Edgar Filing: DUN & BRADSTREET CORP/NW

Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________

Form 10-K

__________________________________

Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Fiscal Year Ended December 31, 2016

Commission file number 1-15967

__________________________________

The Dun & Bradstreet Corporation

(Exact name of registrant as specified in its charter)

___________________________________



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)

Registrant’s telephone number, including area code: (973) 921-5500

___________________________________

Securities registered pursuant to Section 12(b) of the Act:



Title of each class		Name of each exchange on which registered
Common Stock, par value $0.01 per share		New York Stock Exchange
Preferred Share Purchase Rights		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No o

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o No x

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer	ý	Accelerated filer	o	Non-accelerated filer	o	Smaller reporting company	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of June 30, 2016, the aggregate market value of all shares of Common Stock of The Dun & Bradstreet Corporation outstanding and held by nonaffiliates* (based upon its closing transaction price on the New York Stock Exchange Composite Tape on June 30, 2016) was approximately $4.416 billion.

As of January 31, 2017, 36,820,968 shares of Common Stock of The Dun & Bradstreet Corporation were outstanding.

Documents Incorporated by Reference

Portions of the registrant’s definitive proxy statement for use in connection with its annual meeting of shareholders, scheduled to be held on May 10, 2017, are incorporated into Part III of this Form 10-K.

* Calculated by excluding all shares held by executive officers and directors of the registrant. Such exclusions will not be deemed to be an admission that all such persons are “affiliates” of the registrant for purposes of federal securities laws.

INDEX



		Page
	PART I

Item 1.	Business	3
Item 1A.	Risk Factors	10
Item 1B.	Unresolved Staff Comments	18
Item 2.	Properties	18
Item 3.	Legal Proceedings	18
Item 4.	Mine Safety Disclosures	19

	PART II

Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	19
Item 6.	Selected Financial Data	21
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	24
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	55
Item 8.	Financial Statements and Supplementary Data	56
	Consolidated Statements of Operations and Comprehensive Income	59
	Consolidated Balance Sheets	60
	Consolidated Statements of Cash Flows	61
	Consolidated Statements of Shareholders' Equity (Deficit)	62
	Notes to Consolidated Financial Statements	63
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	134
Item 9A.	Controls and Procedures	134
Item 9B.	Other Information	135
	PART III

Item 10.	Directors, Executive Officers and Corporate Governance	135
Item 11.	Executive Compensation	135
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	135
Item 13.	Certain Relationships and Related Transactions and Director Independence	136
Item 14.	Principal Accountant Fees and Services	136

	PART IV

Item 15.	Exhibits and Financial Statement Schedules	136
Item 16.	10-K Summary	136
	SIGNATURES	137
	Index to Exhibits	138

PART I


Item 1.	Business

Overview

The Dun & Bradstreet Corporation (“Dun & Bradstreet” or “we” or “us” or “our” or the “Company”)grows the most valuable relationships in business. By uncovering truth and meaning from data, we connect customers with the prospects, suppliers, clients and partners that matter most, and have since 1841. Nearly ninety percent of the Fortune 500, and companies of every size around the world, rely on our data, insights and analytics.

Dun & Bradstreet^® is the world’s leading source of commercial data, analytics and insight on businesses. Our global commercial database as of December 31, 2016 contained approximately 265 million business records. We transform commercial data into valuable insight which is the foundation of our global solutions that customers rely on to make critical business decisions.

Dun & Bradstreet provides solution sets that meet a diverse set of customer needs globally. Customers use Risk Management Solutions™ to mitigate credit, compliance and supplier risk, increase cash flow and drive increased profitability, and Sales & Marketing Solutions™ to better use data to grow sales and improve marketing effectiveness and also for data management capabilities that provide effective and cost efficient marketing solutions to increase revenue from new and existing customers.

Our Strategy

Dun & Bradstreet’s strategy is to become one global company delivering indispensable content through modern channels to serve new customer needs with our forward-leaning culture. We remain focused on the commercial marketplace and continuing to be the world’s largest and best provider of insight about businesses. Our strategy is designed to drive long term sustainable growth in the years ahead and we remain committed to increasing Total Shareholder Return (“TSR”) through revenue growth.

Our strategy has five key components:

•

First, we are globalizing the business, moving from a regional structure to an integrated global organization. As part of this transformation we intend to expand upon our relationships with our large, strategic customers, many of which also have global operations, while servicing them as global accounts. We are also creating global, cloud-based solutions, to service our customers. This globalization of our business will be closely integrated with our Worldwide Network^® partners. For example, in 2016, we shifted our businesses based in the Latin America and Benelux regions to a Worldwide Network partner model in support of our global data strategy and customer-centric approach built on having the best data in every market;

•

Second, we are investing in content, which includes our data and analytics, that is indispensable to our customers’ growth. We are improving the quality and consistency of our data around the globe, developing new analytic tools and scores to improve the predictive capability of our content, cultivating new proprietary data sources and acquiring companies and other third-party sources of data to combine with our existing data;


•	Third, we are modernizing content delivery by transitioning from older, traditional platforms to more agile cloud-based and Data-as-a-Service (or “DaaS”) approaches leveraging Application Programming Interface (“API”) connectors, and focusing on alliance and third-party distribution in addition to our own products;


•	Fourth, we have modernized the brand. Building on our modernized brand efforts the year prior, we unveiled in 2016 a reimagined, data-driven, content-led digital experience for our customers, and made significant investments in our persona-based go-to-market strategy; and


•	Fifth, we are creating an outside-in, forward-leaning culture with a team that is externally focused, and plugged into our customers’ needs and the markets in which we operate.

The strategy is built on the valuable assets the Company possesses today that we believe provide a competitive advantage for Dun & Bradstreet:


•	Well Recognized Brand


•	Superior Content and Solutions


•	Loyal Customers

For the reasons described below, we believe that these core competitive advantages will enable successful execution of our strategy going forward.

Well Recognized Brand

Dun & Bradstreet has benefitted for over 175 years from a respected and well-recognized brand in the marketplace. We’ve exhibited an unmatched ability to help customers achieve their objectives through the use of data and analytics. To bring this to life, Dun & Bradstreet revealed a modernized brand, purpose and values in March 2015. This was both an internal culture update - increasing generous people policies, consistent and transparent employee communications, and well-designed, collaborative office spaces - as well as an external expression of the modernized Dun & Bradstreet.“Dun & Bradstreet grows the most valuable relationships in business by uncovering truth and meaning from data” is our guiding purpose, grounded in the understanding that growing strong relationships through data empowers our customers’ success. Dun & Bradstreet expanded its brand modernization in April 2016 with a focused effort to drive thought-leadership across industries, and by unveiling a reimagined digital experience on DNB.com in the United States (“U.S.”) and on DNB.co.uk in the United Kingdom. Through these data-fueled, content-led sites, our new digital experience better reflects and augments the brand, connecting a customer’s online and offline interactions with Dun & Bradstreet, and demonstrating the breadth and depth of our expertise. Utilizing tools such as Web Visitor ID, DNB.com destinations provide the most relevant content to viewers, resulting in fully-customizable user experiences, increased engagement, robust lead-generation and full-funnel stewardship. Additionally, we refined our persona-based go-to-market strategy in 2016 to continually deliver solutions - through a myriad of customer touchpoints - tailored to specific needs, both for existing and potential new customers. Feedback has shown that customers now associate our brand with a company that is modern, data-inspired and useful, while employees have become more inspired by and proud of the brand. We believe that a modern, data-inspired, humanized brand is an important part of the Company’s growth strategy overall.

Superior Content and Solutions

Risk Management Solutions

Risk Management Solutions is our largest customer solution set, accounting for 59%, 60% and 61% of our total revenue, exclusive of businesses we no longer operate, for each of the years ended December 31, 2016, 2015 and 2014.

Our Risk Management Solutions help customers increase cash flow and profitability while mitigating credit, operational and regulatory risks by helping them answer questions such as:


•	Should I extend credit to this new customer?


•	Should I do business with this entity?


•	What credit limit should I set?


•	Will this customer pay me on time?


•	How can I avoid supply chain disruption?


•	How do I know whether I am in compliance with regulatory acts?

Our principal Risk Management Solutions are:


•	DNBi^®and D&B Credit®, subscription-based online applications that offer customers real time access to our most complete and up-to-date global information, comprehensive monitoring and portfolio analysis;


•	Our credit building and credibility solutions for emerging businesses, which provide, among other solutions, a credit monitoring solution to companies looking to monitor and impact their own business credit profile, offered through our Emerging Businesses division;


•	Various business information reports (e.g., Business Information Report, Comprehensive Report, and Global Report, etc.) that are consumed in a transactional manner across multiple platforms such as DNB.com;


•	Our Compliance product suite which includes Onboard and Compliance Check, online applications that help customers comply with Anti-Money Laundering and Know Your Customer requirements and global anti-bribery and corruption regulations through advanced screening and monitoring of customers and third-party vendors;


•	Supplier Risk Manager, an online application that helps businesses mitigate supply chain risk by certifying and onboarding suppliers, monitoring including alerts, and portfolio analysis; and


•	Products that are part of our DaaS strategy, which integrate our content directly into the applications and platforms that our customers use every day. This includes D&B Direct^®, an API that enables data integration inside Enterprise applications such as Enterprise Resource Planning (“ERP”), and enables master data management and Toolkit.

Certain solutions are available on a subscription pricing basis, including our DNBi and D&B Credit subscription pricing plans. Our subscription pricing plans represent a larger portion of our revenue and provide increased access to our risk management reports and data to help customers increase their profitability while mitigating their risk.

Sales & Marketing Solutions

Sales & Marketing Solutions accounted for 41%, 40% and 39% of our total revenue, exclusive of businesses we no longer operate, for each of the years ended December 31, 2016, 2015 and 2014, respectively.

Our Sales & Marketing Solutions help customers increase revenue from new and existing customers by helping them answer questions such as:


•	Who are my best customers?


•	How can I find prospects that look like my best customers?


•	How can I capture untapped opportunities with my existing customers?


•	How can I allocate sales force resources to revenue growth potential?


•	How can I ensure my data on customers is accurate, up to date and robust?


•	Who are the best contacts at a business for my services?


•	How can I target the right audience with online advertising?

Our principal Sales & Marketing Solutions are:

•

Our customer data management solutions, which are solutions that cleanse, identify, link and enrich customer and contact information. Our D&B Optimizer™ solution, for example, transforms our customers’ prospects and data into up-to-date, accurate and actionable commercial insight, facilitating a single customer view across multiple systems and touchpoints, such as marketing and billing databases, and better enables a customer to make sales and marketing decisions;


•	Various other marketing solutions including our education business, our electronic licensing products, and our Integration Manager product which is an onsite match tool that leverages Dun & Bradstreet match technology to enable customers to perform onsite matching on Dun & Bradstreet data, customer data and third-party data;

•

Hoover’s^®, which is primarily a traditional prospecting solution, provides information on public and private companies, and on industries and executives, sales, marketing and research professionals worldwide to help customers convert prospects to clients faster by providing a workflow solution. In January 2017, we acquired Avention, Inc., which we believe will help us evolve Hoover’s and our traditional prospecting solutions into Sales Acceleration products. These enhanced offerings feature more actionable information through capabilities such as news alerts and prescriptive triggers, as well as more robust integrations of data and analytics across enterprise platforms;

•

Products leveraging our next generation API’s such as Direct Plus and our rapidly growing “as a Service” offerings, including D&B Credit, which is entirely cloud based. In addition, we have strategic alliances with leading third-party application providers, including Salesforce.com^® and Oracle^®, whereby our content is natively integrated into the solution. The vision for DaaS is to make Dun & Bradstreet’s content available wherever and whenever our customers need it, thereby powering more effective business processes;


•	Our Market Insight tool, which provides robust marketing analytics that help customers segment and understand existing customers, in order to more effectively create campaigns to cross-sell new business; and


•	Our new Audience Solutions suite of products, which are tailored towards the shifting dynamics of the B2B marketing space from traditional to digital. This set of products enables advertisers and companies to intelligently target professionals in multiple ways via the insight created by our company and contact data.

Loyal Customers

In the fourth quarter of 2015, we brought together the majority of our customer-facing, go-to-market activities into segments called, “Lines of Business,” which created a more focused approach to serving customers. This created a strong alignment between product and solutions and how we go to market.

We continue to serve our customers through a multi-channel sales organization, which is centered around three key areas: our Global Direct sales channel, Alliances and Emerging Businesses.

This structure creates better alignment with product and solutions, and how they work more closely with our go to market channels. This more aligned, integrated approach will enable us to be more agile and effective in the marketplace and help us to serve our customers efficiently and effectively.

We support principal customers across communications, technology, government, strategic financial services and retail/telecommunications/manufacturing across our sales channels. None of our customers accounted for 10% or more of our total revenue in any of the past three fiscal years.

We utilize the Net Promoter Score (“NPS”), which is the global standard for measuring customer loyalty, to evaluate our customer engagement and satisfaction and to help us improve upon the customer experience.

Segments

Since January 1, 2015, we have managed and reported our business through two segments:


•	Americas, which currently consists of our operations in the United States (“U.S.”), Canada, and our Latin America Worldwide Network (we divested our Latin America operations in September 2016); and


•	Non-Americas, which currently consists of our operations in the United Kingdom (“U.K.”), Greater China, India and our European and Asia Pacific Worldwide Networks (we divested our operations in both the Netherlands and Belgium in November 2016 and our Australian operations in June 2015).

Prior to January 1, 2015, we managed and reported our business through the following three segments:


•	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 U.K., the Netherlands, Belgium, Latin America, and our European Worldwide Network.

The following table presents the contribution by segment to revenue (See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report on Form 10-K):



	For the Years Ended December 31,
	2016		2015		2014
Revenue:
Americas	83	%	81	%	80	%
Non-Americas	17	%	19	%	20	%

We may also acquire, divest, or shut down businesses from time to time. For example:


•	In January 2017, we acquired Avention, Inc.;


•	In 2016, we completed the sales of our businesses in Benelux (the Netherlands and Belgium) and Latin America, converting these businesses to our Worldwide Network model; and


•	In 2015, we:


▪	Acquired NetProspex, Inc. and Dun & Bradstreet Credibility Corp. (“DBCC”); and


▪	Completed the sale of our businesses in Australia and New Zealand (“ANZ”).

Segment data and other information for the years ended December 31, 2016, 2015 and 2014 are included in Note 14 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K. As our strategy evolves, we may modify our reporting structure, as appropriate, to reflect changes in the way we manage our business.

We also report and monitor the performance of our Risk Management Solutions as Trade Credit and Other Enterprise Risk Management, and the results of our Sales & Marketing Solutions as Traditional Prospecting Solutions and Advanced Marketing Solutions. Trade Credit represents our traditional commercial credit products such as DNBi (which includes D&B Credit) and all other products that help customers assess payment risk. Other Enterprise Risk Management includes all of our remaining Risk Management products, such as our compliance, supply chain, credit on self and D&B Direct risk solutions. Traditional Prospecting Solutions includes Hoover’s and our educational marketing business Market Data Retrieval (“MDR”). Advanced Marketing Solutions includes all of our remaining Sales & Marketing Solutions products including Optimizer, NetProspex and DaaS (e.g., CRM and D&B Direct sales and marketing solutions).

Our Direct Sales Force

Our direct sales force consists of approximately 1,700 team members worldwide, of whom approximately 1,300 were in our Americas and 400 were in our Non-Americas business as of December 31, 2016. Our sales force includes enterprise sales executives and customer solution specialists who sell to our vertically aligned strategic customers and our geographically aligned national commercial customers, a telesales team that sells to our small- and medium-sized customers, and a team that sells to federal, state and local governments.

Our Alliances and the Dun & Bradstreet Worldwide Network

In addition, we have sales teams who are dedicated specifically to our alliance partners. These teams are focused around: (i) alliance partners to whom we are a major supplier of data, which they specifically request and leverage as content to enhance their own products and services for sale to their customers; and (ii) alliance partners who enable the seamless delivery of our data, regardless of the content, to enable their end users to consume our content in a flexible, user friendly manner.

We also conduct business through our wholly-owned subsidiaries, majority-owned joint ventures, independent correspondents, strategic relationships through our Worldwide Network and minority equity investments. Our Worldwide Network is an alliance of network partners covering more than 220 countries. In those countries, we have determined it is beneficial to engage with dominant, well known local partners to enable us to better collect data from such countries and to better sell our existing content into such countries. Our Worldwide Network enables our customers globally to make business decisions with confidence, because we incorporate data from the members of the Worldwide Network into our database and utilize it in our customer solutions. Our customers, therefore, have access to a more powerful database and global solution sets that they can rely on to make their business decisions.

Competition

We are subject to highly competitive conditions in all aspects of our business. However, we believe no competitor offers our complete line of solutions, global data breadth and consistency, analytic capabilities and multi-channel approach for commercial entities and the people who run them.

In North America, we are a market leader in our Risk Management Solutions business based upon revenue. We compete with our customers’ own internal business practices by continually developing more efficient alternatives to our customers’ risk management processes to capture more of their internal spend. We also directly compete with a broad range of companies, including consumer credit companies such as Equifax, Inc. (“Equifax^®”) and Experian Information Solutions, Inc. (“Experian^®”), as well as a number of low cost, vertical and regionally specific companies. In addition, competitors with unique assets and capabilities outside of commercial data create bundled offerings which are attractive to certain customer segments.

We also compete in North America with a broad range of companies offering solutions similar to our Sales & Marketing Solutions. Our direct competitors in Sales & Marketing Solutions vary significantly depending on the many possible uses for our solutions such as market segmentation, lead generation, lead enrichment, sales effectiveness, and data management. We also face competition in data services from our customers’ own internal development and from data quality software solutions.

Outside the U.S., the competitive environment varies by region and country, and can be significantly impacted by the legislative actions of local governments, availability of data and local business preferences.

In the U.K. and Ireland, our direct competition is primarily from Experian and Bureau van Dijk^®. We believe that we offer superior solutions when compared to these competitors. In addition, the Sales & Marketing Solutions landscape in these markets is both localized and fragmented, where numerous local players of varying size compete for business.

In Asia Pacific, we face competition in our Risk Management Solutions business from a mix of local and global providers. For example, we compete with Experian in India and with Sinotrust International Information & Consulting (Beijing) Co., Ltd. in China, which is owned by Experian. In addition, as in the U.K., the Sales & Marketing Solutions landscape throughout Asia is localized and fragmented.

We also face significant competition from the in-house operations of the businesses we seek as customers, other general and specialized credit reporting and business information services, and credit insurers. In addition, business information solutions and services are becoming more readily available, principally due to the expansion of the Internet, greater availability of public data and the emergence of new providers of business information solutions and services.

We believe that our trusted brand, proprietary data assets, global identity resolution knowledge, globally recognized D-U-N-S^® Number and analytic capabilities form a powerful competitive advantage.

Our ability to continue to compete effectively will be based on a number of factors, including our ability to:


•	Communicate and demonstrate to our customers the value of our existing and new products and services based upon our proprietary data, and as a result, improve customer satisfaction;


•	Maintain and develop our proprietary D-U-N-S^® numbering classification system and information and services such as analytics and sources of data not publicly available;


•	Leverage our technology to significantly improve our value proposition for customers in order to make Dun & Bradstreet’s data available wherever and whenever our customers need it, as well as our brand perception and the value of our Worldwide Network;


•	Maintain those third-party relationships on whom we rely for data and certain operational services; and


•	Attract and retain a high-performing workforce.

