Nielsen Reports Fourth Quarter and Full Year 2012 Results and Announces Dividend

Mon Feb 11, 2013 4:34pm EST

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* Revenues for the year increased 1% to $5,612 million, up 4% in constant
currency
* Adjusted EBITDA for the year increased 4% to $1,602 million, up 6% in constant
currency
* Net income for the year increased to $273 million from $86 million in 2011
* Adjusted Net Income for the year increased to $704 million from $590 million
in 2011
* Quarterly dividend policy announced; cash dividend payment of $0.16 declared
for first quarter 2013

NEW YORK--(Business Wire)--
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 fourth quarter and year ended December 31, 2012. 

"Nielsen`s fourth quarter results showed strong growth in recurring revenue and
continued margin expansion," said David Calhoun, Chief Executive Officer of
Nielsen. "Our full year performance demonstrated the overall resilience of our
business despite a tougher environment for corporate spending. We remain focused
on delivering value to clients, investing to grow our business and expanding our
capabilities. We are pleased to deliver enhanced shareholder value as we begin
paying a quarterly dividend. " 

Fourth Quarter 2012 Operating Results

Revenues for the fourth quarter increased 3% to $1,464 million (4% on a constant
currency basis) compared to the fourth quarter of 2011. Our revenue performance
was driven by a 3% increase within our Buy segment (3% on a constant currency
basis), a 5% increase within our Watch segment (5% on a constant currency basis)
and a 19% decrease in our Expositions segment (19% 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 globally due to lower
discretionary spending by clients. Our Expositions segment declined primarily
due to the timing of trade shows. 

Adjusted EBITDA for the fourth quarter increased 6% to $457 million (6% on a
constant currency basis), compared to the fourth quarter of 2011. We continue to
see the benefits of productivity efforts while strategically reinvesting in
growth initiatives. 

Net income for the fourth quarter decreased to $39 million compared to $95
million in the fourth quarter of 2011. The 2012 results included charges of $70
million, net of tax, related to the redemption of our 11.50% Senior Notes due
2016 and the prepayment of the 8.50% Senior Secured Term Loan due 2017. Net
income per share, on a diluted basis, was $0.11 compared to $0.26 in the fourth
quarter of 2011. 

Adjusted Net Income for the fourth quarter increased to $234 million compared to
$190 million in the fourth quarter of 2011. Adjusted Net Income per share was
$0.62 compared to $0.51 in the fourth quarter of 2011. 

Year Ended December 31, 2012 Operating Results

Revenues for full year 2012 increased 1% to $5,612 million, or 4% on a constant
currency basis compared to 2011. Revenues within our Buy segment were flat (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 2% (2% on a constant currency basis). 

Adjusted EBITDA for full year 2012 increased 4% to $1,602 million, or 6% on a
constant currency basis compared to 2011. 

Net income for full year 2012 was $273 million compared to $86 million in 2011.
The 2012 results included charges of $70 million, net of tax, related to the
redemption of our 11.50% Senior Notes due 2016 and the prepayment of the 8.50%
Senior Secured Term Loan due 2017. The 2011 results included charges of $206
million, net of tax, related to the redemption and prepayment of debt with IPO
proceeds. Net income per share, on a diluted basis, was $0.75 compared to $0.24
in 2011. 

Adjusted Net Income for full year 2012 increased to $704 million compared to
$590 million in 2011. Adjusted Net Income per share was $1.87 compared to $1.61
in 2011. 

Financial Position

As of December 31, 2012, cash balances were $288 million and gross debt was
$6,296 million, excluding the $288 million mandatory convertible subordinated
bonds due in February 2013. Net debt (gross debt less cash and cash equivalents)
was $6,008 million and our net debt leverage ratio was 3.75x at the end of 2012.
Capital expenditures were $358 million for full year 2012 as compared to $367
million in 2011. Cash paid for interest, net of amounts capitalized, was $384
million for full year 2012 as compared to $446 million in 2011. 

Dividend Policy

On January 31, 2013, our board of directors adopted a cash dividend policy with
the present intent to pay quarterly cash dividends on our outstanding common
stock. The board also declared the first quarterly cash dividend of $0.16 per
share, to be paid on March 20, 2013 to holders of record of our common stock on
March 6, 2013. Our dividend policy and the payment of future cash dividends are
subject to the discretion of the board of directors. 

Other Matters

On December 17, 2012, we signed a definitive agreement to acquire Arbitron Inc.
(NYSE: ARB), an international media and marketing research firm, for $48 per
share in cash. The transaction has been approved by the board of directors of
both companies and is subject to customary closing conditions, including
regulatory review. 

