Nielsen Reports Third Quarter 2012 Results

  Nielsen Reports Third Quarter 2012 Results

  *Revenues for the quarter increased 1% to $1,423 million, up 5% in constant
    currency
  *Adjusted EBITDA for the quarter grew 4% to $424 million, up 7% in constant
    currency
  *Net income for the quarter increased to $106 million from $103 million in
    2011
  *Adjusted Net Income for the quarter increased to $200 million from $181
    million in 2011

Business Wire

NEW YORK -- October 22, 2012

Nielsen Holdings N.V. (NYSE: NLSN), a leading global provider of information
and insights into what consumers buy and watch, today announced financial
results for the third quarter and nine months ended September 30, 2012.

"Nielsen had solid performance in the third quarter, with healthy growth in
recurring revenue and margin expansion,” said David Calhoun, Chief Executive
Officer of Nielsen. “Our resilience given today’s economic environment
demonstrates the value we deliver to clients, and we will continue to invest
to support their global business priorities.”

Third Quarter 2012 Operating Results

Revenues for the third quarter increased 1% to $1,423million, or 5% on a
constant currency basis compared to the third quarter of 2011. Our revenue
performance was driven by a 1% decrease within our Buy segment (4% increase on
a constant currency basis), a 4% increase within our Watch segment (5% on a
constant currency basis) and a 5% increase in our Expositions segment (5% on a
constant currency basis). Global growth in Information services was driven by
increased client investment in retail measurement, including the impact of
additional coverage in the U.S. market. Our Insights services declined due to
lower spending by clients globally.

Adjusted EBITDA for the third quarter increased 4% to $424 million, or 7% on a
constant currency basis compared to the third quarter of 2011. We continue to
see the benefits of productivity efforts while strategically reinvesting in
growth initiatives.

Net income for the third quarter increased to $106 million compared to $103
million in the third quarter of 2011. Net income per share, on a diluted
basis, was $0.29 compared to $0.28 in the third quarter of 2011.

Adjusted Net Income for the third quarter increased to $200 million compared
to $181 million in the third quarter of 2011. Adjusted Net Income per share
was $0.53 compared to $0.48 in the third quarter of 2011.

Nine Months Ended September 2012 Operating Results

Revenues for the first nine months of 2012 increased 1% to $4,148 million, or
4% on a constant currency basis compared to the first nine months of 2011.
Revenues within our Buy segment decreased 1% (4% increase on a constant
currency basis), revenues within our Watch segment increased 3% (4% on a
constant currency basis) and revenues within our Expositions segment increased
5% (5% on a constant currency basis).

Adjusted EBITDA for the first nine months of 2012 increased 3% to $1,145
million, or 6% on a constant currency basis compared to the nine months of
2011.

Net income for the first nine months of 2012 was $234 million compared to a
net loss of $9 million for the first nine months of 2011. The 2011 results
included charges of $206 million, net of tax, associated with the IPO. Net
income per share, on a diluted basis, was $0.64 compared to a net loss per
share of $0.03 in the first nine months of 2011.

Adjusted Net Income for the first nine months of 2012 increased to $470
million compared to $400 million in the first nine months of 2011. Adjusted
Net Income per share was $1.25 compared to $1.10 in the first nine months of
2011.

Financial Position

As of September 30, 2012, cash balances were $325 million and gross debt was
$6,392 million, excluding the $288 million mandatory convertible subordinated
bonds due 2013. Net debt (gross debt less cash and cash equivalents) was
$6,067 million and our net debt leverage ratio was 3.8x at the end of the
quarter. Capital expenditures were $225 million for the first nine months of
2012 as compared to $213 million for the first nine months of 2011.

In October 2012, we issued $800 million in aggregate principal amount of 4.50%
Senior Notes due 2020 at par with cash proceeds of approximately $788 million,
net of fees and expenses. Further in October 2012, we redeemed all of our
11.50% Senior Notes due 2016 and prepaid our 8.50% Senior Secured Term Loan
due 2017. The redemption and prepayment transactions will result in a pre-tax
charge of approximately $115 million in the fourth quarter of 2012.