Intellectual Property

We own and control various intellectual property rights, such as trade secrets, confidential information, trademarks, service marks, trade names, copyrights, patents and applications to the foregoing. These rights, in the aggregate, are of material importance to our business. We also believe that the Dun & Bradstreet name and related trade names, marks and logos are of material importance to our business. We are licensed to use certain technology and other intellectual property rights owned and controlled by others, and other companies are licensed to use certain technology and other intellectual property rights owned and controlled by us. We consider our trademarks, service marks, databases, software, copyrights, patents, patent applications

and other intellectual property to be proprietary, and we rely on a combination of statutory (e.g., copyright, trademark, trade secret, patent, etc.) and contract and liability safeguards for protecting them throughout the world.

Unless the context indicates otherwise, the names of our branded solutions and services referred to in this Annual Report on Form 10-K are common law or registered trademarks or service marks owned by or licensed to us or one or more of our subsidiaries.

We own patents and patent applications both in the U.S. and in other selected countries of importance to us. The patents and patent applications include claims which pertain to certain technologies and inventions which we have determined are proprietary and warrant patent protection. We believe that the protection of our innovative technology and inventions, such as our proprietary methods for data curation and identity resolution, through the filing of patent applications, is a prudent business strategy, and we will continue to seek to protect those certain assets for which we have expended substantial capital or otherwise deem to provide a competitive advantage. Filing of these patent applications may or may not provide us with a dominant position in the fields of technology. However, these patents and/or patent applications may provide us with legal defenses should subsequent patents in these fields be issued to third parties and later asserted against us. Where appropriate, we may also consider asserting or cross-licensing our patents.

Employees

As of December 31, 2016, we employed approximately 4,800 employees worldwide, of whom approximately 3,400 were in our Americas segment and Corporate, and approximately 1,400 were in our Non-Americas segments. Our workforce also engages third-party consultants as an ongoing part of our business where appropriate. There are no unions in our U.S. or Canada operations, and works councils and trade unions represent a small portion of our employees outside of the U.S. and Canada.

We know we must have a passionate, forward-leaning culture to support our growth strategy and brand. Toward that end, we are implementing our long-term plan to attract and retain top talent, deliver modern learning and development programs and diversity initiatives and transform Dun & Bradstreet’s culture through creative initiatives, modern systems and leading practices.

In 2016, we launched a number of key people initiatives including, among others:


•	We adopted a competency-based interview model across the organization, relaunched our career website which improved user experience, and customized email outreach by functional area, all in order to better attract and retain top talent.


•	We delivered modern learning and development programs and diversity initiatives, such as the launch of an Executive Edge for Women Class, discussions held globally regarding talent profile and succession planning, enhanced participation in our Global Learning and Development programs, and the launch of our third CEO Leadership Experience Class.


•	We continue to transform our culture through creative initiatives, modern systems and leading practices, including the launch of Workday, our first global People Technology solution, continued Ampersand Awards recognition to team members who embody our values, and continuous Sustainable High Performance efforts throughout the year.

Our Board of Directors is committed to helping our cultural transformation and we actively engage with them around our cultural initiatives which we expect to roll out continuously in future years, commensurate with our growth as a company.

Available Information

We are required to file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (“SEC”). Investors may read and copy any document that we file, including this Annual Report on Form 10-K, at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Investors may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, from which investors can electronically access our SEC filings.

We make available free of charge on or through our Internet site (www.dnb.com) our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file such material with, or furnish the material to, the SEC. The information on our Internet site or on any of our related Internet sites is not, and shall not be deemed to be, a part of this Annual Report on Form 10-K or incorporated into any other filings we make with the SEC.

Organizational Background of Our Company

As used in this report, except where the context indicates otherwise, the terms “Dun & Bradstreet,” “Company,” “we,” “us,” or “our” refer to The Dun & Bradstreet Corporation and our subsidiaries. We were incorporated in 2000 in the State of Delaware.


Item 1A.	Risk Factors

Our business model is dependent upon third parties to provide data and certain operational services, the loss of which would materially impact our business and financial results.

We rely significantly on third parties to support our business model. For example:


•	We obtain much of the data that we use from third parties, including public record sources;


•	We utilize single source providers in certain countries to support the needs of our customers around the globe and rely on members of our Worldwide Network to provide local data in countries in which we do not directly operate;


•	We have outsourced certain portions of our data acquisition, processing and delivery and customer service and call center processes; and


•	We have also outsourced various functions, such as our data center operations, technology help desk and network management functions in the U.S. and the U.K.

If one or more data providers were to experience financial or operational difficulties or were to unilaterally decide to withdraw their data, cease making it available, be unable to make it available due to changing industry standards or government regulations, substantially increase the cost of their data to us, not adhere to our data quality standards, or be acquired by a competitor who would cause any of these disruptions to occur, our ability to provide solutions and services to our customers could be materially adversely impacted, which could have a material adverse effect on our business and financial results. Similarly, if one of our outsource providers, including third parties with whom we have strategic relationships, were to experience financial or operational difficulties, their services to us would suffer or they may no longer be able to provide services to us at all, having a material adverse effect on our business and financial results. This could also be the case if some of our data providers that currently make their data available exclusively to us start to provide that data, or similar data, to our competitors or to other third-parties.

We cannot be certain that we could replace our large third-party vendors in a timely manner or on terms commercially reasonable to us given, among other reasons, the vast scope of responsibilities undertaken by some of our providers, the depth of their experience and their familiarity with our intellectual property and operations generally. If we change a significant outsource provider, an existing provider makes significant changes to the way it conducts its operations, or is acquired, or we seek to bring in house certain services performed today by third parties, we may experience unexpected disruptions in the provision of our solutions, which could have a material adverse effect on our business and financial results.

Cyber-security risks could harm our operations, the operations of our critical outsourcers, or the operations of our partners on whom we rely for data and to meet our customer needs, any of which could materially impact our business and financial results.

We rely upon the security of our information technology infrastructure to protect us from cyber-attacks and unauthorized access. Cyber-attacks that we have experienced, continue to experience, or in the future we may experience, can include malware or ransomware, computer viruses, hacking, phishing or other significant disruption of our Information Technology (“IT”) networks and related systems. Government agencies and security experts have warned about the growing risks of hackers, cyber-criminals and other potential attacks targeting every type of IT system, and in 2013 we learned that we were one of several victims of a sophisticated cyber-attack. We may face increasing cyber-security risks as we receive data from new sources such as social media sites or through data aggregators who provide us with information. Additionally, outside parties may attempt to fraudulently induce employees or users to disclose sensitive or confidential information in order to gain access to our data or our users’ data.

If we experience a problem with the functioning of an important IT system or a security breach of our IT systems, the resulting disruptions could have a material adverse effect on our business and financial results. We store sensitive information in connection with our customers’ data, data we collect from a variety of public and private sources, data collected from our human resources operations and other aspects of our business which could be compromised by a cyber-attack. To the extent

that any disruptions or security breach results in a loss or damage to any of this data, an inappropriate disclosure of this data or other confidential information, an inability to access data sources, or an inability to process data for or send data to our customers, it could cause significant damage to our reputation, affect our relationships with our customers, lead to claims against the Company and ultimately harm our business. Our servers and other hardware, as well as our operating systems software and applications may not contain sufficient protection from malware or unauthorized access. The costs to us to minimize or alleviate the effects of cyber-attacks, viruses, worms, malicious software programs or other security vulnerabilities are significant and could require significant upgrades to our IT infrastructure. We may be required to incur significant costs to undertake these actions and to protect against damage caused by these disruptions, security breaches, or cyber-attacks of the nature we have already incurred, in the future. Moreover, because the techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques, implement adequate preventative measures or remediate any intrusion on a timely or effective basis. Efforts we undertake to prevent these sorts of disruptions and breaches may not be successful. While we have insurance coverage for certain instances of a cyber-security breach, our coverage may not be sufficient now or in the future if we suffer additional significant or multiple attacks. Our insurance may not cover IT enhancements and upgrades we may undertake from time to time, or harm to our reputation, loss of customers or any related loss of revenue related to cyber-security incidents.

We rely on a number of outsourcing partners to design, build, and maintain critical components of our IT environment and we rely significantly on third parties to supply clean data content and to resell our products in a secure manner. All of these third parties face risks relating to cyber-security similar to ours which could disrupt their businesses and therefore materially impact ours. While we provide guidance and specific requirements in some cases, we do not directly control any of such parties’ IT security operations, or the amount of investment they place in guarding against cyber-security threats. Accordingly, we are subject to any flaw in or breaches to their IT systems or those that they operate for us, which could have a material adverse effect on our business and financial results.

Violations of the U.S. Foreign Corrupt Practices Act (“FCPA”), and similar laws, and the investigation of such matters, including the current investigations regarding violations of consumer data privacy laws in China, or, related investigations and compliance reviews that we may conduct from time to time, could have a material adverse effect on our business.

The FCPA and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government officials and/or other persons for the purpose of obtaining or retaining business. Recent years have seen a substantial increase in anti-bribery law enforcement activity by regulators, with more frequent and aggressive investigations and enforcement proceedings by the U.S. Department of Justice (“DOJ”), the SEC, and the U.K. Serious Frauds Office (“SFO”) among others, and increases in criminal and civil proceedings brought against companies and individuals. Our policies mandate compliance with these anti-bribery laws. We operate in many parts of the world that are recognized as having a greater potential for governmental and commercial corruption. We cannot assure that our policies and procedures will always protect us from reckless or criminal acts committed by our employees or third-party vendors. From time to time, we conduct internal investigations and compliance reviews, the findings of which could negatively impact our business. Any determination that our operations or activities are not, or were not, in compliance with existing U.S. or foreign laws or regulations could result in the imposition of substantial fines, interruptions of business, debarment, loss of supplier, vendor or other third-party relationships, disruption or cessation of certain lines of business, termination of necessary licenses and permits, and other legal or equitable sanctions. Other internal or government investigations or legal or regulatory proceedings, including lawsuits brought by private litigants, including our shareholders, may also follow as a consequence. Violations of these laws by the Company, its employees or its third-parties, such as vendors, brokers and agents, may result in criminal or civil sanctions, which could result in a material adverse effect on our reputation, business, results of operations or financial condition.

Since 2012, we have been reviewing certain allegations that we may have violated the FCPA and certain other laws in our China operations. As previously reported, we have voluntarily contacted the SEC and the DOJ to advise both agencies of our investigation. As our investigation and our discussions with both the SEC and DOJ are ongoing, we cannot yet predict the ultimate outcome of the matter or its ultimate impact on our business, financial condition or results of operations. Based on our discussions with the SEC and DOJ, including indications from the SEC of its estimate of the amount of net benefit potentially earned by the Company as a result of the challenged activities, we continue to believe that it is probable that the Company will incur a loss related to the government's investigation. The DOJ also advised the Company in February 2015 that they will be proposing terms of a potential settlement, but we are unable to predict the timing or terms of any such proposal. We continue to have follow-up meetings with the SEC and DOJ, most recently meeting with the SEC in June 2016 and with the DOJ in October 2016, and the parties are still discussing the evidence and other factors to help bring this matter to resolution. In our June 2016 meetings with the SEC, the SEC provided us with its current net benefit calculations, but has not indicated whether it will impose additional penalties. In accordance with ASC 450, an amount in respect of this matter has been accrued in the consolidated financial statements during the second quarter of 2016. We are still in discussions with the DOJ to determine what

range of penalties the DOJ might propose. Accordingly, we remain unable at this time to reasonably estimate the final amount or ultimate range of any loss, although it is possible that the amount of such additional loss could be material. In addition, the SEC and DOJ have a broad range of civil and criminal sanctions available to them under the FCPA and other laws and regulations including, but not limited to, injunctive relief, disgorgement, fines, penalties, modifications to business practices, including the termination or modification of existing business relationships, and the imposition of compliance programs and the retention of a monitor to oversee compliance with the FCPA. The imposition of any of these sanctions or remedial measures could have a material adverse effect on our reputation, business, results of operations and/or financial condition.

We face competition that may cause price reductions or loss of market share.

We are subject to competitive conditions in all aspects of our business. We compete directly with a broad range of companies offering business information services to customers. We also face competition from:


•	The in-house operations of the businesses we seek as customers;


•	Other general and specialized credit reporting and other business information providers;


•	Credit insurers; and


•	Analytics providers.

Business information solutions and services are becoming more readily available, principally due to the expansion of available insight on the Internet, greater availability of public data and the emergence of new techniques for capturing, managing and analyzing data. These industry changes have lowered barriers to entry in many of the global customer segments that Dun & Bradstreet targets. Internet-based search aggregators can provide low-cost alternatives to data gathering and change how our customers perform key activities such as marketing campaigns, or collect information on customers, suppliers and competitors. Such companies, and other third parties which may not be readily apparent today, may become significant low-cost or no-cost competitors and adversely impact the demand for our solutions and services, or limit our growth potential.

Weak economic conditions can result in customers seeking to utilize free or lower-cost information that is available from alternative sources. Intense competition could adversely impact us by causing, among other things, price reductions, reduced operating margins and loss of market share.

We face competition globally, and our competitors could develop an alternative to our Worldwide Network.

We face competition from consumer credit companies that offer consumer information solutions to help their customers make credit decisions regarding small businesses. Consumer information companies are expanding their operations more broadly into aspects of the business information space and, given the size of the consumer market in which they operate, they have scale advantages in terms of scope of operations and size of relationship with customers, which they can potentially leverage to their advantage.

Our ability to continue to compete effectively will depend upon a number of factors, including our ability to:


•	Maintain, communicate and demonstrate to our customers the value of our products and services based upon our global, proprietary D-U-N-S numbering classification system, identity resolution capabilities and predictive insights;


•	Maintain and develop proprietary information and solutions such as predictive analytics, and sources of data not publicly available, such as detailed trade data;


•	Demonstrate and deliver value through our decision-making tools, integration capabilities and embeddedness with leading enterprise application providers;


•	Leverage our brand perception and the value of our Worldwide Network;


•	Obtain and deliver reliable and high-quality business and professional contact information through various media and distribution channels in formats tailored to customer requirements;


•	Attract and retain a high-performance workforce;


•	Enhance our existing products and services, and introduce new products and services;


•	Enter new customer markets;


•	Operate within any changing regulatory schemes or with restrictions imposed by foreign governments that favor local competitors; and


•	Improve our global business model and data quality through the successful relationship with members of our Worldwide Network and through potentially undertaking acquisitions or entering into joint ventures, partnership arrangements or similar relationships.

In addition, our ability to successfully compete depends on our ability to adapt our solutions to our customers’ preferences and to meet any specific contractual requirements that they impose upon us which may require significant or ongoing investments. Advances in information technology and uncertain or changing economic conditions are impacting the way our customers use and purchase business information. As a result, our customers are demanding both lower prices and more features from our solutions, such as decision-making tools like credit scores, and are expecting real-time content provided in a manner relevant to them.

If we do not successfully adapt our solutions to our customers’ preferences, our business and financial results may be materially adversely affected. Specifically, for our larger customers, including our alliance partners, our continued success will be dependent on our ability to satisfy more of their needs by providing more breadth and depth of content and allowing them more flexibility to use our content through web services and third-party solutions. For our smaller customers, our success will depend in part on our ability to develop a strong value proposition, including simplifying our solutions and pricing offerings, to enhance our marketing efforts to these customers and to improve our service to them.

The failure to continue to invest in our business in order to remain competitive could result in a material adverse effect on our future business and financial results.

If we cannot successfully execute on our strategy, our long-term business and financial results may be adversely impacted and we may not meet the financial guidance that we provide publicly.

Our strategy is designed to drive long term sustainable growth as one global company delivering indispensable content through modern channels to serve new customer needs with our forward-leaning culture. We may not be able to successfully implement our strategic initiatives in accordance with our expectations, or in the timeframe we desire, which may result in an adverse impact on our business and financial results. In addition, the success of our strategic initiatives depends in part upon parties whom we do not control. For example, each year we negotiate new multi-year arrangements, or the renewal of existing arrangements, with alliance partners and other third parties in order to modernize our content delivery. If our larger alliance partners or third parties fail to renew their arrangements with us, or they are unable to successfully fulfill their obligations, it could have a negative impact on our business and financial results. Furthermore, we cannot be certain that even upon successful execution of our strategy, we will continue to meet our customers’ changing needs, which could significantly harm our business and financial results.

In addition, we provide financial guidance and metrics to the public which are based, among other things, upon our assumptions regarding our expected financial performance. These include, for example, assumptions regarding our ability to grow revenue and operating income, and to achieve desired tax rates and to generate free cash flow. In addition, we evaluate sales, which represents the value of committed contracts, as a measure of how we are performing against our strategic initiatives. We believe that our financial guidance and these metrics provide our investors and analysts with a better understanding of our view of our near-term financial performance. Such financial guidance and metrics may not always be accurate, due to our inability to meet the assumptions we make and the impact on our financial performance that could occur as a result of the various risks and uncertainties to our business as set forth in these risk factors and in our public filings with the SEC or otherwise. Our focus on, and dedication of resources to, achieving our strategy in order to drive long-term sustainable growth, or a failure to effectively implement our strategy, could further impact our ability to meet our financial guidance or our metrics in a given year. If we fail to meet the financial guidance that we provide or if we find it necessary to revise such guidance as we conduct our operations throughout the year, or if we fail to achieve sufficient performance against the metrics we have provided externally, such as sales, the market value of our common stock or other securities could be materially adversely affected.

We may lose key business assets or suffer interruptions in product delivery, including loss of data center capacity or the interruption of telecommunications links, the Internet, or power sources which could significantly impede our ability to do business.

Our operations depend on our ability to protect data centers and related technology against damage from hardware failure, fire, power loss, telecommunications failure, impacts of terrorism, breaches in security (such as the actions of computer hackers), the theft of services, natural disasters, or other disasters. The online services we provide are also completely dependent on cloud services and links to telecommunications providers. We generate a significant amount of our revenue through our support centers and Internet sites that we use in the acquisition of new customers, fulfillment of services and responding to customer inquiries. We may not have sufficient redundant infrastructure to prevent a loss or failure across the full application and support sites to recover access in a timely manner. Any damage to, or failure by our service providers to properly maintain our data centers, telecommunications links or ability to provide access to our telesales centers or Internet sites could cause interruptions in operations that adversely affect our ability to meet our customers’ requirements and materially adversely affect our business and financial results.

A failure in the integrity of our databases or the systems upon which we rely could harm our brand and result in a loss of sales and an increase in legal claims.

The reliability of our solutions is dependent upon the integrity of the data in our global databases. A failure in the integrity of our databases, or an inability to ensure that our usage of data is consistent with any terms or restrictions on such use, whether inadvertently or through the actions of a third party, could harm us by exposing us to customer or third-party claims or by causing a loss of customer confidence in our solutions. We may experience an increase in risks to the integrity of our databases as we move toward real-time data feeds, including those from social media sources, and as we acquire content through the acquisitions of companies with existing databases that may not be of the same quality or integrity as our existing Dun & Bradstreet databases. In addition, although we are continually evolving the systems upon which we rely to sustain product delivery, meet customer demands and support the development of new solutions, certain of our existing infrastructure is comprised of complex legacy technology that requires time and investment to upgrade without disruption to the business. We plan to continue to invest in our core systems to improve and maintain the quality, timeliness and coverage of the data contained therein and their ongoing operation in order to maintain our competitive positioning in the marketplace. We have in the past been subject to customer and third-party complaints and lawsuits regarding our data, which have occasionally been resolved by the payment of monetary damages. We have also licensed, and we may license in the future, proprietary rights to third parties. While we attempt to ensure that the quality of our brand is maintained by the third parties to whom we grant such licenses and by customers, they may take actions that could materially adversely affect the value of our proprietary rights or our reputation. It cannot be assured that these licensees and customers will take the same steps we have taken to prevent misappropriation of our data solutions or technologies.

