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, 2001
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/ Mary Jane Raymond
_____________________________
Mary Jane Raymond
Vice President & Corporate Controller
Date: June 27, 2002
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, 2001 and 2000 2
Statement of Changes in Net Assets Available for Plan Benefits
For the year ended December 31, 2001 3
Notes to Financial Statements 4 - 10
Schedule of Assets Held for Investment Purposes at December 31, 2001 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, 2001 and 2000, and the changes in net
assets available for plan benefits for the year ended December 31, 2001 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 at December 31, 2001 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
Profit Participation Plan of
The Dun & Bradstreet Corporation
Statements of Net Assets Available for Plan Benefits
(Dollars in Thousands)
--------------------------------------------------------------------------------
December 31, December 31,
2001 2000
Assets
Investments (See Note 3) $ 705,331 $ 777,037
--------------- ---------------
Receivables:
Employer contributions receivable 229 -
Participant contributions receivable 697 -
--------------- ---------------
Total receivables 926 -
--------------- ---------------
Net Assets Available for Plan Benefits $ 706,257 $ 777,037
--------------- ---------------
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,
2001
Additions:
Additions to net assets attributed to:
Investment (loss) income:
Net depreciation in fair value of investments (see Note 3) $ (27,197)
Interest income 15,352
Dividends received 1,343
---------------
(10,502)
Less investment expenses (64)
---------------
Net Investment Loss (10,566)
---------------
Contributions:
Participant 21,603
Employer 7,210
---------------
Total Contributions 28,813
---------------
Total Additions 18,247
---------------
Deductions:
Deductions from net assets attributed to:
Benefits paid to participants 70,598
Transfer to the RMS Savings Plan 18,429
---------------
Total Deductions 89,027
---------------
Net Decrease (70,780)
Net assets available for plan benefits:
Beginning of year 777,037
---------------
End of year $ 706,257
---------------
See accompanying notes to the financial statements.
Profit Participation Plan of
The Dun & Bradstreet Corporation
Notes to 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, Old D&B had completed an
internal reorganization to the effect, at the time of 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 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.
In May 2001, the Company completed the sale of the operations of its
Receivable Management Service ("RMS"). RMS employees were immediately
vested in their employer contributions. As a result of this sale,
assets totaling $18.43 million were transferred to RMS Savings 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. For Plan years ended prior to January 1, 2001, 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 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. Beginning with Plan year
2001, the provisions of the Plan with respect to the EPS match were
amended such that the Company may contribute a percentage of the
aggregate participant contributions in the form of The Dun &
Bradstreet Corporation Common Stock if the Company meets the annual
EPS goal determined by management. Such EPS match contributions are
recorded by the Plan in the period in which they are received by the
Plan. Diversification rules prohibit transfers of the EPS match for
The Dun & Bradstreet Corporation Common Stock until age 50.
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. At December 31, 2001, interest on participant loans ranged
between 6.75% and 11.5%.
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 to a
participant's Plan account after three years of service beginning on
the participant's initial 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, 2001 were
$940,890. 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 risks in
the near term could materially affect 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.
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.
Participants in the Plan can invest in the benefit responsive
investment contracts with various insurance companies by allocating a
percentage of their contributions into 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 4.44% to 7.14% for 2001
and 5.47% to 7.14% for 2000 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.
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 - Administrative Class is invested
primarily in investment-grade bonds, including U.S. government,
corporate, mortgage-backed and foreign bonds.
3. The Barclays Global Investors Balanced Index Fund is invested in
approximately 60% of the S&P 500 index funds 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 Market Fund K.
4. The Dun & Bradstreet Stock Fund is invested primarily in the
common stock of The Dun & Bradstreet Corporation, as well as
short-term investments.
5. The Moody's Legacy Fund is invested primarily in the common
stock of Moody's Corporation, as well as short-term investments.
This fund does not accept additional contributions.
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 the
fund manager believes to have above-average growth potential.
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 normally invested at least
65% of total assets 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 Barclays Global Investors Mid and Small Capitalization
Index Fund is invested in stocks of 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.
12. The Barclays Global Investors International Equity Index Fund is
invested in stocks of highly capitalized companies in 21
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 Barclays Global Investors 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.
