Dun & Bradstreet Holdings, Inc. [DNB] Filings

10-Q 1 dnb-20220331.htm 10-Q dnb-20220331

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022


☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-39361

Dun & Bradstreet Holdings, Inc.

(Exact name of registrant as specified in its charter)


Delaware			83-2008699
(State of incorporation)			(I.R.S. Employer Identification No.)

5335 Gate Parkway, Jacksonville, FL			32256
(Address of principal executive offices)			(Zip Code)

(904) 648-6350

Registrant’s telephone number, including area code

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


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, $0.0001 par value	DNB	New York Stock Exchange

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

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

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

There were 434,081,419 shares outstanding of the Registrant's common stock as of May 5, 2022.

FORM 10-Q

QUARTERLY REPORT

Quarter Ended March 31, 2022

TABLE OF CONTENTS


		Page
	PART I. FINANCIAL INFORMATION	3
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3
	Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) (Unaudited)	3
	Condensed Consolidated Balance Sheets (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows (Unaudited)	5
	Condensed Consolidated Statements of Stockholder Equity (Unaudited)	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations (Unaudited)	32
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	47
Item 4.	Controls and Procedures	47
	PART II. OTHER INFORMATION	48
Item 1.	Legal Proceedings	48
Item1A.	Risk Factors	48
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 3.	Defaults Upon Senior Securities	48
Item 4.	Mine Safety Disclosures	48
Item 5.	Other Information	48
Item 6.	Exhibits	49

Table of Contents

Part I: FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)

Dun & Bradstreet Holdings, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(In millions, except per share data)

(Unaudited)


	Three months ended March 31,
		2022		2021
Revenue		$	536.0	$	504.5
Cost of services (exclusive of depreciation and amortization)		176.7		160.9
Selling and administrative expenses		188.2		179.8
Depreciation and amortization		149.4		149.7
Restructuring charges		5.3		5.8
Operating costs		519.6		496.2
Operating income (loss)		16.4		8.3
Interest income		0.3		0.1
Interest expense		(47.2)		(48.9)
Other income (expense) - net		(9.3)		6.8
Non-operating income (expense) - net		(56.2)		(42.0)
Income (loss) before provision (benefit) for income taxes and equity in net income of affiliates		(39.8)		(33.7)
Less: provision (benefit) for income taxes		(9.3)		(9.8)
Equity in net income of affiliates		0.7		0.6
Net income (loss)		(29.8)		(23.3)
Less: net (income) loss attributable to the non-controlling interest		(1.5)		(1.7)
Net income (loss) attributable to Dun & Bradstreet Holdings, Inc.		$	(31.3)	$	(25.0)

Basic earnings (loss) per share of common stock attributable to Dun & Bradstreet Holdings, Inc.		$	(0.07)	$	(0.06)
Diluted earnings (loss) per share of common stock attributable to Dun & Bradstreet Holdings, Inc.		$	(0.07)	$	(0.06)
Weighted average number of shares outstanding-basic		428.8		428.5
Weighted average number of shares outstanding-diluted		428.8		428.5
Other comprehensive income (loss), net of income taxes:
Net income (loss)		$	(29.8)	$	(23.3)
Foreign currency translation adjustments, net of tax (1)		$	(36.3)	$	(49.3)
Defined benefit pension plans:
Prior service credit (cost), net of tax expense (benefit) (2)		(0.1)		—
Net actuarial gain (loss), net of tax expense (benefit) (3)		—		0.4
Derivative financial instrument, net of tax expense (benefit) (4)		23.6		1.8
Total other comprehensive income (loss), net of tax		$	(12.8)	$	(47.1)
Comprehensive income (loss), net of tax		$	(42.6)	$	(70.4)
Less: comprehensive (income) loss attributable to the non-controlling interest		(1.5)		(2.4)
Comprehensive income (loss) attributable to Dun & Bradstreet Holdings, Inc.		$	(44.1)	$	(72.8)

(1)Tax Expense (Benefit) of $(0.9) million and $1.1 million for the three months ended March 31, 2022 and 2021, respectively.

(2)Tax Expense (Benefit) of less than $(0.1) million for the three months ended March 31, 2022.

(3)Tax Expense (Benefit) of $0.1 million for the three months ended March 31, 2021.

(4)Tax Expense (Benefit) of $8.7 million and $(0.1) million for the three months ended March 31, 2022 and 2021, respectively.

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

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Dun & Bradstreet Holdings, Inc.