Our brand and reputation are key assets and competitive advantages of our Company and our business may be affected by how we are perceived in the marketplace.

Our Brand and its attributes are key assets of the Company. Our ability to attract and retain customers is highly dependent upon the external perceptions of our level of data quality, effective provision of services, business practices, including the actions of our employees, third-party providers, members of the Worldwide Network and other brand licensees that are not consistent with Dun & Bradstreet’s policies and standards, and overall financial condition. Negative perception or publicity regarding these matters could damage our reputation with customers and the public, which could make it difficult for us to attract and maintain customers. Adverse developments with respect to our industry may also, by association, negatively impact our reputation, or result in higher regulatory or legislative scrutiny. Negative perceptions or publicity could have a material adverse effect on our business and financial results.

We rely on annual contract renewals for a substantial part of our revenue, and our quarterly results may be significantly impacted by the timing of these renewals, including from various government institutions, a shift in product mix that results in a change in the timing of revenue recognition or a significant decrease in government spending.

We derive a substantial portion of our revenue from annual customer contracts, including from various government institutions. If we are unable to renew a significant number of these contracts, our revenue and results of operations would be negatively impacted. In addition, our results of operations from period-to-period may vary due to the timing of customer contract renewals or a change in our sales practices. As contracts are renewed, we have experienced, and may continue to experience, a shift in product mix underlying such contracts. This could result in the deferral of increased amounts of revenue into future periods as a larger portion of revenue is recognized over the term of our contracts rather than up front at contract signing or the acceleration of deferred revenue into an earlier reporting period. Although this may cause our financial results from period-to-period to vary substantially, such change in revenue recognition would not change the total revenue recognized

over the life of our contracts. A reduction in government spending on our products could, however, have a material adverse impact on our business. We derive a portion of our revenue from direct and indirect sales to U.S., state, local and foreign governments and their respective agencies and our competitors are increasingly targeting such governmental agencies as potential customers. Such government contracts are subject to various procurement laws and regulations, and contract provisions in our government contracts could result in the imposition of various civil and criminal penalties, termination of contracts, forfeiture of profits, suspension of payments, or suspension of future government contracting. In addition, governments continue to struggle with sustained debt and social obligations, and efforts to balance government deficits could result in lower spending by the government with Dun & Bradstreet. If we were to lose government customers to our competitors, or our government contracts are not renewed or are terminated, or we are suspended from government work, or our ability to compete for new contracts is adversely affected, our business and financial results could experience material adverse effects.

We may be adversely affected by the global economic environment and the evolving standards of markets in which we operate.

We operate in both emerging and mature global markets. As a result of the macro-economic challenges currently affecting the economy of the U.S., Europe, and other parts of the world, 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 we may experience delays in payment or their inability to pay amounts owed to us. Customers are increasingly asking for delayed payment terms, which could impact our cash flows, our need for short-term borrowing, and possibly our ability to get paid. Tepid economic growth is also intensifying the competitive pressures in our business categories including increasing price pressure. In addition, our vendors may substantially increase their prices to us and without notice. Any such change in the behavior of our customers or vendors may materially adversely affect our earnings and cash flow. In addition, as we continue to compete in a greater number of emerging markets, potential customers may show a significant preference for local vendors. Our ability to compete in emerging markets depends on our ability to provide products in a manner that is sufficiently flexible to meet local needs, and to continue to undertake technological advances in local markets in a cost effective manner, utilizing local labor forces. If economic conditions in the U.S. and other key markets deteriorate further or do not show improvement, or we are not able to successfully compete in emerging markets, we may experience material adverse impacts to our business, operating results, and/or access to credit markets.

Changes in the legislative, regulatory and commercial environments in which we operate could adversely impact our ability to collect, compile, store, use, cross-border transfer, publish, and/or sell data and could impact our financial results.

Certain types of information we collect, compile, store, use, transfer, publish and/or sell are subject to regulation by governmental authorities in various jurisdictions in which we operate, particularly in our global markets. There are increasing legislative and regulatory actions regarding the governance of personal, credit and adverse data (that is, negative data about individuals), even in the context of businesses. These actions may result in new or amended laws and regulations or regulatory actions that could adversely impact our business. Legislation or regulatory actions regarding cyber-security, imposing content restrictions, requiring access to our network to conduct security assessments, or requirements that databases containing information on local businesses or individuals be stored in-country and at times coupled with restrictions on exporting the data out of the country, increasing the rights of those who are the subject of data, and/or increasing restrictions on automated decision making could have a material adverse effect on our business and financial results. In addition, any other legislation, court actions, or laws and regulations with respect to the collection, compilation, storage, use, cross-border transfer, publication and/or sale of credit-related, adverse, or personal information, or adverse publicity or litigation concerning the improper use or hacking of such information, could result in limitations being imposed on our operations, increased compliance or litigation costs and/or loss of revenue, which could have a material adverse effect on our business and financial results.

Governmental agencies and commercial entities from which we acquire data may seek to increase the costs we must pay to acquire, use and/or redistribute such data. Governmental agencies or laws may also limit or restrict access to, or use of, data and information that are currently publicly available, which could have a material adverse impact on our business and financial results. In addition, as more federal, state, and foreign governments continue to struggle with significant fiscal pressure, we may be faced with changes to tax laws that could have immediate negative consequences to our business. While we would seek to pass along any such cost increases or tax impacts to our customers or provide alternative services, there is no guarantee that we would be able to do so, given competitive pressures or other considerations. Should our proportion of multi-year contracts increase, our risk of not being able to recover such additional costs further increases. Any such price increases or change to alternative services may result in reduced usage by our customers and/or loss of market share, which could have a material adverse effect on our business and financial results.

Acquisitions, joint ventures or similar strategic relationships, or dispositions of any of our businesses may disrupt or otherwise have a material adverse effect on our business and financial results.

As part of our strategy, we may seek to acquire other complementary businesses, products and technologies or enter into joint ventures or similar strategic relationships. We may also undertake a disposition of certain of our businesses. These transactions are subject to the following risks which could have a material adverse effect on our business and financial results:


•	Acquisitions, joint ventures or similar relationships or the disposition of any of our businesses may cause a disruption in our ongoing business, distract our management and make it difficult to maintain our standards, controls and procedures;


•	We may not be able to integrate successfully the services, content, including data, products and people of any such transaction into our operations;

•

The acquisition of a third party that has operations in territories covered by one or more of our Worldwide Network partners may conflict with the terms of our agreements with such partners, and if a mutual resolution cannot be achieved, may cause us to realize less than the expected full value of the transaction, or may cause us not to do a transaction that we otherwise deem valuable to the business;


•	We could experience downgrades to our credit ratings as a result of these transactions which could increase our cost of funding;


•	We may not derive the revenue improvements, cost savings and other intended benefits of any such transaction; and


•	There may be risks, exposures and liabilities of acquired entities or other third parties with whom we undertake a transaction, that may arise from such third parties’ activities prior to undertaking a transaction with us and which we may not discover or fully understand through the due diligence process.

While we have certain contractual commitments with each of the third-party members of the Worldwide Network, we have no direct management control over such third parties or other third parties who conduct business under the Dun & Bradstreet brand name in local markets or who license and sell under the Dun & Bradstreet name, and the renewal by third-party members of the Worldwide Network of their agreements with Dun & Bradstreet is subject to mutual agreement.

The Worldwide Network is comprised of wholly-owned subsidiaries and businesses where there is third-party member participation, whether through joint ventures that we control or hold a minority interest in, or through third-party members who conduct business under the Dun & Bradstreet brand name in local markets. While third-party member participation in the Worldwide Network and certain of our relationships with other third parties are governed by commercial services agreements and the use of our trademarks is governed by license agreements, we have no direct management control over these members or third parties beyond the terms of the agreements. We license data to certain third parties to be included in the data solutions that they sell to their customers and such arrangements may increase as a percentage of our total revenue in the future. We do not have direct control over such third parties’ sales people or practices, and their failure to successfully sell products which include our data will impact the revenue we receive and could have a material adverse effect on our business and financial results. Conversely, we license data from certain third parties for inclusion in the data solutions that we sell to our customers, and while we have guidelines and quality control requirements in place, we do not have absolute control over such third-parties’ data collection and compliance practices. As a result, actions or inactions taken by these third parties or their failure to renew their contractual relationships with us could have a material adverse effect on our business and financial results. For example, one or more third parties or members may:


•	Provide a product or service that does not adhere to our data quality standards;


•	Fail to comply with Dun & Bradstreet brand and communication standards or behave in a manner that tarnishes our brand;


•	Engage in illegal or unethical business or marketing practices;


•	Elect not to support new or revised products and services or other strategic initiatives or elect to operate on platforms and technologies that are incompatible with new developments that Dun & Bradstreet may rollout in our various markets from time to time;


•	Fail to execute subsequent agreements to remain a part of the Worldwide Network on terms and conditions that are mutually agreeable to Dun & Bradstreet, upon the expiration of their existing agreements;


•	Fail to execute other data or distribution contract requirements; or


•	Refuse to provide new sources of data.

Such actions or inactions could materially adversely impact our business and financial results directly or have an impact on customer confidence in the Dun & Bradstreet brand globally which could in turn, materially adversely impact our business and financial results.

Our businesses around the globe are subject to various risks associated with operations in foreign countries, which could materially adversely affect our business and financial results.

Our success depends in part on our various businesses around the globe. For each of the three years ended December 31, 2016, 2015 and 2014, our businesses outside of the U.S. accounted for 19%, 22% and 24% of total revenue, respectively. Our business in the U.S. is also dependent on our ability to provide information from other markets at a reasonable cost. These businesses are subject to many of the same challenges as our domestic business, as well as the following:


•	Our competition in foreign markets is primarily local, and our customers may have greater loyalty to our local competitors which may have a competitive advantage because they are not restricted by U.S. and foreign laws with which we require our businesses around the globe to comply, such as the FCPA;

•

Although our services have not usually been regulated, governments may adopt legislation or regulations, or we may learn that our current methods of operation violate existing legislation or regulations, governing the collection, compilation, storage, use, cross-border transfer, publication, and/or sale of the kinds of information we collect, compile, store, use, transfer cross border, publish, and/or sell, which could bar or impede our ability to operate and this could adversely impact our business;


•	Credit insurance is a significant credit risk mitigation tool in certain global markets that may reduce the demand for our Risk Management Solutions; and


•	In some markets, key data elements are generally available from public-sector sources, thus reducing a customer’s need to purchase that data from us.

In addition, the FCPA and anti-bribery and anti-corruption laws in other jurisdictions generally prohibit improper payments to government officials or other persons for the purpose of obtaining or retaining business. We cannot assure you that our policies and procedures will always protect us from acts committed by our employees or third parties, such as our vendors, brokers and agents. From time to time, under appropriate circumstances, we have undertaken and will continue to undertake investigations of the relevant facts and circumstances and, when appropriate, take remedial actions, which can be expensive and require significant time and attention from senior management, and which may also lead to disclosure to the SEC and/or DOJ. Violations of these laws may result in criminal or civil sanctions, which could disrupt our business and result in a material adverse effect on our business and financial results.

Our global strategy includes leveraging our Worldwide Network to improve our data quality. We form and manage strategic relationships to create a competitive advantage for us over the long term; however, these strategic relationships may not be successful or may be subject to ownership change.

The issue of data privacy is an increasingly important area of public policy in various global markets, and we operate in an evolving regulatory environment. If our existing business practices were deemed to violate existing data privacy laws or such laws as they may evolve from time to time, our business or the business of third parties on whom we depend could be adversely impacted.

Our operating results could be negatively affected by a variety of other factors affecting our foreign operations, many of which are beyond our control. These factors may include currency fluctuations, economic, political or regulatory conditions, competition from government agencies in a specific country or region, trade protection measures and other regulatory requirements. Additional risks inherent in global business activities generally include, among others:


•	The costs and difficulties of managing global operations and strategic alliances, including our Worldwide Network;


•	The costs and difficulties of enforcing agreements, collecting receivables and protecting assets, especially our intellectual property rights, in non-U.S. legal systems; and


•	The need to comply with a broader array of regulatory and licensing requirements, the failure of which could result in fines, penalties or business suspensions.

We may not be able to attract and retain qualified people, which could impact the quality of our performance and customer satisfaction.

Our success and financial results depend in part on our continuing ability to attract, retain and motivate highly qualified people at all levels. Competition for these individuals is intense, especially in roles requiring skills, capabilities and experiences that are in high demand. As a priority, we continue to focus on attracting and retaining our key people, building a strong employment brand and creating a forward leaning culture. Any inability to retain or attract highly-qualified individuals could have a material adverse effect on our business and financial results.

Our retirement and post retirement pension plans are subject to financial market risks that could adversely affect our future results of operations and cash flow.

We have significant retirement and post retirement pension plan assets and funding obligations. The performance of the financial and capital markets impacts our plan expenses and funding obligations. Significant decreases in market interest rates, decreases in the fair value of plan assets and investment losses on plan assets will increase our funding obligations, and could adversely impact our results of operations and cash flows.

We are involved in legal proceedings that could have a material adverse impact on us.

We are involved in legal proceedings, claims and litigation that arise in the ordinary course of business. As discussed in greater detail under “Note 13. Contingencies” in “Notes to Consolidated Financial Statements” in Part II, Item 8. of this Annual Report on Form 10-K, certain of these matters could materially adversely affect our business and financial results.


Item 1B.	Unresolved Staff Comments

Not applicable.


Item 2.	Properties

Our corporate office is located at 103 JFK Parkway, Short Hills, New Jersey 07078, in a 123,000 square-foot property that we lease. This property also serves as our executive offices. In December 2014, we supplemented this space with the addition of 69,280 square feet of leased office space located at 101 JFK Parkway, Short Hills, New Jersey. Both of these leases are co-terminus and expire on March 31, 2023, with two five-year renewal options.

Our other properties, most of which are leased, are geographically distributed worldwide to meet sales and operating requirements. We consider all of these properties to be both suitable and adequate to meet current operating requirements. As of December 31, 2016, the most notable of these other properties included the following sites:


•	A 178,330 square-foot leased office building in Center Valley, Pennsylvania, housing various sales, emerging businesses, finance, fulfillment and data operations groups;


•	A 61,471 square-foot leased office building in Austin, Texas, housing technology development, certain product development and sales operations;


•	A 51,810 square-foot leased space in Marlow, England, housing our U.K. business, global technology and certain other international groups; and


•	A 47,782 square-foot leased space in Dublin, Ireland, housing technology development, data operations and sales operations groups.


Item 3.	Legal Proceedings

Information in response to this Item is included in Part II, Item 8. “Note 13. Contingencies” and is incorporated by reference into Part I of this Annual Report on Form 10-K.


Item 4.	Mine Safety Disclosures

Not applicable.

PART II


Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock is listed on the New York Stock Exchange and trades under the symbol DNB. We had 1,561 shareholders of record as of December 31, 2016.

The following table summarizes the high and low sales prices for our common stock, as reported in the periods shown:



	2016				2015
	High		Low		High		Low
First Quarter	$	103.52	$	87.91	$	135.92	$	114.95
Second Quarter	$	128.36	$	102.71	$	134.74	$	122.00
Third Quarter	$	140.73	$	122.14	$	126.00	$	101.18
Fourth Quarter	$	135.52	$	115.60	$	115.00	$	100.97

We paid quarterly dividends to our shareholders totaling $70.5 million, $66.7 million and $64.0 million during the years ended December 31, 2016, 2015 and 2014, respectively. In February 2017, we declared a dividend of $0.5025 per share for the first quarter of 2017. This cash dividend will be payable on March 10, 2017 to shareholders of record at the close of business on February 23, 2017.

Issuer Purchases of Equity Securities

The following table provides information about purchases made by us or on our behalf during the quarter ended December 31, 2016 of shares of equity that are registered pursuant to Section 12 of the Exchange Act:



Period	Total Number of Shares Purchased (a)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (a)	Approximate Dollar Value of Currently Authorized Shares That May Yet Be Purchased Under the Plans or Programs (a)
	(Dollar amounts in millions, except share data)
October 1 - 31, 2016	—	$	—	—	$	—
November 1 - 30, 2016	—	$	—	—	$	—
December 1 - 31, 2016	—	$	—	—	$	—
	—	$	—	—	$	100.0

(a)

In August 2014, our Board of Directors approved a $100 million share repurchase program to mitigate the dilutive effect of shares issued under our stock incentive plans and Employee Stock Purchase Program, and to be used for discretionary share repurchases from time to time. The $100 million share repurchase program will remain open until it has been fully utilized. There is currently no definitive timeline under which the program will be completed. As of December 31, 2016, we had not yet commenced share repurchases under this program.

FINANCIAL PERFORMANCE COMPARISON GRAPH*

SINCE DECEMBER 31, 2011

In accordance with SEC rules, the graph below compares the Company’s cumulative total shareholder return against the cumulative total return of the Standard & Poor’s 500 Index and a published industry index starting on December 31, 2011. Our past performance may not be indicative of future performance.

As an industry index, the Company chose the S&P 500 Commercial & Professional Services Index, a subset of the S&P 500 Index that includes companies that provide business-to-business services.

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN

AMONG DUN & BRADSTREET, S&P 500 INDEX AND THE S&P 500 COMMERCIAL &

PROFESSIONAL SERVICES INDEX


*	Assumes $100 invested on December 31, 2011, and reinvestment of dividends.

