58.4 | 58.3 | 114.8 | 115.7 | |||||||||||
Consolidated Core | 386.4 | 383.7 | 767.4 | 768.1 | |||||||||||
Divested and Other Businesses | — | 0.2 | — | 18.6 | |||||||||||
Consolidated Total | $ | 386.4 | $ | 383.9 | $ | 767.4 | $ | 786.7 | |||||||
Operating Income (Loss): | |||||||||||||||
North America | 84.5 | 103.2 | 170.5 | 205.7 | |||||||||||
Asia Pacific | 8.4 | 5.6 | 10.8 | (5.5 | ) | ||||||||||
Europe and Other International Markets | 15.7 | 14.6 | 29.7 | 28.8 | |||||||||||
Total Segments | 108.6 | 123.4 | 211.0 | 229.0 | |||||||||||
Corporate and Other (1) | (14.7 | ) | (34.1 | ) | (29.3 | ) | (65.3 | ) | |||||||
Consolidated Total | 93.9 | 89.3 | 181.7 | 163.7 | |||||||||||
Non-Operating Income (Expense), Net (2) | (9.7 | ) | (9.0 | ) | (20.6 | ) | (11.4 | ) | |||||||
Income Before Provision for Income Taxes and Equity in Net Income of Affiliates | $ | 84.2 | $ | 80.3 | $ | 161.1 | $ | 152.3 |
(1) | The following table summarizes “Corporate and Other:” |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Corporate Costs | $ | (8.8 | ) | $ | (9.9 | ) | $ | (19.5 | ) | $ | (22.4 | ) | |||
Restructuring Expense | (2.2 | ) | (9.3 | ) | (4.5 | ) | (18.4 | ) | |||||||
Strategic Technology Investment or MaxCV | — | (10.5 | ) | — | (18.9 | ) | |||||||||
Legal and Other Professional Fees and Shut-Down Costs Related to Matters in China | (3.7 | ) | (4.4 | ) | (5.3 | ) | (5.6 | ) | |||||||
Total Corporate and Other | $ | (14.7 | ) | $ | (34.1 | ) | $ | (29.3 | ) | $ | (65.3 | ) |
(2) | The following table summarizes “Non-Operating Income (Expense):” |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Interest Income | $ | 0.4 | $ | 0.2 | $ | 0.6 | $ | 0.3 | |||||||
Interest Expense | (10.0 | ) | (9.2 | ) | (19.9 | ) | (18.3 | ) | |||||||
Other Income (Expense) - Net | (0.1 | ) | — | (1.3 | ) | 6.6 | |||||||||
Non-Operating Income (Expense) - Net | $ | (9.7 | ) | $ | (9.0 | ) | $ | (20.6 | ) | $ | (11.4 | ) |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Customer Solution Set Revenue: | |||||||||||||||
North America: | |||||||||||||||
Risk Management Solutions | $ | 168.1 | $ | 169.5 | $ | 334.1 | $ | 339.7 | |||||||
Sales & Marketing Solutions | 110.6 | 109.5 | 227.8 | 224.8 | |||||||||||
North America Core Revenue | 278.7 | 279.0 | 561.9 | 564.5 | |||||||||||
Divested and Other Businesses | — | — | — | — | |||||||||||
Total North America Revenue | 278.7 | 279.0 | 561.9 | 564.5 | |||||||||||
Asia Pacific: | |||||||||||||||
Risk Management Solutions | 42.6 | 38.7 | 78.2 | 73.5 | |||||||||||
Sales & Marketing Solutions | 6.7 | 7.7 | 12.5 | 14.4 | |||||||||||
Asia Pacific Core Revenue | 49.3 | 46.4 | 90.7 | 87.9 | |||||||||||
Divested and Other Businesses (3) | — | 0.2 | — | 18.6 | |||||||||||
Total Asia Pacific Revenue | 49.3 | 46.6 | 90.7 | 106.5 | |||||||||||
Europe and Other International Markets: | |||||||||||||||
Risk Management Solutions | 48.6 | 48.5 | 94.9 | 96.2 | |||||||||||
Sales & Marketing Solutions | 9.8 | 9.8 | 19.9 | 19.5 | |||||||||||
Europe and Other International Markets Core Revenue | 58.4 | 58.3 | 114.8 | 115.7 | |||||||||||
Divested and Other Businesses | — | — | — | — | |||||||||||
Total Europe and Other International Markets Revenue | 58.4 | 58.3 | 114.8 | 115.7 | |||||||||||
Consolidated Total: | |||||||||||||||
Risk Management Solutions | 259.3 | 256.7 | 507.2 | 509.4 | |||||||||||
Sales & Marketing Solutions | 127.1 | 127.0 | 260.2 | 258.7 | |||||||||||
Core Revenue | 386.4 | 383.7 | 767.4 | 768.1 | |||||||||||
Divested and Other Businesses (3) | — | 0.2 | — | 18.6 | |||||||||||
Consolidated Total Revenue | $ | 386.4 | $ | 383.9 | $ | 767.4 | $ | 786.7 |
(3) | During the fiscal year ended 2012, we: (a) completed the sales of: (i) the domestic portion of our Japanese operations to Tokyo Shoko Research Ltd. ("TSR Ltd."); and (ii) a research and advisory services business in India; and (b) the shut-down of our Roadway operations. These businesses have been classified as “Divested and Other Businesses.” These Divested and Other Businesses contributed less than 1% and 17% to our Asia Pacific total revenue for the three month and six month periods ended June 30, 2012, respectively. |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Divested and Other Businesses: | |||||||||||||||
Risk Management Solutions | $ | — | $ | 0.2 | $ | — | $ | 9.2 | |||||||
Sales & Marketing Solutions | — | — | — | 9.4 | |||||||||||
Total Divested and Other Businesses Revenue | $ | — | $ | 0.2 | $ | — | $ | 18.6 |
June 30, 2013 | December 31, 2012 | ||||||
Assets: | |||||||
North America (4) | $ | 737.6 | $ | 795.4 | |||
Asia Pacific (5) | 389.6 | 414.6 | |||||
Europe and Other International Markets (6) | 374.9 | 365.7 | |||||
Total Segments | 1,502.1 | 1,575.7 | |||||
Corporate and Other (7) | 336.4 | 416.1 | |||||
Consolidated Total | $ | 1,838.5 | $ | 1,991.8 | |||
Goodwill: | |||||||
North America | $ | 265.4 | $ | 266.5 | |||
Asia Pacific (8) | 217.8 | 234.0 | |||||
Europe and Other International Markets (8) | 107.8 | 110.6 | |||||
Consolidated Total | $ | 591.0 | $ | 611.1 |
(4) | The decrease in assets in the North America segment to $737.6 million at June 30, 2013 from $795.4 million at December 31, 2012 was primarily due to a decrease in accounts receivable partially offset by increases in cash and computer software. |
(5) | The decrease in assets in the Asia Pacific segment to $389.6 million at June 30, 2013 from $414.6 million at December 31, 2012 was primarily due to the negative impact of foreign currency translation. |
(6) | The increase in assets in the Europe and Other International Markets segment to $374.9 million at June 30, 2013 from $365.7 million at December 31, 2012 was primarily due to an increase in cash partially offset by a decrease in accounts receivable. |
(7) | The decrease in assets in Corporate and Other to $336.4 million at June 30, 2013 from $416.1 million at December 31, 2012 was primarily due to a decrease in cash primarily due to bond interest and dividend payments. |
(8) | The decrease in goodwill in the Asia Pacific segment to $217.8 million at June 30, 2013 from $234.0 million at December 31, 2012 was primarily due to the negative impact of foreign currency translation. The decrease in goodwill in the Europe and Other International Markets segment to $107.8 million at June 30, 2013 from $110.6 million at December 31, 2012 was primarily due to the negative impact of foreign currency translation. |
Asset Derivatives | Liability Derivatives | ||||||||||||||||||||||
June 30, 2013 | December 31, 2012 | June 30, 2013 | December 31, 2012 | ||||||||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||||||
Foreign exchange forward contracts | Other Current Assets | $ | 0.1 | Other Current Assets | $ | — | Other Accrued & Current Liabilities | $ | 0.5 | Other Accrued & Current Liabilities | $ | 0.4 | |||||||||||
Total derivatives not designated as hedging instruments | $ | 0.1 | $ | — | $ | 0.5 | $ | 0.4 | |||||||||||||||
Total Derivatives | $ | 0.1 | $ | — | $ | 0.5 | $ | 0.4 |
Gain or (Loss) Recognized in Income on Derivatives | ||||||||||||||||||||||||||||||||||||||
Derivatives in Fair Value Hedging Relationships | Location | For the Three Months Ended June 30, | For the Six Months Ended June 30, | Hedged Item | Location | For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||||||||
Interest rate contracts | Non-Operating Income (Expenses) – Net | $ | — | $ | — | $ | — | $ | 0.8 | Fixed- rate debt | Non-Operating Income (Expenses) – Net | $ | — | $ | — | $ | — | $ | (0.5 | ) |
Derivatives not Designated as Hedging Instruments | Location of Gain or (Loss) Recognized in Income on Derivatives | Amount of Gain or (Loss) Recognized in Income on Derivatives | |||||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Foreign exchange forward contracts | Non-Operating Income (Expenses) – Net | $ | 0.2 | $ | (3.6 | ) | $ | (5.2 | ) | $ | 1.9 | ||||||
Foreign exchange option contracts | Non-Operating Income (Expenses) – Net | $ | — | $ | 0.1 | $ | — | $ | (0.1 | ) |
Level Input: | Input Definition: |
Level I | Observable inputs utilizing quoted prices (unadjusted) for identical assets or liabilities in active markets at the measurement date. |
Level II | Inputs other than quoted prices included in Level I that are either directly or indirectly observable for the asset or liability through corroboration with market data at the measurement date. |
Level III | Unobservable inputs for the asset or liability in which little or no market data exists therefore requiring management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. |
Quoted Prices in Active Markets for Identical Assets (Level I) | Significant Other Observable Inputs (Level II) | Significant Unobservable Inputs (Level III) | Balance at June 30, 2013 | ||||||||||||
Assets: | |||||||||||||||
Cash Equivalents (1) | $ | 87.2 | $ | — | $ | — | $ | 87.2 | |||||||
Other Current Assets: | |||||||||||||||
Foreign Exchange Forwards (2) | $ | — | $ | 0.1 | $ | — | $ | 0.1 | |||||||
Liabilities: | |||||||||||||||
Other Accrued and Current Liabilities: | |||||||||||||||
Foreign Exchange Forwards (2) | $ | — | $ | 0.5 | $ | — | $ | 0.5 |
(1) | Cash equivalents represent fair value as it consists of highly liquid investments with an original maturity of three months or less. |
(2) | Primarily represents foreign currency forward contracts. Fair value is determined utilizing a market approach and considers a factor for nonperformance in the valuation. |
Quoted Prices in Active Markets for Identical Assets (Level I) | Significant Other Observable Inputs (Level II) | Significant Unobservable Inputs (Level III) | Balance at December 31, 2012 | ||||||||||||
Assets: | |||||||||||||||
Cash Equivalents (1) | $ | 58.1 | $ | — | $ | — | $ | 58.1 | |||||||
Liabilities: | |||||||||||||||
Other Accrued and Current Liabilities: | |||||||||||||||
Foreign Exchange Forwards (2) | $ | — | $ | 0.4 | $ | — | $ | 0.4 |
(1) | Cash equivalents represent fair value as it consists of highly liquid investments with an original maturity of three months or less. |
(2) | Primarily represents foreign currency forward contracts. Fair value is determined utilizing a market approach and considers a factor for nonperformance in the valuation. |
Balance at | |||||||||||||||
June 30, 2013 | December 31, 2012 | ||||||||||||||
Carrying Amount (Asset) Liability | Fair Value (Asset) Liability | Carrying Amount (Asset) Liability | Fair Value (Asset) Liability | ||||||||||||
Long-term Debt | $ | 1,046.7 | $ | 1,052.6 | $ | 1,046.5 | $ | 1,059.3 | |||||||
Credit Facilities | $ | 358.0 | $ | 358.7 | $ | 240.2 | $ | 237.7 |
