SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________________ to _________________
Commission file number 1-7155 (The Dun & Bradstreet Corporation)
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
Profit Participation Plan of The Dun & Bradstreet Corporation.
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
The Dun & Bradstreet Corporation, One Diamond Hill Road, Murray Hill, NJ 07974.
REQUIRED INFORMATION
The required financial statements are attached to this report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Employee Benefits Committee of The Dun & Bradstreet Corporation has duly caused
this annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
PROFIT PARTICIPATION PLAN of THE DUN & BRADSTREET CORPORATION (Name of Plan)
BY: /s/ Chester J. Geveda Jr.
_____________________________
Chester J. Geveda Jr.
Vice President & Controller
Acting Chief Financial Officer
Date: June 28, 2001
Profit Participation Plan
of The Dun & Bradstreet Corporation
Index to Financial Statements
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Pages
Report of Independent Accountants 1
Statements of Net Assets Available for Plan Benefits as of
December 31, 2000 and 1999 2
Statement of Changes in Net Assets Available for Plan Benefits
For the year ended December 31, 2000 3
Notes to Financial Statements 4 - 10
Schedule of Assets Held for Investment Purposes 11
Report of Independent Accountants
To the Employee Benefits Committee of the Board of Directors of
The Dun & Bradstreet Corporation:
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statement of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of the Profit Participation Plan of The Dun & Bradstreet
Corporation (the "Plan") at December 31, 2000 and 1999, and the changes in net
assets available for plan benefits for the year ended December 31, 2000 in
conformity with accounting principles generally accepted in the United States of
America. These financial statements are the responsibility of the Plan's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of Assets Held
for Investment Purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedule is the responsibility of the Plan's management.
The supplemental schedule has been subjected to the auditing procedures applied
in the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
PRICEWATERHOUSECOOPERS LLP
June 15, 2001
Profit Participation Plan of
The Dun & Bradstreet Corporation
Statements of Net Assets Available for Plan Benefits
(Dollars in Thousands)
--------------------------------------------------------------------------------
December 31, December 31,
2000 1999
Assets
Investments (See Note 3) $777,037 $935,350
Net Assets Available for Plan Benefits $777,037 $935,350
See accompanying notes to the financial statements.
Profit Participation Plan of
The Dun & Bradstreet Corporation
Statement of Changes in Net Assets Available for Plan Benefits
(Dollars in Thousands)
--------------------------------------------------------------------------------
Year Ended
December 31,
2000
Additions:
Additions to net assets attributed to:
Investment (loss) income:
Net depreciation in fair value of investments $ (45,102)
Interest 15,119
Dividends 9,351
(20,632)
Less investment expenses (113)
Net Investment Loss (20,745)
Contributions:
Participant 31,517
Employer 12,502
Total Contributions 44,019
Total Additions 23,274
Deductions:
Deductions from net assets attributed to:
Benefits paid to participants 98,287
Transfer to the Profit Participation Plan of the Moody's Corporation 83,300
Total Deductions 181,587
Net Decrease (158,313)
Net assets available for plan benefits:
Beginning of year 935,350
End of year $ 777,037
Profit Participation Plan of
The Dun & Bradstreet Corporation
Notes to the Financial Statements
1. Background and Plan Description
The Dun & Bradstreet Corporation established The Dun & Bradstreet
Defined Contribution Plan Trust (the "Trust") for the purpose of
holding the assets of The Profit Participation Plan of The Dun &
Bradstreet Corporation (the "Plan").
On September 30, 2000, (the "2000 Distribution Date"), the company then
known as The Dun & Bradstreet Corporation ("Old D&B") separated into
two independent, publicly traded companies - The New D&B Corporation
(the "Company") and Moody's Corporation ("Moody's"). The separation was
accomplished through a tax-free distribution to shareholders of Old D&B
(the "2000 Distribution") of all of the shares of common stock of the
company. For every two shares of common stock of Old D&B held,
shareholders received one share of common stock of the Company.
Following the 2000 Distribution, Old D&B was renamed "Moody's
Corporation" and the Company was renamed "The Dun & Bradstreet
Corporation." Prior to the 2000 Distribution, the business of the
Company consisted solely of the business of supplying credit, marketing
and purchasing information as well as receivables management services
(the "D&B Business"), and the business of Old D&B (other than the
Company and its subsidiaries) consisted solely of the business of
providing ratings and related research and risk management services
(the "Moody's Business").