Item 6. Selected Financial Data



	For the Years Ended December 31,
	2016			2015			2014			2013			2012
	(Amounts in millions, except per share data)
Results of Operations:
Revenue	$	1,703.7		$	1,637.1		$	1,584.5		$	1,558.4		$	1,563.9
Costs and Expenses	1,344.5			1,300.1			1,173.1			1,132.3			1,147.3
Operating Income (1)	359.2			337.0			411.4			426.1			416.6
Non-Operating Income (Expense) - Net (2)	(155.6		)	(57.0		)	(71.2		)	(39.8		)	(53.6		)
Income Before Provision for Income Taxes and Equity in Net Income of Affiliates	203.6			280.0			340.2			386.3			363.0
Provision for Income Taxes (3)	99.9			74.2			54.3			135.6			82.2
Equity in Net Income of Affiliates	2.8			2.7			1.9			1.6			1.3
Net Income (Loss) from Continuing Operations	106.5			208.5			287.8			252.3			282.1
Less: Net (Income) Loss Attributable to the Noncontrolling Interest	(5.0		)	(4.3		)	(3.5		)	(3.6		)	(1.0		)
Net Income (Loss) from Continuing Operations Attributable to Dun & Bradstreet	101.5			204.2			284.3			248.7			281.1
Income from Discontinued Operations, Net of Income Taxes (4)	—			2.1			10.1			9.8			14.4
Loss on Disposal of Business, Net of Income Taxes	(4.1		)	(37.5		)	—			—			—
Income (Loss) from Discontinued Operations, Net of Income Taxes (5)	(4.1		)	(35.4		)	10.1			9.8			14.4
Net Income (Loss) Attributable to Dun & Bradstreet	$	97.4		$	168.8		$	294.4		$	258.5		$	295.5
Basic Earnings (Loss) Per Share of Common Stock:
Income (Loss) from Continuing Operations Attributable to Dun & Bradstreet Common Shareholders	$	2.78		$	5.66		$	7.79		$	6.36		$	6.16
Income (Loss) from Discontinued Operations Attributable to Dun & Bradstreet Common Shareholders	(0.11		)	(0.98		)	0.27			0.25			0.31
Net Income (Loss) Attributable to Dun & Bradstreet Common Shareholders	$	2.67		$	4.68		$	8.06		$	6.61		$	6.47
Diluted Earnings (Loss) Per Share of Common Stock:
Income (Loss) from Continuing Operations Attributable to Dun & Bradstreet Common Shareholders	$	2.76		$	5.61		$	7.71		$	6.29		$	6.12
Income (Loss) from Discontinued Operations Attributable to Dun & Bradstreet Common Shareholders	(0.11		)	(0.97		)	0.28			0.25			0.31
Net Income (Loss) Attributable to Dun & Bradstreet Common Shareholders	$	2.65		$	4.64		$	7.99		$	6.54		$	6.43

Other Data:
Weighted Average Number of Shares Outstanding - Basic	36.5			36.1			36.5			39.1			45.6
Weighted Average Number of Shares - Diluted	36.8			36.4			36.9			39.5			46.0

Cash Dividends Paid per Common Share	$	1.93		$	1.85		$	1.76		$	1.60		$	1.52
Cash Dividends Declared per Common Share	$	1.93		$	1.85		$	1.76		$	1.60		$	1.52
Other Comprehensive Income, Net of Tax:
Net Income (Loss) from Continuing Operations	$	106.5		$	208.5		$	287.8		$	252.3		$	282.1
Income (Loss) from Discontinued Operations, Net of Income Taxes	(4.1		)	(35.4		)	10.1			9.8			14.4
Net Income (Loss)	102.4			173.1			297.9			262.1			296.5
Foreign Currency Translation Adjustments, no Tax Impact	24.9			(59.0		)	(46.9		)	(35.6		)	17.1
Defined Benefit Pension Plans:
Prior Service Costs, Net of Tax Income (Expense) (6)	(0.9		)	(0.9		)	1.8			(5.6		)	(6.4		)
Net Actuarial Gain (Loss), Net of Tax Income (Expense) (7)	(8.7		)	15.8			(138.3		)	154.4			(56.2		)
Derivative Financial Instruments, Net of Tax Income (Expense) (8)	—			—			(0.1		)	—			0.1
Total Other Comprehensive Income (Loss), Net of Tax	15.3			(44.1		)	(183.5		)	113.2			(45.4		)
Comprehensive Income (Loss), Net of Income Taxes	117.7			129.0			114.4			375.3			251.1
Less: Comprehensive Income (Loss) Attributable to the Noncontrolling Interest	(4.4		)	(3.6		)	(3.3		)	(3.5		)	(1.0		)
Comprehensive Income (Loss) Attributable to Dun & Bradstreet	$	113.3		$	125.4		$	111.1		$	371.8		$	250.1

Balance Sheet:
Total Assets (9) (10)	$	2,209.2		$	2,266.5		$	1,981.9		$	1,884.6		$	1,984.8
Long-Term Debt (10)	$	1,594.5		$	1,797.0		$	1,348.3		$	1,510.4		$	1,283.7
Total Dun & Bradstreet Shareholders’ Equity (Deficit)	$	(1,002.0	)	$	(1,116.8	)	$	(1,203.3	)	$	(1,048.4	)	$	(1,017.4	)
Noncontrolling Interest	$	14.2		$	11.5		$	8.7		$	6.1		$	3.1
Total Equity (Deficit)	$	(987.8	)	$	(1,105.3	)	$	(1,194.6	)	$	(1,042.3	)	$	(1,014.3	)

(1) Restructuring, non-core gains and (charges) and acquisition and divestiture-related charges^(a) included in Operating Income:



	For the Years Ended December 31,
Gain (Charge):	2016			2015			2014			2013			2012
Restructuring Charges	$	(22.1	)	$	(32.3	)	$	(14.9	)	$	(13.9	)	$	(29.4	)
Legal and Other Professional Fees and Shut-Down Costs Related to Matters in China	$	(2.0	)	$	(1.6	)	$	(3.7	)	$	(7.4	)	$	(15.6	)
Accrual for Legal Matters	$	(26.0	)	$	—		$	—		$	—		$	—
Acquisition/Divestiture Related Costs	$	(9.5	)	$	(21.9	)	$	—		$	—		$	—
Amortization of Acquisition Related Intangibles	$	(24.2	)	$	(17.8	)	$	—		$	—		$	—
Impairments Related to Matters in China	$	—		$	—		$	—		$	—		$	(12.9	)
Impairment of Assets	$	(2.4	)	$	(6.8	)	$	(7.3	)	$	(33.3	)	$	—
Strategic Technology Investment or MaxCV	$	—		$	—		$	—		$	—		$	(30.3	)


(a)	See Item 7. included in this Annual Report on Form 10-K for further detail.


(2)	Restructuring, non-core gains and (charges) and acquisition and divestiture-related charges^(a) included in Non-Operating Income (Expense) – Net:



	For the Years Ended December 31,
Gain (Charge):	2016			2015			2014			2013		2012
Effect of Legacy Tax Matters (b)	$	(1.7	)	$	(6.9	)	$	(28.6	)	$	0.8	$	(14.8	)
Gain (Loss) on Sale of Businesses (c)	$	(95.1	)	$	—		$	—		$	—	$	6.1
Gain (Loss) on Investment	$	(6.7	)	$	(1.2	)	$	—		$	—	$	—
Acquisition/Divestiture Related Costs	$	(0.1	)	$	(0.3	)	$	—		$	—	$	—


(a)	See Item 7. included in this Annual Report on Form 10-K for further detail.

(b) During the year ended December 31, 2016, we recognized the reduction of a contractual receipt under a tax allocation agreement between Moody’s Corporation and Dun & Bradstreet as a result of the expiration of a statute of limitations for the 2012 tax year.

During the year ended December 31, 2015, we recognized the reduction of a contractual receipt under a tax allocation agreement between Moody’s Corporation and Dun & Bradstreet as a result of the expiration of a statute of limitations for the 2011 tax year.

During the year ended December 31, 2014, we recognized the reduction of a contractual receipt under a tax allocation agreement between Moody’s Corporation and Dun & Bradstreet as a result of the effective settlement of audits for the 2007 - 2009 tax years and the expiration of a statute of limitations for the 2010 tax year.

During the year ended December 31, 2012, we recognized the reduction of a contractual receipt under a tax allocation agreement between Moody’s Corporation and Dun & Bradstreet as a result of the expiration of the statute of limitations for the 2005 and 2006 tax years.


(c)	During the year ended December 31, 2016, we recognized a total pre-tax loss on the sale of businesses related to the disposal of our Belgium, Netherlands and Latin America operations. See Note 17 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for further detail.


(3)	Restructuring, non-core gains and (charges) and acquisition and divestiture-related charges^(a) included in Provision for Income Taxes:



	For the Years Ended December 31,
Tax Benefit (Expense):	2016			2015		2014		2013			2012
Restructuring Charges	$	7.7		$	11.7	$	4.1	$	3.6		$	10.7
Legal and Other Professional Fees and Shut-Down Costs Related to Matters in China	$	0.7		$	0.8	$	1.3	$	2.8		$	5.2
Accrual for Legal Matters	$	3.4		$	—	$	—	$	—		$	—
Gain (Loss) on Sale of Businesses	$	(2.7	)	$	—	$	—	$	—		$	5.1
Acquisition/Divestiture Related Costs	$	1.6		$	3.8	$	—	$	—		$	—
Amortization of Acquisition Related Intangibles	$	9.1		$	6.8	$	—	$	—		$	—
Cash Repatriation Tax Benefit	$	—		$	2.9	$	—	$	—		$	—
Impairment of Assets	$	—		$	2.1	$	2.8	$	6.2		$	—
Strategic Technology Investment or MaxCV	$	—		$	—	$	—	$	—		$	9.5
Gain (Loss) on Investment	$	—		$	0.3	$	—	$	—		$	—
Tax Benefit on a Loss on the Tax Basis of a Legal Entity	$	—		$	—	$	—	$	—		$	15.4
Effect of Legacy and Other Tax Matters	$	3.4		$	14.3	$	65.8	$	(0.8	)	$	27.8


(a)	See Item 7. included in this Annual Report on Form 10-K for further detail.

(4) Tax Benefit (Expense) of $2.2 million, $1.7 million, $0.1 million and $(0.9) million during the years ended December 31, 2015, 2014, 2013 and 2012, respectively.

(5) In June 2015, we divested our business in Australia and New Zealand (“ANZ”) for $169.8 million, which was part of our Non-Americas segment. Accordingly, we have reclassified the historical financial results of our business in ANZ as discontinued operations for all periods presented in this Annual Report on Form 10-K and recorded a loss on the disposal of the business of $4.1 million and $37.5 million (both pre-tax and after tax) for the years ended December 31, 2016 and 2015, respectively, in the consolidated statement of operations and comprehensive income (loss). See Note 17 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for further detail.


(6)	Tax Benefit (Expense) of $0.4 million, $0.5 million, $(1.1) million, $3.3 million and $3.1 million during the years ended December 31, 2016, 2015, 2014, 2013 and 2012, respectively. See Note 10 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for further detail.


(7)	Tax Benefit (Expense) of $4.3 million, $(9.6) million, $84.9 million, $(91.7) million and $27.2 million during the years ended December 31, 2016, 2015, 2014, 2013 and 2012, respectively. See Note 10 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for further detail.

(8) Tax Benefit (Expense) of $(0.1) million and $(1.9) million for the years ended December 31, 2014 and 2012, respectively.

(9) During the year ended December 31, 2015, we acquired NetProspex and Dun & Bradstreet Credibility Corp. See Note 18 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for further detail.

(10)

The prior period consolidated balance sheets were adjusted associated with the adoption of Accounting Standards Update (“ASU”) No. 2015-03 “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” in the first quarter of 2016. The impacts were adjustments of $7.1 million, $3.9 million, $5.6 million and $7.0 million to the consolidated balance sheet at December 31, 2015, 2014, 2013 and 2012, respectively. See Note 2 and Note 6 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for further detail.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

How We Manage Our Business

In addition to reporting generally accepted accounting principles in the United States of America (“GAAP”) results, the Company evaluates performance and reports on a total company basis and on a business segment level basis its results (such as revenue, operating income, operating income growth, operating margin, net income, tax rate and diluted earnings per share) on an “As Adjusted” basis. The term “As Adjusted” refers to the following: the elimination of the effect on revenue due to purchase accounting fair value adjustments to deferred revenue; restructuring charges; other non-core gains and charges that are not in the normal course of our business (such as gains and losses on sales of businesses, impairment charges and material tax and legal settlements); acquisition and divestiture-related fees (such as costs for bankers, legal fees, diligence costs, retention payments and contingent consideration adjustments); and acquisition-related intangible amortization expense. A recurring component of our “As Adjusted” basis is our restructuring charges, which we believe do not reflect our underlying business performance. Such charges are variable from period to period based upon actions identified and taken during each period. Additionally, our “As Adjusted” results exclude the results of Discontinued Operations. Management reviews operating results on an “As Adjusted” basis on a monthly basis and establishes internal budgets and forecasts based upon such measures. Management further establishes annual and long-term compensation such as salaries, target cash bonuses and target equity compensation amounts based on performance on an “As Adjusted” basis and a significant percentage weight is placed upon performance on an “As Adjusted” basis in determining whether performance objectives have been achieved. Management believes that by reflecting these adjustments to our GAAP financial measures, business leaders are provided incentives to recommend and execute actions that support our long-term growth strategy rather than being influenced by the potential impact one of these items can have in a particular period on their compensation. The Company adjusts for these items because they do not reflect the Company’s underlying business performance and they may have a disproportionate positive or negative impact on the results of its ongoing business operations. We believe that the use of our non-GAAP financial measures provides useful supplemental information to our investors.

We also isolate the effects of changes in foreign exchange rates on our revenue growth because we believe it is useful for investors to be able to compare revenue from one period to another, both after and before the effects of foreign exchange. The change in our operating performance attributable to foreign currency rates is determined by converting both our prior and current periods by a constant rate. As a result, we monitor our “As Adjusted” revenue growth both after and before the effects of foreign exchange.

We also analyze “As Adjusted” revenue growth on an organic basis because management believes this information provides important insight into the underlying/ongoing performance of the business. Organic revenue excludes revenue from acquired businesses for one year from the date of the acquisition and net divested revenue which we define as the historical revenues from the divested businesses net of the annual ongoing future revenue streams resulting from the commercial arrangements entered into in connection with such divestitures.

We may from time to time use the term “sales,” which we define as the annual value of committed customer contracts. This term is often referred to as “bookings” or “commitments” by other companies.

In June 2015, we divested our business in Australia and New Zealand (“ANZ”) for $169.8 million, which was part of our Non-Americas segment. Accordingly, we have reclassified the historical financial results of our business in ANZ as discontinued operations for all periods presented as set forth in Item 8. of this Annual Report on Form 10-K. See Note 17 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for further detail.

In the fourth quarter of 2016, we divested our operations in the Netherlands and Belgium (“Benelux”) and Latin America, which were reported within our Non-Americas and Americas segments, respectively.

We monitor free cash flow as a measure of our business. We define free cash flow as net cash provided by operating activities minus capital expenditures and additions to computer software and other intangibles. Free cash flow measures our available cash flow for potential debt repayment, acquisitions, share repurchases, dividend payments and additions to cash, cash equivalents and short-term investments. We believe free cash flow to be relevant and useful to our investors as this measure is used by our management in evaluating the funding available after supporting our ongoing business operations and our portfolio of investments.

Free cash flow should not be considered as a substitute measure for, or superior to, net cash flows provided by operating activities, investing activities or financing activities. Therefore, we believe it is important to view free cash flow as a complement to the consolidated statements of cash flows.

We also monitor deferred revenue after adjusting for the effect of foreign exchange, dispositions, acquisitions and the impacts of the write-down of deferred revenue due to purchase accounting.

We evaluate our business based on the following supplemental revenue metrics for Trade Credit we further evaluate it by “DNBi^®,” which includes D&B Credit, and “Other Trade Credit” and for total revenue we further evaluate it by “Direct” and “Alliance & Partners.” We define “DNBi” as our interactive, online application that offers customers a subscription based real time access to our most complete and up-to-date global information, comprehensive monitoring and portfolio. We define “Other Trade Credit” as products and services used to manage credit risk and to support our customers’ internal credit risk decisioning processes. We define “Direct” as when we hold the relationship with the end customer. We define “Alliance & Partners” as where we do not maintain the end relationship with the customer of our content (e.g., Alliances, Dun & Bradstreet Worldwide Network partners, Third Party or Broker type relationships). Management believes these measures provide further insight into our revenue performance.

The adjustments discussed herein to our results as determined under GAAP are among the primary indicators management uses as a basis for our planning and forecasting of future periods, to allocate resources, to evaluate business performance and, as noted above, for compensation purposes. However, these financial measures (e.g., results on an “As Adjusted” basis and free cash flow) are not prepared in accordance with GAAP, and should not be considered in isolation or as a substitute for total revenue, operating income, operating income growth, operating margin, net income, tax rate, diluted earnings per share, or net cash provided by operating activities, investing activities and financing activities prepared in accordance with GAAP. In addition, it should be noted that because not all companies calculate these financial measures similarly, or at all, the presentation of these financial measures is not likely to be comparable to similar measures of other companies.

See “Results of Operations” below for a discussion of our results reported on a GAAP basis.

Overview

Since January 1, 2015, we have managed and reported our business through two segments:


•	Americas, which currently consists of our operations in the United States (“U.S.”), Canada, and our Latin America Worldwide Network (we divested our Latin America operations in September 2016); and


•	Non-Americas, which currently consists of our operations in the United Kingdom (“U.K.”), Greater China, India and our European and Asia Pacific Worldwide Networks (we divested our operations in both the Netherlands and Belgium (“Benelux”) in November 2016 and our Australian operations in June 2015).

Prior to January 1, 2015, we managed and reported our business through the following three segments:


•	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 U.K., the Netherlands, Belgium, Latin America and our European Worldwide Network.

The financial statements of our subsidiaries outside of the U.S. and Canada reflect a fiscal year ended November 30 to facilitate the timely reporting of our consolidated financial results and consolidated financial position.

The following table presents the contribution by segment to revenue:



	For the Years Ended December 31,
	2016		2015		2014
Revenue:
Americas	83	%	81	%	80	%
Non-Americas	17	%	19	%	20	%

The following table presents contributions by customer solution set to revenue:



	For the Years Ended December 31,
	2016		2015		2014
Revenue by Customer Solution Set:
Risk Management Solutions	59	%	60	%	61	%
Sales & Marketing Solutions	41	%	40	%	39	%

Our customer solution sets are discussed in greater detail in “Item 1. Business” of this Annual Report on Form 10-K.

Critical Accounting Policies and Estimates

In preparing our consolidated financial statements and accounting for the underlying transactions and balances reflected therein, we have applied the significant accounting policies described in Note 1 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K. Of those policies, we consider the policies described below to be critical because they are both most important to the portrayal of our financial condition and results, and they require management’s subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We base our estimates on historical experience and on various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

If actual results in a given period ultimately differ from previous estimates, the actual results could have a material impact on such period.

We have discussed the selection and application of our critical accounting policies and estimates with the Audit Committee of our Board of Directors, and the Audit Committee has reviewed the disclosure regarding critical accounting policies and estimates as well as the other sections in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Pension and Postretirement Benefit Obligations

Through June 30, 2007, we offered coverage to substantially all of our U.S. based employees under a defined benefit plan called The Dun & Bradstreet Corporation Retirement Account (“U.S. Qualified Plan”). The U.S. Qualified Plan covered active and retired employees. The benefits to be paid upon retirement are based on a percentage of the employee’s annual compensation. The percentage of compensation allocated annually to a retirement account ranged from 3% to 12.5% based on age and service. Amounts allocated under the U.S. Qualified Plan also receive interest credits based on the 30-year Treasury rate or equivalent rate published by the Internal Revenue Service. Pension costs are determined actuarially and funded in accordance with the Internal Revenue Code.

We also maintain supplemental and excess plans in the United States (“U.S. Non-Qualified Plans”) to provide additional retirement benefits to certain key employees of the Company. These plans are unfunded, pay-as-you-go plans. The U.S. Qualified Plan and the U.S. Non-Qualified Plans account for approximately 71% and 14% of our pension obligation, respectively, at December 31, 2016.

Effective June 30, 2007, we amended the U.S. Qualified Plan and one of the U.S. Non-Qualified Plans, known as the U.S. Pension Benefit Equalization Plan (the “PBEP”). Any pension benefit that had been accrued through such date under the two plans was “frozen” at its then current value and no additional benefits, other than interest on such amounts, will accrue under the U.S. Qualified Plan and the PBEP. Effective April 2011, we amended our Executive Retirement Plan to close the plan to new participants. Our employees in certain of our international operations are also provided with retirement benefits through defined benefit plans, representing the remaining balance of our pension obligations.