Condensed Consolidated Balance Sheets

(In millions, except share data and per share data)

(Unaudited)


	March 31, 2022		December 31, 2021
Assets
Current assets
Cash and cash equivalents	$	215.8	$	177.1
Accounts receivable, net of allowance of $17.5 at March 31, 2022 and $16.5 at December 31, 2021 (Note 3)	339.4		401.7
Prepaid taxes	52.9		52.2
Other prepaids	67.8		63.9
Interest rate swap assets (Note 12)	42.4		10.1
Other current assets	14.0		13.0
Total current assets	732.3		718.0
Non-current assets
Property, plant and equipment, net of accumulated depreciation of $30.3 at March 31, 2022 and $27.5 at December 31, 2021	95.6		96.8
Computer software, net of accumulated amortization of $258.8 at March 31, 2022 and $234.2 at December 31, 2021 (Note 15)	563.4		557.4
Goodwill (Notes 15 and 16)	3,475.4		3,493.3
Deferred income tax	17.2		18.5
Other intangibles (Notes 15 and 16)	4,689.7		4,824.5
Deferred costs (Note 3)	116.7		116.1
Other non-current assets (Note 6)	166.9		172.6
Total non-current assets	9,124.9		9,279.2
Total assets	$	9,857.2	$	9,997.2
Liabilities
Current liabilities
Accounts payable	$	74.9	$	83.5
Accrued payroll	62.3		125.6
Short-term debt (Note 5)	32.7		28.1
Deferred revenue (Note 3)	632.8		569.4
Other accrued and current liabilities (Note 6)	170.7		198.3
Total current liabilities	973.4		1,004.9
Long-term pension and postretirement benefits (Note 9)	167.0		178.4
Long-term debt (Note 5)	3,688.7		3,716.7
Deferred income tax	1,180.1		1,207.2
Other non-current liabilities (Note 6)	139.1		144.7
Total liabilities	6,148.3		6,251.9
Commitments and contingencies (Note 7)

Equity
Common Stock, $0.0001 par value per share, authorized—2,000,000,000 shares; 434,988,280 shares issued and 434,115,063 shares outstanding at March 31, 2022 and 432,070,999 shares issued and 431,197,782 shares outstanding at December 31, 2021	—		—
Capital surplus	4,506.8		4,500.4
Accumulated deficit	(793.1)		(761.8)
Treasury Stock, 873,217 shares at both March 31, 2022 and December 31, 2021	(0.3)		(0.3)
Accumulated other comprehensive loss	(69.9)		(57.1)
Total stockholder equity	3,643.5		3,681.2
Non-controlling interest	65.4		64.1
Total equity	3,708.9		3,745.3
Total liabilities and stockholder equity	$	9,857.2	$	9,997.2

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

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Dun & Bradstreet Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(In millions)

(Unaudited)


	Three months ended March 31,
	2022		2021
Cash flows provided by (used in) operating activities:
Net income (loss)	$	(29.8)	$	(23.3)
Reconciliation of net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	149.4		149.7
Amortization of unrecognized pension loss (gain)	(0.1)		0.5
Debt early redemption premium expense	16.3		—
Amortization and write off of deferred debt issuance costs	11.0		4.7
Equity-based compensation expense	10.7		7.6
Restructuring charge	5.3		5.8
Restructuring payments	(4.0)		(3.3)
Changes in deferred income taxes	(28.8)		(26.1)
Changes in operating assets and liabilities: (1)
(Increase) decrease in accounts receivable	59.5		9.9
(Increase) decrease in prepaid taxes, other prepaids and other current assets	(5.7)		61.2
Increase (decrease) in deferred revenue	70.9		78.7
Increase (decrease) in accounts payable	(12.1)		(2.1)
Increase (decrease) in accrued liabilities	(70.6)		(61.2)
Increase (decrease) in other accrued and current liabilities	(16.4)		(9.1)
(Increase) decrease in other long-term assets	0.6		(2.6)
Increase (decrease) in long-term liabilities	(18.1)		(23.9)
Net, other non-cash adjustments	0.7		1.7
Net cash provided by (used in) operating activities	138.8		168.2
Cash flows provided by (used in) investing activities:
Acquisitions of businesses, net of cash acquired	—		(617.0)
Cash settlements of foreign currency contracts	(1.7)		23.3

Capital expenditures	(4.1)		(1.2)
Additions to computer software and other intangibles	(43.6)		(42.4)
Other investing activities, net	—		(0.6)
Net cash provided by (used in) investing activities	(49.4)		(637.9)
Cash flows provided by (used in) financing activities:
Payment for debt early redemption premiums	(16.3)		—
Payment of long term debt	(420.0)		—
Proceeds from borrowings on Credit Facility	1.7		50.0
Proceeds from borrowings on Term Loan Facility	460.0		300.0
Payments of borrowings on Credit Facility	(61.7)		(50.0)
Payments of borrowing on Term Loan Facility	(7.0)		(7.0)