Note 12 -- | Accumulated Other Comprehensive Income (Loss) |
Foreign Currency Translation Adjustments | Defined Benefit Pension Plans | Derivative Financial Instruments | Total | |||||||||||||
Balance, December 31, 2011 | $ | (168.3 | ) | $ | (638.4 | ) | $ | — | $ | (806.7 | ) | |||||
Other Comprehensive Income Before Reclassifications | (7.6 | ) | — | — | (7.6 | ) | ||||||||||
Amounts Reclassified From Accumulated Other Comprehensive Income, net of tax | — | 8.6 | 0.8 | 9.4 | ||||||||||||
Balance, June 30, 2012 | $ | (175.9 | ) | $ | (629.8 | ) | $ | 0.8 | $ | (804.9 | ) | |||||
Balance, December 31, 2012 | $ | (151.2 | ) | $ | (701.0 | ) | $ | 0.1 | $ | (852.1 | ) | |||||
Other Comprehensive Income Before Reclassifications | (36.7 | ) | — | — | (36.7 | ) | ||||||||||
Amounts Reclassified From Accumulated Other Comprehensive Income, net of tax | — | 11.0 | — | 11.0 | ||||||||||||
Balance, June 30, 2013 | $ | (187.9 | ) | $ | (690.0 | ) | $ | 0.1 | $ | (877.8 | ) |
Details About Accumulated Other Comprehensive Income Components | Affected Line Item in the Statement Where Net Income is Presented | Amount Reclassified from Accumulated Other Comprehensive Income | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||
Foreign Currency Translation Adjustments: | ||||||||||||||||||
Sale of Business | Other Income (Expense) – Net | $ | — | $ | — | $ | — | $ | — | |||||||||
Defined Benefit Pension Plans: | ||||||||||||||||||
Amortization of Prior Service Costs, Pretax | Selling and Administrative Expenses | $ | (1.7 | ) | $ | (1.9 | ) | $ | (3.3 | ) | $ | (3.6 | ) | |||||
Operating Expenses | (0.5 | ) | (0.6 | ) | (1.1 | ) | (1.2 | ) | ||||||||||
Amortization of Actuarial Gain/Loss | Selling and Administrative Expenses | 8.0 | 6.3 | 15.8 | 12.4 | |||||||||||||
Operating Expenses | 2.4 | 2.0 | 5.1 | 4.2 | ||||||||||||||
Total Before Tax | 8.2 | 5.8 | 16.5 | 11.8 | ||||||||||||||
Tax (Expense) or Benefit | (2.7 | ) | (1.1 | ) | (5.5 | ) | (3.2 | ) | ||||||||||
Total After Tax | $ | 5.5 | $ | 4.7 | $ | 11.0 | $ | 8.6 | ||||||||||
Derivative Financial Instruments: | ||||||||||||||||||
Amortization of Cash Flow Hedges | Interest Expense | $ | — | $ | 0.5 | $ | — | $ | 0.8 | |||||||||
Total Before Tax | — | 0.5 | — | 0.8 | ||||||||||||||
Tax (Expense) or Benefit | — | — | — | — | ||||||||||||||
Total After Tax | $ | — | $ | 0.5 | $ | — | $ | 0.8 | ||||||||||
Total Reclassifications for the Period, Net of Tax | $ | 5.5 | $ | 5.2 | $ | 11.0 | $ | 9.4 |
Note 13 -- | Divestitures and Other Businesses |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations |
• | DNBi subscription plans - interactive, customizable online application that offers our customers real time access to our most complete and up-to-date global DUNSRight information, comprehensive monitoring and portfolio analysis. DNBi subscription plans are contracts that allow customers' unlimited use, within pre-defined ranges; |
• | Non-DNBi subscription plans - subscription contracts which provide increased access to our risk management reports and data to help customers increase their profitability while mitigating their risk. The non-DNBi subscription plans allow customers' unlimited use, within pre-defined ranges; and |
• | Projects and other risk management solutions - all other revenue streams. This includes, for example, our Business Information Report, our Comprehensive Report, our International Report, and D&B Direct. |
• | North America (which consists of our operations in the U.S. and Canada); |
• | Asia Pacific (which primarily consists of our operations in Australia, Greater China, India and Asia Pacific Worldwide Network); and |
• | Europe and Other International Markets (which primarily consists of our operations in the UK, the Netherlands, Belgium, Latin America and European Worldwide Network). |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||
Total Revenue: | |||||||||||
North America | 72 | % | 73 | % | 73 | % | 72 | % | |||
Asia Pacific | 13 | % | 12 | % | 12 | % | 13 | % | |||
Europe and Other International Markets | 15 | % | 15 | % | 15 | % | 15 | % | |||
Core Revenue: | |||||||||||
North America | 72 | % | 73 | % | 73 | % | 74 | % | |||
Asia Pacific | 13 | % | 12 | % | 12 | % | 11 | % | |||
Europe and Other International Markets | 15 | % | 15 | % | 15 | % | 15 | % |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||
Total Revenue by Customer Solution Set (1): | |||||||||||
Risk Management Solutions | 67 | % | 67 | % | 66 | % | 65 | % | |||
Sales & Marketing Solutions | 33 | % | 33 | % | 34 | % | 33 | % | |||
Core Revenue by Customer Solution Set: | |||||||||||
Risk Management Solutions | 67 | % | 67 | % | 66 | % | 66 | % | |||
Sales & Marketing Solutions | 33 | % | 33 | % | 34 | % | 34 | % |
(1) | Our Divested and Other Businesses contributed less than 1% and 2% to our total consolidated revenue for the three month and six month periods ended June 30, 2012, respectively. See Note 10 and Note 13 to our unaudited consolidated financial statements included in Item 1. of this Quarterly Report on Form 10-Q for further detail. |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(Amounts in millions) | (Amounts in millions) | ||||||||||||||
Revenue: | |||||||||||||||
North America | $ | 278.7 | $ | 279.0 | $ | 561.9 | $ | 564.5 | |||||||
Asia Pacific | 49.3 | 46.4 | 90.7 | 87.9 | |||||||||||
Europe and Other International Markets | 58.4 | 58.3 | 114.8 | 115.7 | |||||||||||
Core Revenue | 386.4 | 383.7 | 767.4 | 768.1 | |||||||||||
Divested and Other Businesses | — | 0.2 | — | 18.6 | |||||||||||
Total Revenue | $ | 386.4 | $ | 383.9 | $ | 767.4 | $ | 786.7 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(Amounts in millions) | (Amounts in millions) | ||||||||||||||
Revenue: | |||||||||||||||
Risk Management Solutions | $ | 259.3 | $ | 256.7 | $ | 507.2 | $ | 509.4 | |||||||
Sales & Marketing Solutions | 127.1 | 127.0 | 260.2 | 258.7 | |||||||||||
Core Revenue | 386.4 | 383.7 | 767.4 | 768.1 | |||||||||||
Divested and Other Businesses | — | 0.2 | — | 18.6 | |||||||||||
Total Revenue | $ | 386.4 | $ | 383.9 | $ | 767.4 | $ | 786.7 |
• | Higher revenue from new and existing customers including revenue from our new products (e.g., D&B Direct and Data-as-a-Service ("DaaS")); and |
• | Increased collections revenue from services provided to the government in our Australia market which shifted revenue from future quarters to the current quarter; |
• | The carry-over from the weak sales performance in North America in prior quarters due to the ratable nature of Risk Management Solutions revenue. |
• | A $2.6 million, or 1% increase (2% increase before the effect of foreign exchange), in Risk Management Solutions. The increase was driven by an increase in revenue in Asia Pacific of $3.9 million, or 11% (12% increase before the effect of foreign exchange) and an increase in revenue in Europe and Other International Markets of $0.1 million, or less than 1% (3% increase before the effect of foreign exchange), partially offset by a decrease in revenue in North America of $1.4 million, or 1% (both before and after the effect of foreign exchange); and |
• | A $0.1 million, or less than 1% increase (1% increase before the effect of foreign exchange), in Sales & Marketing Solutions. The increase was driven by an increase in revenue in North America of $1.1 million, or 1% (both before and after the effect of foreign exchange), partially offset by a decrease in revenue in Asia Pacific of $1.0 million, or 13% (12% decrease before the effect of foreign exchange). |
• | The carry-over from the weak sales performance in North America in prior quarters due to the ratable nature of Risk Management Solutions revenue; |
• | Increased purchases from new and existing customers including revenue from our new products (e.g., D&B Direct and DaaS); and |
• | Increased revenue from our ten-year commercial agreement, signed in February 2012, to provide TSR with global data for its Japanese customers and to distribute TSR data to the Worldwide Network. |
• | A $2.2 million, or less than 1% decrease (both before and after the effect of foreign exchange), in Risk Management Solutions. The decrease was driven by a decrease in revenue in North America of $5.6 million, or 2% (both before and after the effect of foreign exchange), and a decrease in revenue in Europe and Other International Markets of $1.3 million, or 1% (less than 1% decrease before the effect of foreign exchange), partially offset by an increase in revenue in Asia Pacific of $4.7 million, or 7% (8% increase before the effect of foreign exchange); and |
• | A $1.5 million, or 1% increase (both before and after the effect of foreign exchange), in Sales & Marketing Solutions. The increase was driven by an increase in revenue in North America of $3.0 million, or 1% (both before and after the effect of foreign exchange), and an increase in revenue in Europe and Other International Markets of $0.4 million, or 2% (4% increase before the effect of foreign exchange), partially offset by a decrease in revenue in Asia Pacific of $1.9 million, or 13% (12% decrease before the effect of foreign exchange). |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(Amounts in millions) | (Amounts in millions) | ||||||||||||||
Operating Expenses | $ | 130.1 | $ | 126.4 | $ | 256.3 | $ | 271.0 | |||||||
Selling and Administrative Expenses | 142.3 | 139.2 | 288.7 | 293.7 | |||||||||||
Depreciation and Amortization | 17.9 | 19.7 | 36.2 | 39.9 | |||||||||||
Restructuring Charge | 2.2 | 9.3 | 4.5 | 18.4 | |||||||||||
Operating Costs | $ | 292.5 | $ | 294.6 | $ | 585.7 | $ | 623.0 | |||||||
Operating Income | $ | 93.9 | $ | 89.3 | $ | 181.7 | $ | 163.7 |
• | An increase in costs for the deployment of our new data supply chain and increased investments in data analytics and technology. |
• | Costs associated with our Strategic Technology Investment or MaxCV that occurred in the prior year period. |
• | Lower costs as a result of: (a) the divestiture of the domestic portion of our Japanese operations to TSR Ltd.; and (b) the shut-down of our Roadway operations; and |
• | Costs associated with our Strategic Technology Investment or MaxCV that occurred in the prior year period; |
• | An increase in costs for the deployment of our new data supply chain and increased investments in data analytics and technology. |
• | Lower costs as a result of: (a) the divestiture of the domestic portion of our Japanese operations to TSR Ltd.; and (b) the shut-down of our Roadway operations; |
• | Higher costs associated with investments in the sales force. |