We also provide various health care benefits for retirees. U.S. based employees, hired before January 1, 2004, who retire with 10 years of vesting service after age 45, are eligible to receive benefits. Postretirement benefit costs and obligations are determined actuarially. In July 2014, we amended our post-65 retiree health plan to eliminate our group-based retiree medical

and prescription plans effective December 31, 2014. Effective January 1, 2015, we provide eligible retirees and dependents age 65 or older access to coverage in the individual Medicare market. We also provide an annual contribution towards retirees’ premiums and other out-of-pocket costs.

Certain of our non-U.S. based employees receive postretirement benefits through government-sponsored or administered programs.

The key assumptions used in the measurement of the pension and postretirement obligations and net periodic pension and postretirement cost are:


•	Expected long-term rate of return on pension plan assets, which is based on a target asset allocation as well as expected returns on asset categories of plan investments;


•	Discount rate, which is used to measure the present value of pension plan obligations and postretirement health care obligations. The discount rates are derived using a yield curve approach which matches projected plan benefit payment streams with bond portfolios, reflecting actual liability duration unique to our plans;


•	Mortality rates, which are used to estimate life expectancy of plan participants, determining the period over which retirement plan benefits are expected to be paid; and


•	Rates of compensation increase and cash balance accumulation/conversion rates, which are based on an evaluation of internal plans and external market indicators.

We believe that the assumptions used are appropriate, though changes in these assumptions would affect our pension and other postretirement benefit costs.

The factor with the most immediate impact on our pension costs is a change in the expected long-term rate of return on pension plan assets for the U.S. Qualified Plan. This assumption was 7.25% for 2016 and 7.75% for each of 2015 and 2014. For 2017, we will use a long-term rate of return of 7.00%. The 7.00% assumption represents our best estimate of the expected long-term future investment performance of the U.S. Qualified Plan, after considering expectations for future capital market returns and the plan’s asset allocation. As of December 31, 2016, the U.S. Qualified Plan was 50% invested in publicly traded equity securities, 45% invested in debt securities and 5% invested in alternative investments (e.g. real estate).

A change in the discount rate also has an effect on our annual operating income and financial position. Effective January 1, 2016, we changed the approach used to measure service and interest cost components of net periodic benefit costs for our pension and postretirement benefit plans. Previously, we measured service and interest costs utilizing a single weighted-average discount rate derived from the yield curve used to measure the plan obligations. Beginning in 2016, we elected to measure service and interest costs by applying the specific spot rates along that yield curve to the plans’ liability cash flows (“Spot Rate Approach”). We believe the new approach provides a more precise measurement of service and interest costs by improving the correlation between projected benefit cash flows and their corresponding spot rates on the yield curve. This change does not affect the measurement of our plan obligations and it was accounted for as a change in accounting estimate which was applied prospectively. This change in estimate reduced our 2016 pension and postretirement net periodic cost by approximately $14 million. The weighted average discount rate used in effect for the 2016 interest and service cost for the U.S. plans under the Spot Rate Approach was 3.04%. The weighted average discount rate used to measure the benefit obligation for the U.S. plans was 3.89% at December 31, 2015.

Changes in the above key assumptions for our U.S. plans would have the following effects:



	Long-Term Rate of Return					Discount Rate
	A 25 Basis Point					A 25 Basis Point
	Increase			Decrease		Increase			Decrease
Increase (Decrease) in Pension Cost	$	(3.0	)	$	3.0	$	1.0		$	(1.0	)
Increase (Decrease) in Pension Obligation	N/A			N/A		$	(47.0	)	$	37.0

Differences between the assumptions stated above and actual experience could affect our pension and other postretirement benefit costs. When actual plan experience differs from the assumptions used, actuarial gains or losses arise. These gains and losses are aggregated and amortized generally over the average future service periods or life expectancy of plan participants to the extent that such gains or losses exceed a “corridor.” The purpose of the corridor is to reduce the volatility caused by the difference between actual experience and the pension-related assumptions noted above, on a plan-by-plan basis. For all of our pension plans, total actuarial losses that have not been recognized in our pension costs as of

December 31, 2016 and 2015 were $1,132.5 million and $1,120.7 million, respectively, of which $894.9 million and $885.2 million, respectively, were attributable to the U.S. Qualified Plan, $122.8 million and $124.0 million, respectively, were attributable to the U.S. Non-Qualified Plans, and the remainder was attributable to the non-U.S. pension plans. See discussion in Note 10 to our consolidated financial statements included in Item 8. of this Annual Report on Form 10-K. In our 2017 net periodic pension cost, we expect to recognize a portion of such losses amounting to $29.8 million, $6.9 million and $3.4 million for the U.S. Qualified Plan, U.S. Non-Qualified Plans and non-U.S. plans, respectively, compared to $29.0 million, $6.9 million and $2.9 million, respectively, in 2016. The higher amortization of actuarial loss included in our 2017 pension cost for the U.S. and non-U.S. plans, is due to a higher unrecognized actuarial loss subject to amortization in 2017, primarily as a result of lower discount rates at December 31, 2016.

The mortality assumption is one of the key components in determining projected pension obligations as well as the pension and postretirement benefit costs. For our U.S. plans we used the RP-2014 aggregate mortality table together with mortality improvement projection scale MP-2016 and MP-2015 at December 31, 2016 and 2015, respectively. The adoption of the updated mortality improvement projection scale MP-2016 and MP-2015 resulted in a reduction of the projected benefit obligations for the U.S. plans of approximately $11 million and $21 million, respectively, at December 31, 2016 and 2015.

Differences between the expected long-term rate of return assumption and actual experience could affect our net periodic pension cost. For our pension plans, we recorded net periodic pension cost of $5.2 million, $18.1 million and $18.7 million for the years ended December 31, 2016, 2015 and 2014, respectively. A major component of the net periodic pension cost is the expected return on plan assets, which was $96.5 million, $102.6 million and $100.2 million for the years ended December 31, 2016, 2015 and 2014, respectively. The expected return on plan assets is determined by multiplying the expected long-term rate of return assumption by the market-related value of plan assets. The market-related value of plan assets recognizes asset gains and losses over five years to reduce the effects of short-term market fluctuations on net periodic cost. For our pension plans we recorded: (i) for the year ended December 31, 2016, a total investment gain of $112.5 million which was comprised of a gain of $68.1 million in our U.S. Qualified Plan and a gain of $44.4 million in our non-U.S. plans, (ii) for the year ended December 31, 2015, a total investment gain of $13.5 million which was comprised of a loss of $2.7 million in our U.S. Qualified Plan and a gain of $16.2 million in our non-U.S. plans, and (iii) for the year ended December 31, 2014, a total investment gain of $139.2 million which was comprised of a gain of $94.3 million in our U.S. Qualified Plan and a gain of $44.9 million in our non-U.S. plans. At January 1, 2017, the market-related value of plan assets of our U.S. Qualified Plan and the non-U.S. plans was $1,199.8 million and $241.9 million, respectively, compared with the fair value of the plan assets of $1,150.6 million and $275.7 million, respectively.

Changes in the funded status of our pension plans could result in fluctuations in our shareholders’ equity (deficit). We are required to recognize the funded status of our benefit plans as a liability or an asset, on a plan-by-plan basis with an offsetting adjustment to Accumulated Other Comprehensive Income (“AOCI”), in our shareholders’ equity (deficit), net of tax. Accordingly, the amounts recognized in equity represent unrecognized gains (losses) and prior service costs. These unrecognized gains (losses) and prior service costs are amortized out of equity (deficit) based on an actuarial calculation each period. Gains (losses) and prior service costs that arise during the year are recognized as a component of Other Comprehensive Income (“OCI”) which is then reflected in AOCI. During the years ended December 31, 2016 and 2015, we recorded in OCI, net of applicable tax, a net loss of $9.6 million and net income of $14.9 million, respectively. The loss in 2016 was primarily driven by lower discount rates applied to our global plans at December 31, 2016. Total net funded status for our global plans improved by $12.3 million to a deficit of $537.9 million at December 31, 2016, compared to a deficit of $550.2 million at December 31, 2015, primarily due to better asset performance during 2016.

For information on pension and postretirement benefit plan contribution requirements, please see “Future Liquidity-Sources and Uses of Funds-Pension Plan and Postretirement Benefit Plan Contribution Requirements.” See Note 10 to our consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for more information regarding costs of, and assumptions for, our pension and postretirement benefit obligations and costs.

Revenue Recognition

Application of the various accounting principles in GAAP related to the measurement and recognition of revenue requires us to make judgments and estimates. Specifically, complex arrangements with non-standard terms and conditions may require significant contract interpretation to determine the appropriate accounting, including whether the deliverables specified in a multiple-element arrangement should be treated as separate units of accounting. Other significant judgments include determining whether we are acting as the principal in a transaction, primarily as it relates to transactions with alliances and partners, and whether separate contracts are considered part of one arrangement. We also use judgment to assess whether collectability is reasonably assured before we recognize any revenue. We base our judgment on the creditworthiness of the customer, their historical payment experience and the market and economic conditions affecting the customer.

Total consideration in multiple-element arrangements is allocated to each deliverable based on the relative selling price at the inception of the arrangements and does not change. We determine the estimated selling price for each deliverable using the selling price hierarchy (vendor-specific objective evidence of selling price, third-party evidence of selling price, and best estimated selling price). We review estimated selling prices used in this hierarchy on a quarterly basis and update as required. As a result, the allocation of total consideration in future new multiple-element arrangements with the same deliverables can change.

Goodwill and Other Intangible Assets

Goodwill represents the excess of the purchase consideration over the fair value of assets and liabilities of businesses acquired. Goodwill is not subject to regular periodic amortization. Instead, the carrying amount of goodwill is tested for impairment at least annually at December 31, and between annual tests if events or circumstances warrant such a test. An impairment loss would be recognized if the carrying amount exceeded the fair value.

We assess recoverability of goodwill at the reporting unit level. A reporting unit is an operating segment or a component of an operating segment which is a business and for which discrete financial information is available and reviewed by a segment manager. Our reporting units are North America and Latin America Partnership within the Americas segment, and United Kingdom, European Partnerships, Greater China, India and Asia Pacific Partnerships within the Non-Americas segment. During the fourth quarter of 2016, we shifted our business model in Benelux and Latin America to our Worldwide Network partnership model in connection with the divestiture of the domestic operations of Benelux and Latin America. As a result, the former Benelux and Latin America reporting units through the divestiture dates were eliminated and we currently report our new partnership businesses in Benelux and Latin America within the European Partnerships and Latin America Partnership reporting units, respectively.

We perform a two-step goodwill impairment test. In the first step, we compare the fair value of each reporting unit to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets, including goodwill assigned to that reporting unit, goodwill is not impaired and no further test is performed. However, if the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, the second step of the impairment test is performed to determine the magnitude of the impairment, which is the implied fair value of the reporting unit’s goodwill compared to the carrying value. The implied fair value of goodwill is the difference between the fair value of the reporting unit and the fair value of its identifiable net assets. If the carrying value of goodwill exceeds the implied fair value of goodwill, the goodwill is written down to its implied fair value and an impairment loss equal to this difference is recorded in the period that the impairment is identified as an operating expense.

We determine the fair value of our reporting units based on the market approach and also in certain instances use the income approach to further validate our results. Under the market approach, we estimate the fair value based on market multiples of current year Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) for each individual reporting unit. We use judgment in identifying the relevant comparable company market multiples (i.e., recent divestitures/acquisitions, facts and circumstances surrounding the market, dominance, growth rate, etc.). As of our most recent impairment analysis at December 31, 2016, the EBITDA multiples used to determine the individual reporting unit’s fair value range from 8 to 12. For the income approach, we use the discounted cash flow method (“DCF”) to estimate the fair value of a reporting unit. The projected cash flows are based on management’s most recent view of the long-term outlook for each reporting unit. Factors specific to each reporting unit could include revenue growth, profit margins, terminal value, capital expenditures projections, assumed tax rates, discount rates and other assumptions deemed reasonable by management. For our 2016 year-end impairment analysis, we also applied the DCF approach to estimate the fair value for the India reporting unit and derived the reporting unit fair value using an equal weighting of the two valuation approaches (see below discussion for further detail).

Our determination of current year EBITDA multiples and projected cash flows are sensitive to the risk of future variances due to market conditions as well as business unit execution risks. Management assesses the relevance and reliability of the multiples and projected cash flows by considering factors unique to its reporting units, including recent operating results, business plans, economic projections, anticipated future cash flows, recent market transactions involving comparable businesses and other data. EBITDA multiples and projected cash flows can also be significantly impacted by the future growth opportunities for the reporting unit as well as for the Company itself, general market and geographic sentiment and pending or recently completed merger transactions.

Consequently, if future results fall below our forward-looking projections for an extended period of time, the results of future impairment tests could indicate that impairment exists. Although we believe the multiples of current year EBITDA in our market approach and the projected cash flows in our income approach make reasonable assumptions about our business, a significant increase in competition or reduction in our competitive capabilities could have a significant adverse impact on our ability to retain market share and thus on the projected values for our reporting units.

As a reasonableness check, we reconcile the estimated fair values derived in the valuations for the total Company based on the individual reporting units to our total enterprise value (calculated by multiplying the closing price of our common stock on December 31, 2016 by the number of shares outstanding at that time, adjusted for the value of the Company’s debt).

At December 31, 2016, the estimated fair values of our reporting units exceeded the respective carrying values by amounts ranging from 13% to well over 100%. Our India reporting unit was at the low end of the range and our largest reporting unit, North America, was at the high end of the range at December 31, 2016. We also further estimated the fair value for the India reporting unit by applying the DCF method to validate the fair value derived from the market approach. We applied a discount rate of 15% and a terminal growth rate of 5% to the most recent projected cash flows generated from the reporting unit. The carrying value of goodwill for India is immaterial.

The allocated goodwill by reportable segment is as follows:



	As of December 31, 2016			As of December 31, 2015
(in millions)	Number of Reporting Units	Goodwill		Number of Reporting Units	Goodwill
Americas	2	$	550.5	2	$	562.6
Non-Americas	5	101.4		6	141.4
Consolidated Total		$	651.9		$	704.0

Indefinite-lived intangibles other than goodwill, are also assessed annually for impairment at December 31 of each year, or, under certain circumstances which indicate there may be an impairment. An impairment loss is recognized if the carrying value exceeds the fair value. The estimated fair value is determined by utilizing the expected present value of the future cash flows of the assets. We perform both qualitative and quantitative impairment tests to compare the fair value of the indefinite-lived intangible asset with its carrying value. For the recently acquired indefinite-lived intangible assets from acquisitions, we perform a qualitative impairment test based on macroeconomic and market conditions, industry considerations, overall performance and other relevant factors. For other indefinite-lived intangible assets, we may also perform a quantitative impairment test primarily using an income approach based on projected cash flows.

No impairment charges related to goodwill and indefinite-lived intangibles have been recognized for the years ended December 31, 2016, 2015 and 2014.

Income Taxes and Tax Contingencies

We are subject to income taxes in the U.S. and many foreign jurisdictions. In determining our consolidated provision for income taxes for financial statement purposes, we must make certain estimates and judgments. These estimates and judgments affect the determination of the recoverability of certain of the deferred tax assets and the calculation of certain tax liabilities, which arise from temporary differences between the tax and financial statement recognition of revenue and expense and net operating losses.

In evaluating our ability to recover our deferred tax assets, we consider all available positive and negative evidence including our past operating results, the existence of cumulative losses in the most recent years and our forecast of future taxable income. In estimating future taxable income, we develop assumptions, including the amount of future pre-tax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates we are using to manage the underlying businesses.

We currently have recorded valuation allowances in certain jurisdictions that we will maintain until it is more likely than not the deferred tax assets will be realized. Our income tax expense recorded in the future may be reduced to the extent of decreases in our valuation allowances. The realization of our remaining deferred tax assets is primarily dependent on future taxable income in the appropriate jurisdiction. Any reduction in future taxable income may require that we record an additional valuation allowance against our deferred tax assets. An increase in the valuation allowance could result in additional income tax expense in such period and could have a significant impact on our future earnings.

Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future. Management records the effect of a tax rate or law change on our deferred tax assets and liabilities in the period of enactment. Future tax rate or law changes could have a material adverse effect on our financial condition, results of operations or cash flows.

Recently Issued Accounting Standards

See Note 2 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for disclosure of the impact that recent accounting standards may have on our audited consolidated financial statements.

Results of Operations

The following discussion and analysis of our financial condition and results of operations are based upon the consolidated financial statements and should be read in conjunction with the consolidated financial statements and related notes set forth in Item 8. of this Annual Report on Form 10-K, which have been prepared in accordance with GAAP.

Consolidated Revenue

The following table presents our revenue by segment:



	For the Years Ended December 31,
	2016		2015		2014
	(Amounts in millions)
Revenue:
Americas	$	1,416.1	$	1,329.1	$	1,260.3
Non-Americas	287.6		308.0		324.2
Total Revenue	$	1,703.7	$	1,637.1	$	1,584.5

The following table presents our total revenue by customer solution set:



	For the Years Ended December 31,
	2016		2015		2014
	(Amounts in millions)
Revenue:
Risk Management Solutions	$	1,011.8	$	978.3	$	962.1
Sales & Marketing Solutions	691.9		658.8		622.4
Total Revenue	$	1,703.7	$	1,637.1	$	1,584.5

Year Ended December 31, 2016 vs. Year Ended December 31, 2015

Total revenue increased $66.6 million, or 4% (5% increase before the effect of foreign exchange), for the year ended December 31, 2016 as compared to the year ended December 31, 2015. The increase in total revenue was driven by an increase in Americas total revenue of $87.0 million, or 7% (both after and before the effect of foreign exchange), partially offset by a decrease in Non-Americas total revenue of $20.4 million, or 7% (1% decrease before the effect of foreign exchange).

Total revenue was impacted by the divestiture of our operations in Benelux (which we divested in November 2016) and Latin America (which we divested in September 2016). Prior to the divestiture, Benelux contributed $48.2 million and $58.7 million of revenue during the years ended December 31, 2016 and 2015, respectively. Prior to the divestiture, Latin America contributed $8.7 million and $10.0 million of revenue during the years ended December 31, 2016 and 2015, respectively.

We acquired a 100% equity interest in DBCC during the second quarter of 2015 and a 100% equity interest in NetProspex during the first quarter of 2015. In accordance with ASC 805, “Business Combinations,” deferred revenue at the acquisition date was recorded at fair value based on the estimated cost to provide the related services plus a reasonable profit margin on such costs. The impact of the deferred revenue fair value adjustment was a reduction of $3.1 million and $19.9 million for the years ended December 31, 2016 and 2015, respectively.

The increase in total revenue is primarily attributed to:


•	Increased revenue associated with our acquisition of Dun & Bradstreet Credibility Corp. (“DBCC”), which was completed during the second quarter of 2015, net of the impact of the deferred revenue fair value adjustment;


•	Growth in our Integration Manager and Optimizer products, driven primarily by increased spend by our larger strategic customers;


•	Increased revenue associated with Credit-on-Self products and certain of our other Risk Management Solutions driven by our emerging businesses channel; and


•	Increased revenue through our third-party alliances and our D&B Direct offering;

partially offset by:


•	The negative impact of foreign exchange;


•	Decreased revenue of our DNBi and Hoover's subscription plans primarily due to a decline in sales in prior periods; and


•	More of our revenue is being deferred out as we shift more of our sales to newer, embedded products where revenue is recognized over time.