Investments held by the Plan at December 31, 2001 and 2000 are
summarized as follows (in thousands):
December 31,
------------------------------
2001 2000
Common Stock $ 103,307 $80,393
Common/Collective Trusts 296,513 384,245
Mutual Funds 60,233 74,031
Insurance Contracts 225,965 216,519
Money Market Funds 11,354 11,942
Participant Loans 7,959 9,907
--------------- ------------
Total Investments Held by the Plan $ 705,331 $777,037
--------------- ------------
Investments that represent 5% or more of the Plan's net assets at
December 31, 2001 and 2000 are identified as follows (in thousands):
December 31,
-------------------------------
2001 2000
Common Stocks:
The Dun & Bradstreet Corporation Common Stock $ 39,626 $ 28,618
Moody's Corporation Common Stock 63,681 51,775
Common/Collective Trust:
Barclays Global Investors S&P 500 Index 227,770 318,155
Mutual Fund:
Fidelity Aggressive Growth Fund 19,191 39,793
Insurance Contracts:
Connecticut General Life Insurance 48,365 75,881
Massachusetts' Mutual 34,871 32,547
Metropolitan Life Inc Co. 51,952 17,083
New York Life Insurance 35,547 40,471
Principal Life Insurance 47,032 32,787
Other (investments individually less than 5%) 137,296 139,927
-------------- --------------
Total Investments $ 705,331 $ 777,037
-------------- --------------
During 2001, 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 (in thousands):
Year Ended
December 31,
2001
Net (Depreciation)/Appreciation:
Common Stocks:
The Dun & Bradstreet Corporation Common Stock $ 10,746
Moody's Corporation Common Stock 25,228
Common/Collective Trusts:
Barclays Global Investors Mid and Small Capitalization Index Fund (2,452)
Barclays Global Investors S&P 500 Index Fund (34,649)
Barclays Global Investors International Equity Index Fund (3,717)
Barclays Global Investors Balanced Index Fund (1,097)
Mutual Funds:
Fidelity Equity Income Fund (467)
Fidelity Blue Chip Growth Fund (2,515)
Fidelity Low-Price Stock Fund 733
Fidelity Aggressive Growth Fund (17,916)
Fidelity Diversified International Fund (1,024)
PIMCO Total Return Fund - Administrative Class (67)
-----------------
Total net depreciation $ (27,197)
-----------------
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 $64,339 for the year
ended December 31, 2001.
6. Reconciliation of Financial Statement to Form 5500
The following is a reconciliation of net assets available for plan
benefit per the financial statements to the Form 5500 (in thousands):
Net assets available for plan benefit per the financial statements $ 706,257
Less: Employer contributions receivable (229)
Less: Participant contributions receivable (697)
---------------
Net assets available for plan benefit per Form 5500 $ 705,331
---------------
The receivables noted above relate to deposits in transit at year-end
and were recorded in the Plan in January 2002.
Profit Participation Plan of
The Dun & Bradstreet Corporation
Schedule of Assets Held for Investment Purposes at December 31, 2001
--------------------------------------------------------------------------------
Price Per Number of Fair Market
Description of Investments Share/Unit Shares/Units Value
Common Stocks:
The Dun & Bradstreet Corporation Common Stock 35.30 1,122,539.00 $ 39,625,626
Moody's Corporation Common Stock 39.86 1,597,615.00 63,680,934
----------------
103,306,560
Common/Collective Trusts:
Barclays Global Investors Mid/Sm Cap Index Fund 23.01 1,275,566.04 29,350,775
Barclays Global Investors S&P 500 Index Fund 32.56 6,995,405.31 227,770,397
Barclays Global Investors International Equity Index Fund 8.13 1,480,674.31 12,037,882
Barclays Global Investors Balanced Index Fund 10.25 2,668,696.93 27,354,144
----------------
296,513,198
Mutual Funds:
Fidelity Equity Income Fund* 48.77 118,460.59 5,777,323
Fidelity Blue Chip Growth Fund* 42.94 283,791.62 12,186,012
Fidelity Low-Priced Stock Fund* 27.42 283,999.70 7,787,272
Fidelity Aggressive Growth Fund* 19.02 1,009,002.03 19,191,219
Fidelity Diversified International Fund* 19.08 336,733.42 6,424,874
PIMCO Total Return Fund - Administrative Class 10.46 847,621.71 8,866,123
----------------
60,232,823
Insurance Contracts:
Connecticut General Life Ins #25247 4/01/02 6.51% 1.00 8,066,899.00 8,066,899
Connecticut General Life Ins #25261 10/01/02 5.67% 1.00 16,495,856.00 16,495,856
Connecticut General Life Ins #25277 1/01/03 6.10% 1.00 23,802,376.00 23,802,376
Massachusetts Mutual #35055 10/01/03 7.14% 1.00 34,871,195.00 34,871,195
Metropolitan Life Inc Co #25835 10/01/02 5.63% 1.00 12,503,685.00 12,503,685
Metropolitan Life Inc Co #28352 10/01/04 4.64% 1.00 39,448,410.00 39,448,410
New York Life Insurance #GA30818 04/01/02 6.13% 1.00 23,139,278.00 23,139,278
New York Life Insurance #GA31045 04/01/02 4.96% 1.00 12,407,803.00 12,407,803
Principal Life Insurance #4-04402-06 10/01/02 6.00% 1.00 17,805,491.00 17,805,491
Principal Life Insurance #4-04402-7 10/01/03 6.91% 1.00 17,094,775.00 17,094,775
Principal Life Insurance #4-04402-8 4/01/04 4.44% 1.00 12,132,120.00 12,132,120
Travelers Insurance Co #51426 10/01/02 5.47% 1.00 8,197,274.48 8,197,273
----------------
225,965,161
Money Market Funds:
Fidelity Investments Short Term Investment Fund* 11,354,656
Participant Loans:
Dun & Bradstreet Corp Various Loans to Participants 7,958,668
----------------
Total investments $705,331,066
----------------
*Party in interest transaction.