Conference Call and Webcast

Nielsen will hold a conference call to discuss third quarter results at 8:30
a.m. U.S. Eastern Time (ET) on October 22, 2012. The audio and slides for the
call can be accessed live by webcast at http://ir.nielsen.com or by dialing
1-866-652-5200. Callers outside the U.S. and Canada can dial +1-412-317-6060.
The passcode for the call is “Nielsen.” An archive will be available on the
investor relations website after the call.

Forward-looking Statements

This news release includes information that could constitute forward-looking
statements made pursuant to the safe harbor provision of the Private
Securities Litigation Reform Act of 1995. These statements may be identified
by words such as ‘will’, ‘expect’, ‘should’, ‘could’, ‘shall’ and similar
expressions. These statements are subject to risks and uncertainties, and
actual results and events could differ materially from what presently is
expected. Factors leading thereto may include without limitations general
economic conditions, conditions in the markets Nielsen is engaged in, behavior
of customers, suppliers and competitors, technological developments, as well
as legal and regulatory rules affecting Nielsen’s business and specific risk
factors discussed in other releases and public filings made by the Company
(including the Company’s filings with the Securities and Exchange Commission).
This list of factors is not intended to be exhaustive. Such forward-looking
statements only speak as of the date of this press release, and we assume no
obligation to update any written or oral forward-looking statement made by us
or on our behalf as a result of new information, future events, or other
factors.

About Nielsen

Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement
company with leading market positions in marketing and consumer information,
television and other media measurement, online intelligence, mobile
measurement, trade shows and related properties. Nielsen has a presence in
approximately 100 countries, with headquarters in New York, USA and Diemen,
the Netherlands. For more information,visit www.nielsen.com.

Results of Operations—(Three and Nine Months Ended September 30, 2012 and
2011)

The following table sets forth, for the periods indicated, the amounts
included in our Condensed Consolidated Statements of Operations:

                                                                       
                                                                            
                        Three Months Ended                Nine Months Ended

                        September 30,                     September 30,

                        (Unaudited)                       (Unaudited)
(IN MILLIONS EXCEPT
SHARE AND PER SHARE    2012          2011            2012             2011        
DATA)
Revenues                $ 1,423        $ 1,413          $ 4,148          $ 4,111       
                                                                            
Cost of revenues          565             554               1,694             1,673
Selling, general
and administrative        444             460               1,338             1,453
expenses
Depreciation and          130             125               388               396
amortization
Restructuring            3             9               56              55          
charges
                                                                            
Operating income         281           265             672             534         
                                                                            
Interest income           1               2                 3                 5
Interest expense          (106        )   (114        )     (319        )     (368        )
Loss on derivative        —               —                 —                 (1          )
instruments
Foreign currency
exchange                  1               (4          )     (12         )     (7          )
transaction
gains/(losses), net
Other
(expense)/income,        (1          )  —               3               (221        )
net
                                                                            
Income/(loss) from
continuing
operations before
income taxes and          176             149               347               (58         )
equity in net
income of
affiliates
(Provision)/benefit       (69         )   (44         )     (114        )     51
for income taxes
Equity in net
income of                (1          )  (2          )    1               (1          )
affiliates
                                                                            
Income/(loss) from
continuing                106             103               234               (8          )
operations
Loss from
discontinued             —             —               —               (1          )
operations, net of
tax
                                                                            
Net income/(loss)         106             103               234               (9          )
Net income
attributable to          1             1               —               2           
noncontrolling
interests
                                                                            
Net income/(loss)
attributable to         $ 105          $ 102            $ 234            $ (11         )
Nielsen
stockholders
                                                                            