• | Severance and termination costs of $2.1 million in accordance with the provisions of ASC 712-10 were recorded. Approximately 20 employees were impacted. Of these 20 employees, approximately 15 employees exited the Company in the second quarter of 2013, with the remaining primarily to exit in the third quarter of 2013. The cash payments for these employees will be substantially completed by the fourth quarter of 2013; and |
• | Lease termination obligations, other exit costs including those to consolidate or close facilities and asset impairments of $0.1 million. |
• | Severance and termination costs of $8.1 million and $1.1 million in accordance with the provisions of ASC 712-10 and ASC 420-10, respectively, were recorded. Approximately 500 employees were impacted. Of these 500 employees, approximately 435 employees exited the Company in the second quarter of 2012, with the remaining |
• | Lease termination obligations, other costs to consolidate or close facilities and other exit costs of $0.1 million. |
• | Severance and termination costs of $2.7 million in accordance with the provisions of ASC 712-10 were recorded. Approximately 65 employees were impacted. Of these 65 employees, approximately 50 employees exited the Company in the first half of 2013, with the remaining to exit in the second half of 2013. The cash payments for these employees will be substantially completed by the fourth quarter of 2013; and |
• | Lease termination obligations, other costs to consolidate or close facilities and other exit costs of $1.8 million. |
• | Severance and termination costs of $11.2 million and $4.7 million in accordance with the provisions of ASC 712-10 and ASC 420-10, respectively, were recorded. Approximately 620 employees were impacted. Of these 620 employees, approximately 555 employees exited the Company in the first half of 2012, with the remaining primarily having exited in the second half of 2012. The cash payments for these employees were substantially completed by the fourth quarter of 2012; and |
• | Lease termination obligations, other costs to consolidate or close facilities and other exit costs of $2.5 million. |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(Amounts in millions) | (Amounts in millions) | ||||||||||||||
Interest Income | $ | 0.4 | $ | 0.2 | 0.6 | 0.3 | |||||||||
Interest Expense | (10.0 | ) | (9.2 | ) | (19.9 | ) | (18.3 | ) | |||||||
Interest Income (Expense) – Net | $ | (9.6 | ) | $ | (9.0 | ) | $ | (19.3 | ) | $ | (18.0 | ) |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(Amounts in millions) | (Amounts in millions) | ||||||||||||||
Effect of Legacy Tax Matters | $ | 0.3 | $ | 0.3 | $ | 0.4 | $ | 0.4 | |||||||
Gain on Sale of Businesses(a) | — | — | — | 6.0 | |||||||||||
Miscellaneous Other Income (Expense) – Net(b) | (0.4 | ) | (0.3 | ) | (1.7 | ) | 0.2 | ||||||||
Other Income (Expense) – Net | $ | (0.1 | ) | $ | — | $ | (1.3 | ) | $ | 6.6 |
(a) | During the six months ended June 30, 2012, we recognized gains primarily related to the sale of the domestic portion of our Japanese operations to TSR Ltd. and our market research business in China, consisting of two joint venture companies. See Note 13 to our unaudited consolidated financial statements in Item 1. of this Quarterly Report on Form 10-Q. |
(b) | Miscellaneous Other Income (Expense) – Net decreased for the six months ended June 30, 2013 compared to the six months ended June 30, 2012, primarily due to a write-down of a third party indemnification receivable related to a release of reserves for uncertain tax positions. |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Basic Earnings Per Share of Common Stock Attributable to D&B Common Shareholders | $ | 1.46 | $ | 1.21 | $ | 2.76 | $ | 2.54 | |||||||
Diluted Earnings Per Share of Common Stock Attributable to D&B Common Shareholders | $ | 1.44 | $ | 1.20 | $ | 2.73 | $ | 2.52 |
• | North America (which consisted of our operations in the U.S. and Canada); |
• | Asia Pacific (which primarily consisted of our operations in Australia, Greater China, India and Asia Pacific Worldwide Network); and |
• | Europe and Other International Markets (which primarily consisted of our operations in the UK, the Netherlands, Belgium, Latin America and European Worldwide Network). |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(Amounts in millions) | (Amounts in millions) | ||||||||||||||
Revenue: | |||||||||||||||
Risk Management Solutions | $ | 168.1 | $ | 169.5 | $ | 334.1 | $ | 339.7 | |||||||
Sales & Marketing Solutions | 110.6 | 109.5 | 227.8 | 224.8 | |||||||||||
North America Total and Core Revenue | $ | 278.7 | $ | 279.0 | $ | 561.9 | $ | 564.5 | |||||||
Operating Income | $ | 84.5 | $ | 103.2 | $ | 170.5 | $ | 205.7 |
• | Decreased revenue in our Internet Solutions, primarily small business, due to customer spend and competitive pressures. Most of the revenue is subscription based so we expect this trend to continue; |
• | The impact of entering into a commercial arrangement in the first quarter of 2012 with a third party whereby certain print and online products are now being provided under a licensing agreement. During 2012, we also recognized the remainder of the original contract we were still servicing. |
• | An increase in costs for the deployment of our new data supply chain and increased investments in data analytics and technology; and |
• | Higher costs associated with investments in the sales force. |
• | Decreased revenue in our Internet Solutions, primarily small business, due to customer spend and competitive pressures. Most of the revenue is subscription based so we expect this trend to continue; and |
• | Decreased purchases from certain customers due to economic and budgetary pressures particularly in our education marketing business; and |
• | The impact of entering into a commercial arrangement with a third party whereby certain print and online products are now being provided under a licensing agreement. During 2012, we also recognized the remainder of the original contract we were still servicing. |
• | An increase in costs for the deployment of our new data supply chain and increased investments in data analytics and technology; |
• | Higher costs associated with investments in the sales force; and |
• | A decrease in total revenue. |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(Amounts in millions) | (Amounts in millions) | ||||||||||||||
Revenue: | |||||||||||||||
Risk Management Solutions | $ | 42.6 | $ | 38.7 | $ | 78.2 | $ | 73.5 | |||||||
Sales & Marketing Solutions | 6.7 | 7.7 | 12.5 | 14.4 | |||||||||||
Asia Pacific Core Revenue | 49.3 | 46.4 | 90.7 | 87.9 | |||||||||||
Divested and Other Businesses | — | 0.2 | — | 18.6 | |||||||||||
Asia Pacific Total Revenue | $ | 49.3 | $ | 46.6 | $ | 90.7 | $ | 106.5 | |||||||
Operating Income (Loss) | $ | 8.4 | $ | 5.6 | $ | 10.8 | $ | (5.5 | ) |
• | Increased collections revenue from services provided to the government in our Australia market which shifted revenue from future quarters to the current quarter; |
• | Increased purchases from new and existing customers; and |
• | Increased revenue from our ten-year commercial agreement, signed in February 2012, to provide TSR with global data for its Japanese customers and to distribute TSR data to the Worldwide Network. |
• | Decreased expenses in the current year related to our Roadway operations (see "Recent Developments" discussed above); and |
• | The net impact of the sale of the domestic portion of our Japanese operations to TSR Ltd. and our ten-year commercial agreement with TSR Ltd. to provide global data to its Japanese customers; |
• | An increase in expenses related to investments. |
• | Increased revenue from our ten-year commercial agreement, signed in February 2012, to provide TSR with global data for its Japanese customers and to distribute TSR data to the Worldwide Network; |
• | Increased collections revenue from services provided to the government in our Australia market which shifted revenue from future quarters to the current quarter; and |
• | Increased purchases from new and existing customers. |
• | An impairment in China in the prior year related to our Roadway operations (see "Recent Developments" discussed above); and |
• | The net impact of the sale of the domestic portion of our Japanese operations to TSR Ltd. and our ten-year commercial agreement with TSR Ltd. to provide global data to its Japanese customers. |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(Amounts in millions) | (Amounts in millions) | ||||||||||||||
Revenue: | |||||||||||||||
Risk Management Solutions | $ | 48.6 | $ | 48.5 | $ | 94.9 | $ | 96.2 | |||||||
Sales & Marketing Solutions | 9.8 | 9.8 | 19.9 | 19.5 | |||||||||||
Europe and Other International Markets Total and Core Revenue | $ | 58.4 | $ | 58.3 | $ | 114.8 | $ | 115.7 | |||||||
Operating Income | $ | 15.7 | $ | 14.6 | $ | 29.7 | $ | 28.8 |
• | We rely significantly on third parties to support critical components of our business model in a continuous and high quality manner, including third-party data providers, strategic third-party members in our D&B Worldwide Network, and third parties with whom we have significant outsourcing arrangements; |
• | The effectiveness of our technology investments and our ability to maintain sufficient investment in a technology infrastructure that assists us in achieving our strategic goals; |
• | Our ability to achieve our financial and operational expectations which are based upon the successful implementation of our business strategy for the next several years. |
• | Risks associated with potential violations of the Foreign Corrupt Practices Act and similar laws, and any consequences of the investigations of our China operations; |
• | Demand for our products is subject to intense competition, changes in customer preferences and economic conditions which impact customer behavior; |
• | Our solutions and brand image are dependent upon the integrity and security of our global database and the continued availability thereof through the internet and by other means, as well as our ability to protect key assets, such as our data centers; |
• | Our ability to secure our information technology infrastructure from cyber attack and unauthorized access; |
• | Our ability to maintain the integrity of our brand and reputation, which we believe are key assets and competitive advantages; |
• | Our ability to renew large contracts, including from various government institutions, the related revenue recognition and the timing thereof, a shift in product mix, or a significant decrease in government spending, may impact our results of operations from period-to-period; |