On February 1, 2013, the mandatory convertible subordinated bonds were 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. 

Conference Call and Webcast

Nielsen will hold a conference call to discuss fourth quarter and full year
results at 5:00 pm U.S. Eastern Time (ET) on February 11, 2013. The audio and
slides for the call can be accessed live by webcast at http://ir.nielsen.com 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 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, 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. 

Results of Operations:

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

                                                                                                                                                                                                             
                                                                                                     Three Months Ended                                   Twelve Months Ended                                
                                                                                                     December 31,                                         December 31,                                       
                                                                                                     (Unaudited)                                          (Unaudited)                                        
 (IN MILLIONS EXCEPT SHARE AND PER SHARE DATA)                                                            2012                        2011                     2012                        2011              
 Revenues                                                                                            $    1,464                  $    1,421               $    5,612                  $    5,532             
                                                                                                                                                                                                             
 Cost of revenues                                                                                         584                         564                      2,278                       2,237             
 Selling, general and administrative expenses                                                             440                         435                      1,778                       1,888             
 Depreciation and amortization                                                                            132                         133                      520                         529               
 Restructuring charges                                                                                    28                          29                       84                          84                
                                                                                                                                                                                                             
 Operating income                                                                                         280                         260                      952                         794               
                                                                                                                                                                                                             
 Interest income                                                                                          1                           1                        4                           6                 
 Interest expense                                                                                         (94          )              (109         )           (413         )              (477         )    
 Loss on derivative instruments                                                                           -                           -                        -                           (1           )    
 Foreign currency exchange transaction losses, net                                                        (5           )              (2           )           (17          )              (9           )    
 Other (expense)/income, net                                                                              (121         )              12                       (118         )              (209         )    
                                                                                                                                                                                                             
 Income from continuing operations before income taxes and equity in net income of affiliates             61                          162                      408                         104               
 Provision for income taxes                                                                               (26          )              (73          )           (140         )              (22          )    
 Equity in net income of affiliates                                                                       4                           4                        5                           3                 
                                                                                                                                                                                                             
 Income from continuing operations                                                                        39                          93                       273                         85                
 Income from discontinued operations, net of tax                                                          -                           2                        -                           1                 
                                                                                                                                                                                                             
 Net income                                                                                               39                          95                       273                         86                
 Net income attributable to noncontrolling interests                                                      -                           -                        -                           2                 
                                                                                                                                                                                                             
 Net income attributable to Nielsen stockholders                                                     $    39                     $    95                  $    273                    $    84                
                                                                                                                                                                                                             
 Net income per share of common stock, basic                                                                                                                                                                 
 Income from continuing operations                                                                   $    0.11                   $    0.26                $    0.75                   $    0.24              
 Income from discontinued operations, net of tax                                                          -                           -                        -                           -                 
 Net income attributable to Nielsen stockholders                                                     $    0.11                   $    0.26                $    0.75                   $    0.24              
 Net income per share of common stock, diluted                                                                                                                                                               
 Income from continuing operations                                                                   $    0.11                   $    0.26                $    0.75                   $    0.24              
 Income from discontinued operations, net of tax                                                          -                           -                        -                           -                 
 Net income attributable to Nielsen stockholders                                                     $    0.11                   $    0.26                $    0.75                   $    0.24              
                                                                                                                                                                                                             
 Weighted-average shares of common stock outstanding, basic                                               362,712,063                 360,062,174              361,787,868                 352,469,181       
 Dilutive shares of common stock                                                                          4,261,882                   5,071,820                4,523,116                   5,032,773         
 Weighted-average shares of common stock outstanding, diluted                                             366,973,945                 365,133,994              366,310,984                 357,501,954       
                                                                                                                                                                                                             


Condensed Consolidated Balance Sheets:

The following table sets forth, for the periods indicated, the amounts included
in our Condensed Consolidated Balance Sheets:

                                                                                                                              
                                                                                               December 31,                   
                                                                                               (Unaudited)                    
 (IN MILLIONS)                                                                                      2012              2011    
                                                                                                                              
 Assets:                                                                                                                      
 Current assets                                                                                                               
 Cash and cash equivalents                                                                     $    288          $    319     
 Trade receivables, net and other current assets                                                    1,388             1,346   
                                                                                                                              
 Total current assets                                                                               1,676             1,665   
 Non-current assets                                                                                                           
 Property, plant and equipment, net                                                                 560               609     
 Goodwill and other intangible assets, net                                                          11,907            11,716  
 Other non-current assets                                                                           448               514     
                                                                                                                              
 Total assets                                                                                  $    14,591       $    14,504  
                                                                                                                              