Net income/(loss)
per share of common
stock, basic
Income/(loss) from
continuing              $ 0.29          $ 0.28            $ 0.65            $ (0.03       )
operations
Net income/(loss)
attributable to         $ 0.29          $ 0.28            $ 0.65            $ (0.03       )
Nielsen
stockholders
Net income/(loss)
per share of common
stock, diluted
Income/(loss) from
continuing              $ 0.29          $ 0.28            $ 0.64            $ (0.03       )
operations
Net income/(loss)
attributable to         $ 0.29          $ 0.28            $ 0.64            $ (0.03       )
Nielsen
stockholders
                                                                            
Weighted-average
shares of common          362,016,373     359,381,233       361,477,554       349,910,371
stock outstanding,
basic
Dilutive shares of        4,205,147       5,090,571         4,511,519         —
common stock
Weighted-average
shares of common         366,221,520   364,471,804     365,989,073     349,910,371 
stock outstanding,
diluted
                                                                                          

Certain Non-GAAP Measures

We use the non-GAAP financial measures discussed below to evaluate the results
of our operations. We believe that the presentation of these non-GAAP measures
provides useful information to investors regarding financial and business
trends related to our results of operations and that when this non-GAAP
financial information is viewed with our GAAP financial information, investors
are provided with a more meaningful understanding of our ongoing operating
performance. None of the non-GAAP measures presented should be considered as
an alternative to net income or loss, operating income or loss, cash flows
from operating activities, total indebtedness or any other performance
measures of operating performance, liquidity or indebtedness derived in
accordance with GAAP. These non-GAAP measures have important limitations as
analytical tools and should not be considered in isolation or as substitutes
for an analysis of our results as reported under GAAP. Our use of these terms
may vary from the use of similarly-titled measures by others in our industry
due to the potential inconsistencies in the method of calculation and
differences due to items subject to interpretation.

Constant Currency Presentation

We evaluate our results of operations on both an as reported and a constant
currency basis. The constant currency presentation, which is a non-GAAP
measure, excludes the impact of fluctuations in foreign currency exchange
rates. We believe providing constant currency information provides valuable
supplemental information regarding our results of operations, consistent with
how we evaluate our performance. We calculate constant currency percentages by
converting our prior-period local currency financial results using the current
period exchange rates and comparing these adjusted amounts to our current
period reported results.

Adjusted EBITDA and Adjusted Net Income

We define Adjusted EBITDA as net income or loss from our consolidated
statements of operations before interest income and expense, income taxes,
depreciation and amortization, restructuring charges, goodwill and intangible
asset impairment charges, stock compensation expense and other non-operating
items from our consolidated statements of operations as well as certain other
items considered unusual or non-recurring in nature. We use Adjusted EBITDA to
measure our performance from period to period both at the consolidated level
as well as within our operating segments, to evaluate and fund incentive
compensation programs and to compare our results to those of our competitors.

We define Adjusted Net Income as net income or loss from our consolidated
statements of operations before income taxes, depreciation and amortization
associated with acquired tangible and intangible assets, restructuring
charges, goodwill and intangible asset impairment charges, other non-operating
items from our consolidated statements of operations and certain other items
considered unusual or non-recurring in nature, reduced by cash paid for income
taxes. Also excluded from Adjusted Net Income is interest expense attributable
to the mandatory convertible subordinated bonds due 2013. Adjusted Net Income
per share of common stock presented on a diluted basis includes potential
common shares associated with stock-based compensation plans that may have
been considered anti-dilutive in accordance with GAAP. The amount also
includes the weighted-average amount of shares of common stock convertible
associated with the mandatory convertible bonds based upon the average price
of our common stock during the period.

Adjusted Net Income and Adjusted Net Income per share of common stock are not
presentations made in accordance with GAAP.