• | As a result of the macro-economic challenges currently affecting the global economy, our customers or vendors may experience problems with their earnings, cash flow, or both. This may cause our customers to delay, cancel or significantly decrease their purchases from us and impact their ability to pay amounts owed to us. In addition, our vendors may substantially increase their prices without notice. Such behavior may materially, adversely affect our earnings and cash flow. In addition, if economic conditions in the United States, including any possible impact of efforts to balance government deficits, and/or other key markets deteriorate further or do not show improvement, we may experience material adverse impacts to our business, operating results and/or access to credit markets; |
• | Our results are subject to the effects of foreign economies, exchange rate fluctuations, legislative or regulatory requirements, such as the adoption of new or changes in accounting policies and practices, including pronouncements by the Financial Accounting Standards Board or other standard setting bodies, the implementation or modification of fees or taxes that we must pay to acquire, use, and/or redistribute data, and the evolving standards of emerging markets in which we operate. Future laws or regulations with respect to the collection, compilation, use and/ or publication of information and adverse publicity or litigation concerning the commercial use of such information, or changes in the rules governing the operation of the Internet, could have a material adverse effect on our business and financial results; |
• | Our ability to acquire and successfully integrate other complementary businesses, products and technologies into our existing business, without significant disruption to our existing business or to our financial results; |
• | The continued adherence by third-party members of our D&B Worldwide Network, or other third parties who license and sell under the D&B name, to our quality standards, our brand and communication standards and to the terms and conditions of our commercial services arrangements, and the renewal by third-party members of the D&B Worldwide Network of their agreements with D&B; |
• | The profitability of our international businesses depends on our ability to identify and execute on various initiatives, such as successfully managing our D&B Worldwide Network, enforcing agreements, collecting receivables and protecting assets in non-U.S. legal systems, complying with the Foreign Corrupt Practices Act and other anti-bribery and anti-corruption laws in all jurisdictions, and our ability to identify and contend with various challenges present in foreign markets, such as local competition and the availability of public records at no cost, or the adoption of new laws or regulations governing the collection, compilation, use and/or publication of information, particularly in emerging markets; |
• | Our future success requires that we attract and retain qualified personnel, including members of our sales force and technology teams, in regions throughout the world; |
• | Our ability to successfully implement our growth strategy requires that we successfully reduce our expense base through our Financial Flexibility initiatives, and reallocate certain of the expense-base reductions into initiatives that produce revenue growth; |
• | Our ability to fund our obligations under our retirement and post retirement pension plans which are subject to financial market risks; |
• | We are involved in various legal proceedings, the outcomes of which are unknown and uncertain with respect to the impact on our cash flow and profitability; |
• | Our ability to repurchase shares is subject to market conditions, including trading volume in our stock, and our ability to repurchase shares in accordance with applicable securities laws; and |
• | Our projection for free cash flow is dependent upon our ability to generate revenue, our collection processes, customer payment patterns, the timing and volume of stock option exercises and the amount and timing of payments related to the tax and other matters and legal proceedings in which we are involved. |
• | First, making ongoing investments in the business to drive growth; |
• | Second, investing in acquisitions that we believe will be value-accretive to enhance our capabilities and accelerate our growth; and |
• | Third, continuing to return cash to shareholders. |
• | Decreased net income of our underlying business excluding the impact of non-cash gains and losses; and |
• | Increased costs associated with investments; |
• | Lower restructuring payments compared to prior year. |
• | Proceeds in the prior year related to the sale of: (a) the domestic portion of our Japanese operations to TSR Ltd.; (b) Purisma Incorporated; (c) our market research business in China, consisting of two joint venture companies; and (d) AllBusiness.com, Inc. See Note 13 to our unaudited consolidated financial statements included in Item 1. of this Quarterly Report on Form 10-Q; and |
• | Cash settlements of our foreign currency contracts for our hedged transactions resulted in cash outflows of $5.1 million for the six months ended June 30, 2013, as compared to cash inflows of $1.8 million for the six months ended June 30, 2012; |
• | Decreased additions to computer software as compared to the prior year period (e.g., Strategic Technology Investment or MaxCV). |
• | In August 2012, our Board of Directors approved a $500 million increase to our then existing $500 million share repurchase program, for a total program authorization of $1 billion. The then existing $500 million program was approved by our Board of Directors in October 2011 and commenced in November 2011 upon the completion of our previous $200 million share repurchase program. We repurchased 2,517,131 shares of common stock for $215.1 million under this share repurchase program during the six months ended June 30, 2013. We anticipate that this program will be completed by mid-2014. |
• | In May 2010, our Board of Directors approved a four-year, five million share repurchase program to mitigate the dilutive effect of the shares issued under our stock incentive plans and ESPP. We repurchased 706,637 shares of common stock for $68.0 million under this share repurchase program during the six months ended June 30, 2013. This repurchase program commenced in October 2010 and expires in October 2014. |
• | In October 2011, our Board of Directors approved a $500 million share repurchase program, which commenced in November 2011 upon completion of our then existing $200 million share repurchase program. We repurchased |
• | In May 2010, our Board of Directors approved a four-year, five million share repurchase program to mitigate the dilutive effect of the shares issued under our stock incentive plans and ESPP. We repurchased 59,563 shares of common stock for $4.0 million under this share repurchase program during the six months ended June 30, 2012. This repurchase program commenced in October 2010 and expires in October 2014. |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures. |
Item 1. | Legal Proceedings |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Period | Total Number of Shares Purchased (a)(b) | Average Price Paid Per Share | Total Number of Shares Purchased as part of Publicly Announced Plans or Programs (a)(b) | Maximum Number of Currently Authorized Shares that May Yet Be Purchased Under the Plans or Programs (a) | Approximate Dollar Value of Currently Authorized Shares that May Yet Be Purchased Under the Plans or Programs (b) | |||||||||||
(Dollar amounts in millions, except share data) | ||||||||||||||||
April 1 - 30, 2013 | 421,659 | $ | 85.11 | 421,659 | — | $ | — | |||||||||
May 1 - 31, 2013 | 645,804 | $ | 95.16 | 645,804 | — | $ | — | |||||||||
June 1 - 30, 2013 | 658,453 | $ | 98.27 | 658,453 | — | $ | — | |||||||||
1,725,916 | $ | 93.89 | 1,725,916 | 3,114,883 | $ | 275.0 |
(a) | During the three months ended June 30, 2013, we repurchased 632,322 shares of common stock for $62.0 million under our Board of Directors approved share repurchase program to mitigate the dilutive effect of the shares issued under our stock incentive plans and Employee Stock Purchase Plan. This program commenced in October 2010 and expires in October 2014. The maximum number of shares authorized for repurchase under this program is 5,000,000 shares, of which 1,885,117 shares had been repurchased as of June 30, 2013. |
(b) | In August 2012, our Board of Directors approved a $500 million increase to our then existing $500 million share repurchase program, for a total program authorization of $1 billion. During the three months ended June 30, 2013, we repurchased 1,093,594 shares of common stock for $100.1 million under this share repurchase program. We anticipate that this program will be completed by mid-2014. |
Item 6. | Exhibits |
Exhibit 31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15(d)-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
Exhibit 31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15(d)-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
Exhibit 32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
Exhibit 32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
Exhibit 101 | The following financial information from The Dun & Bradstreet Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Operations and Comprehensive Income, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Cash Flows, (iv) the Consolidated Statements of Shareholders’ Equity, and (v) the Notes to the Consolidated Financial Statements. |
THE DUN & BRADSTREET CORPORATION | ||
By: | /s/ RICHARD H. VELDRAN | |
Richard H. Veldran | ||
Senior Vice President and Chief Financial Officer | ||
Date: | August 7, 2013 | |
By: | /s/ ANTHONY PIETRONTONE JR. | |
Anthony Pietrontone Jr. | ||
Principal Accounting Officer and Corporate Controller | ||
Date: | August 7, 2013 |
By: | /s/ Sara Mathew | |
Sara Mathew | ||
Chairman and Chief Executive Officer | ||
Date: | August 7, 2013 |
By: | /s/ Richard H. Veldran | |
Richard H. Veldran | ||
Senior Vice President and Chief Financial Officer | ||
Date: | August 7, 2013 |
(1) | the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ Sara Mathew |
Sara Mathew | |
Chairman and Chief Executive Officer | |
August 7, 2013 |
(1) | the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ Richard H. Veldran |
Richard H. Veldran | |
Senior Vice President and Chief Financial Officer | |
August 7, 2013 |