Payment of debt issuance costs	(7.4)		(2.6)
Other financing activities, net	(0.3)		(0.3)
Net cash provided by (used in) financing activities	(51.0)		290.1
Effect of exchange rate changes on cash and cash equivalents	0.3		0.7
Increase (decrease) in cash and cash equivalents	38.7		(178.9)
Cash and Cash Equivalents, Beginning of Period	177.1		352.3
Cash and Cash Equivalents, End of Period	$	215.8	$	173.4
Supplemental Disclosure of Cash Flow Information:
Cash Paid for:
Income taxes payment (refund), net	$	30.5	$	(57.4)
Interest	$	40.7	$	63.0
Noncash Investing and Financing activities:
Fair value of acquired assets, including measurement period adjustments	$	0.5	$	1,185.8
Cash paid for acquired businesses	—		(646.9)
Unpaid purchase price accrued in "Other accrued and current liabilities"	(0.5)		—
6,237,087 shares of common stock issued for the acquisition	—		(158.9)
Assumed liabilities from acquired businesses including non-controlling interest and measurement period adjustments	$	—	$	380.0

(1)Net of the effect of acquisitions, see further details in Note 14.

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

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Dun & Bradstreet Holdings, Inc.

Condensed Consolidated Statements of Stockholder Equity

(In millions)

(Unaudited)


	Common stock		Capital surplus		(Accumulated deficit) Retained earnings		Treasury stock		Cumulative translation adjustment		Defined benefit postretirement plans		Cash flow hedging derivative		Total stockholder equity		Non-controlling interest		Total equity

Three months ended March 31, 2021
Balance, January 1, 2021	$	—	$	4,310.2	$	(690.1)	$	—	$	26.2	$	(120.3)	$	(0.4)	$	3,525.6	$	58.3	$	3,583.9
Net income (loss)	—		—		(25.0)		—		—		—		—		(25.0)		1.7		(23.3)
Shares issued for Bisnode acquisition	—		158.9		—		—		—		—		—		158.9		—		158.9
Equity-based compensation plans	—		6.2		—		(0.3)		—		—		—		5.9		—		5.9
Pension adjustments, net of tax expense of $0.1	—		—		—		—		—		0.4		—		0.4		—		0.4
Change in cumulative translation adjustment, net of tax expense of $1.1	—		—		—		—		(50.0)		—		—		(50.0)		0.7		(49.3)
Derivative financial instruments, net of tax benefit of $0.1	—		—		—		—		—		—		1.8		1.8		—		1.8
Payment to non-controlling interest	—		—		—		—		—		—		—		—		(0.1)		(0.1)
Balance, March 31, 2021	$	—	$	4,475.3	$	(715.1)	$	(0.3)	$	(23.8)	$	(119.9)	$	1.4	$	3,617.6	$	60.6	$	3,678.2













Three months ended March 31, 2022
Balance, January 1, 2022	$	—	$	4,500.4	$	(761.8)	$	(0.3)	$	(52.6)	$	(11.9)	$	7.4	$	3,681.2	$	64.1	$	3,745.3
Net income (loss)	—		—		(31.3)		—		—		—		—		(31.3)		1.5		(29.8)
Equity-based compensation plans	—		6.4		—		—		—		—		—		6.4		—		6.4
Pension adjustments, net of tax benefit of less than $0.1	—		—		—		—		—		(0.1)		—		(0.1)		—		(0.1)
Change in cumulative translation adjustment, net of tax benefit of $0.9	—		—		—		—		(36.3)		—		—		(36.3)		—		(36.3)
Derivative financial instruments, net of tax expense of $8.7	—		—		—		—		—		—		23.6		23.6		—		23.6
Payment to non-controlling interest	—		—		—		—		—		—		—		—		(0.2)		(0.2)
Balance, March 31, 2022	$	—	$	4,506.8	$	(793.1)	$	(0.3)	$	(88.9)	$	(12.0)	$	31.0	$	3,643.5	$	65.4	$	3,708.9

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

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DUN & BRADSTREET HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Tabular dollar amounts, except share data and per share data, in millions)

Note 1 --Basis of Presentation

The accompanying interim unaudited condensed consolidated financial statements of Dun & Bradstreet Holdings, Inc. and its subsidiaries ("we" or "us" or "our" or the "Company") were prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). They should be read in conjunction with the consolidated financial statements and related notes, which appear in the consolidated financial statements for the year ended December 31, 2021, included in our Annual Report on Form 10-K and filed with the Securities and Exchange Commission ("SEC") on February 24, 2022. The unaudited condensed consolidated financial statements for interim periods do not include all disclosures required by GAAP for annual financial statements and are not necessarily indicative of results for the full year or any subsequent period. In the opinion of our management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of the unaudited consolidated financial position, results of operations and cash flows at the dates and for the periods presented have been included.