The existing Plan was adopted by the Company as of the separation date.
The Plan retained the balances of the Company's active and disabled
participants as well as all retirees and vested terminated participants
of Old D&B as of the separation date. Moody's participants were given
the option to keep their balances as of separation date in the Plan or
transfer their balances to the Profit Participation Plan of Moody's
Corporation ("Moody's Plan"). Absent an election to remain in the Plan,
all balances of Moody's active and disabled participants as of the
separation date were transferred to the Moody's Plan. Moody's active
and disabled participants who elected to remain in the Plan cannot make
contributions to the Plan.
The following summary of major Plan provisions in effect for the Plan
year is provided for general information purposes only. Participants
should refer to the Plan document for more complete description of the
Plan's provisions. The Plan is a defined contribution plan and is
subject to the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA).
Eligibility
Full time associates of the Company are immediately eligible to
participate in the Plan on their date of hire. Part time associates who
work at least one thousand hours during the consecutive twelve-month
period following employment, or in any calendar year thereafter, are
eligible to participate in the Plan.
Contributions
Participants contribute to the basic Plan by authorizing payroll
deductions between 1% and 6% of their creditable compensation as
defined in the Plan. The Company makes matching contributions equal to
a minimum of 50% of aggregate participants contributions. If the
average increase in earnings per share ("EPS"), as defined in the Plan,
of common stock of The Dun & Bradstreet Corporation for any Plan year
and the immediately preceding Plan year is greater
Profit Participation Plan of
The Dun & Bradstreet Corporation
Notes to the Financial Statements (cont.)
1. Background and Plan Description (cont.)
than 5%, the Company may contribute an additional percentage of the
aggregate participant contributions. The percentage of additional
Company matching contributions depends on the 2-year average increase
in EPS and a participant's total years of service.
Participants may also make additional contributions to the Investment
Plan (which are not eligible for Company matching contributions) under
an Investment Plan addendum to the basic Plan by authorizing payroll
deductions between 1% and 10% of their creditable compensation as
defined in the Plan.
Participants' contributions under the basic Plan and additional
contributions under the Investment Plan may be made in the form of
contributions from after-tax earnings and/or contributions from
before-tax earnings, which have the effect of reducing current taxable
earnings for federal income tax purposes. A participant's aggregate
contributions may not exceed 16% of the participant's creditable
compensation (up to 6% in contributions under the basic Plan and up to
10% in contributions under the Investment Plan) subject to an overall
limit on before-tax contributions imposed by the Internal Revenue Code
(IRC).
Individual Accounts
A separate account is established and maintained for each Plan
participant. Contributions are invested in one or more of the Plan's
investment funds as designated by the participant. Participants are not
permitted to invest more than 50% of their account balance in The Dun &
Bradstreet Common Stock Fund. Income earned and net appreciation or
depreciation on Plan investments for a given fund is allocated in
proportion to the participant's account balance in that fund on a daily
basis.
Payment of Benefits
Upon termination of service with the Company, participants become
eligible for a lump sum distribution of the vested portion of their
account balance. Retired and terminated participants who have an
account balance in excess of $5,000 may elect various forms of deferred
distribution.
Participant Loans
Participants may obtain loans from the Plan, which are secured by the
vested balance in their account. The Plan limits the total number and
amount of loans outstanding at any time for each participant, of up to
two general-purpose loans and a principal residence loan. The minimum
loan is $500 and the maximum is the lower of 50% of a participant's
vested account balance or $50,000. The maximum applies to all
outstanding loans. Interest rates applicable to Plan loans are based on
the prime rate as reported in The Wall Street Journal on the last
business day of the month before the loan is processed plus 200 basis
points.
Vested Benefits and Forfeitures
Participants are immediately vested in their voluntary contributions
plus actual earnings thereon. The Plan provides for 100% vesting in the
value of Company contributions plus actual earnings thereon.
Profit Participation Plan of
The Dun & Bradstreet Corporation
Notes to the Financial Statements (cont.)
1. Background and Plan Description (cont.)
to a participant's Plan account after three years of service beginning
on the participant's initial to employment date with the Company. In
addition, a participant becomes 100% vested in the value of Company
contributions immediately upon attainment of age 65 or if they become
totally and permanently disabled or die.