Pension and Postretirement Benefits
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Pension and Postretirement Benefits | Pension and Postretirement Benefits The following table sets forth the components of the net periodic cost (income) associated with our pension plans and our postretirement benefit obligations:
We previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2012 that we expected to contribute $22.0 million to our U.S. Non-Qualified plans and non-U.S. pension plans and $5.0 million to our postretirement benefit plan for the year ended December 31, 2013. As of June 30, 2013, we have made contributions to our Non-Qualified U.S. and non-U.S. pension plans of $8.8 million and postretirement benefit plan of $1.2 million, respectively. |
Fair Values of Derivative Instruments in Consolidated Balance Sheet (Detail) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
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Dec. 31, 2012
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Derivatives, Fair Value [Line Items] | ||
Assets Derivatives | $ 0.1 | $ 0 |
Liabilities Derivative | 0.5 | 0.4 |
Derivatives not designated as hedging instruments
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Derivatives, Fair Value [Line Items] | ||
Assets Derivatives | 0.1 | 0 |
Liabilities Derivative | 0.5 | 0.4 |
Derivatives not designated as hedging instruments | Other Accrued and Current Liabilities | Foreign exchange forward contracts
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Derivatives, Fair Value [Line Items] | ||
Liabilities Derivative | 0.5 | 0.4 |
Derivatives not designated as hedging instruments | Other Current Assets | Foreign exchange forward contracts
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Derivatives, Fair Value [Line Items] | ||
Assets Derivatives | $ 0.1 | $ 0 |
Recent Accounting Pronouncements
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6 Months Ended |
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Jun. 30, 2013
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Text Block [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-11, "Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the Emerging Issues Task Force)," which states that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. If a company does not have: (i) a net operating loss carryforward; (ii) a similar tax loss; or (iii) a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the entity does not intend to use the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The authoritative guidance is effective for fiscal years and the interim periods within those fiscal years beginning on or after December 15, 2013 and should be applied on a prospective basis. We do not expect that the adoption of this authoritative guidance will have a material impact on our consolidated financial statements. In July 2013, the FASB issued ASU No. 2013-10, "Derivatives and Hedging (Topic 815): Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes (a consensus of the Emerging Issues Task Force)," which permits a company to designate the Fed Funds Effective Swap Rate ("Fed Funds rate"), also referred to as the overnight index swap rate ("OIS"), as a benchmark interest rate for hedge accounting purposes. In addition, the ASU removes the restriction on using different benchmark interest rates for similar hedges. The authoritative guidance is effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. We do not expect that the adoption of this authoritative guidance will have a material impact on our consolidated financial statements. In March 2013, the FASB issued ASU No. 2013-5, "Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (a consensus of the FASB Emerging Issues Task Force)," which states that a cumulative translation adjustment ("CTA") is attached to the parent’s investment in a foreign entity and should be released in a manner consistent with the derecognition guidance on investments in entities. The entire amount of the CTA associated with the foreign entity would be released when there has been a: (i) sale of a subsidiary or group of net assets within a foreign entity and the sale represents the substantially complete liquidation of the investment in the foreign entity; (ii) loss of a controlling financial interest in an investment in a foreign entity; and (iii) step acquisition for a foreign entity. The authoritative guidance does not change the requirement to release a pro rata portion of the CTA of the foreign entity into earnings for a partial sale of an equity method investment in a foreign entity. The authoritative guidance is effective for fiscal years and the interim periods within those fiscal years beginning on or after December 15, 2013 and should be applied on a prospective basis. We do not expect that the adoption of this authoritative guidance will have a material impact on our consolidated financial statements. In February 2013, the FASB issued ASU No. 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." The authoritative guidance adds new disclosure requirements for items reclassified out of accumulated other comprehensive income. A company would disaggregate the total change of each component of other comprehensive income and separately present reclassification adjustments and current-period other comprehensive income. The authoritative guidance requires a company to present information about significant items reclassified out of accumulated other comprehensive income by component either on the face of the statement where net income is presented or as a separate disclosure in the notes to the financial statements. The authoritative guidance is effective for fiscal years and the interim periods within those annual periods beginning after December 15, 2012. The authoritative guidance should be applied prospectively. See Note 12 to our unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for more information. In January 2013, the FASB issued ASU No. 2013-01, "Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities," which clarifies which instruments and transactions are subject to the offsetting disclosure requirements established by ASU No. 2011-11, “Balance Sheet (Topic 210); Disclosures about Offsetting Assets and Liabilities” or “ASU No. 2011-11.” The authoritative guidance limits the scope of the offsetting disclosures to (i) recognized derivative instruments accounted for in accordance with ASC 815, “Derivatives and Hedging”, or “ASC 815,” subject to the authoritative guidance for offsetting in the statement of financial position and (ii) recognized derivative instruments accounted for in accordance with ASC 815 that are subject to an enforceable master netting arrangement or similar agreement. The authoritative guidance is effective for annual reporting periods beginning on or after January 1, 2013 and interim periods within those annual periods. A company is required to provide the disclosures required in ASU No. 2011-11 for the applicable instruments and transactions under this authoritative guidance retrospectively for all comparative periods presented. The adoption of this authoritative guidance did not have a material impact on our consolidated financial statements. In July 2012, the FASB issued ASU No. 2012-02, “Intangibles - Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment.” The amendments in this ASU allow a company to qualitatively assess whether indefinite-lived intangible assets are more likely than not impaired. If the indefinite-lived intangible assets are considered impaired, a company is required to perform the quantitative test under ASC 350-30, “Intangibles - Goodwill and Other - General Intangibles Other than Goodwill.” The authoritative guidance does not amend the requirement to test indefinite-lived intangible assets annually for impairment. In addition, the authoritative guidance does not amend the requirement to test these assets for impairment between annual tests if there is a change in events or circumstances. The authoritative guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The adoption of this authoritative guidance did not have a material impact on our consolidated financial statements. In December 2011, the FASB issued ASU No. 2011-11. The amendments in this ASU require a company to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. A company is required to apply the amendments for annual reporting periods beginning on or after January 1, 2013 and interim periods within those annual periods. A company should provide the disclosures required by those amendments retrospectively for all comparative periods presented. The adoption of this authoritative guidance did not have a material impact on our consolidated financial statements. |
Notes Payable and Indebtedness (Tables)
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Jun. 30, 2013
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Text Block [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings | Our borrowings are summarized in the following table:
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Assets and Liabilities Measured at Fair Value on Recurring Basis (Parenthetical) (Detail) (Senior Notes Due November Twenty Fifteen [Member], Fair Value Hedging [Member], Swap Arrangement, USD $)
In Millions, unless otherwise specified |
Dec. 31, 2010
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Nov. 29, 2010
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Senior Notes Due November Twenty Fifteen [Member] | Fair Value Hedging [Member] | Swap Arrangement
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative, Notional Amount | $ 125.0 | $ 125.0 |
Segment Information
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Segment Information | Segment Information The segments reported below are our segments for which separate financial information is available and upon which operating results are evaluated by management on a timely basis to assess performance and to allocate resources. We manage our operations and our results are reported under the following three segments:
Our customer solution sets are D&B Risk Management Solutions™ and D&B Sales & Marketing Solutions™. Inter-segment sales are immaterial, and no single customer accounted for 10% or more of our total revenue. For management reporting purposes, we evaluate business segment performance before restructuring charges and intercompany transactions because these charges are not a component of our ongoing income or expenses and may have a disproportionate positive or negative impact on the results of our ongoing underlying business.