We manage our business and report our financial results through the following two segments:

•North America offers Finance & Risk and Sales & Marketing data, analytics and business insights in the United States and Canada; and

•International offers Finance & Risk and Sales & Marketing data, analytics and business insights directly in the United Kingdom and Ireland ("U.K."), Nordics (Sweden, Norway, Denmark and Finland), DACH (Germany, Austria and Switzerland) and CEE (Central and Eastern Europe) countries ("Europe"), Greater China, India and indirectly through our Worldwide Network alliances ("WWN alliances").

All intercompany transactions and balances have been eliminated in consolidation.

Our unaudited condensed consolidated financial statements presented herein reflect the latest estimates and assumptions made by management that affect the reported amounts of assets and liabilities and related disclosures as of the date of the unaudited consolidated financial statements and reported amounts of revenue and expenses during the reporting periods presented. Since early 2020, the novel coronavirus ("COVID-19") and its variants have caused disruptions and continue to cause disruption in the economy and volatility in the global financial markets. While we continue to expect the impact of COVID-19 to global businesses to moderate, there still remains uncertainty regarding its duration and the speed and nature of recovery. In addition, the ongoing conflict between Russia and Ukraine, which started in February 2022, has further exacerbated uncertainty in the global economy resulting from disruptions in supply chains and government sanctions. The extent of the impact of the COVID-19 global pandemic and the current Russia/Ukraine conflict on our operations and financial performance will depend on, among many factors, the duration of the pandemic, the continuation of the Russia/Ukraine conflict, the government mandates or guidance regarding COVID-19 restrictions and their effects on our clients and vendors, which continue to be uncertain at this time and cannot be predicted. The ongoing uncertainty may affect management's estimates and assumptions of variable consideration in contracts with clients as well as other estimates and assumptions, in particular those that require a projection of our financial results, our cash flows or broader economic conditions.

Note 2 -- Recent Accounting Pronouncements

We consider the applicability and impact of all Accounting Standards Updates (“ASUs”) and applicable authoritative guidance. The ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on our consolidated financial position, results of operations and/or cash flows.

Recently Adopted Accounting Pronouncements

In October 2021, the FASB issued ASU No. 2021-08, "Business Combinations (Topic 805) Accounting for Contract Assets and Contract Liabilities from Contracts with Customers." The amendments require an acquirer to recognize and measure contract assets and contract liabilities in a business combination based on the guidance of ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" rather than fair value. For public business entities, the amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption of this ASU is permitted, including adoption in an interim period. If early adopted, the amendments are applied retrospectively to all business combinations for which the acquisition date occurred during the fiscal year of adoption. We early adopted this update during the fourth quarter of 2021. As a result of the adoption of this update, no fair value adjustments were made to the

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - Continued

(Tabular dollar amounts, except share data and per share data, in millions)

acquired deferred revenue balances for acquisitions completed in 2021. See Note 14 to the consolidated financial statements for further detail.

Recently Issued Accounting Pronouncements

In March 2020, the FASB issued ASU No. 2020-04 "Facilitation of the Effects of Reference Rate Reform on Financial Reporting" to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate ("LIBOR") to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform - Scope,” which clarified the scope and application of the original guidance in ASU No. 2020-04. Both ASU's were effective upon issuance, and the Company may elect to apply the amendments prospectively through December 31, 2022 as the transition from LIBOR is completed. On April 20, 2022, the FASB issued a proposed ASU that would extend the transition date to December 31, 2024.

Note 3 -- Revenue

The total amount of the transaction price for our revenue contracts allocated to performance obligations that are unsatisfied (or partially unsatisfied) as of March 31, 2022 is as follows:


	Remainder of 2022		2023		2024		2025		2026		Thereafter		Total
Future revenue	$	1,047.7	$	688.7	$	398.6	$	189.5	$	136.6	$	396.5	$	2,857.6

The table of future revenue does not include any amount of variable consideration that is a sales or usage-based royalty in exchange for distinct data licenses or that is allocated to a distinct service period within a single performance obligation that is a series of distinct service periods.

Timing of Revenue Recognition


	Three months ended March 31,
	2022		2021
Revenue recognized at a point in time	$	208.8	$	205.0
Revenue recognized over time	327.2		299.5
Total revenue recognized	$	536.0	$	504.5

Contract Balances


	At March 31, 2022		At December 31, 2021
Accounts receivable, net	$	339.4	$	401.7
Short-term contract assets (1)	$	4.0	$	3.4
Long-term contract assets (2)	$	12.3	$	9.1
Short-term deferred revenue	$	632.8	$	569.4
Long-term deferred revenue (3)	$	17.3	$	13.7

(1) Included within "Other current assets" in the condensed consolidated balance sheet.