The below table presents a reconciliation from net income/(loss) to Adjusted
EBITDA and Adjusted Net Income and a reconciliation from weighted-average
shares outstanding on a GAAP basis to diluted shares outstanding for the three
and nine months ended September 30, 2012 and 2011, respectively:

                                                                       
                                                                            
                        Three Months Ended                Nine Months Ended

                        September 30,                     September 30,

                        (Unaudited)                       (Unaudited)
(IN MILLIONS EXCEPT
SHARE AND PER SHARE   2012           2011              2012              2011
DATA)
Net income/(loss)       $ 106           $ 103             $ 234             $ (9          )
Loss from
discontinued              —               —                 —                 1
operations, net of
tax
Interest expense,         105             112               316               363
net
Provision/(benefit)       69              44                114               (51         )
for income taxes
Depreciation and         130           125             388             396         
amortization
                                                                            
EBITDA                    410             384               1,052             700
Equity in net
loss/(income) of          1               2                 (1          )     1
affiliates
Other non-operating       —               4                 9                 229
expense, net
Restructuring             3               9                 56                55
charges
Stock-based
compensation              10              8                 24                18
expense
Other items^(a)          —             1               5               111         
                                                                            
Adjusted EBITDA           424             408               1,145             1,114
Interest expense,         (105        )   (112        )     (316        )     (363        )
net
Depreciation and          (130        )   (125        )     (388        )     (396        )
amortization
Depreciation and
amortization
associated with           41              41                123               140
acquisition-related
tangible and
intangible assets
Cash paid for             (26         )   (29         )     (88         )     (92         )
income taxes
Stock-based
compensation              (10         )   (8          )     (24         )     (18         )
expense
Interest expense
attributable to          6             6               18              15          
mandatory
convertible bonds
                                                                            
Adjusted net income     $ 200          $ 181            $ 470            $ 400         
                                                                            
Adjusted net income
per share of common     $ 0.53         $ 0.48           $ 1.25           $ 1.10        
stock, diluted
                                                                            
Weighted-average
shares of common          362,016,373     359,381,233       361,477,554       349,910,371
stock outstanding,
basic
Dilutive shares of
common stock from         4,205,147       5,090,571         4,511,519         5,020,344
stock compensation
plans
Shares of common
stock convertible
associated with the      10,416,700    10,416,700      10,416,700      9,233,851   
mandatory
convertible bonds
                                                                            
Weighted-average
shares of common         376,638,220   374,888,504     376,405,773     364,164,566 
stock outstanding,
diluted
                                                                                          

      Other items primarily consist of Sponsor Advisory Fees (including
(a)  termination payments of $102 million for the nine months ended September
      30, 2011), costs related to public offerings and other
      transaction-related costs.
      

Net Debt and Net Debt Leverage Ratio

The net debt leverage ratio is defined as net debt (gross debt less cash and
cash equivalents) as of the balance sheet date divided by Adjusted EBITDA for
the twelve months then ended. Net debt and the net debt leverage ratio are
commonly used metrics to evaluate and compare leverage between companies and
are not presentations made in accordance with GAAP. The calculation of net
debt and the net debt leverage ratio as of September 30, 2012 is as follows:


(IN MILLIONS)
Total indebtedness as of September 30, 2012                         $ 6,680
Less: mandatory convertible subordinated bonds due 2013               288
                                                                     
Gross debt as of September 30, 2012                                    6,392
Less: cash and cash equivalents as of September 30, 2012              325
                                                                     
Net debt as of September 30, 2012                                    $ 6,067
                                                                     
Adjusted EBITDA for the year ended December 31, 2011                 $ 1,546
Less: Adjusted EBITDA for the nine months ended September 30, 2011     1,114
Add: Adjusted EBITDA for the nine months ended September 30, 2012     1,145
                                                                     
Adjusted EBITDA for the twelve months ended September 30, 2012       $ 1,577
Net debt leverage ratio as of September 30, 2012                     3.8x
                                                                     

Contact:

Nielsen Holdings N.V.
Investor Relations:
Liz Zale, +1-646-654-4593
or
Media Relations:
Kristie Bouryal, +1-646-654-5577
 
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