Supplemental Geographic and Customer Solution Set Information:
The following table represents Divested and Other Businesses revenue by solution set:
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Segment Information (Parenthetical) (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Segment Reporting Disclosure [Line Items] | ||||||||||
Corporate and Other | $ (14.7) | $ (34.1) | $ (29.3) | $ (65.3) | ||||||
Interest Income | 0.4 | 0.2 | 0.6 | 0.3 | ||||||
Interest Expense | (10.0) | (9.2) | (19.9) | (18.3) | ||||||
Other Income (Expense) - Net | (0.1) | 0 | (1.3) | 6.6 | ||||||
Non-Operating Income (Expense) - Net | (9.7) | [1] | (9.0) | [1] | (20.6) | [1] | (11.4) | [1] | ||
Corporate Costs
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||||||||||
Segment Reporting Disclosure [Line Items] | ||||||||||
Corporate and Other | (8.8) | (9.9) | (19.5) | (22.4) | ||||||
Restructuring accruals
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Segment Reporting Disclosure [Line Items] | ||||||||||
Corporate and Other | (2.2) | (9.3) | (4.5) | (18.4) | ||||||
Strategic Technology Investment (MaxCV)
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Segment Reporting Disclosure [Line Items] | ||||||||||
Corporate and Other | 0 | (10.5) | 0 | (18.9) | ||||||
Legal Fees And Other Shut-Down Costs Associated with Matters in China
|
||||||||||
Segment Reporting Disclosure [Line Items] | ||||||||||
Corporate and Other | $ (3.7) | $ (4.4) | $ (5.3) | $ (5.6) | ||||||
Asia Pacific
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Segment Reporting Disclosure [Line Items] | ||||||||||
Percentage Of Total Revenue From Divested And Other Business | 1.00% | 17.00% | ||||||||
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Carrying Amount and Estimated Fair Value of Asset (Liability) (Detail) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt, Carrying Amount (Asset) Liability | $ 1,046.7 | $ 1,046.5 |
Credit Facilities, Carrying Amount (Asset) Liability | 358.0 | 240.2 |
Fair Value (Asset) Liability
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt, fair value (Asset) Liability | 1,052.6 | 1,059.3 |
Credit Facilities, fair value (Asset) Liability | $ 358.7 | $ 237.7 |
Earnings Per Share (Detail) (USD $)
In Millions, except Per Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
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Jun. 30, 2013
|
Jun. 30, 2012
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Earnings Per Share Disclosure [Line Items] | ||||
Net Income Attributable to D&B | $ 57.5 | $ 56.5 | $ 110.4 | $ 119.9 |
Less: Allocation to Participating Securities | 0 | 0 | 0 | 0 |
Net Income Attributable to D&B Common Shareholders - Basic and Diluted | $ 57.5 | $ 56.5 | $ 110.4 | $ 119.9 |
Weighted Average Number of Shares Outstanding - Basic (in shares) | 39.4 | 46.7 | 40.0 | 47.2 |
Dilutive Effect of Our Stock Incentive Plans (in shares) | 0.4 | 0.3 | 0.4 | 0.4 |
Weighted Average Number of Shares Outstanding - Diluted (in shares) | 39.8 | 47.0 | 40.4 | 47.6 |
Basic Earnings Per Share of Common Stock Attributable to D&B Common Shareholders (in dollars per share) | $ 1.46 | $ 1.21 | $ 2.76 | $ 2.54 |
Diluted Earnings Per Share of Common Stock Attributable to D&B Common Shareholders (in dollars per share) | $ 1.44 | $ 1.20 | $ 2.73 | $ 2.52 |
Pension and Postretirement Benefits (Tables)
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Jun. 30, 2013
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Components of Net Periodic (Income) Cost Associated with Pension Plans and Postretirement Benefit Obligations | The following table sets forth the components of the net periodic cost (income) associated with our pension plans and our postretirement benefit obligations:
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Other Accrued and Current Liabilities (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Schedule of Accrued Liabilities [Table Text Block] | Other Accrued and Current Liabilities
|
Segment Information - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 3 Months Ended | 6 Months Ended | 6 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
segment
|
Dec. 31, 2012
|
Jun. 30, 2012
Asia Pacific
|
Jun. 30, 2012
Asia Pacific
|
Jun. 30, 2013
Asia Pacific
|
Dec. 31, 2012
Asia Pacific
|
Jun. 30, 2013
Maximum
|
|||||
Segment Reporting Disclosure [Line Items] | |||||||||||
Assets | $ 1,838.5 | $ 1,991.8 | $ 389.6 | [1] | $ 414.6 | [1] | |||||
Number of Operating Segments | 3 | ||||||||||
Percentage of total revenue from single customer | 10.00% | ||||||||||
Percentage of Revenue from Divested and Other Businesses | 1.00% | 17.00% | |||||||||
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Notes Payable and Indebtedness - Additional Information (Detail) (USD $)
|
3 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||||||||||||||
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Jun. 30, 2013
|
Jun. 30, 2012
|
Mar. 31, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Mar. 31, 2012
Interest Rate Contract [Member]
|
Jun. 30, 2013
Interest Rate Contract [Member]
|
Mar. 11, 2012
Interest Rate Contract [Member]
|
Mar. 31, 2012
Interest Rate Contract [Member]
Non-Operating Income (Expenses) - Net
|
Dec. 31, 2012
Interest Rate Contract [Member]
Non-Operating Income (Expenses) - Net
|
Mar. 31, 2012
Interest Rate Contract [Member]
Long-Term Fixed-Rate Notes
Non-Operating Income (Expenses) - Net
|
Dec. 31, 2012
Senior Notes Due 2017 [Member]
|
Jun. 30, 2013
Senior Notes Due 2017 [Member]
|
Dec. 31, 2012
Senior Notes Due 2022 [Member]
|
Jun. 30, 2013
Senior Notes Due 2022 [Member]
|
Nov. 29, 2010
Senior Notes Due November 2015
|
Jun. 30, 2013
Senior Notes Due November 2015
|
Dec. 31, 2010
Senior Notes Due March Twenty Eleven [Member]
|
Dec. 31, 2010
Senior Notes Due March Twenty Eleven [Member]
|
Nov. 29, 2010
Senior Notes Due March Twenty Eleven [Member]
|
Dec. 31, 2012
2013 Senior Notes
|
Mar. 27, 2008
2013 Senior Notes
|
Dec. 31, 2012
2013 Senior Notes
Interest Rate Contract [Member]
Non-Operating Income (Expenses) - Net
|
Dec. 31, 2012
Senior Notes Due 2017 and 2022 [Member]
person
|
Jun. 30, 2013
Revolving Credit Facility October 2016
|
Dec. 31, 2012
Revolving Credit Facility October 2016
|
Jul. 30, 2012
Revolving Credit Facility October 2016
Maximum
|
Jun. 30, 2012
Revolving Credit Facility October 2016
Maximum
|
Jun. 30, 2013
International Operations
|
Dec. 31, 2012
International Operations
|
Jun. 30, 2013
Interest Rate Contract [Member]
Non-Operating Income (Expenses) - Net
|
Jun. 30, 2012
Interest Rate Contract [Member]
Non-Operating Income (Expenses) - Net
|
Jun. 30, 2013
Interest Rate Contract [Member]
Non-Operating Income (Expenses) - Net
|
Jun. 30, 2012
Interest Rate Contract [Member]
Non-Operating Income (Expenses) - Net
|
Jun. 30, 2013
Interest Rate Contract [Member]
Long-Term Fixed-Rate Notes
Non-Operating Income (Expenses) - Net
|
Jun. 30, 2012
Interest Rate Contract [Member]
Long-Term Fixed-Rate Notes
Non-Operating Income (Expenses) - Net
|
Jun. 30, 2013
Interest Rate Contract [Member]
Long-Term Fixed-Rate Notes
Non-Operating Income (Expenses) - Net
|
Jun. 30, 2012
Interest Rate Contract [Member]
Long-Term Fixed-Rate Notes
Non-Operating Income (Expenses) - Net
|
Jan. 30, 2008
Interest Rate Contract [Member]
Cash Flow Hedging [Member]
|
Dec. 31, 2010
Interest Rate Contract [Member]
Senior Notes Due November 2015
Fair Value Hedging [Member]
|
Nov. 29, 2010
Interest Rate Contract [Member]
Senior Notes Due November 2015
Fair Value Hedging [Member]
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Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||
Long-Term Fixed-Rate Notes issued, face value | $ 450,000,000 | $ 300,000,000 | $ 300,000,000 | |||||||||||||||||||||||||||||||||||||||
Long-Term Fixed-Rate Notes, annual interest rate | 3.25% | 4.375% | 2.875% | 5.50% | 6.00% | |||||||||||||||||||||||||||||||||||||
Long-Term Fixed-Rate Notes, maturity date | Dec. 01, 2017 | Dec. 01, 2022 | ||||||||||||||||||||||||||||||||||||||||
Repayment of long-term fixed-rate notes | 300,000,000 | 400,000,000 | ||||||||||||||||||||||||||||||||||||||||
Long-Term Fixed-Rate Notes, premium payment | 5,400,000 | 3,700,000 | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Debt Rating Decrease Threshold | 3 | |||||||||||||||||||||||||||||||||||||||||
Long-Term Fixed-Rate Notes | 1,046,700,000 | 1,046,700,000 | 1,046,500,000 | 450,000,000 | 297,200,000 | 299,500,000 | ||||||||||||||||||||||||||||||||||||
Long-Term Fixed-Rate Notes, discount | 3,300,000 | 3,300,000 | 3,500,000 | 100,000 | 100,000 | 2,900,000 | 2,800,000 | 1,100,000 | 500,000 | |||||||||||||||||||||||||||||||||
Long-Term Fixed-Rate Notes, underwriting and other fees | 3,400,000 | 2,500,000 | 2,500,000 | 100,000 | ||||||||||||||||||||||||||||||||||||||
Derivative, Notional Amount | 400,000,000 | 125,000,000 | 125,000,000 | |||||||||||||||||||||||||||||||||||||||
Gain (loss) recognized in income on derivatives | (800,000) | (300,000) | 500,000 | 300,000 | 0 | 0 | 0 | (800,000) | 0 | 0 | 0 | 500,000 | ||||||||||||||||||||||||||||||
Cash received from interest rate derivatives terminated | 5,000,000 | |||||||||||||||||||||||||||||||||||||||||
Carrying amount of hedged debt | 3,200,000 | 4,900,000 | ||||||||||||||||||||||||||||||||||||||||
Amortization of carrying amount of hedged debt | 600,000 | |||||||||||||||||||||||||||||||||||||||||
Maximum adjustments above initial interest rate | 2.00% | |||||||||||||||||||||||||||||||||||||||||
Loss from interest rate derivative terminated | (8,500,000) | |||||||||||||||||||||||||||||||||||||||||
Credit facility, maximum borrowing capacity | 800,000,000 | 800,000,000 | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Number of Days From Issuance | 364 days | |||||||||||||||||||||||||||||||||||||||||
Commercial papers borrowings supported by line of credit | 800,000,000 | 300,000,000 | ||||||||||||||||||||||||||||||||||||||||
Revolving credit facility, expiration date | 2016-10 | 2016-10 | ||||||||||||||||||||||||||||||||||||||||
Revolving credit facility, period | 5 years | |||||||||||||||||||||||||||||||||||||||||