Amounts forfeited by nonvested or partially vested participants who
terminated employment during the year ended December 31, 2000 were
$517,068. Forfeited amounts reduce future Company contributions.
Administration of the Plan
The Plan is administered by the Employee Benefits Committee which is
appointed by the Board of Directors of the Company. Fidelity Management
Trust Company ("The Trustee") are the Trustees of the Plan and has
custody of the Plan's assets. The expenses of administering the Plan
are paid by the Company except for investment management fees which are
charged to the Plan.
Plan Termination
While the Company has not expressed any intent to discontinue its
contributions or to terminate the Plan, it is free to do so at any time
subject to the provisions of the ERISA and the Internal Revenue Code
which state that, in such event, all participants of the Plan shall be
fully vested in the amounts credited to their accounts.
2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared on the accrual method
of accounting.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make significant
estimates and assumptions that affect the reported amounts of assets
and liabilities and changes therein, and disclosures of contingent
assets and liabilities. Actual results could differ from those
estimates.
Risks and Uncertainties
The Plan provides for various investment options in any combination of
stocks, bonds, fixed income securities, mutual funds, and other
investment securities. Certain investment securities are exposed to
various risks, such as interest rate, market and credit. Due to the
level of risk associated with certain investment securities and the
level of uncertainty related to changes in the value of investment
securities, it is at least reasonably possible that changes in
valuations in the near term could materially affect participants'
account balances and the amounts reported in The Statements of Net
Assets Available for Plan Benefits and The Statement of Changes in Net
Assets Available for Plan Benefits.
Profit Participation Plan of
The Dun & Bradstreet Corporation
Notes to the Financial Statements (cont.)
Summary of Significant Accounting Policies (cont.)
Payment of Benefits
Benefits are recorded when paid.
Investment Valuation
Investments in securities of regulated investment companies are valued
at the closing fund share price on the last business day of the period.
The Plan has entered into benefit responsive investment contracts with
various insurance companies.
The Plan maintains the contributions in the Special Fixed Income Fund.
The Special Fixed Income Fund is credited with earnings on the
underlying investments and charged for participant withdrawals and
administrative expenses. Such contracts are included in the financial
statements at contract value as reported to the Plan by the respective
contract issuers. Contract values represent contributions made under
the contract, plus earnings, less participant withdrawals and
administrative expenses. Participants direct the withdrawal of their
investment at contract value. There are no reserves against contract
value for credit risk of the contract issuer or otherwise. The average
yield and crediting interest rates ranged from 5.47% to 7.14% for 2000
and 5.47% to 6.91% for 1999 and the crediting interest rates are fixed
for the duration of such contracts.
Investment Transactions and Investment Income
Purchase and sales of securities are reflected on a trade date basis.
Dividend income is recorded on the ex-dividend date. Income from other
investment is recorded as earned on an accrual basis.
Summary of Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities"
("SFAS No. 133"). SFAS No. 133 requires that an entity recognize all
derivatives and measure those instruments at fair value.
SFAS No. 133 is effective for fiscal years beginning after June 15,
2000. Pursuant to SFAS No. 137, the Plan is required to adopt SFAS No.
133 effective January 1, 2001. Management has not yet been able to
determine the impact of SFAS No. 133 on the Plan financial statements
as a result of the inconsistency in accounting literature between SFAS
No. 133, requiring derivatives to be measured at fair value, and the
AICPA Audit and Accounting Guide on "Audits of Employee Benefit Plans"
and Statement of Position 94-4, "Reporting of Investment Contracts
Held by Health and Welfare Benefit Plans and Defined Contribution
Pension Plans", requiring benefit responsive investment contracts
(including synthetic GICs) to be measured at contract value. Until
this discrepancy is resolved, management is unable to determine the
impact that SFAS No. 133 will have on the Plan financial statements.
The carrying value of those instruments is $216,518,787 at December
31, 2000.
The actual impact on the Plan's net assets available for plan benefits
of adopting SFAS No. 133 will be made based on the derivative positions
and hedging relationships at the date of adoption.
Profit Participation Plan of
The Dun & Bradstreet Corporation
Notes to the Financial Statements (cont.)