(2) Included within "Other non-current assets" in the condensed consolidated balance sheet.

(3) Included within "Other non-current liabilities" in the condensed consolidated balance sheet.

The increase in deferred revenue of $67.0 million from December 31, 2021 to March 31, 2022 was primarily due to cash payments received or due in advance of satisfying our performance obligations, largely offset by $255.9 million of revenue recognized that were included in the deferred revenue balance at December 31, 2021.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - Continued

(Tabular dollar amounts, except share data and per share data, in millions)

The increase in contract assets of $3.8 million is primarily due to new contract assets recognized, net of new amounts reclassified to receivables during 2021, partially offset by $6.3 million of contract assets included in the balance at January 1, 2021 that were reclassified to receivables when they became unconditional.

See Note 16 for a schedule of disaggregation of revenue.

Assets Recognized for the Costs to Obtain a Contract

Commission assets, net of accumulated amortization included in deferred costs, were $116.7 million and $116.1 million as of March 31, 2022 and December 31, 2021, respectively.

The amortization of commission assets was $8.6 million and $6.0 million for the three months ended March 31, 2022 and 2021, respectively.

Note 4 -- Restructuring Charge

We incurred restructuring charges (which generally consist of employee severance and termination costs, and contract terminations). These charges were incurred as a result of eliminating, consolidating, standardizing and/or automating our business functions.

Three months ended March 31, 2022 vs. Three months ended March 31, 2021

We recorded a restructuring charge of $5.3 million for the three months ended March 31, 2022. This charge consists of:

•Severance costs of $2.5 million under ongoing benefit arrangements. Approximately 20 employees were impacted. Most of the employees impacted exited the Company by the end of the first quarter of 2022. The cash payments for these employees will be substantially completed by the end of the third quarter of 2022; and

•Contract termination, write down of right of use assets and other exit costs, including those to consolidate or close facilities of $2.8 million.

We recorded a restructuring charge of $5.8 million for the three months ended March 31, 2021. This charge consists of:

•Severance costs of $4.7 million under ongoing benefit arrangements. Approximately 35 employees were impacted. Most of the employees impacted exited the Company by the end of the first quarter of 2021. The cash payments for these employees were substantially completed by the end of the fourth quarter of 2021; and

•Contract termination, write down of right of use assets and other exit costs, including those to consolidate or close facilities of $1.1 million.

The following table sets forth the restructuring reserves and utilization for the three months ended March 31, 2022 and the three months ended March 31, 2021:

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - Continued

(Tabular dollar amounts, except share data and per share data, in millions)


	Severance and termination		Contract termination and other exit costs		Total

2022:
Balance remaining as of December 31, 2021	$	4.7	$	3.3	$	8.0
Charge taken during first quarter 2022 (1)	2.5		0.6		3.1
Payments made during first quarter 2022	(3.4)		(0.6)		(4.0)
Balance remaining as of March 31, 2022	$	3.8	$	3.3	$	7.1

2021:
Balance remaining as of December 31, 2020	$	2.6	$	7.1	$	9.7
Charge taken during first quarter 2021 (1)	4.7		(0.3)		4.4
Payments made during first quarter 2021	(2.4)		(0.9)		(3.3)
Balance remaining as of March 31, 2021	$	4.9	$	5.9	$	10.8

(1)Balance excludes charges accounted for under ASU No. 2016-02, "Leases (Topic 842)."

Note 5 -- Notes Payable and Indebtedness

Our borrowings are summarized in the following table:


		March 31, 2022						December 31, 2021
	Maturity	Principal amount		Debt issuance costs and discount*		Carrying value		Principal amount		Debt issuance costs and discount*		Carrying value
Debt maturing within one year:
2026 Term loan (1)	February 8, 2026	$	28.1	$	—	$	28.1	$	28.1	$	—	$	28.1
2029 Term loan (1)	January 18, 2029	4.6		—		4.6		—		—		—
Total short-term debt		$	32.7	$	—	$	32.7	$	28.1	$	—	$	28.1

Debt maturing after one year:
2026 Term loan (1)	February 8, 2026	$	2,747.8	$	60.6	$	2,687.2	$	2,754.8	$	64.5	$	2,690.3
2029 Term loan (1)	January 18, 2029	455.4		7.2		448.2		—		—		—
Revolving facility (1) (2)	September 11, 2025	100.0		—		100.0		160.0		—		160.0
5.000% Senior unsecured notes (1)	December 15, 2029	460.0		6.7		453.3		460.0		6.8		453.2
6.875% Senior secured notes (1)	Fully paid off in January 2022	—		—		—		420.0		6.8		413.2
Total long-term debt		$	3,763.2	$	74.5	$	3,688.7	$	3,794.8	$	78.1	$	3,716.7
Total debt		$	3,795.9	$	74.5	$	3,721.4	$	3,822.9	$	78.1	$	3,744.8

*Initial debt issuance costs were recorded as a reduction of the carrying amount of the debt and amortized over the contractual term of the debt. Balances represent the unamortized portion of debt issuance costs and discounts.

