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8-K - FORM 8-K - Nielsen CO B.V.d247201d8k.htm

Exhibit 99.1

LOGO

News Release

Investor Relations: Liz Zale, +1 646 654 4593

Media Relations: Kristie Bouryal, +1 646 654 5577

NIELSEN REPORTS THIRD QUARTER 2011 RESULTS

 

   

Revenues for the quarter grew 10% to $1,413 million, up 6% in constant currency

 

   

Adjusted EBITDA for the quarter grew 10% to $408 million, up 7% in constant currency

 

   

Adjusted Net Income for the quarter increased to $181 million from $83 million

New York, USA – October 27, 2011 – Nielsen Holdings N.V. (NYSE: NLSN), a leading global provider of insights and analytics into what consumers buy and watch, today announced financial results for the third quarter ended September 30, 2011.

“Nielsen’s third quarter results reflect solid revenue growth and operating performance. We continue to execute a balanced approach to strategic investment and commitment to de-leveraging.” said David Calhoun, Chief Executive Officer of Nielsen.

Third Quarter 2011 Operating Results

Revenues for the third quarter increased 10% to $1,413 million, or 6% on a constant currency basis compared to the third quarter of 2010. Growth was driven by a 12% increase within our Buy segment (7% on a constant currency basis), a 6% increase within our Watch segment (4% on a constant currency basis) and a 2% increase within our Expositions segment.

Adjusted EBITDA for the third quarter increased 10% to $408 million, or 7% on a constant currency basis compared to the third quarter of 2010. Net income for the third quarter was $103 million compared to $11 million of net income in the third quarter of 2010. Adjusted Net Income for the third quarter increased to $181 million compared to $83 million in the third quarter of 2010.

Nine Months Ended September 2011 Operating Results

Revenues for the first nine months of 2011 increased 9% to $4,111 million, or 6% on a constant currency basis compared to the same period in 2010. Growth was driven by a 12% increase within our Buy segment (7% on a constant currency basis), a 5% increase within our Watch segment (3% on a constant currency basis) and a 5% increase in our Expositions segment.

Adjusted EBITDA for the first nine months of 2011 increased 10% to $1,114 million, or 7% on a constant currency basis compared to the same period in 2010. Net loss for the first nine months of 2011 was $9 million compared to $128 million of net income for the same period in 2010. The 2011 results included charges associated with the IPO of $206 million

 

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(net of tax of $127 million). Adjusted Net Income for the first nine months of 2011 increased to $400 million compared to $167 million for the same period in 2010.

Financial Position

As of September 30, 2011, cash balances were $404 million and gross debt was $6,723 million, excluding the $288 million mandatory convertible subordinated bonds due 2013. Net debt at the end of the third quarter was $6,319 million and our net debt leverage ratio was 4.2x. In the first nine months of 2011, we voluntarily repaid $125 million of our senior secured term loans due 2013, including $105 million in the third quarter. Capital expenditures were $213 million for the first nine months of 2011, compared with $226 million for the same period in 2010.

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 27, 2011. The call can be accessed live by webcast at http://ir.nielsen.com or by dialing 1-800-884-5695. Callers outside the U.S. and Canada can dial +1-617-786-2960. The passcode for the call is “Nielsen”. An archive will be available on the website after the call. A presentation will be posted on the Investor Relations website that provides summary information for 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.

 

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Results of Operations—(Three and Nine Months Ended September 30, 2011 and 2010)

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

 

    

Three Months Ended

September 30,

   

Nine Months Ended

September 30,

 

(IN MILLIONS EXCEPT SHARE AND PER SHARE DATA)

   2011     2010     2011     2010  

Revenues

   $ 1,413      $ 1,289      $ 4,111      $ 3,755   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues

     554        521        1,673        1,569   

Selling, general and administrative expenses

     460        414        1,453        1,219   

Depreciation and amortization

     125        142        396        419   

Restructuring charges

     9        11        55        33   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     265        201        534        515   
  

 

 

   

 

 

   

 

 

   

 

 

 

Interest income

     2        1        5        3   

Interest expense

     (114     (169     (368     (491

Loss on derivative instruments

     —          (5     (1     (17

Foreign currency exchange transaction (losses)/gains, net

     (4     (5     (7     141   

Other (expense)/income, net

     —          —          (221     9   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income/(loss) from continuing operations before income taxes and equity in net (loss)/income of affiliates

     149        23        (58     160   

(Provision)/benefit for income taxes

     (44     (2     51        (14

Equity in net (loss)/income of affiliates

     (2     1        (1     1   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income/(loss) from continuing operations

     103        22        (8     147   

Loss from discontinued operations, net of tax

     —          (11     (1     (19
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income/(loss)