3. Investments
The Plan currently offers the following thirteen funds:
1. The Special Fixed Income Fund is invested in investment contracts with one or
more insurance companies and/or other financial institutions. The interest rate
of each contract depends on market conditions when the contract is negotiated.
2. The PIMCO Total Return Fund is invested primarily in investment-grade bonds,
including U.S. government, corporate, - mortgage-backed and foreign bonds.
3. The Balanced Index Fund is invested in approximately 60% of the S&P 500 and
approximately 40% in U.S. fixed income securities. Investments are included in
Barclays Global Investors Equity Index Fund T and Barclays Global Investors US
Debt Fund K.
4. The Dun & Bradstreet Common Stock Fund is invested primarily in the common
stock of The Dun & Bradstreet Corporation.
5. The Moody's Corporation Common Stock Fund is invested primarily in the common
stock of Moody's Corporation.
6. The Fidelity Aggressive Growth Fund is invested primarily in common stocks of
domestic and foreign issuers. The fund focuses on medium-sized companies, but
may also invest in larger or smaller companies and foreign companies.
7. The Fidelity Blue Chip Growth Fund is invested in common stocks of well-known
and established companies considered "blue chip" by the investment manager. The
fund may also invest in companies with strong earnings and future growth
potential that the fund's manager believes is positioned to become the "blue
chips" of the future.
8. The Fidelity Diversified International Fund is invested at least 65% in
stocks of companies based outside of the U.S. The investment manager may invest
in emerging markets, convertible securities and cash-equivalent investments.
9. The Fidelity Equity Income Fund is normally invested at least 65% in assets
of income-producing equity securities, which tend to lead to investments in
large-cap stocks. The fund may also invest in other types of equity and debt
securities, including lower-quality debt securities.
10. The Fidelity Low-Priced Stock Fund is invested primarily in "low-priced"
common stocks. Low-priced stocks that are priced at or below $35 per share at
time of investment. Often these are stocks of smaller, less well-known companies
that the fund manager considers undervalued.
11. The Mid and Small Capitalization Index Fund is invested in stocks of
predominantly medium-and small-sized U.S. companies. The fund will consider
investing in substantially all U.S. common stocks that are not included in the
S&P 500 Index. Investments are included in Barclays Global Investors Extended
Equity Market Fund K.
Profit Participation Plan of
The Dun & Bradstreet Corporation
Notes to the Financial Statements (cont.)
Investments (cont.)
12. The International Equity Index Fund is invested in stocks in more than 1,000
highly capitalized companies in 20 developed countries located in Western
Europe, Australia, Japan and the Pacific Rim. Investments are included in
Barclays Global Investors EAFE Equity Index Fund T.
13. The S&P 500 Index Fund is invested in all of the stocks included in the S&P
500 Index, which contains 500 predominantly large U.S. - based companies.
Investments are included in Barclays Global Investors Equity Index Fund T.
The Moody's Corporation Common Stock Fund was created on September 30, 2000
following the 2000 Distribution.
Investments held by the Plan at December 31, 2000 and 1999 are summarized as
follows (in thousands):
December 31,
2000 1999
Common Stocks $80,393 $67,398
Common/Collective Trusts 384,245 541,765
Mutual Funds 74,031 46,943
Insurance Contracts 216,519 255,082
Money Market Funds 11,942 12,369
Participant Loans 9,907 11,793
Total Investments Held by the Plan $777,037 $935,350
Investments that represent 5% or more of the Plan's net assets at December 31,
2000 and 1999 are identified as follows (in thousands):
December 31,
2000 1999
Barclays Global Investors Equity Index Fund T $ 318,155 $ 452,340
Moody's Corporation Common Stock 51,775 -
Fidelity Aggressive Growth Fund 39,793 -
The Dun & Bradstreet Corporation Common Stock - 67,398
Other (investments individually less than 5%) 367,314 415,612
Total Investments $ 777,037 $ 935,350
Profit Participation Plan of
The Dun & Bradstreet Corporation
Notes to the Financial Statements (cont.)