(1) The 5.000% Senior Unsecured Notes, the 6.875% Senior Secured Notes and the Senior Secured Credit Facilities contain certain covenants that limit our ability to incur additional indebtedness and guarantee indebtedness, create liens, engage in mergers or acquisitions, sell, transfer or otherwise dispose of assets, pay dividends and distributions or repurchase capital

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stock, prepay certain indebtedness and make investments, loans and advances. We were in compliance with these non-financial covenants at March 31, 2022 and December 31, 2021.

(2) The Revolving Facility contains a springing financial covenant requiring compliance with a maximum ratio of first lien net indebtedness to consolidated EBITDA of 6.75. The financial covenant applies only if the aggregate principal amount of borrowings under the Revolving Facility and certain outstanding letters of credit exceed 35% of the total amount of commitments under the Revolving Facility on the last day of any fiscal quarter. The financial covenant did not apply at March 31, 2022 and December 31, 2021.

On January 18, 2022, we amended our credit agreement dated February 8, 2019, specifically related to the Term Loan Facility, to establish Incremental Term Loans in an aggregate principal amount of $460 million with a maturity date of January 18, 2029 ("2029 Term Loan"). We used the proceeds from the 2029 Term Loans to redeem our then-outstanding $420 million in aggregate principal amount of the 6.875% Senior Secured Notes due 2026, inclusive of early redemption premium of $16.3 million, accrued interest and fees and expenses. As a result of the redemption, we recorded a loss on debt extinguishment of $23.0 million as the difference between the settlement payments of $436.3 million and the carrying amount of the debt of $413.3 million, including unamortized debt issuance costs of $6.7 million. The loss was recorded within "Non-operating income (expense)-net" for the three months ended March 31, 2022. Initial debt issuance costs of $7.4 million related to the 2029 Term Loan were recorded as a reduction of the carrying amount of the term loan and will be amortized over its contractual term.

Senior Secured Credit Facilities

Borrowings under the Senior Secured Credit Facilities bear interest at a rate per annum equal to an applicable margin over a LIBOR or Secured Overnight Financing Rate ("SOFR") for the interest period relevant to such borrowing, subject to interest rate floors, and they are secured by substantially all of the Company’s assets. Initial debt issuance costs related to the Term Loan facility were recorded as a reduction of the carrying amount of the Term Loan Facility and are being amortized over the term of the facility. Initial debt issuance costs related to the Revolving Facility were included in "Other non-current assets" on the consolidated balance sheet and amortized over the term of the Revolving Facility.

Other details of the Senior Secured Credit Facilities:

•For the 2029 Term Loan, beginning June 30, 2022, the principal amount is required to be paid down in equal quarterly installments in an aggregate annual amount equal to 1.00% of the original principal amount, with the balance being payable on January 18, 2029. The 2029 Incremental Term Loan bears interest at a rate per annum equal to 325 basis points over a SOFR rate for the interest period. The interest rate associated with the outstanding balance of the 2029 Term Loan at March 31, 2022 was 3.560%.

•For the term loans issued prior to January 18, 2022, beginning June 30, 2020, the principal amount is required to be paid down in equal quarterly installments in an aggregate annual amount equal to 1.00% of the original principal amount, with the balance being payable on February 8, 2026 ("2026 Term Loan"). The margin to LIBOR was 500 basis points initially. Several amendments were made subsequently to reduce the margin to LIBOR. As of March 31, 2022 and December 31, 2021, the spread was 325 basis points. The interest rate associated with the outstanding balances of the 2026 Term Loan at March 31, 2022 and December 31, 2021 were 3.697% and 3.352%, respectively.

•For borrowings under the Revolving Facility, the margin to LIBOR was 350 basis points initially. Subsequent to the IPO transaction, the spread was reduced by 25 basis points to 325 basis points, subject to a ratio-based pricing grid. The aggregate amount available under the Revolving Facility is $850 million. The available borrowings under the Revolving Facility at March 31, 2022 and December 31, 2021 were $750 million and $690 million, respectively. The interest rate associated with the outstanding balance of the Revolving Facility at March 31, 2022 and December 31, 2021 was 3.468% and 3.104%, respectively.

