Nielsen Reports First Quarter 2013 Results *Revenues for the quarter increased 3% to $1,376 million, up 4% in constant currency *Adjusted EBITDA for the quarter grew 5% to $349 million, up 6% in constant currency *Net income for the quarter grew 36% to $34 million, up 53% in constant currency *Adjusted Net Income for the quarter grew 26% to $145 million, up 29% in constant currency Business Wire NEW YORK -- April 25, 2013 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 quarter ended March 31, 2013. “Nielsen delivered solid revenue growth and strong operating performance in the first quarter,” said David Calhoun, Chief Executive Officer of Nielsen. “Our results reflect our continued ability to create value for our clients and we remain well-positioned to achieve our 2013 expectations.” First Quarter 2013 Operating Results Revenues for the first quarter increased 3% to $1,376million, or 4% on a constant currency basis compared to the first quarter of 2012. Our revenue performance was driven by a 3% increase within our Buy segment (5% increase on a constant currency basis), a 4% increase within our Watch segment (4% on a constant currency basis) and a 7% decrease in our Expositions segment (7% 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 revenues declined due to lower discretionary spending by clients. Adjusted EBITDA for the first quarter increased 5% to $349 million, or 6% on a constant currency basis compared to the first quarter of 2012. We continue to see the benefits of productivity efforts that enable our reinvestment in growth initiatives. Net income for the first quarter increased 36% to $34 million, or 53% on a constant currency basis compared to the first quarter of 2012. Net income per share, on a diluted basis, was $0.09 compared to $0.07 in the first quarter of 2012. Adjusted Net Income for the first quarter increased 26% to $145 million, or 29% on a constant currency basis compared to the first quarter of 2012. Adjusted Net Income per share was $0.38 compared to $0.31 in the first quarter of 2012. Financial Position As of March 31, 2013, cash balances were $233 million and gross debt was $6,320 million. Net debt (gross debt less cash and cash equivalents) was $6,087 million and our net debt leverage ratio was 3.76x at the end of the quarter. On March 20, 2013, our first quarterly dividend payment of $0.16 per share was made to shareholders of record as of March 6, 2013. Capital expenditures were $70 million for the first quarter of 2013 as compared to $82 million in the first quarter of 2012. In February 2013, we amended our senior secured credit agreement to provide for a new class of term loans with an aggregate principal amount of $2.9 billion maturing May 1, 2016. The proceeds from this term loan were used to repay or replace in full a like amount of our existing ClassA Term Loans maturing August9, 2013, Class B Term Loans maturing May1, 2016 and Class C Term Loans maturing May1, 2016. As of March 31, 2013, approximately 90% of our debt portfolio had a maturity of 2016 or beyond. Additionally, in February 2013, a secondary public offering of 40.8 million shares of our common stock was completed on behalf of certain selling stockholders, primarily comprised of the Sponsor group. All proceeds were received by the selling stockholders and the offering did not have a significant impact on our operating results or financial position. Other Matters On April 16, 2013, Arbitron’s shareholders voted to approve our proposed acquisition of Arbitron. The transaction remains subject to customary closing conditions, including regulatory review. Conference Call and Webcast Nielsen will hold a conference call to discuss first quarter results at 8:30 a.m. U.S. Eastern Time (ET) on April 25, 2013. The audio and slides for the call can be accessed live by webcast at www.nielsen.com/investors or by dialing +1-888-317-6016. Callers outside the U.S. can dial +1-412-317-6016. The passcode for the call is “Nielsen.” An audio replay and transcript 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, the acquisition of Arbitron, 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. From time to time, Nielsen may use its website and social media outlets as channels of distribution of material company information. Financial and other material information regarding the company is routinely posted and accessible on our website at http://www.nielsen.com/investors, our Twitter account at http://twitter.com/NielsenIR and our iPad App, NielsenIR, available on the App Store. Results of Operations—(Three Months Ended March 31, 2013 and 2012) The following table sets forth, for the periods indicated, the amounts included in our Condensed Consolidated Statements of Operations: Three Months Ended March 31 (Unaudited) (IN MILLIONS EXCEPT SHARE AND PER SHARE 2013 2012 DATA) Revenues $ 1,376 $ 1,334 Cost of revenues 593 564 Selling, general and administrative 451 447 expenses Depreciation and amortization 126 129 Restructuring charges 35 37 Operating income 171 157 Interest income 1 1 Interest expense (83 ) (106 ) Foreign currency exchange transaction (12 ) (9 ) losses, net Other expense, net (12 ) (6 ) Income from