While revenue from our alliances increased in 2016 as compared to 2015, it increased at a slower rate. For 2017, we expect this trend to continue.

Customer Solution Sets

On a customer solution set basis, total revenue reflects:


•	A $33.5 million, or 3% increase (5% increase before the effect of foreign exchange), in Risk Management Solutions. The increase was driven by an increase in revenue in Americas of $42.0 million, or 6% (both after and before the effect of foreign exchange), partially offset by a decrease in revenue in Non-Americas of $8.5 million, or 3%, (2% increase before the effect of foreign exchange); and


•	A $33.1 million, or 5% increase (6% increase before the effect of foreign exchange), in Sales & Marketing Solutions. The increase was driven by an increase in revenue in Americas of $45.0 million, or 8% (both after and before the effect of foreign exchange), partially offset by a decrease in revenue in Non-Americas of $11.9 million, or 19% (13% decrease before the effect of foreign exchange).

Year Ended December 31, 2015 vs. Year Ended December 31, 2014

Total revenue increased $52.6 million, or 3% (5% increase before the effect of foreign exchange), for the year ended December 31, 2015 as compared to the year ended December 31, 2014. The increase in total revenue was primarily driven by an increase in Americas total revenue of $68.8 million, or 5% (6% increase before the effect of foreign exchange), and an increase in Non-Americas total revenue of $16.2 million, or 5% (3% increase before the effect of foreign exchange).

Non-Americas total revenue was impacted by the ceasing of operations in our Ireland Small Corporate Registry Business during the year ended December 31, 2014.

The increase in total revenue is primarily attributed to:

•

Increased revenue associated with our acquisitions of DBCC, which was completed during the second quarter of 2015, and NetProspex, which was completed during the first quarter of 2015. Revenue includes revenue from DBCC and NetProspex since their respective acquisition dates of $71.2 million and $17.6 million, respectively, for the year ended December 31, 2015, net of the impact of the deferred revenue fair value adjustment of $18.2 million and $1.7 million, respectively;


•	Growth in our DaaS offerings (e.g., DaaS CRM alliances and D&B Direct); and


•	An increase in purchases by our Worldwide Network primarily for fulfillment services and product usage;

partially offset by:


•	The negative impact of foreign exchange;


•	More of our revenue is being deferred out as we shift more of our sales to newer, embedded products where revenue is recognized over time; and


•	Decreased revenue of our subscription plans (e.g., Hoover's and DNBi) primarily due to a decline in sales in prior quarters.

Customer Solution Sets

On a customer solution set basis, total revenue reflects:


•	A $16.2 million, or 2% increase (5% increase before the effect of foreign exchange), in Risk Management Solutions. The increase was driven by an increase in revenue in Americas of $32.0 million, or 5% (both after and before the effect of foreign exchange), partially offset by a decrease in revenue in Non-Americas of $15.8 million, or 6% (2% increase before the effect of foreign exchange); and


•	A $36.4 million, or 6% increase (7% increase before the effect of foreign exchange), in Sales & Marketing Solutions. The increase was driven by an increase in revenue in Americas of $36.8 million, or 7% (both after and before the effect of foreign exchange), partially offset by a decrease in revenue in Non-Americas of $0.4 million, or 1% (7% increase before the effect of foreign exchange).

Recent Developments

United Kingdom's Proposed Exit from the European Union

In June 2016, voters in the United Kingdom (“U.K.”) approved a non-binding referendum in favor of the U.K.’s withdrawal from membership in the European Union (“EU”), which is commonly referred to as “Brexit.” An immediate consequence of the Brexit vote was an adverse impact to global markets, including currency markets which experienced a sharp drop in the value of the British pound. Longer term, Brexit will require negotiations regarding the future terms of the U.K.’s relationship with the EU, which could result in the U.K. losing access to certain aspects of the single EU market and the global trade deals negotiated by the EU on behalf of its members. The Brexit vote and the perceptions as to the impact of the withdrawal of the U.K. may adversely affect business activity, political stability and economic conditions in the U.K., the Eurozone, the EU and elsewhere. While we have not experienced any material impact from Brexit on our underlying business to date, we cannot predict its future implications, which will in part depend on the outcome of the trade negotiations referenced above. For the three year period 2014 through 2016, the U.K. contributed an annual average of approximately 7% of total company revenue and 10% of consolidated operating income. See further discussion in “Liquidity and Financial Position.”

In January 2017, the U.K. Supreme Court stated that the non-binding referendum result does not authorize the Government to apply to leave the EU, and Parliament must now vote on whether the U.K. leaves the EU. It is widely believed that the vote will reflect the referendum result and notice to leave the EU will be served in March 2017.

European Union Safe Harbor Ruling

In October 2015, the European Court of Justice invalidated the “Safe Harbor” framework as a means of transferring personally identifiable information from the EU to the U.S. Dun & Bradstreet had relied on Safe Harbor as the basis for transfers from the EU prior to the decision. Since that time, we have relied on alternative mechanisms. In July 2016, the EU and U.S. authorities reached an agreement on a replacement for Safe Harbor, called Privacy Shield. Dun & Bradstreet became certified under the Privacy Shield on September 26, 2016 and now relies on this certification for transfers from the EU to the U.S.

Shanghai Roadway D&B Marketing Services Co. Ltd.

On March 18, 2012, we announced we had temporarily suspended our Shanghai Roadway D&B Marketing Services Co. Ltd. (“Roadway”) operations in China, pending an investigation into allegations that its data collection practices may have violated local Chinese consumer data privacy laws. Thereafter, the Company decided to permanently cease the operations of Roadway. In addition, we have been reviewing certain allegations that we may have violated the Foreign Corrupt Practices Act (“FCPA”) and certain other laws in our China operations. As previously reported, we have voluntarily contacted the Securities and Exchange Commission (“SEC”) and the United States Department of Justice (“DOJ”) to advise both agencies of our investigation, and we are continuing to meet with representatives of both the SEC and DOJ in connection therewith. Our investigation remains ongoing and is being conducted at the direction of the Audit Committee.

On September 28, 2012, Roadway was charged in a Bill of Prosecution, along with five former employees, by the Shanghai District Prosecutor with illegally obtaining private information of Chinese citizens. On December 28, 2012, the Chinese court imposed a monetary fine on Roadway and fines and imprisonment on four former Roadway employees. A fifth former Roadway employee was separated from the case.

For the years ended December 31, 2016, 2015 and 2014, we incurred $2.0 million, $1.6 million and $3.7 million, respectively, of legal and other professional fees related to matters in China.

As our investigation and our discussions with both the SEC and DOJ are ongoing, we cannot yet predict the ultimate outcome of the matter or its ultimate impact on our business, financial condition or results of operations. Based on our discussions with the SEC and DOJ, including indications from the SEC of its estimate of the amount of net benefit potentially earned by the Company as a result of the challenged activities, we continue to believe that it is probable that the Company will incur a loss related to the government’s investigation. The DOJ also advised the Company in February 2015 that they will be proposing terms of a potential settlement, but we are unable to predict the timing or terms of any such proposal. We continue to have follow-up meetings with the SEC and DOJ, most recently meeting with the SEC in June 2016 and with the DOJ in October 2016, and the parties are still discussing the evidence and other factors to help bring this matter to resolution. In our June 2016 meetings with the SEC, the SEC provided us with its current net benefit calculations, but has not indicated whether it will impose additional penalties. In accordance with ASC 450, an amount in respect of this matter has been accrued in the consolidated financial statements in the second quarter of 2016. We are still in discussions with the DOJ to determine what range of penalties the DOJ might propose. Accordingly, we remain unable at this time to reasonably estimate the final amount or ultimate range of any loss, although it is possible that the amount of such additional loss could be material.

Consolidated Operating Costs

The following table presents our consolidated operating costs and operating income:



	For the Years Ended December 31,
	2016		2015		2014
	(Amounts in millions)
Operating Expenses	$	542.6	$	544.7	$	530.1
Selling and Administrative Expenses	711.2		664.4		575.6
Depreciation and Amortization	68.6		58.7		52.5
Restructuring Charge	22.1		32.3		14.9
Operating Costs	$	1,344.5	$	1,300.1	$	1,173.1
Operating Income	$	359.2	$	337.0	$	411.4

Operating Expenses

Year Ended December 31, 2016 vs. Year Ended December 31, 2015

Operating expenses decreased $2.1 million, or less than 1%, for the year ended December 31, 2016, compared to the year ended December 31, 2015. The decrease was primarily due to the following:


•	Lower costs as a result of management restructuring initiatives taken in the fourth quarter of 2015 and January 2016; and


•	The positive impact of foreign exchange;

partially offset by:


•	Increased costs in data and technology as a result of our strategic investments; and


•	Increased costs associated with our acquisition of DBCC during the second quarter of 2015.

Year Ended December 31, 2015 vs. Year Ended December 31, 2014

Operating expenses increased $14.6 million, or 3%, for the year ended December 31, 2015, compared to the year ended December 31, 2014. The increase was primarily due to the following:


•	Increased costs associated with our acquisition of DBCC during the second quarter of 2015 and NetProspex during the first quarter of 2015;


•	Increased costs in technology for product development and data as a result of our strategic investments; and


•	Increased compensation costs;

partially offset by:


•	The positive impact of foreign exchange.

Selling and Administrative Expenses

Year Ended December 31, 2016 vs. Year Ended December 31, 2015

Selling and administrative expenses increased $46.8 million, or 7%, for the year ended December 31, 2016, compared to the year ended December 31, 2015. The increase was primarily due to the following:


•	Increased costs associated with our acquisition of DBCC during the second quarter of 2015;


•	Increased costs associated with the accrual for legal matters recorded in the second quarter of 2016. See Note 13 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for further detail; and


•	Increased costs resulting from our strategic investments;

partially offset by:


•	Lower costs as a result of management restructuring initiatives taken in the fourth quarter of 2015 and January 2016; and


•	The positive impact of foreign exchange.

Year Ended December 31, 2015 vs. Year Ended December 31, 2014

Selling and administrative expenses increased $88.8 million, or 15%, for the year ended December 31, 2015, compared to the year ended December 31, 2014. The increase was primarily due to the following:


•	Increased costs associated with our acquisition of DBCC during the second quarter of 2015 and NetProspex during the first quarter of 2015;


•	Increased compensation costs primarily related to our investments in Alliances and the sales organization; and


•	Increased costs associated with our brand modernization effort;

partially offset by:


•	The positive impact of foreign exchange.

Matters Impacting Both Operating Expenses and Selling and Administrative Expenses

Pension, Postretirement and 401(k) Plan

For our pension plans globally, we had a net periodic pension cost of $5.2 million, $18.1 million and $18.7 million for the years ended December 31, 2016, 2015 and 2014, respectively. The decrease in net periodic pension costs in each of 2016 and 2015, as compared to the respective prior year was due to the following:

•

Interest cost decreased in 2016, compared to the prior year, primarily due to the impact associated with the following change in accounting estimate. Effective January 1, 2016, we changed the approach used to measure service and interest cost components of net periodic benefit costs for our pension and postretirement benefit plans. Previously we measured service and interest costs utilizing a single weighted-average discount rate derived from the yield curve used to measure the plan obligations (“Traditional Approach”). Starting in 2016, we elected to measure service and interest costs by applying the specific spot rates along that yield curve to the plans’ liability cash flows (“Spot Rate Approach”). We believe the new approach provides a more precise measurement of service and interest costs by improving the correlation between projected benefit cash flows and their corresponding spot rates on the yield curve. This change does not affect the measurement of our plan obligations and it was reflected as a change in accounting estimate which was applied prospectively. The weighted average discount rate in effect using the Spot Rate Approach for the U.S. Qualified Plan was 3.04%, 85 basis points lower than the discount rate derived from using the Traditional Approach. Interest cost decreased in 2015 compared to 2014 primarily due to a lower discount rate used to measure the U.S. plans’ pension cost in 2015. The discount rate used to measure the pension cost for our U.S. plans using the Traditional Approach was 3.89%, 3.60% and 4.44%, respectively, for the years ended December 31, 2016, 2015 and 2014.

•

The actuarial loss amortization included in annual pension expense was also a major factor in driving the pension costs to fluctuate from year to year. Actuarial loss amortization was largely impacted by the discount rate, amortization period and plan experience (for example, the lower the discount rate, the higher the loss amortization). Actuarial loss amortization included in annual pension expense for all global plans was $38.8 million, $42.5 million and $36.1 million for the years ended December 31, 2016, 2015 and 2014, respectively, of which $35.9 million, $39.0 million and $32.7 million were attributable to our U.S. plans for the years ended December 31, 2016, 2015 and 2014, respectively. Lower actuarial loss amortization in 2016 compared to 2015 was primarily due to the higher discount rate applied to our U.S. plans at January 1, 2016. Higher actuarial loss amortization in the U.S. plans for 2015 was a result of the adoption of new mortality tables which assume a longer life expectancy of plan participants and a lower discount rate at January 1, 2015.

•

Expected return on plan assets included in annual pension expense for all global plans was $96.5 million, $102.6 million and $100.2 million for the years ended December 31, 2016, 2015 and 2014, respectively. The expected return on plan assets was determined by multiplying the expected long-term rate of return assumption by the market-related value of plan assets. The market-related value of plan assets recognizes asset gains and losses over five years to reduce the effects of short-term market fluctuations on net periodic cost. The decrease of the expected return on plan assets for 2016 was primarily driven by a lower long-term rate of return assumption at January 1, 2016. For 2016, we used a long-term rate of return assumption of 7.25%, compared to 7.75% for both 2015 and 2014. Higher expected return on plan assets in 2015 compared to 2014 was due to the higher market-related value of plan assets at January 1, 2015, primarily as a result of asset performance and a company contribution of $10 million to our U.S. Qualified Plan in December 2014.

We expect that the net pension cost in 2017 will be approximately $6 million for all of our global pension plans, most of which will be attributable to the U.S. plans. This compares to a net pension cost of $5.2 million in 2016, of which $4.5 million and $0.7 million were attributable to the U.S. plans and non-U.S. plans, respectively. For our U.S. plans, the pension cost in 2017 is primarily impacted by a lower expected return on plan assets driven by a lower long-term rate of return assumption at January 1, 2017. For 2017, we will use a long-term rate of return of 7.00%, compared to 7.25% for 2016. This decrease in income is partially offset by a lower interest cost driven by a lower discount rate at January 1, 2017. The weighted average discount rate applied to the projected benefit obligation for our U.S. plans at January 1, 2017 is 3.74%, a 15 basis points decrease from the 3.89% discount rate used for 2016.

We had postretirement benefit income of $2.1 million, $1.6 million and $2.0 million for the years ended December 31, 2016, 2015 and 2014, respectively. Higher postretirement benefit income in 2016 compared to the prior year period was primarily due to better actual plan experience as well as a change in assumptions at January 1, 2016 (i.e. higher discount rate). Lower postretirement benefit income in 2015 compared to 2014 was primarily attributable to the lower amortization of prior service credits, primarily due to prior service credits being fully amortized at various points of time (discussed below). These prior service credits were established as a result of plan amendments.

•

In July 2014, we amended our post-65 retiree health plan to eliminate our group-based retiree medical and prescription plans effective December 31, 2014. Effective January 1, 2015, we began providing eligible retirees and dependents age 65 or older access to coverage in the individual Medicare market. Dun & Bradstreet also provides an annual contribution towards retirees’ premiums and other out-of-pocket costs. As a result of this change, we reduced our accumulated postretirement obligation by $4.9 million in the third quarter of 2014, which is being amortized over approximately three years.

•

The credit which was fully amortized in the fourth quarter of 2014 was established in July 1, 2010 in connection with the Health Care and Education Reconciliation Act of 2010. In connection with the adoption of this health care law, we converted the then-current prescription drug program for retirees over 65 to a group-based company sponsored Medicare Part D program, or EGWP. Beginning in 2013, we used the Part D subsidies delivered through the EGWP each year to reduce net company retiree medical costs until net company costs were completely eliminated. As a result, we reduced our accumulated postretirement obligation by $21 million in the third quarter of 2010, which was amortized over approximately four years.

We expect postretirement benefit income will be approximately $1 million in 2017. The decrease in postretirement benefit income in 2017, as compared to 2016, is primarily due to lower amortization of the prior service credits as the remaining prior service credits will be fully amortized in the second quarter of 2017.

Plan changes were accounted for as plan amendments under ASC 715-60-35, “Compensation-Retirement Benefits.”

We had expense associated with our 401(k) Plan of $11.0 million, $10.5 million and $8.5 million for the years ended December 31, 2016, 2015 and 2014, respectively. Higher expense in each of 2016 and 2015 as compared to the respective prior year was primarily due to higher company matching contributions associated with higher compensation. We consider net pension cost and postretirement benefit income to be part of our compensation costs, and, therefore, they are included in operating expenses and in selling and administrative expenses, based upon the classifications of the underlying compensation costs. See the discussion of “Critical Accounting Policies and Estimates - Pension and Postretirement Benefit Obligations,” above, and Note 10 to our consolidated financial statements included in Item 8. of this Annual Report on Form 10-K.

Stock-Based Compensation

For the years ended December 31, 2016, 2015 and 2014, we recognized total stock-based compensation expense (e.g., restricted stock, stock options, etc.) of $21.2 million, $14.7 million and $11.2 million, respectively.

For the years ended December 31, 2016, 2015 and 2014, we recognized expense associated with our restricted stock unit programs of $19.9 million, $13.3 million and $9.5 million, respectively. The increase for the year ended December 31, 2016, as compared to the year ended December 31, 2015 was primarily due to our increased use of performance-based restricted stock units, awards related to the 2015 acquisition of DBCC and NetProspex as well as higher than anticipated forfeitures in 2015. The increase for the year ended December 31, 2015 as compared to the year ended December 31, 2014 was primarily due to changes in our executive compensation program beginning in 2013 where more emphasis was placed on grants of longer-term performance-based restricted stock units, as well as higher grant date fair values related to the 2015 performance-based restricted stock unit awards, partially offset by the impact of higher forfeitures in 2015.

For the years ended December 31, 2016, 2015 and 2014, we recognized expense associated with our Employee Stock Purchase Plan (“ESPP”) of $1.2 million, $0.9 million and $0.8 million, respectively. The increase for the year ended December 31, 2016 as compared to the year ended December 31, 2015 was primarily due to the implementation in November 2015 of our new 2015 ESPP, which includes a lookback provision.

For the years ended December 31, 2016, 2015 and 2014, we recognized expense associated with our stock option programs of $0.1 million, $0.5 million, and $0.9 million, respectively. The decrease in expense in 2016 and 2015 as compared to the respective prior period was primarily due to changes in our executive compensation program beginning in 2013 where the annual grants of stock options were replaced by grants of longer-term performance-based restricted stock units.

We consider these costs to be part of our compensation costs and, therefore, they are included in operating expenses and in selling and administrative expenses, based upon the classifications of the underlying compensation costs.

Depreciation and Amortization

Depreciation and amortization increased $9.9 million, or 17%, for the year ended December 31, 2016 as compared to the year ended December 31, 2015. This increase was primarily due to our acquisition of DBCC during the second quarter of 2015 and an increase in our technology investments, partially offset by the completion of the depreciable lives of certain assets.

Depreciation and amortization increased $6.2 million, or 12%, for the year ended December 31, 2015 as compared to the year ended December 31, 2014. This increase was primarily due to our acquisitions of DBCC during the second quarter of 2015 and NetProspex during the first quarter of 2015, partially offset by the completion of the depreciable lives of certain assets.