 Liabilities and equity:                                                                                                      
 Current liabilities                                                                                                          
 Accounts payable, deferred revenue and other current liabilities                              $    1,398        $    1,548   
 Current portion of long-term debt, capital lease obligations and short-term borrowings             355               144     
                                                                                                                              
 Total current liabilities                                                                          1,753             1,692   
 Non-current liabilities                                                                                                      
 Long-term debt and capital lease obligations                                                       6,229             6,619   
 Other non-current liabilities                                                                      1,625             1,552   
                                                                                                                              
 Total liabilities                                                                                  9,607             9,863   
                                                                                                                              
 Total equity                                                                                       4,984             4,641   
                                                                                                                              
 Total liabilities and equity                                                                  $    14,591       $    14,504  
                                                                                                                              


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-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 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 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
twelve months ended December 31, 2012 and 2011, respectively:

                                                                                                                                                                                                                 
                                                                                                         Three Months Ended                                   Twelve Months Ended                                
                                                                                                         December 31,                                         December 31,                                       
                                                                                                         (Unaudited)                                          (Unaudited)                                        
 (IN MILLIONS EXCEPT SHARE AND PER SHARE DATA)                                                                2012                        2011                     2012                        2011              
 Net income                                                                                              $    39                     $    95                  $    273                    $    86                
 Income from discontinued operations, net of tax                                                              -                           (2           )           -                           (1           )    
 Interest expense, net                                                                                        93                          108                      409                         471               
 Provision for income taxes                                                                                   26                          73                       140                         22                
 Depreciation and amortization                                                                                132                         133                      520                         529               
                                                                                                                                                                                                                 
 EBITDA                                                                                                       290                         407                      1,342                       1,107             
 Equity in net income of affiliates                                                                           (4           )              (4           )           (5           )              (3           )    
 Other non-operating expense, net                                                                             126                         (10          )           135                         219               
 Restructuring charges                                                                                        28                          29                       84                          84                
 Stock-based compensation expense                                                                             10                          9                        34                          27                
 Other items(a)                                                                                               7                           1                        12                          112               
                                                                                                                                                                                                                 
 Adjusted EBITDA                                                                                              457                         432                      1,602                       1,546             
 Interest expense, net                                                                                        (93          )              (108         )           (409         )              (471         )    
 Depreciation and amortization                                                                                (132         )              (133         )           (520         )              (529         )    
 Depreciation and amortization associated with acquisition-related tangible and intangible assets             43                          42                       166                         182               
 Cash paid for income taxes                                                                                   (36          )              (40          )           (124         )              (132         )    
 Stock-based compensation expense                                                                             (10          )              (9           )           (34          )              (27          )    
 Interest expense attributable to mandatory convertible bonds                                                 5                           6                        23                          21                
                                                                                                                                                                                                                 
 Adjusted net income                                                                                     $    234                    $    190                 $    704                    $    590               
                                                                                                                                                                                                                 
 Adjusted net income per share of common stock, diluted                                                  $    0.62                   $    0.51                $    1.87                   $    1.61              
                                                                                                                                                                                                                 
 Weighted-average shares of common stock outstanding, basic                                                   362,712,063                 360,062,174              361,787,868                 352,469,181       
 Dilutive shares of common stock from stock compensation plans                                                4,261,882                   5,071,820                4,523,116                   5,032,773         
 Shares of common stock convertible associated with the mandatory convertible bonds                           10,416,700                  10,416,700               10,416,700                  9,531,994         
                                                                                                                                                                                                                 
 Weighted-average shares of common stock outstanding, diluted                                                 377,390,645                 375,550,694              376,727,684                 367,033,948       
                                                                                                                                                                                                                 


     (a)    For the three and twelve months ended December 31, 2012, other items consists primarily of deal related costs. For the three and twelve months ended December 31, 2011, other items consist of Sponsor Advisory Fees (including termination payments of $102 million for the twelve months ended December 31, 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 December 31, 2012 is as follows:

                                                                                              
             (IN MILLIONS)                                                                    
             Total indebtedness as of December 31, 2012                           $    6,584  
             Less: mandatory convertible subordinated bonds due 2013                   288    
                                                                                              
             Gross debt as of December 31, 2012                                        6,296  
             Less: cash and cash equivalents as of December 31, 2012                   288    
                                                                                              
             Net debt as of December 31, 2012                                     $    6,008  
                                                                                              
             Adjusted EBITDA for the twelve months ended December 31, 2012        $    1,602  
             Net debt leverage ratio as of December 31, 2012                      3.75x       


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

Copyright Business Wire 2013

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