Credit facility Outstanding amount | 358,000,000 | 240,200,000 | ||||||||||||||||||||||||||||||||||||||||
Credit facility, interest percentage | 1.30% | 1.62% | ||||||||||||||||||||||||||||||||||||||||
Uncommitted credit facility, maximum borrowing capacity | 2,900,000 | 3,000,000 | ||||||||||||||||||||||||||||||||||||||||
Contingent liability under open standby letters of credit in favor of third parties | 5,300,000 | 5,300,000 | 12,500,000 | |||||||||||||||||||||||||||||||||||||||
Interest paid for all outstanding debt | $ (18,800,000) | $ (16,800,000) | $ 4,400,000 | $ (19,500,000) | $ (12,400,000) |
Share Repurchases (Parenthetical) (Detail) (USD $)
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1 Months Ended | 3 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | ||
---|---|---|---|---|---|---|---|
Aug. 30, 2012
Share repurchase plan, 2011
Share Repurchase Programs
|
Aug. 31, 2012
Share repurchase plan, 2011
Share Repurchase Programs
|
Oct. 30, 2011
Share repurchase plan, 2011
Share Repurchase Programs
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Dec. 31, 2012
Share repurchase plan, 2011
Share Repurchase Programs
|
Feb. 27, 2009
Share repurchase plan, 2009
Share Repurchase Programs
|
Dec. 29, 2009
Share repurchase plan, 2009
Share Repurchase Programs
|
May 30, 2010
Share Repurchase Program, 2010
Repurchases to Mitigate the Dilutive Effect of the Shares Issued Under Our Stock Incentive Plans and Employee Stock Purchase Plan (ESPP)
|
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Accelerated Share Repurchases [Line Items] | |||||||
Amount approved for repurchase of shares | $ 500,000,000 | $ 500,000,000 | $ 1,000,000,000 | $ 200,000,000 | |||
Repurchase program, commencement date | 2011-11 | 2010-10 | |||||
Repurchase program, period | 4 years | ||||||
Share repurchase program, completion date | 2014-06 | 2011-11 | 2014-10 | ||||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 5,000,000 |
Supplemental Geographic and Customer Solution Set Information (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
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Jun. 30, 2013
|
Jun. 30, 2012
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Segment Reporting Disclosure [Line Items] | ||||||||||
Revenue | $ 386.4 | $ 383.9 | $ 767.4 | $ 786.7 | ||||||
Divested and other revenue | 0 | 0.2 | 0 | 18.6 | ||||||
Risk Management Solutions
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Segment Reporting Disclosure [Line Items] | ||||||||||
Divested and other revenue | 0 | 0.2 | 0 | 9.2 | ||||||
Sale and Marketing Solutions
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Segment Reporting Disclosure [Line Items] | ||||||||||
Divested and other revenue | 0 | 0 | 0 | 9.4 | ||||||
Segment, Continuing Operations
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Segment Reporting Disclosure [Line Items] | ||||||||||
Revenue | 386.4 | 383.7 | 767.4 | 768.1 | ||||||
Divested and other revenue | 0 | [1] | 0.2 | [1] | 0 | [1] | 18.6 | [1] | ||
Segment, Continuing Operations | Risk Management Solutions
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Segment Reporting Disclosure [Line Items] | ||||||||||
Revenue | 259.3 | 256.7 | 507.2 | 509.4 | ||||||
Segment, Continuing Operations | Sale and Marketing Solutions
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Segment Reporting Disclosure [Line Items] | ||||||||||
Revenue | 127.1 | 127.0 | 260.2 | 258.7 | ||||||
North America
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Segment Reporting Disclosure [Line Items] | ||||||||||
Revenue | 279.0 | 561.9 | 564.5 | |||||||
North America | Segment, Continuing Operations
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Segment Reporting Disclosure [Line Items] | ||||||||||
Revenue | 278.7 | 279.0 | 561.9 | 564.5 | ||||||
Divested and other revenue | 0 | 0 | 0 | 0 | ||||||
North America | Segment, Continuing Operations | Risk Management Solutions
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Segment Reporting Disclosure [Line Items] | ||||||||||
Revenue | 168.1 | 169.5 | 334.1 | 339.7 | ||||||
North America | Segment, Continuing Operations | Sale and Marketing Solutions
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Segment Reporting Disclosure [Line Items] | ||||||||||
Revenue | 110.6 | 109.5 | 227.8 | 224.8 | ||||||
Asia Pacific
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Segment Reporting Disclosure [Line Items] | ||||||||||
Revenue | 49.3 | 46.6 | 90.7 | 106.5 | ||||||
Asia Pacific | Segment, Continuing Operations
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Segment Reporting Disclosure [Line Items] | ||||||||||
Revenue | 49.3 | 46.4 | 90.7 | 87.9 | ||||||
Divested and other revenue | 0 | [1] | 0.2 | [1] | 0 | [1] | 18.6 | [1] | ||
Asia Pacific | Segment, Continuing Operations | Risk Management Solutions
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Segment Reporting Disclosure [Line Items] | ||||||||||
Revenue | 42.6 | 38.7 | 78.2 | 73.5 | ||||||
Asia Pacific | Segment, Continuing Operations | Sale and Marketing Solutions
|
||||||||||
Segment Reporting Disclosure [Line Items] | ||||||||||
Revenue | 6.7 | 7.7 | 12.5 | 14.4 | ||||||
Europe and Other International Markets
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Segment Reporting Disclosure [Line Items] | ||||||||||
Revenue | 58.4 | 58.3 | 114.8 | 115.7 | ||||||
Europe and Other International Markets | Segment, Continuing Operations
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Segment Reporting Disclosure [Line Items] | ||||||||||
Revenue | 58.4 | 58.3 | 114.8 | 115.7 | ||||||
Divested and other revenue | 0 | 0 | 0 | 0 | ||||||
Europe and Other International Markets | Segment, Continuing Operations | Risk Management Solutions
|
||||||||||
Segment Reporting Disclosure [Line Items] | ||||||||||
Revenue | 48.6 | 48.5 | 94.9 | 96.2 | ||||||
Europe and Other International Markets | Segment, Continuing Operations | Sale and Marketing Solutions
|
||||||||||
Segment Reporting Disclosure [Line Items] | ||||||||||
Revenue | $ 9.8 | $ 9.8 | $ 19.9 | $ 19.5 | ||||||
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Basis of Presentation - Additional Information (Detail)
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3 Months Ended |
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Jun. 30, 2013
segment
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Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | |
Number of Operating Segments | 3 |
Income Taxes - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Income Taxes [Line Items] | ||||
Effective tax rate | 31.40% | 30.20% | 31.20% | 21.40% |
Gross unrecognized tax benefits | $ 98.6 | $ 98.6 | ||
Unrecognized tax benefits that, if recognized, would impact effective tax rate | 93.0 | 93.0 | ||
Unrecognized Tax Benefits, Decrease Resulting from Prior Period Tax Positions | 0.5 | |||
Unrecognized Tax Benefits, Reduction Resulting from Lapse of Applicable Statute of Limitations and Settlements with Tax Authority | 2.1 | |||
Reasonably possible decrease in unrecognized tax benefits within next twelve months | 62 | 62 | ||
Period within which Unrecognized Tax Benefits will possibly decrease | 12 months | |||
Interest expense related to unrecognized tax benefits | 0.6 | 0.8 | 1.1 | 1.3 |
Accrued interest expense related to unrecognized tax benefits | $ 9.1 | $ 12.7 | $ 9.1 | $ 12.7 |
Earnings Per Share (Tables)
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Jun. 30, 2013
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Text Block [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share |
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Share Repurchases | Our share repurchases were as follows:
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Consolidated Statements of Shareholders' Equity (Deficit) (Parenthetical) (USD $)
In Millions, unless otherwise specified |
6 Months Ended | |
---|---|---|
Jun. 30, 2013
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Jun. 30, 2012
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Pension Adjustments, tax | $ 5.5 | $ 3.2 |
Derivative Financial instruments, tax impact | $ 0 | $ 0 |
Restructuring Charge
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Text Block [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Charge | Restructuring Charge Financial Flexibility is an ongoing process by which we seek to reallocate our spending from low-growth or low-value activities to other activities that will create greater value for shareholders through enhanced revenue growth, improved profitability and/or quality improvements. With most initiatives, we have incurred restructuring charges (which generally consist of employee severance and termination costs, contract terminations, and/or costs to terminate lease obligations less assumed sublease income). These charges are incurred as a result of eliminating, consolidating, standardizing and/or automating our business functions. Restructuring charges have been recorded in accordance with Accounting Standards Codification (“ASC”) 712-10, “Nonretirement Postemployment Benefits,” or “ASC 712-10” and/or ASC 420-10, “Exit or Disposal Cost Obligations,” or “ASC 420-10,” as appropriate. We record severance costs provided under an ongoing benefit arrangement once they are both probable and estimable in accordance with the provisions of ASC 712-10. We account for one-time termination benefits, contract terminations, and/or costs to terminate lease obligations less assumed sublease income in accordance with ASC 420-10, which addresses financial accounting and reporting for costs associated with restructuring activities. Under ASC 420-10, we establish a liability for cost associated with an exit or disposal activity, including severance and lease termination obligations, and other related costs, when the liability is incurred, rather than at the date that we commit to an exit plan. We reassess the expected cost to complete the exit or disposal activities at the end of each reporting period and adjust our remaining estimated liabilities, if necessary. The determination of when we accrue for severance costs and which standard applies depends on whether the termination benefits are provided under an ongoing arrangement as described in ASC 712-10 or under a one-time benefit arrangement as defined by ASC 420-10. Inherent in the estimation of the costs related to the restructurings are assessments related to the most likely expected outcome of the significant actions to accomplish the exit activities. In determining the charges related to the restructurings, we had to make estimates related to the expenses associated with the restructurings. These estimates may vary significantly from actual costs depending, in part, upon factors that may be beyond our control. We will continue to review the status of our restructuring obligations on a quarterly basis and, if appropriate, record changes to these obligations in current operations based on management’s most current estimates. Three Months Ended June 30, 2013 vs. Three Months Ended June 30, 2012 During the three months ended June 30, 2013, we recorded a $2.2 million restructuring charge. The significant components of this charge included:
During the three months ended June 30, 2012, we recorded a $9.3 million restructuring charge. The significant components of this charge included:
Six Months Ended June 30, 2013 vs. Six Months Ended June 30, 2012 During the six months ended June 30, 2013, we recorded a $4.5 million restructuring charge. The significant components of this charge included:
During the six months ended June 30, 2012, we recorded an $18.4 million restructuring charge. The significant components of this charge included:
The following tables set forth, in accordance with ASC 712-10 and/or ASC 420-10, the restructuring reserves and utilization related to our Financial Flexibility initiatives:
(1) We incurred an asset impairment of $0.5 million in the first quarter of 2013 related to the termination of a lease. |
Basis of Presentation
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6 Months Ended | ||||||||||||
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Jun. 30, 2013
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Text Block [Abstract] | |||||||||||||
Basis of Presentation | Basis of Presentation These interim unaudited consolidated financial statements have been prepared in accordance with the instructions to the Quarterly Report on Form 10-Q. They should be read in conjunction with the consolidated financial statements and related notes, which appear in The Dun & Bradstreet Corporation’s (“D&B,” the "Company," “we” or “our”) Annual Report on Form 10-K for the year ended December 31, 2012. The unaudited consolidated results for interim periods do not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for annual financial statements and are not necessarily indicative of results for the full year or any subsequent period. In the opinion of our management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of the unaudited consolidated financial position, results of operations and cash flows at the dates and for the periods presented have been included. All inter-company transactions have been eliminated in consolidation. Effective January 1, 2013, we began managing and reporting our North America Risk Management Solutions set as:
Management believes that these measures provide further insight into our performance and the growth of our North America Risk Management Solutions revenue. We will no longer report our Risk Management Solutions business on a traditional, value-added and supply management solutions basis for any segment. Also, effective January 1, 2013, we began managing and reporting our Internet Solutions business as part of our Traditional Sales & Marketing Solutions set. The financial statements of the subsidiaries outside North America reflect results for the three month and six month periods ended May 31 in order to facilitate the timely reporting of our unaudited consolidated financial results and unaudited consolidated financial position. Where appropriate, we have reclassified certain prior year amounts to conform to the current year presentation due to the changes in solution sets discussed above. |
Other Accrued and Current Liabilities (Detail) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
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Mar. 31, 2013
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Dec. 31, 2012
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Jun. 30, 2012
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Mar. 30, 2012
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Schedule of Accrued Liabilities [Line Items] | |||||||||
Restructuring Reserve | $ 8.3 | $ 9.5 | $ 11.7 | $ 15.6 | $ 14.6 | ||||
Accrued Professional Fees, Current | 36.4 | 37.4 | |||||||
Accrued Operating Expenses, Current | 26.0 | 28.9 | |||||||
Other Accrued Liabilities | 53.3 | [1] | 40.9 | [1] | |||||
Other Accrued Liabilities, Current | $ 124.0 | $ 118.9 | |||||||
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Segment Information (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Segment Information, Revenue and Operating Income (Loss) |
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Supplemental Geographic and Customer Solution Set Information |
The following table represents Divested and Other Businesses revenue by solution set:
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Restructuring Charge - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||||
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Jun. 30, 2013
person
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Mar. 31, 2013
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Jun. 30, 2012
person
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Mar. 31, 2012
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Jun. 30, 2013
person
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Jun. 30, 2012
person
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Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charge | $ 2.2 | $ 2.3 | $ 9.3 | $ 9.1 | $ 4.5 | $ 18.4 |
Number of employees exited | 15 | 435 | 50 | 555 | ||
Severance
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Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charge | 2.1 | 8.1 | 2.7 | 11.2 | ||
One-time Termination Benefits [Member]
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Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charge | 1.1 | 4.7 | ||||
Severance and Termination
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Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charge | 2.1 | 0.6 | 9.2 | 6.7 | ||
Number of employees impacted | 20 | 500 | 65 | 620 | ||
Lease Termination Obligations and Other Exit Costs
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Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charge | $ 0.1 | $ 1.7 | $ 0.1 | $ 2.4 | $ 1.8 | $ 2.5 |
Earnings Per Share - Additional Information (Detail)
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3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Weighted average restricted shares outstanding | 8,396 | 19,331 | ||
Stock-based awards to acquire shares of common stock outstanding but not included in computation of diluted earnings per share (in shares) | 185,095 | 1,470,565 | 616,988 | 1,377,458 |
Options, expiration period | 10 years |
Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
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Dec. 31, 2012
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Assets: | ||||||||||||
Cash Equivalents | $ 87.2 | [1] | $ 58.1 | [2] | ||||||||
Other Current Assets | Foreign exchange forward contracts
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Assets: | ||||||||||||
Assets measured at fair value | 0.1 | [3] | ||||||||||
Other Accrued and Current Liabilities | Foreign exchange forward contracts
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Liabilities: | ||||||||||||
Liabilities measured at fair value | 0.5 | [3] | 0.4 | [4] | ||||||||
Quoted Prices in Active Markets for Identical Assets (Level I)
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Assets: | ||||||||||||
Cash Equivalents | 87.2 | [1] | 58.1 | [2] | ||||||||
Quoted Prices in Active Markets for Identical Assets (Level I) | Other Current Assets | Foreign exchange forward contracts
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Assets: | ||||||||||||
Assets measured at fair value | 0 | [3] | ||||||||||
Quoted Prices in Active Markets for Identical Assets (Level I) | Other Accrued and Current Liabilities | Foreign exchange forward contracts
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Liabilities: | ||||||||||||
Liabilities measured at fair value | 0 | [3] | 0 | [4] | ||||||||
Significant Other Observable Inputs (Level II)
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Assets: | ||||||||||||
Cash Equivalents | 0 | [1] | 0 | [2] | ||||||||
Significant Other Observable Inputs (Level II) | Other Current Assets | Foreign exchange forward contracts
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Assets: | ||||||||||||
Assets measured at fair value | 0.1 | [3] | ||||||||||
Significant Other Observable Inputs (Level II) | Other Accrued and Current Liabilities | Foreign exchange forward contracts
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Liabilities: | ||||||||||||
Liabilities measured at fair value | 0.5 | [3] | 0.4 | [4] | ||||||||
Significant Unobservable Inputs (Level III)
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Assets: | ||||||||||||
Cash Equivalents | 0 | [1] | 0 | [2] | ||||||||
Significant Unobservable Inputs (Level III) | Other Current Assets | Foreign exchange forward contracts
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Assets: | ||||||||||||
Assets measured at fair value | 0 | [3] | ||||||||||
Significant Unobservable Inputs (Level III) | Other Accrued and Current Liabilities | Foreign exchange forward contracts
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Liabilities: | ||||||||||||
Liabilities measured at fair value | $ 0 | [3] | $ 0 | [4] | ||||||||
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