Restructuring Charge

We recorded restructuring charges of $22.1 million, $32.3 million, and $14.9 million for the years ended December 31, 2016, 2015 and 2014, respectively. See Note 3 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for further detail.

Interest Income (Expense) – Net

The following table presents our “Interest Income (Expense) – Net”:



	For the Years Ended December 31,
	2016			2015			2014
	(Amounts in millions)
Interest Income	$	1.8		$	1.6		$	1.6
Interest Expense	(53.1		)	(51.0		)	(43.3		)
Interest Income (Expense) - Net	$	(51.3	)	$	(49.4	)	$	(41.7	)

Interest income increased $0.2 million, or 15% for the year ended December 31, 2016 as compared to the year ended December 31, 2015. The increase in interest income was primarily attributable to higher average amounts of invested cash. Interest income remained flat for the year ended December 31, 2015 as compared to the year ended December 31, 2014.

Interest expense increased $2.1 million, or 4%, for the year ended December 31, 2016 as compared to the year ended December 31, 2015. The increase in interest expense was primarily attributable to higher average interest rates on our outstanding debt balances. Interest expense increased $7.7 million, or 18%, for the year ended December 31, 2015 as compared to the year ended December 31, 2014. The increase in interest expense was primarily attributable to higher amounts of average outstanding debt.

Other Income (Expense) – Net

The following table presents our “Other Income (Expense) – Net”:



	For the Years Ended December 31,
	2016			2015			2014
	(Amounts in millions)
Loss on Sale of Businesses (a)	$	(95.1	)	$	—		$	—
Effect of Legacy Tax Matters (b)	(1.7		)	(6.9		)	(28.6		)
Miscellaneous Other Income (Expense) - Net (c)	(7.5		)	(0.7		)	(0.9		)
Other Income (Expense) - Net	$	(104.3	)	$	(7.6	)	$	(29.5	)


(a)	Loss on Sale of Businesses for the year ended December 31, 2016 was related to the divestitures of our operations in Benelux and Latin America. See Note 17 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for further detail.

(b)

During the years ended December 31, 2016 and 2015, we recognized the reduction of a contractual receipt under a tax allocation agreement between Moody's Corporation and Dun & Bradstreet as a result of the expiration of a statute of limitations for the 2012 and 2011 tax years, respectively. During the year ended December 31, 2014, we recognized the reduction of a contractual receipt under a tax allocation agreement between Moody’s Corporation and Dun & Bradstreet as a result of the effective settlement of audits for the 2007 - 2009 tax years and the expiration of a statute of limitations for the 2010 tax year.


(c)	Miscellaneous Other Expense increased during the year ended December 31, 2016 as compared to the year ended December 31, 2015 primarily due to an impairment charge recorded in the fourth quarter of 2016 related to a change in our assessment of the recoverability of a non-operating asset as a result of a decline in the projected cash flows.

Provision for Income Taxes



Effective Tax Rate for the Year Ended December 31, 2014	16.0	%
Impact of Legacy Tax Matters (1)	10.7
Impact of Release of Uncertain Tax Positions	3.9
Impact of Income Earned in Jurisdictions with Low Tax Rates	(6.2	)
Impact of Nondeductible Charges	0.7
Impact of Tax Credits and Deductions	4.9
Impact of Earnings Repatriation (2)	(1.1	)
Impact of Change in State Tax	(1.1	)
Other	(1.3	)
Effective Tax Rate for the Year Ended December 31, 2015	26.5	%
Impact of Legacy Tax Matters (3)	3.0
Impact of Release of Uncertain Tax Positions	0.6
Impact of Income Earned in Jurisdictions with Low Tax Rates	0.6
Impact of Nondeductible Charges (4)	5.6
Impact of Tax Credits and Deductions (5)	(4.3	)
Impact of Prior Year Earnings Repatriation	1.1
Impact of Change in State Tax	0.2
Impact of Sale of Benelux and Latin America (6)	15.1
Other	0.6
Effective Tax Rate for the Year Ended December 31, 2016	49.0	%

(1) The impact was due to the release of uncertain tax positions in 2015 as a result of the expiration of the statute of limitations for the 2011 tax year. The impact is unfavorable as a result of a lower release of uncertain tax positions in 2015 as compared to 2014.

(2) The impact was due to the recognition of a U.S. tax benefit on the repatriation of the 2015 and prior year earnings, in the amount of $132.5 million, from the Company’s subsidiaries in Canada and Japan. Of the $132.5 million, $123.0 million was distributed in the fourth quarter of 2015 and $2.5 million was distributed in the second quarter of 2016 with the remaining $7.0 million to be distributed in future periods. The tax benefit was due to the recognition of foreign tax credits in excess of the U.S. taxes due on the repatriation. This remittance was effected to partially offset the funding requirement associated with acquisitions in 2015.

(3) The impact was due to the release of uncertain tax positions in 2016 as a result of the expiration of the statute of limitations for the 2012 tax year. The impact is unfavorable as a result of a lower release of uncertain tax positions in 2016 as compared to 2015.

(4) The impact was primarily due to the reserve for the China matter recorded in the second quarter of 2016 which may not be deductible.

(5) The impact was primarily due to incremental foreign tax credits available to reduce our U.S. tax liability.

(6) The impact was due to the non-deductible loss associated with the release of cumulative foreign currency translation as part of the divestitures of our operations in Benelux and Latin America in 2016.

Discontinued Operations

In June 2015, we divested our business in ANZ for $169.8 million, which was part of our Non-Americas segment. Accordingly, we have reclassified the historical financial results of our business in ANZ as discontinued operations for all periods presented as set forth in this Annual Report. As of December 31, 2015, we received proceeds of $159.7 million, inclusive of a working capital adjustment of $0.7 million with no additional proceeds in 2016. For the year ended December 31, 2016, we recorded a total loss on disposal of business of $4.1 million, reflecting the increase of escrow reserve. For the year ended December 31, 2015, we recorded a total loss of $37.5 million. See Note 17 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for further detail.

Earnings per Share

Basic earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted-average number of common shares outstanding during the period, plus the dilutive effect of outstanding restricted stock unit awards, stock options, and contingently issuable shares using the treasury stock method. See Note 1 to our consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for further detail on our accounting policies related to EPS.

The following table sets forth our EPS:



	For the Years Ended December 31,
	2016			2015			2014
Basic Earnings (Loss) Per Share of Common Stock:
Income (Loss) from Continuing Operations Attributable to Dun & Bradstreet Common Shareholders	$	2.78		$	5.66		$	7.79
Income (Loss) from Discontinued Operations Attributable to Dun & Bradstreet Common Shareholders	(0.11		)	(0.98		)	0.27
Net Income (Loss) Attributable to Dun & Bradstreet Common Shareholders	$	2.67		$	4.68		$	8.06
Diluted Earnings (Loss) Per Share of Common Stock:
Income (Loss) from Continuing Operations Attributable to Dun & Bradstreet Common Shareholders	$	2.76		$	5.61		$	7.71
Income (Loss) from Discontinued Operations Attributable to Dun & Bradstreet Common Shareholders	(0.11		)	(0.97		)	0.28
Net Income (Loss) Attributable to Dun & Bradstreet Common Shareholders	$	2.65		$	4.64		$	7.99

For the year ended December 31, 2016, both basic and diluted EPS attributable to Dun & Bradstreet common shareholders decreased 43% compared with the year ended December 31, 2015. The decrease was primarily due to a decrease of 42% in Net Income Attributable to Dun & Bradstreet common shareholders which was primarily due to the loss on the divestiture of our operations in Benelux and Latin America primarily resulting from the recognition of a cumulative foreign currency translation loss as well as the accrual for legal matters recorded in the second quarter of 2016. See Note 17 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for further detail on the divestiture of our operations in Benelux and Latin America. See Note 13 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for further detail on the accrual for legal matters.

For the year ended December 31, 2015, both basic and diluted EPS attributable to Dun & Bradstreet common shareholders decreased 42%, compared with the year ended December 31, 2014. The decrease was primarily due to a decrease of 43% in Net Income Attributable to Dun & Bradstreet common shareholders which was primarily due to: (i) lower net income from continuing operations mainly related to the effective settlement of audits for the 2007 - 2009 tax years resulting in higher income in 2014; and (ii) the loss on the divestiture of the business in ANZ in 2015, partially offset by a 1% reduction in the weighted average number of basic and diluted shares outstanding resulting from our total share repurchases in the prior year.

Segment Results

Since January 1, 2015, we have managed and reported our business through two segments:


•	Americas, which currently consists of our operations in the U.S., Canada, and our Latin America Worldwide Network (we divested our Latin America operations in September 2016); and


•	Non-Americas, which currently consists of our operations in the U.K., Greater China, India and our European and Asia Pacific Worldwide Networks (we divested our operations in both the Netherlands and Belgium in November 2016 and our Australian operations in June 2015).

Prior to January 1, 2015, we managed and reported our business through the following three segments:


•	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 U.K., the Netherlands, Belgium, Latin America and our European Worldwide Network.

Americas

Americas is our largest segment representing 83%, 81%, and 80% of our total revenue for the years ended December 31, 2016, 2015 and 2014, respectively.

During the year ended December 31, 2016, we divested our operations in Latin America. See Note 17 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for further detail.

The following table presents our Americas revenue by customer solution set and Americas operating income:



	For the Years Ended December 31,
	2016		2015		2014
	(Amounts in millions)
Revenue:
Risk Management Solutions	$	775.4	$	733.4	$	701.4
Sales & Marketing Solutions	640.7		595.7		558.9
Americas Total Revenue	$	1,416.1	$	1,329.1	$	1,260.3
Operating Income	$	429.5	$	369.3	$	404.8

Year Ended December 31, 2016 vs. Year Ended December 31, 2015

Americas Overview

Americas total revenue increased $87.0 million, or 7% (both after and before the effect of foreign exchange), for the year ended December 31, 2016 as compared to the year ended December 31, 2015. We acquired a 100% equity interest in DBCC during the second quarter of 2015 and a 100% equity interest in NetProspex during the first quarter of 2015. The impact of the deferred revenue fair value adjustment was a reduction of $3.1 million and $19.9 million for the years ended December 31, 2016 and 2015, respectively. See Note 18 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for further details.

Americas total revenue was impacted by the divestiture of our Latin America operations during the fourth quarter of 2016. Prior to the divestiture, Latin America contributed $8.7 million and $10.0 million of revenue during the years ended December 31, 2016 and 2015, respectively.

Americas Customer Solution Sets

On a customer solution set basis, the $87.0 million increase in total revenue for the year ended December 31, 2016, as compared to the year ended December 31, 2015, reflects:

Risk Management Solutions

An increase in Risk Management Solutions of $42.0 million, or 6% (both after and before the effect of foreign exchange), attributable to:

Trade Credit, which accounted for 67% of total Americas Risk Management Solutions, decreased 2% (both after and before the effect of foreign exchange) primarily attributable to:


•	Decreased revenue associated with our legacy Trade Credit products;


•	Declining DNBi sales performance in prior periods resulting in lower revenue for the year due to the ratable nature of DNBi. While DNBi retention continued to be in the low 90% range, and the increase in pricing continued to be in the low single digits, we were not generating enough new customers to offset normal attrition;

partially offset by:


•	Increased revenue associated with certain of our other Risk Management Solutions driven by our emerging businesses channel; and


•	Increased revenue associated with our acquisition of DBCC, which was completed during the second quarter of 2015, net of the impact of the deferred revenue fair value adjustment.

Other Enterprise Risk Management, which accounted for 33% of total Americas Risk Management Solutions, increased 27% (both after and before the effect of foreign exchange), primarily due to:


•	Increased revenue associated with our acquisition of DBCC, which was completed during the second quarter of 2015, net of the impact of the deferred revenue fair value adjustment;


•	Increased revenue associated with Credit-on-Self products, driven by our emerging businesses channel;


•	Increased revenue associated with Supply Management and Compliance Solutions driven by new business; and


•	Increased revenue from other usage based solutions such as D&B Direct.

Sales & Marketing Solutions

An increase in Sales & Marketing Solutions of $45.0 million, or 8% (both after and before the effect of foreign exchange) primarily due to:

Traditional Prospecting Solutions, which accounted for 23% of total Americas Sales & Marketing Solutions, increased less than 1% (both after and before the effect of foreign exchange). The increase was primarily due to:


•	Increased revenue associated with our acquisition of DBCC, which was completed during the second quarter of 2015, net of the impact of the deferred revenue fair value adjustment;

partially offset by:


•	Decreased revenue in Hoover's, primarily due to declining sales performance in prior periods. The product had not been a focus of investment; and


•	Decreased revenue in our education marketing business due to lower customer spend.

Advanced Marketing Solutions, which accounted for 77% of total Americas Sales & Marketing Solutions, increased 10% (both after and before the effect of foreign exchange). The increase was primarily due to:


•	Growth in our Integration Manager and Optimizer products, driven primarily by increased spend by our larger strategic customers;


•	Increased revenue through our third-party alliances and our D&B Direct offering; and


•	Increased revenue from Audience Solutions, which is our new product offering in the digital marketing space.

Americas Operating Income

Americas operating income for the year ended December 31, 2016 was $429.5 million, compared to $369.3 million for the year ended December 31, 2015, an increase of $60.2 million, or 16%. The increase in operating income was primarily attributable to:


•	The impact of the acquisition of DBCC during the second quarter of 2015, as well as revenue growth from our existing business; and


•	Lower costs as a result of management restructuring initiatives taken in the fourth quarter of 2015 and January 2016;

partially offset by:


•	Increased costs (e.g., amortization of intangibles) as a result of the acquisition of DBCC during the second quarter of 2015;


•	Increased data and compensation costs.

Year Ended December 31, 2015 vs. Year Ended December 31, 2014

Americas Overview

Americas total revenue increased $68.8 million, or 5% (6% increase before the effect of foreign exchange), for the year ended December 31, 2015 as compared to the year ended December 31, 2014. We acquired a 100% equity interest in DBCC during the second quarter of 2015 and a 100% equity interest in NetProspex during the first quarter of 2015. The impact of the deferred revenue fair value adjustment was a reduction of $19.9 million for the year ended December 31, 2015. See Note 18 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for further details.

Americas Customer Solution Sets

On a customer solution set basis, the $68.8 million increase in total revenue for the year ended December 31, 2015, as compared to the year ended December 31, 2014, reflects:

Risk Management Solutions

An increase in Risk Management Solutions of $32.0 million, or 5% (both after and before the effect of foreign exchange) primarily attributable to:

Trade Credit, which accounted for 72% of total Americas Risk Management Solutions, decreased 3% (2% decrease before the effect of foreign exchange) primarily attributable to:

•

Declining sales performance in prior quarters of DNBi. Due to the ratable nature of DNBi revenue, DNBi revenue was down 2% (1% decrease before the effect of foreign exchange) during the year ended December 31, 2015 compared to a 4% decline (both after and before the effect of foreign exchange) during the year ended December 31, 2014. While DNBi retention continued to be in the low 90% range, and the increase in pricing continued to be in the low single digits, we were not generating enough new customers to offset normal attrition;


•	The negative impact of foreign exchange; and


•	Decreased revenue due to certain customers shifting from subscription-based plans to usage-based plans;

partially offset by:


•	Increased revenue associated with our acquisition of DBCC, which was completed during the second quarter of 2015.

Other Enterprise Risk Management, which accounted for 28% of total Americas Risk Management Solutions, increased 31% (both after and before the effect of foreign exchange), primarily due to:


•	Increased revenue associated with our acquisition of DBCC, which was completed during the second quarter of 2015; and


•	Growth and higher usage of our D&B Direct product;

partially offset by:


•	Decreased customer spend for certain supply chain products.

Sales & Marketing Solutions

An increase in Sales & Marketing Solutions of $36.8 million, or 7% (both after and before the effect of foreign exchange) primarily due to:

Traditional Prospecting Solutions, which accounted for 25% of total Americas Sales & Marketing Solutions, increased 2% (3% increase before the effect of foreign exchange). The increase was primarily due to:


•	Increased revenue associated with our acquisition of DBCC, which was completed during the second quarter of 2015;

partially offset by:


•	Decreased revenue in Hoover’s, primarily due to declining sales performance in prior quarters, driven by reduced customer spend and competitive pressures.

Advanced Marketing Solutions, which accounted for 75% of total Americas Sales & Marketing Solutions, increased 8% (both after and before the effect of foreign exchange). The increase was primarily due to:


•	Increased revenue associated with our acquisition of NetProspex, which was completed during the first quarter of 2015;


•	Growth in our DaaS offerings (e.g., CRM alliances and D&B Direct); and


•	Growth in our D&B Optimizer product;

partially offset by:


•	Decreased commitment spend within our third-party alliances primarily due to a loss of a certain customer account, competition and a shift in customer needs, which lowered our revenue from these alliances.

Americas Operating Income

Americas operating income for the year ended December 31, 2015 was $369.3 million, compared to $404.8 million for the year ended December 31, 2014, a decrease of $35.5 million or 9%. The decrease in operating income was primarily attributable to:


•	Increased costs (e.g., amortization of intangibles) as a result of the acquisitions of DBCC during the second quarter of 2015 and NetProspex during the first quarter of 2015; and


•	Increased compensation costs as a result of our strategic investments;

partially offset by:


•	Increased revenue primarily as a result of the acquisitions of DBCC during the second quarter of 2015 and NetProspex during the first quarter of 2015.

Non-Americas

Non-Americas represented 17%, 19% and 20% of our total revenue for the years ended December 31, 2016, 2015 and 2014, respectively.

During the year ended December 31, 2016, we divested our operations in Benelux. See Note 17 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for further detail.

During the year ended December 31, 2015, we divested our business in ANZ and reclassified the historical financial results of our business in ANZ as discontinued operations for all periods presented as set forth in this Annual Report on Form 10-K.

During the year ended December 31, 2014, we ceased the operations in our Ireland Small Corporate Registry Business.

The following table presents our Non-Americas revenue by customer solution set and Non-Americas operating income.



	For the Years Ended December 31,
	2016		2015		2014
	(Amounts in millions)
Revenue:
Risk Management Solutions	$	236.4	$	244.9	$	260.7
Sales & Marketing Solutions	51.2		63.1		63.5
Non-Americas Total Revenue	$	287.6	$	308.0	$	324.2
Operating Income (Loss)	$	59.4	$	83.1	$	87.0

Year Ended December 31, 2016 vs. Year Ended December 31, 2015

Non-Americas Overview

Non-Americas total revenue decreased $20.4 million, or 7% (1% decrease before the effect of foreign exchange), for the year ended December 31, 2016 as compared to the year ended December 31, 2015.

Non-Americas total revenue was impacted by the divestiture of our Benelux operations during the fourth quarter of 2016. Benelux contributed $48.2 million and $58.7 million of revenue during the years ended December 31, 2016 and 2015, respectively.

Non-Americas Customer Solution Sets

On a customer solution set basis, the $20.4 million decrease in Non-Americas revenue for the year ended December 31, 2016, as compared to the year ended December 31, 2015, reflects:

Risk Management Solutions

A decrease in Risk Management Solutions of $8.5 million, or 3% (2% increase before the effect of foreign exchange) primarily due to:

Trade Credit, which accounted for 72% of total Non-Americas Risk Management Solutions, decreased 7% (1% decrease before the effect of foreign exchange) primarily attributable to:


•	The negative impact of foreign exchange;


•	Decreased transactional usage and decreased project revenue of various risk products in most markets; and


•	The divestiture of our Benelux operations during the fourth quarter of 2016;

partially offset by:


•	An increase in purchases by our Worldwide Network partners primarily for technology and fulfillment services.