Other

We were contingently liable under open standby letters of credit and bank guarantees issued by our banks in favor of third parties totaling $13.1 million at March 31, 2022 and $13.5 million at December 31, 2021.

On March 2, 2022, the Company entered into three-year interest rate swaps with an aggregate notional amount of

$250 million, effective February 28, 2022 through February 27, 2025. For these swaps, the Company pays a fixed rate of 1.629% and receives the one-month Term SOFR rate.

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On March 30, 2021, the Company entered into three-year interest rate swaps with an aggregate notional amount of $1 billion, effective March 29, 2021 through March 27, 2024. For these swaps, the Company pays a fixed rate of 0.467% and receives the one-month LIBOR rate.

The objective of the swaps is to mitigate the variation of future cash flows from changes in the floating interest rates on our existing debt. See further discussion in Note 12 to our condensed consolidated financial statements.

Note 6 -- Other Assets and Liabilities

Other Non-Current Assets


	March 31, 2022		December 31, 2021
Right of use assets	$	62.7	$	71.9
Prepaid pension assets	37.4		36.6
Investments	27.6		27.2
Other various	39.2		36.9
Total	$	166.9	$	172.6

Other Accrued and Current Liabilities:


	March 31, 2022		December 31, 2021
Accrued operating costs	$	95.1	$	110.4
Accrued interest expense	8.0		12.6
Short-term lease liability	24.6		26.0
Accrued income tax	6.2		16.4
Other various	36.8		32.9
Total	$	170.7	$	198.3

Other Non-Current Liabilities:


	March 31, 2022		December 31, 2021
Deferred revenue - long term	$	17.3	$	13.7
U.S. tax liability associated with the 2017 Act	44.6		44.6
Long-term lease liability	50.9		59.4
Liabilities for unrecognized tax benefits	18.9		19.2
Other various	7.4		7.8
Total	$	139.1	$	144.7

Note 7 -- Contingencies

In the ordinary course of business, we are involved in various pending and threatened litigation and regulatory matters related to our operations, such as claims brought by our clients in connection with commercial disputes, defamation claims by subjects of our reporting, and employment claims made by our current or former employees, some of which include claims for punitive or exemplary damages. Our ordinary course litigation may also include class action lawsuits, which make allegations related to various aspects of our business. From time to time, we are also subject to regulatory investigations or other proceedings by state and federal regulatory authorities as well as authorities outside of the U.S., some of which take the form of civil investigative demands or subpoenas. Some of these regulatory inquiries may result in the assessment of fines for violations

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of regulations or settlements with such authorities requiring a variety of remedies. We believe that none of these actions depart from customary litigation or regulatory inquiries incidental to our business.

We review lawsuits and other legal and regulatory matters (collectively "legal proceedings") on an ongoing basis when making accrual and disclosure decisions. When assessing reasonably possible and probable outcomes, management bases its decision on its assessment of the ultimate outcome assuming all appeals have been exhausted. For legal proceedings where it has been determined that a loss is both probable and reasonably estimable, a liability based on known facts and which represents our best estimate has been recorded. Actual losses may materially differ from the amounts recorded and the ultimate outcome of our pending cases is generally not yet determinable.

While some of these matters could be material to our operating results or cash flows for any particular period if an unfavorable outcome results, at present we do not believe the ultimate resolution of currently pending legal proceedings, either individually or in the aggregate, will have a material adverse effect on our financial condition.

In addition, in the normal course of business, and including without limitation, our merger and acquisition activities, strategic relationships and financing transactions, the Company indemnifies other parties, including clients, lessors and parties to other transactions with the Company, with respect to certain matters. We have agreed to hold the other parties harmless against losses arising from a breach of representations or covenants, or arising out of other claims made against certain parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. The Company has also entered into indemnity obligations with its officers and directors.