continuing operations before income taxes and equity in net income of 65 37 affiliates Provision for income taxes 27 8 Equity in net loss of affiliates 1 2 Income from continuing operations 37 27 Loss from discontinued operations, net 3 2 of tax Net income 34 25 Net loss attributable to noncontrolling 1 — interests Net income attributable to Nielsen $ 35 $ 25 stockholders Net income per share of common stock, basic and diluted Income from continuing operations $ 0.10 $ 0.07 Discontinued operations, net of tax $ (0.01 ) $ (0.00 ) Net income attributable to Nielsen $ 0.09 $ 0.07 stockholders Weighted-average shares of common stock 370,583,217 360,881,693 outstanding, basic^(a) Dilutive shares of common stock 4,973,804 4,839,365 Weighted-average shares of common stock 375,557,021 365,721,058 outstanding, diluted On February 1, 2013, the mandatory convertible subordinated bonds were (a) converted into 10,416,700 shares of Nielsen’s common stock at a conversion rate of 1.8116 shares per $50.00 principal amount of the bonds. 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 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-based 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 converted on February 1, 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 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 months ended March 31, 2013 and 2012, respectively: Three Months Ended March 31, (Unaudited) (IN MILLIONS EXCEPT SHARE AND PER SHARE 2013 2012 DATA) Net income $ 34 $ 25 Loss from discontinued operations, net of 3 2 tax Interest expense, net 82 105 Provision for income taxes 27 8 Depreciation and amortization 126 129 EBITDA 272 269 Equity in net loss of affiliates 1 2 Other non-operating expense, net 24 15 Restructuring charges 35 37 Stock-based compensation expense 10 8 Other items 7 2 Adjusted EBITDA 349 333 Interest expense, net (82 ) (105 ) Depreciation and amortization (126 ) (129 ) Depreciation and amortization associated with acquisition-related tangible and 41 41 intangible assets Cash paid for income taxes (29 ) (23 ) Stock-based compensation expense (10 ) (8 ) Interest expense attributable to mandatory 2 6 convertible bonds Adjusted net income $ 145 $ 115 Adjusted net income per share of common $ 0.38 $ 0.31 stock, diluted Weighted-average shares of common stock 370,583,217 360,881,693 outstanding, basic Dilutive shares of common stock from stock 4,973,804 4,839,365 compensation plans Shares of common stock convertible associated with the mandatory convertible 3,587,974 10,416,700 bonds Weighted-average shares of common stock 379,144,995 376,137,758 outstanding, diluted 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 March 31, 2013 is as follows: (IN MILLIONS) Gross debt as of March 31, 2013 $ 6,320 Less: cash and cash equivalents as of March 31, 2013 233 Net debt as of March 31, 2013 $ 6,087 Adjusted EBITDA for the year ended December 31, 2012 $ 1,605 Less: Adjusted EBITDA for the three months ended March 31, 2012 333 Add: Adjusted EBITDA for the three months ended March 31, 2013 349 Adjusted EBITDA for the twelve months ended March 31, 2013 $ 1,621 Net debt leverage ratio as of March 31, 2013 3.76x Unaudited Supplemental Information In March 2013, we completed the exit and shut down of one of our legacy online businesses, and recorded a net loss of $3 million associated with this divestiture. The condensed consolidated statements of operations reflect the operating results of this business as a discontinued operation. Note that the discontinued operations had no impact on our Buy or Expositions segments. Summarized results of operations for this discontinued operation for the three months ended March 31, 2013 are as follows: (IN MILLIONS) Revenues $ 3 Adjusted EBITDA (2) The below tables detail supplemental unaudited Total Nielsen and Watch segment revenues and non-GAAP business segment income, which have been adjusted to reflect the impact of the discontinued operations on our historical operating results, for each of the quarterly periods in the two years ended December31, 2012 and 2011. Total Revenues Watch Nielsen (IN MILLIONS) 2012 Three months ended March 31 $ 474 $ 1,334 Three months ended June 30 493 1,380 Three months ended September 30 499 1,418 Three months ended December 31 521 1,458 Total $ 1,987 $ 5,590 Total Revenues Watch Nielsen (INMILLIONS) 2011 Three months ended March 31 $ 462 $ 1,296 Three months ended June 30 481 1,390 Three months ended September 30 479 1,407 Three months ended December 31 497 1,414 Total $ 1,919 $ 5,507 Total Non-GAAP Business Segment Income Watch Nielsen (IN MILLIONS) 2012 Three months ended March 31 $ 186 $ 333 Three months ended June 30 213 390 Three months ended September 30 213 425 Three months ended December 31 234 457 Total $ 846 $ 1,605 2011 Three months ended March 31 $ 176 $ 319 Three months ended June 30 199 386 Three months ended September 30 195 408 Three months ended December 31 208 430 Total $ 778 $ 1,543 Contact: Nielsen Holdings N.V. Investor Relations: Liz Zale, +1 646-654-4593 or Media Relations: Kristie Bouryal, +1 646-654-5577
Nielsen Reports First Quarter 2013 Results
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