Other Enterprise Risk Management, which accounted for 28% of total Non-Americas Risk Management Solutions, increased 6% (11% increase before the effect of foreign exchange) primarily attributable to:


•	Increased usage of various risk products across most markets, by new and existing customers; and


•	An increase in purchases by our Worldwide Network partners primarily for technology and fulfillment services.

partially offset by:


•	The negative impact of foreign exchange; and


•	The divestiture of our Benelux operations during the fourth quarter of 2016.

Sales & Marketing Solutions

A decrease in Sales & Marketing Solutions of $11.9 million, or 19% (13% decrease before the effect of foreign exchange) primarily due to:

Traditional Prospecting Solutions, which accounted for 32% of total Non-Americas Sales & Marketing Solutions, decreased 9% (5% decrease before the effect of foreign exchange) primarily attributed to decreased project revenue in our marketing business in certain markets and the negative impact of foreign exchange.

Advanced Marketing Solutions, which accounted for 68% of total Non-Americas Sales & Marketing Solutions, decreased 23% (16% decrease before the effect of foreign exchange) primarily attributed to:


•	Decreased project revenue primarily due to our decision to end the relationship with a competitor in Europe who was buying our data;


•	The negative impact of foreign exchange; and


•	The divestiture of our Benelux operations during the fourth quarter of 2016;

partially offset by:


•	An increase in purchases by our Worldwide Network partners primarily for fulfillment services and product usage.

Non-Americas Operating Income

Non-Americas operating income for the year ended December 31, 2016 was $59.4 million, compared to operating income of $83.1 million for the year ended December 31, 2015, a decrease of $23.7 million. The decrease was primarily due to:


•	Decreased revenue;


•	Increased compensation, technology and data costs;


•	The negative impact of foreign exchange; and


•	An impairment charge related to certain intangible assets in our Greater China operations, comprised of customer relationships, database and trademark;

partially offset by:


•	Decreased costs associated with the divestiture of our Benelux operations during the fourth quarter of 2016.

Year Ended December 31, 2015 vs. Year Ended December 31, 2014

Non-Americas Overview

Non-Americas total revenue decreased $16.2 million, or 5% (3% increase before the effect of foreign exchange), for the year ended December 31, 2015 as compared to the year ended December 31, 2014.

Non-Americas total revenue was impacted by the ceasing of operations of our Ireland Small Corporate Registry Business, during the year ended December 31, 2014.

Non-Americas Customer Solution Sets

On a customer solution set basis, the $16.2 million decrease in Non-Americas total revenue for the year ended December 31, 2015, as compared to the year ended December 31, 2014, reflects:

Risk Management Solutions

A decrease in Risk Management Solutions of $15.8 million, or 6% (2% increase before the effect of foreign exchange) primarily due to:

Trade Credit, which accounted for 74% of total Non-Americas Risk Management Solutions, decreased 10% (2% decrease before the effect of foreign exchange) primarily attributable to:


•	The negative impact of foreign exchange;


•	Decreased transactional usage of various risk products in most markets; and


•	The conversion of certain customers from our subscription plans to a new Compliance offering within Other Enterprise Risk Management;

partially offset by:


•	Increased revenue from our Worldwide Network for fulfillment services and product usage.

Other Enterprise Risk Management, which accounted for 26% of total Non-Americas Risk Management Solutions, increased 9% (17% increase before the effect of foreign exchange) primarily attributable to:


•	Increased transactional usage of various risk products, across most markets, by new and existing customers;


•	An increase in purchases by our Worldwide Network primarily for fulfillment services and product usage; and


•	Increased revenue from a new Compliance offering in our European markets from customers converting from subscription plans as discussed in Trade Credit above;

partially offset by:


•	The negative impact of foreign exchange.

Sales & Marketing Solutions

A decrease in Sales & Marketing Solutions of $0.4 million, or 1% (7% increase before the effect of foreign exchange) primarily due to:

Traditional Prospecting Solutions, which accounted for 29% of total Non-Americas Sales & Marketing Solutions, decreased 6% (2% decrease before the effect of foreign exchange) primarily attributed to:


•	The negative impact of foreign exchange; and


•	Decreased project revenue in our marketing business in certain Asian markets.

Advanced Marketing Solutions, which accounted for 71% of total Non-Americas Sales & Marketing Solutions, increased 2% (11% increase before the effect of foreign exchange) primarily attributed to:


•	An increase in purchases by our Worldwide Network primarily for fulfillment services and product usage; and


•	Increased project revenue in our marketing business in certain markets;

partially offset by:


•	The negative impact of foreign exchange.

Non-Americas Operating Income

Non-Americas operating income for the year ended December 31, 2015 was $83.1 million, compared to operating income of $87.0 million for the year ended December 31, 2014, a decrease of $3.9 million. The decrease was primarily due to:


•	The negative impact of foreign exchange; and


•	Increased compensation costs.

Market Risk

We employ established policies and procedures to manage our exposure to changes in interest rates and foreign currencies. We use foreign exchange forward and option contracts to hedge short-term foreign currency denominated loans and certain third-party and intercompany transactions. We may also use foreign exchange forward contracts to hedge our net investments in our foreign subsidiaries. In addition, we may use interest rate derivatives to hedge a portion of the interest rate exposure on our outstanding debt or in anticipation of a future debt issuance, as discussed under “Interest Rate Risk Management” below.

We do not use derivative financial instruments for trading or speculative purposes. If a hedging instrument ceases to qualify as a hedge in accordance with hedge accounting guidelines, any subsequent gains and losses are recognized currently in income. Collateral is generally not required for these types of instruments.

A discussion of our accounting policies for financial instruments is included in the summary of significant accounting policies in Note 1 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K, and further disclosure relating to financial instruments is included in Note 7 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K.

Interest Rate Risk Management

Our objective in managing our exposure to interest rates is to limit the impact of interest rate changes on our earnings, cash flows and financial position, and to lower our overall borrowing costs. To achieve these objectives, we maintain a policy that floating-rate debt be managed within a minimum and maximum range of our total debt exposure. To manage our exposure and limit volatility, we may use fixed-rate debt, floating-rate debt and/or interest rate swaps. We recognize all derivative instruments as either assets or liabilities at fair value in the consolidated balance sheets. As of December 31, 2016, we did not have any interest rate derivatives outstanding.

A 100 basis point increase/decrease in the weighted average interest rate on our outstanding debt subject to rate variability would result in an incremental increase/decrease in annual interest expense of approximately $5.7 million and $5.0 million, respectively, for the year ended December 31, 2016.

Foreign Exchange Risk Management

We have numerous offices in various countries outside of the U.S. and conduct operations in several countries through minority equity investments and strategic relationships with local providers. Our operations outside of the U.S. generated approximately 19% and 22% of our total revenue for the years ended December 31, 2016 and 2015, respectively. Approximately 28% and 38% of our assets for the years ended December 31, 2016 and 2015, respectively, were located outside of the U.S.

Our objective in managing our exposure to foreign currency fluctuations is to reduce the volatility caused by foreign exchange rate changes on the earnings, cash flows and financial position of our international operations. We follow a policy of hedging balance sheet positions denominated in currencies other than the functional currency applicable to each of our various subsidiaries. In addition, we are subject to foreign exchange risk associated with our international earnings and net investments in our foreign subsidiaries. We use short-term, foreign exchange forward and, from time to time, option contracts to execute our hedging strategies. Typically, these contracts have maturities of 12 months or less. These contracts are denominated primarily in the British pound sterling, the Euro, Canadian dollar and the Hong Kong dollar. The gains and losses on the forward contracts associated with the balance sheet positions are recorded in “Other Income (Expense) – Net” in the consolidated statements of operations and comprehensive income and are essentially offset by the losses and gains on the underlying foreign currency transactions.

As in prior years, we have hedged substantially all balance sheet positions denominated in a currency other than the functional currency applicable to each of our various subsidiaries with short-term, foreign exchange forward contracts. In addition, we may use foreign exchange forward contracts to hedge certain net investment positions. The underlying transactions and the corresponding foreign exchange forward are marked-to-market at the end of each quarter and the fair value impacts are reflected within the consolidated financial statements.

At December 31, 2016 and 2015, we did not have any foreign exchange option contracts outstanding. At December 31, 2016 and 2015, the notional amounts of our foreign exchange forward contracts were $280.1 million and $326.8 million, respectively.

Realized gains and losses associated with these contracts were $44.0 million and $55.6 million, respectively, at December 31, 2016; $31.0 million and $46.9 million, respectively, at December 31, 2015; and $15.1 million and $23.0 million, respectively, at December 31, 2014. Unrealized gains and losses associated with these contracts were $1.5 million and $1.4 million, respectively, at December 31, 2016; $0.5 million and $0.3 million, respectively, at December 31, 2015; and $0.4 million and $0.1 million, respectively, at December 31, 2014.

If exchange rates to which we are exposed under our outstanding foreign exchange forward contracts were to increase, on average, 10% from year-end 2016 levels, the unrealized losses on our foreign exchange forward contracts would be approximately $14 million, excluding the expected gains on the underlying hedged items. If exchange rates, on average, were to decrease 10% from year-end 2016 levels, the unrealized gains on our foreign exchange forward contracts would be approximately $14 million, excluding the expected losses on the underlying hedged items. However, the estimated potential gains and losses on these contracts would substantially be offset by changes in the dollar equivalent value of the underlying hedged items.

Liquidity and Financial Position

In connection with our commitment to delivering Total Shareholder Return, we will remain disciplined in the use of our shareholders’ cash, maintaining three key priorities for the use of this cash:


•	First, making ongoing investments in the business to drive organic 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.

We believe that cash provided by operating activities, supplemented as needed with available financing arrangements, is sufficient to meet our short-term needs (12 months or less), including restructuring charges, our capital investments, contractual obligations and contingencies (see Note 13 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K), excluding the legal matters identified in such note for which exposures cannot be estimated or are not probable. We have the ability to access the short-term borrowings market to supplement the seasonality in the timing of receipts in order to fund our working capital needs. Such borrowings would be supported by our $1 billion revolving credit facility, when

needed. Our future capital requirements will depend on many factors that are difficult to predict, including the size, timing and structure of any future acquisitions, future capital investments, the ultimate resolution of issues arising from the investigations regarding potential FCPA violations in our China operations and future results of operations.

In June 2016, voters in the U.K. approved a non-binding referendum in favor of the U.K.’s withdrawal from membership in the EU, which is commonly referred to as “Brexit.” An immediate consequence of the Brexit vote was an adverse impact to global markets, including currency markets which experienced a sharp drop in the value of the British pound. Longer term, Brexit will require negotiations regarding the future terms of the U.K.’s relationship with the EU, which could result in the U.K. losing access to certain aspects of the single EU market and the global trade deals negotiated by the EU on behalf of its members. The Brexit vote and the perceptions as to the impact of the withdrawal of the U.K. may adversely affect business activity, political stability and economic conditions in the U.K., the Eurozone, the EU and elsewhere. Our liquidity has not been impacted by the current credit environment and management does not expect that it will be materially impacted in the near future. Management continues to closely monitor our liquidity, the credit markets and our financial counterparties. However, management cannot predict with any certainty the impact to us of any further disruption in the credit environment.

Our $1 billion revolving credit facility, which matures July 2019, requires the maintenance of interest coverage and total debt to Earnings Before Interest, Income Taxes, Depreciation and Amortization (“EBITDA”) ratios which are defined in the credit agreement. On May 14, 2015, we amended the facility to modify the total debt to EBITDA ratio from 4.0:1.0 to 4.5:1.0 for any fiscal quarter that ends before December 31, 2016. For fiscal quarters ending on or after December 31, 2016, the total debt to EBITDA ratio reverts to 4.0:1.0. We were in compliance with the $1 billion revolving credit facility financial and non-financial covenants at December 31, 2016 and at December 31, 2015. At December 31, 2016 and December 31, 2015, we had $199.8 million and $382.2 million, respectively, in borrowings outstanding under our $1 billion revolving credit facility.

As of December 31, 2016, $342.9 million of our $352.6 million cash and cash equivalents on the consolidated balance sheet were held by our foreign operations. We maintain the $342.9 million foreign cash and cash equivalents balance within our foreign operations since we have sufficient liquidity in the United States to satisfy our ongoing domestic funding requirements. The cash held by foreign subsidiaries is permanently invested overseas and is generally used to finance the subsidiaries' operational activities and future foreign investments. We have not provided for U.S. deferred income taxes or foreign withholding taxes on the remaining approximately $548 million of undistributed earnings of our non-U.S. subsidiaries as of December 31, 2016, since we intend to reinvest these earnings indefinitely. If U.S. taxes and applicable withholding taxes have not already been previously provided (e.g., previously taxed earnings), we would be required to accrue and pay additional U.S. and applicable withholding taxes in order to repatriate these undistributed earnings. In the third quarter of 2016, we classified our operations in Benelux and Latin America as assets held for sale in connection with their announced divestitures and repatriated any cash held at those operations prior to completing the disposals in the fourth quarter of 2016.

In December 2015, we remitted to the United States $163.0 million of cash that had been held by our foreign operations, comprising dividends of $123.0 million and borrowings from foreign subsidiaries of $40.0 million. An additional $2.5 million was distributed in the second quarter of 2016 with the remaining $7.0 million to be distributed in future periods. This remittance was effected to partially offset the funding requirement associated with the acquisitions of DBCC and NetProspex in 2015, which had totaled $444.2 million. Given the timing, these acquisitions were funded initially through a combination of borrowings under the Company’s $1 billion revolving credit facility and cash on hand, and subsequently with more permanent financing in the form of senior notes with a face value of $300 million that mature on June 15, 2020. See Note 5 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for a discussion of the tax impacts related to the $163.0 million remittance.

Cash Provided by Operating Activities from Continuing Operations

Net cash provided by operating activities was $322.7 million, $336.8 million and $297.4 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Year ended December 31, 2016 vs. Year Ended December 31, 2015

Net cash provided by operating activities decreased by $14.1 million for the year ended December 31, 2016 compared to the year ended December 31, 2015. This decrease was primarily driven by:


•	Increased restructuring payments in 2016 as compared to the prior year; and


•	Increased interest payments as compared to the prior year;

partially offset by:


•	The net decrease in other working capital during the period.

Year ended December 31, 2015 vs. Year Ended December 31, 2014

Net cash provided by operating activities increased by $39.4 million for the year ended December 31, 2015 compared to the year ended December 31, 2014. This increase was primarily driven by:


•	Increased collections in 2015 as compared to the prior year; and


•	Lower tax payments in 2015 as compared to the prior year;

partially offset by:


•	Increased strategic investments in 2015 (e.g., compensation and data expenses) to drive long-term growth of our business; and


•	Increased acquisition-related costs in 2015 as compared to the prior year.

Cash Used in Investing Activities from Continuing Operations

Net cash used in investing activities was $58.1 million, $371.1 million and $63.3 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Year ended December 31, 2016 vs. Year Ended December 31, 2015

Net cash used in investing activities decreased by $313.0 million for the year ended December 31, 2016 compared to the year ended December 31, 2015. This improvement was primarily driven by:


•	Payment of $444.2 million in the prior year period for the acquisition of DBCC for $320.0 million and NetProspex for $124.2 million. See Note 18 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K;

partially offset by:


•	Net proceeds of $13.0 million from the sale of our Benelux operations during the year ended December 31, 2016 as compared to net proceeds of $159.8 million from the sale of our ANZ business during the prior year period. See Note 17 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K.

Year ended December 31, 2015 vs. Year Ended December 31, 2014

Net cash used in investing activities increased by $307.8 million for the year ended December 31, 2015 compared to the year ended December 31, 2014. This increase was primarily driven by:


•	Payment of $444.2 million for the acquisition of DBCC for $320.0 million and NetProspex for $124.2 million during the year ended December 31, 2015, as compared to smaller acquisitions in the aggregate of $8.3 million during the year ended December 31, 2014. See Note 18 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K; and


•	Increased additions to computer software in 2015 as compared to the prior year period;

partially offset by:

•

Net proceeds of $159.8 million from the sale of our ANZ business and our property in Parsippany, N.J. during the year ended December 31, 2015. See Note 17 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for further information on the sale of our ANZ business. See Note 1 and Note 7 to the consolidated financial statements included in Item 8. of this Annual Report on Form 10-K for further information on the sale of our Parsippany, N.J. building.

Cash (Used in) Provided by Financing Activities from Continuing Operations

Net cash (used in) provided by financing activities was $(224.9) million, $110.7 million and $(144.4) million for the years ended December 31, 2016, 2015 and 2014. As set forth below, these changes primarily relate to contractual obligations, share repurchases, stock-based programs and dividends.

Contractual Obligations

Debt

In June 2015, we issued senior notes with a face value of $300 million that mature on June 15, 2020, bearing interest at a fixed annual rate of 4.00%, payable semi-annually. The proceeds were used in June 2015 to repay borrowings outstanding under our $1 billion revolving credit facility, a portion of which had earlier been drawn in connection with the acquisition of DBCC. In addition, in connection with the issuance, we incurred underwriting and other fees of $2.9 million. We did not issue senior notes during the years ended December 31, 2016 and 2014.

Term Loan Facility

On May 14, 2015, we entered into a delayed draw unsecured term loan facility which provided for borrowings in the form of up to two drawdowns in an aggregate principal amount of up to $400 million at any time up to and including November 15, 2015 (the “term loan facility”). The term loan facility matures five years from the date of the initial drawdown. Proceeds under the term loan facility were designated to be used for general corporate purposes including the refinancing of the 2.875% senior notes that matured in November 2015 and the repayment of borrowings outstanding under the $1 billion revolving credit facility. Borrowings under the term loan facility bear interest at a rate of LIBOR plus a spread of 137.5 basis points. Our initial draw down under the term loan facility in the amount of $400 million was made in November 2015, establishing a facility maturity of November 2020. We also committed to repay the borrowings in prescribed installments over the five year period. We made scheduled repayments of $20.0 million and $5.0 million during the years ended December 31, 2016 and 2015, respectively. We had $375.0 million of borrowings outstanding under the term loan facility at December 31, 2016, of which $22.5 million and $352.5 million were classified within “Short-Term Debt” and “Long-Term Debt,” respectively. We had $395.0 million of borrowings outstanding under the term loan facility at December 31, 2015, of which $20.0 million and $375.0 million were classified within “Short-Term Debt” and “Long-Term Debt,” respectively. The associated weighted average interest rates were 2.03% and 1.73% for the years ended December 31, 2016 and 2015, respectively.

The term loan facility requires the maintenance of interest coverage and total debt to EBITDA ratios, which are defined in the term loan facility credit agreement and which are generally identical to those contained in the $1 billion revolving credit facility. We were in compliance with the term loan facility financial and non-financial covenants at December 31, 2016 and 2015.

Revolving Credit Facility

We had $199.8 million, $382.2 million and $604.5 million of borrowings outstanding under the $1 billion revolving credit facility at December 31, 2016, 2015 and 2014, respectively. We borrowed under this facility from time to time during the years ended December 31, 2016, 2015 and 2014 to supplement the timing of receipts in order to fund our working capital needs. During