Federal Trade Commission Investigation

On April 10, 2018, the Federal Trade Commission (the “FTC” or the "Commission") issued a Civil Investigative Demand (“CID”) to Dun & Bradstreet, Inc. (“D&B Inc.,” a wholly-owned subsidiary of the Company) related to an investigation by the FTC into potential violations of Section 5 of the Federal Trade Commission Act (the “FTC Act”), primarily concerning our credit managing and monitoring products such as CreditBuilder. D&B Inc. completed its response to the CID in November 2018. On May 28, 2019, the FTC staff informed D&B Inc. that it believes that certain of D&B's practices violated Section 5 of the FTC Act, and informed D&B Inc. that it had been given authority by the FTC’s Bureau of Consumer Protection to engage in consent negotiations. Following discussions between the Company and the FTC staff, on September 9, 2019, the FTC issued a second CID seeking additional information, data and documents. The Company completed its response to the second CID in April 2020. In a letter dated March 2, 2020, the FTC staff identified areas of interest related to the CIDs and we completed our responses to the letter on April 7, 2020. On April 20, 2020, the FTC and D&B Inc. entered a tolling agreement with respect to potential claims related to the subject matter of the investigation. On February 23, 2021, the FTC staff provided D&B Inc. with a draft complaint and consent order outlining its allegations and the forms of relief sought, and advised that it had been given authority to engage in consent negotiations. Following consent negotiations, on September 21, 2021, D&B Inc. agreed to enter into an Agreement Containing Consent Order ("Consent Agreement"). On January 13, 2022, the FTC informed the Company that the Commission had voted to accept the Consent Agreement. On January 19, 2022, the Consent Agreement was published in the Federal Register, triggering a 30-day public comment period that ended on February 18, 2022. On April 6, 2022, the Commission finalized approval of the Consent Agreement.

In accordance with ASC 450, as of March 31, 2022, an amount in respect of this matter was accrued in the consolidated income statement during the first quarter of 2021, and was included in the consolidated balance sheet as of March 31, 2022 and December 31, 2021. The amount of any loss has not been fully determined, and it is possible that the amount could exceed the amount accrued and that the amount of such additional loss could be material.

Right of Publicity Class Actions

DeBose v. Dun & Bradstreet Holdings, Inc., No. 2:22-cv-00209-ES-CLW (D.N.J.)

On January 17, 2022, Plaintiff Rashad DeBose filed a Class Action Complaint against the Company, alleging that the Company used the purported class members’ names and personas to promote paid subscriptions to the Company’s Hoovers product website without consent, in violation of the Ohio right of publicity statute and Ohio common law prohibiting misappropriation of a name or likeness. This matter was recently filed and the Company is in the very early stages of investigating this matter. On March 30, 2022, the Company filed a motion to dismiss the Complaint.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - Continued

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In accordance with ASC 450 Contingencies, as the Company is in the very early stage of investigating the claims, we therefore have no basis to determine that a loss in connection with this matter is probable, reasonably possible or estimable, and thus no reserve has been established nor has a range of loss been disclosed. While this matter is in a very early stage, as it is a potential class action, in an abundance of caution, we have included it in our public filings.

Batis v. Dun & Bradstreet Holdings, Inc., No. 4:22-cv-01924-AGT (N.D.Cal.)

On March 25, 2022, Plaintiff Odette R. Batis filed a Class Action Complaint against the Company, alleging that the Company used the purported class members’ names and personas to promote paid subscriptions to the Company’s Hoovers product website without consent, in violation of the California right of publicity statute, California common law prohibiting misappropriation of a name or likeness and California’s Unfair Competition Law. As this matter was recently filed and the Company is in the very early stages of investigating this matter, the Company has not yet completed its evaluation of the claims or its defenses.

Note 8 -- Income Taxes

The effective tax rate for the three months ended March 31, 2022 was 23.4%, reflecting a tax benefit of $9.3 million on pre-tax loss of $39.8 million, compared to 29.0% for the three months ended March 31, 2021, reflecting a tax benefit of $9.8 million on a pre-tax loss of $33.7 million. The reduced tax benefit for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was primarily due to the global intangible low-tax income ("GILTI") inclusion and higher non-deductible executive compensation partially offset by the benefit from increased income in our foreign jurisdictions taxed at lower tax rates.

Note 9 -- Pension and Postretirement Benefits

Net Periodic Pension Cost

The following table sets forth the components of the net periodic cost (income) associated with our pension plans and our postretirement benefit obligations:


	Pension plans				Postretirement benefit obligations
	Three months ended March 31,					Three months ended March 31,
	2022		2021				2022		2021
Components of net periodic cost (income):
Service cost	$	0.8	$	1.3			$	—	$	—
Interest cost	8.8		6.8				—		—
Expected return on plan assets	(20.0)		(20.8)				—		—
Amortization of prior service cost (credit)	—		—				(0.1)		(0.1)
Amortization of actuarial loss (gain)	—		0.6				—		—
Net periodic cost (income)	$	(10.4)	$	(12.1)			$	(0.1)	$	(0.1)

Note 10 --

Dun & Bradstreet Holdings, Inc. [DNB] Filings
10-Q	[2022-05-09]
10-K	[2022-02-24]
10-Q	[2021-11-04]
10-Q	[2021-08-03]
10-Q	[2021-05-05]
10-K	[2021-02-25]
10-Q	[2020-11-05]
10-Q	[2020-08-06]
S-1	[2020-06-09]