During 2000, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year)
depreciated in value as follows:
Year Ended
December 31,
Net (Depreciation)/Appreciation: 2000
PIMCO Total Return Fund $ 166
Balanced Index Fund (278)
Dun & Bradstreet Common Stock Fund 25,343
Moody's Corporation Common Stock (4,237)
Fidelity Aggressive Growth Fund (23,417)
Fidelity Blue Chip Growth Fund (2,598)
Fidelity Diversified International Fund (1,211)
Fidelity Equity Income Fund 37
Fidelity Low-Price Stock Fund 24
Mid and Small Capitalization Index Fund (3,224)
International Equity Index Fund (3,723)
S&P 500 Index Fund (31,984)
Total net depreciation $ (45,102)
4. Tax Status
The Internal Revenue Service has determined and informed the Company by
a letter dated August 18, 1999, that the Plan and related trust are
designed in accordance with applicable sections of the IRC. Although
the Plan has been amended since receiving the determination letter, the
Plan administrator and the Plan's tax counsel believe that the plan is
designed and is currently being operated in compliance with the
applicable requirements of the IRC.
5. Related-Party Transactions
Certain Plan investments are shares of mutual funds managed by Fidelity
Management Trust Company. Fidelity Management Trust Company is the
trustee as defined by the Plan and, therefore, these transactions
qualify as party-in-interest transactions. Fees paid by the Plan for
the investment management services amounted to $112,609 for the year
ended December 31, 2000.
Profit Participation Plan of
The Dun & Bradstreet Corporation
--------------------------------------------------------------------------------
Schedule of Assets Held for Investment Purposes
As of December 31, 2000
Price Per Number of Fair Market
Description of Investments Share/Unit Shares/Units Value
Common Stocks:
The Dun & Bradstreet Corporation Common Stock 25.8750 1,106,007 $ 28,617,931
Moody's Corporation 25.6875 2,015,560 51,774,698
80,392,629
Common/Collective Trusts:
Barclays Global Investors Equity Index Fund T 36.9981 8,599,216 318,154,769
Barclays Global Investors US Debt Fund K 15.5700 807,705 12,575,963
Barclays Global Investors Extended Equity Market Fund K 24.7214 1,418,859 35,076,119
Barclays Global Investors EAFE Equity Index Fund T 10.3977 1,773,346 18,438,686
384,245,537
Mutual Funds:
Fidelity Equity-Income Fund 53.43 74,763.20 3,994,598
Fidelity Blue Chip Growth Fund 51.53 301,225.31 15,522,140
Fidelity Low-Price Stock Fund 23.12 103,456.88 2,391,923
Fidelity Aggressive Growth Fund 36.17 1,100,153.66 39,792,558
Fidelity Diversified International Fund 21.94 372,918.87 8,181,840
PIMCO Total Return Fund 10.39 399,271.03 4,148,426
74,031,485
Insurance Contracts:
CIGNA Insurance Company #25237 4/02/01 6.90% 1.00 7,542,029 7,542,029
CIGNA Insurance Company #25237 10/01/01 6.51% 1.00 15,610,527 15,610,527
CIGNA Insurance Company #25247 10/01/02 5.67% 1.00 30,294,918 30,294,918
CIGNA Insurance Company #25277 4/01/03 6.10% 1.00 22,433,594 22,433,594
Metropolitan Life Insurance Company #24623 04/02/01 6.63% 1.00 17,082,551 17,082,551
Massachusetts Mutual 35055 10/01/03 7.14% 1.00 32,547,313 32,547,313
New York Life Insurance Company #31045 04/02/01 6.33% 1.00 18,668,329 18,668,329
New York Life Insurance Company #30818 04/03/02 6.13% 1.00 21,802,472 21,802,472
Principal Mutual Life Insurance Company
#4-4402-VII 10/01/03 6.91% 1.00 15,989,626 15,989,626
Principal Mutual Life Insurance Company
#4-4402-V 10/01/02 6.00% 1.00 16,797,409 16,797,409
TransAmerica Occidental Life Insurance Company
#51426 10/01/01 6.89% 1.00 9,977,978 9,977,978
Travelers Life & Annuity Insurance Company
#17028 5/01/02 5.47% 1.00 7,772,041 7,772,041
216,518,787
Money Market Funds:
Fidelity Investments Short Term Investment Fund 11,942,373
Participant Loans: (7.0% - 11.0%)
Dun & Bradstreet Corp Various Loans to Participants 9,906,526
Total assets held for investment purposes $777,037,337