Dun & Bradstreet sets third-quarter dividend; Rate Reflects Dividends to Be Paid By Cognizant Corporation and "New" Dun & Bradstreet

Business Wire, July 17, 1996

WILTON, Conn.--(BUSINESS WIRE)--July 17, 1996--Dun & Bradstreet today declared a third-quarter dividend of 25 cents a share, payable on September 10, 1996, to shareholders of record at the close of business August 20, 1996.

D&B plans to split in October into three public corporations: Cognizant Corporation, The "new" Dun & Bradstreet Corporation and ACNielsen. The D&B consolidated third-quarter rate represents emerging dividend policies for Cognizant and "new" D&B. As previously announced, ACNielsen will not pay a dividend initially.

Dun & Bradstreet maintained its quarterly dividend in the first two quarters of 1996, as planned. The company anticipates that the third-quarter 1996 dividend of 25 cents a share will be the last dividend paid out by D&B on a consolidated basis. Fourth-quarter dividends are expected to be paid separately by Cognizant and "new" D&B, subsequent to the planned split in October.

Cognizant Corporation

Cognizant Corporation, with 1995 pro forma revenue of $1.5 billion and more than 10,000 professionals in 100 countries, is a growth company with excellent performance characteristics and outstanding opportunities in high-growth emerging markets in healthcare, high-tech and media. Cognizant forecasts pro forma earnings-per-share growth in the 17-to-20 percent range.

"Cognizant's dividend policy is designed to generate the highest total return to shareholders," said Robert E. Weissman, chairman and CEO of Cognizant Corporation. "Driven by our growth strategy, it reflects the optimum balance of investment for earnings growth and current yield."

Cognizant's dividend was determined by weighing three key factors: the company's ability to generate growth by investing in new opportunities; peer-group practices; and a desire to initiate a dividend record.

"We're confident in Cognizant's growth prospects," said Weissman. "Investing in the business to drive growth provides an excellent return, accelerating our EPS outlook on a longer-term basis."

Cognizant conducted an extensive peer-group analysis of companies with similar high-growth characteristics in the information, healthcare and technology markets.

"We believe the right balance is strong growth plus a modest yield, despite the fact that the majority of companies in our comparator groups pay no dividends," said Weissman.

The dividend attributable to Cognizant in the third quarter is 3 cents a share, which equates to an annualized rate of 12 cents a share. This represents a dividend payout ratio in the 5-to-8 percent range for the current year.

Cognizant launches in October as the worldwide leader in information services for its target markets, including healthcare, high tech and media. The companies three largest businesses are: IMS International, the premier global supplier of marketing information to the pharmaceutical and healthcare industries; Nielsen Media Research, the leader in audience measurement for electronic media; and Gartner Group, the leading provider of advisory services to high-tech users, vendors and suppliers, in which Cognizant holds a majority interest.

The "New" Dun & Bradstreet Corporation

The 'new' Dun & Bradstreet Corporation, with pro forma 1995 revenue of $2.0 billion and 16,000 professionals in 40 countries, will target D&B's historical strength in financial information services. The company is a stable, moderate-growth company with excellent cash flow.

"New D&B delivers to shareholders a steady stream of cash dividends that is competitive and attractive," said Volney Taylor, designated chairman and CEO of the "new" D&B. "Relative to peer-group companies in business information services, our new dividend payout ratio will be at the high end of the range."

"Our capital structure dictates a conservative use of the strong cash flow that 'new' D&B generates," added Taylor. "In DBIS, we have substantial emerging business opportunities outside our traditional markets. A number of these are already generating revenue growth in the 35 percent range. We'd like to accelerate investment in these dynamic new areas such as database marketing and EDI."

"This dividend payout provides us with the financial flexibility to address several options. We're evaluating the trade-offs between growth investments, the ability to retire debt on an accelerated basis and, potentially, repurchase shares," Taylor concluded.

The dividend attributable to "new" D&B in the third quarter is 22 cents a share, which equates to an annualized rate of 88 cents a share. This represents a dividend payout ratio in the 45-to-50 percent range for the current year's pro forma earnings.

The "new" Dun & Bradstreet Corporation consists of Dun & Bradstreet Information Services, the world's largest source of business-to-business marketing and commercial-credit information; Moody's Investors Service, a global leader in rating debt; and Reuben H. Donnelley, a premier provider of Yellow Pages marketing and publishing.

The Dun & Bradstreet Corporation is the world's largest marketer of information, software and services for business decision making, with worldwide revenue of $5.4 billion in 1995.