     103        11        (9     128   

Net income attributable to noncontrolling interests

     1        —          2        1   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income/(loss) attributable to Nielsen stockholders

   $ 102      $ 11      $ (11   $ 127   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income/(loss) per share of common stock, basic

        

Income/(loss) from continuing operations

   $ 0.28      $ 0.08      $ (0.03   $ 0.53   

Loss from discontinued operations, net of tax

     —          (0.04     —          (0.07

Net income/(loss) attributable to Nielsen stockholders

   $ 0.28      $ 0.04      $ (0.03   $ 0.46   

Net income/(loss) per share of common stock, diluted

        

Income/(loss) from continuing operations

   $ 0.28      $ 0.08      $ (0.03   $ 0.52   

Loss from discontinued operations, net of tax

     —          (0.04     —          (0.07

Net income/(loss) attributable to Nielsen stockholders

   $ 0.28      $ 0.04      $ (0.03   $ 0.45   

Weighted-average shares of common stock outstanding, basic

     359,381,233        276,651,344        349,910,371        276,483,502   

Dilutive shares of common stock from stock compensation plans

     5,090,571        3,525,480        —          2,926,670   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average shares of common stock outstanding, diluted

     364,471,804        280,176,824        349,910,371        279,410,172   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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Certain Non-GAAP Measures

We consistently use the below non-GAAP financial measures 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.

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. Adjusted EBITDA is not a presentation made in accordance with GAAP, and our use of the term Adjusted EBITDA 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. We use Adjusted EBITDA to consistently 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.

 

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Adjusted net income and Adjusted net income per share of common stock are not presentations made in accordance with GAAP, and 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.

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 dilutive shares outstanding for the three and nine months ended September 30, 2011 and 2010, respectively:

 

    

Three Months Ended

September 30,

(Unaudited)

   

Nine Months Ended

September 30,

(Unaudited)

 

(IN MILLIONS EXCEPT SHARE AND PER SHARE DATA)

   2011     2010     2011     2010  

Net income/(loss)

   $ 103      $ 11      $ (9   $ 128   

Loss from discontinued operations, net of tax

     —          11        1        19   

Interest expense, net

     112        168        363        488   

Provision/(benefit) for income taxes

     44        2        (51     14   

Depreciation and amortization

     125        142        396        419   
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     384        334        700        1,068   

Equity in net loss/(income) of affiliates

     2        (1     1        (1

Other non-operating expense/(income), net

     4        10        229        (133

Restructuring charges

     9        11        55        33   

Stock-based compensation expense

     8        4        18        13   

Other items(a)

     1        13        111        29   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     408        371        1,114        1,009   

Interest expense, net

     (112     (168     (363     (488

Depreciation and amortization

     (125     (142     (396     (419

Depreciation and amortization associated with acquisition-related tangible and intangible assets

     41        51        140        167   

Cash paid for income taxes

     (29     (25     (92     (89

Stock-based compensation expense

     (8     (4     (18     (13

Interest expense attributable to mandatory convertible bonds

     6        —          15        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net income

   $ 181      $ 83      $ 400      $ 167   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net income per share of common stock, diluted

   $ 0.48      $ 0.30      $ 1.10      $ 0.60   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average shares of common stock outstanding, basic

     359,381,233        276,651,344        349,910,371        276,483,502   

Dilutive shares of common stock from stock compensation plans

     5,090,571        3,525,480        5,020,344        2,926,670   

Shares of common stock convertible associated with the mandatory convertible bonds

     10,416,700        —          9,233,851        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average shares of common stock outstanding, diluted

     374,888,504        280,176,824        364,164,566        279,410,172   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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

 

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Net Debt and Net Debt Leverage Ratio

The net debt leverage ratio is defined as net debt 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. 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. The calculation of net debt and the net debt leverage ratio as of September 30, 2011 is as follows:

 

(IN MILLIONS)  

Total indebtedness as of September 30, 2011

   $ 7,011   

Less: mandatory convertible subordinated bonds due 2013

     288   

Gross debt as of September 30, 2011

     6,723   

Less: cash and cash equivalents as of September 30, 2011

     404   
  

 

 

 

Net debt as of September 30, 2011

   $ 6,319   

Adjusted EBITDA for the year ended December 31, 2010

   $ 1,411   

Less: adjusted EBITDA for the nine months ended September 30, 2010

     1,009   

Add: adjusted EBITDA for the nine months ended September 30, 2011

     1,114   
  

 

 

 

Adjusted EBITDA for the twelve months ended September 30, 2011

   $ 1,516   

Net debt leverage ratio

     4.2x   

 

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