D&B announces projected capital structures for Cognizant, "New" D&B and ACNielsen; Financial Strength and Shareholder Value Are Key Considerations

Business Wire, July 17, 1996

WILTON, Conn.--(BUSINESS WIRE)--July 17, 1996--Dun & Bradstreet, which plans to split into three public corporations in October, today announced the projected capital structures of Cognizant Corporation, the 'new' D&B and ACNielsen on the effective spin-off date. The projected capital structures represent forward-looking information and are qualified by the next-to-last paragraph herein.

"D&B's assets are being deployed to optimize shareholder value, consistent with the performance characteristics and capital requirements of the three new companies," said Robert E. Weissman, chairman and CEO of Dun & Bradstreet.

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 CORPORATION

Projected Capital Structure(1)

Cash $400 million to $450 million

Debt $0 to $10 million

Shareholders' Equity $775 million to $825 million

(1) Capital structure projected on assumed spin-off date of October 1, 1996. All projections are subject to changes in the business outlook, cash flow, and earnings between now and October 1, 1996.

"Cognizant's capital structure is designed to support our growth strategy," said Weissman, chairman and CEO of Cognizant. "Our balance sheet is strong and liquid, including a cash balance of $400 million and virtually no outstanding debt. Shareholders' equity of $775-to-$825 million will support debt of up to $1 billion, as Cognizant pursues business expansion."

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.

THE "NEW" DUN & BRADSTREET CORPORATION

Projected Capital Structure(1)

Cash $90 million to $100 million(2)

Debt $1,000 million to $1,075 million

Shareholders' Equity ($200 million to $220 million)

(1) Capital structure projected on assumed spin-off date of October 1, 1996. All projections are subject to changes in the business outlook, cash flow, and earnings between now and October 1, 1996.

(2) After payment of transaction liabilities.

As previously announced, the "new" D&B assumes the majority of existing D&B debt, estimated at $1.0-to-$1.1 billion when the split becomes effective. An initial cash balance of $90-to-$100 million, augmented by the company's strong free cash flow, provides sufficient coverage for debt service and dividends. The company expects to have investment-grade credit, primarily due to strong cash flow-to-debt ratios. As a result, it anticipates full access to the public debt markets. Initially, it plans to fund the majority of its debt requirements in the U.S. commercial paper market, which will be backed by a syndicated bank revolving credit agreement. Rates are fixed on approximately half of the October 1 debt. Total interest costs are estimated in the range of 7 percent.

While "new" D&B's initial shareholders' equity is negative, this is not reflective of the company's strong business fundamentals that will turn shareholder equity positive over the next several years.

"New D&B's capital structure works, based on our investment strategy, initial competitive dividends, and earnings growth potential," said Volney Taylor, designated chairman and CEO of the "new" D&B. "The beginning capital structure provides the ability to fund investment opportunities needed to meet our growth objectives. Our goal is a single A-rated debt structure, and we believe our strong cash flow makes that attainable." ACNIELSEN

ACNielsen, with offices in more than 80 countries and pro forma 1995 revenue of $1.3 billion, is the global leader in market research, information and analysis. ACNielsen is implementing an aggressive turnaround plan. The company holds potential to yield significant shareholder value near term, and a solid longer-term return.

ACNIELSEN

Projected Capital Structure(1)

Cash $70 million to $75 million

Debt $0 to $5 million

Shareholders' Equity $400 million to $430 million

(1) Capital structure projected on assumed spin-off date of October 1, 1996. All projections are subject to changes in the business outlook, cash flow, and earnings between now and October 1, 1996.

"With virtually no debt and a cash balance of $75 million, ACNielsen has significant financial flexibility and an excellent opportunity to effect a successful turnaround," said Nicholas L. Trivisonno, chairman and CEO. ACNielsen's initial shareholders' equity is estimated at $400-to-$430 million. The company expects positive cash flow in 1996, and an improving outlook for 1997. Initial cash resources, plus a debt capacity of approximately $200 million, are adequate to achieve current objectives.