4 q fy16 earnings webcast deck - final

NYSE: NLSN

THURSDAY FEBRUARY 9, 2017 8:00AM ET

4TH QUARTER AND FULL YEAR 2016 RESULTS

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2NLSN 4Q and FY 2016 Results

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS

The following discussion contains forward-looking statements, including those about Nielsen’s outlook and

prospects, that relate to the Private Securities Litigation Reform Act of 1995. Forward-looking statements

are those which are not historical facts. These and other statements that relate to future results and

events are based on Nielsen’s current expectations as of February 9, 2017.

Our actual results in future periods may differ materially from those currently expected because of a

number of risks and uncertainties. The risks and uncertainties that we believe are material are outlined in

our disclosure filings and materials, which you can find on http://ir.nielsen.com, such as our most recent

10-K, 10-Q and 8-K reports. Please consult these documents for a more complete understanding of these

risks and uncertainties. We disclaim any intention or obligation to update or revise any forward-looking

statements, whether as a result of new information, future events or otherwise, except as may be required

by law.

Our outlook is provided for the purpose of providing information about current expectations for 2017. This

information may not be appropriate for other purposes.

http://ir.nielsen.com/

MITCH BARNSCHIEF EXECUTIVE OFFICER

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FULL YEAR 2016 OVERVIEW

RESILIENT BUSINESS MODEL

• Financial highlights

- Revenue of $6.3 billion…up 4.1% constant currency

• Watch: up 6.3% constant currency• Buy: up 2.3% constant currency

- Adjusted EBITDA of $1.9 billion…up 5.2% constant currency

- Diluted net income per share of $1.39 vs. $1.54 a year ago…up 35.0% ex-items

- Record free cash flow of $941 million…up 16.5% vs. a year ago

• Executing on our balanced capital allocation framework

- Acquisitions remain integral, bolstering key parts of our strategy

- Returned $850 million back to shareholders in the form of dividends and buybacks

• Updating 2017 guidance

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GRACENOTE ACQUISITION

40+ Years in the Business

1,800 Employees

85 Territories with Data Coverage

3,000+ Customers Globally

GRACENOTE DATA STATISTICS

12M TV Shows & Movies

200M Tracks 4,500 Events, Leagues & Teams

75M Cars 20M Smart TVs

1B Devices 250M TV Households

35 Languages

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• 10% increase in Portable People Meter sample size (48 markets)

• Incorporating out-of-home viewing

• Set-top-box data to add stability and granularity to ratings

• “Digital in TV Ratings”: newly MRC accredited; to be included in C3/C7

• Total Content Ratings: limited commercial release on March 1st

• Digital Content Ratings: syndicated September 2016; continued adoption

• Subscription Video On-Demand: >20K episodes; improving data capture

• Digital Ad Ratings: growing client adoption and use for guarantees

• National TV: incorporating out-of-home viewing in April

• 2017 Upfronts: Total Audience and its many components to play a key role

WATCH: STRATEGIC INITIATIVES

• Nielsen Marketing Cloud: increasing the value of data and analytics

Total Audience Measurement

Marketing Effectiveness: Convergence of Watch and Buy

Audio

Local

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BUY: TWO-SPEED WORLD

• Linking measurement data with analytics, explanatory and predictive

• Addressing client needs of speed and efficiency

• Expanding to an additional 20-30 clients as the year unfolds; broader rollout in 2018

• Connected Partner Program growing, adding value to measurement data

Connected System: The Future of Buy

• Global footprint remains strategic advantage

• Balanced portfolio of global and local clients, broad-based growth

• Ongoing investments in measurement coverage and granularity

Emerging Markets: Compelling Story

Developed Markets: Challenging Growth Environment

• Measurement + everyday analytics remain mission critical for clients

• Renewal rates with large global clients 100%

• Clients reining in costs and reducing spend, our business not immune

• Covering 90% of US e-commerce sales of fast moving consumer goods

• Strategic agreement with JD.com in China

• Active in 11 markets, expanding to six more in 2017

E-Commerce: Building Out Coverage

JAMERE JACKSONCHIEF FINANCIAL OFFICER

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TOTAL NIELSEN RESULTS – FY 2016($ in millions, except per share amounts)

NON-GAAP RESULTSFY

2016FY

2015V%(b)

Total Revenue $6,309 $6,172 4.1%

Core Revenue $5,924 $5,749 5.2%

Adjusted EBITDA $1,938 $1,858 5.2%

Adjusted EBITDA margin % 30.7% 30.1% 31 bps

Free Cash Flow $941 $808 16.5%

(a) Growth as reported(b) Growth in constant currency, excluding Free Cash Flow(c) Calculated using weighted average shares outstanding of 362.2 million for FY 2016 and 371.0 million for FY 2015.

U.S. GAAP RESULTSFY

2016FY

2015V%(a)

Total Revenue $6,309 $6,172 2.2%

Net Income (NI) $502 $570 (11.9%)

Diluted NI per share(c) $1.39 $1.54 (9.7%)

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TOTAL NIELSEN RESULTS – 4Q 2016($ in millions, except per share amounts)

NON-GAAP RESULTS4Q

20164Q

2015V%(b)

Total Revenue $1,656 $1,624 3.4%

Core Revenue $1,550 $1,504 4.7%

Adjusted EBITDA $548 $531 3.8%

Adjusted EBITDA margin % 33.1% 32.7% 13 bps

Free Cash Flow $476 $306 55.6%

(a) Growth as reported(b) Growth in constant currency, excluding Free Cash Flow(c) Calculated using weighted average shares outstanding of 359.7 million for 4Q 2016 and 366.5 million for 4Q 2015.

U.S. GAAP RESULTS4Q

20164Q

2015V%(a)

Total Revenue $1,656 $1,624 2.0%

Net Income (NI) $159 $251 (36.7%)

Diluted NI per share(c) $0.44 $0.68 (35.3%)

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WATCH SEGMENT RESULTS ($ in millions, growth in constant currency)

REVENUE

PROFITABILITY

4Q DYNAMICS

Total Watch

Adjusted EBITDA

Margin

$788

$363

46.1%

4Q 16

$745

$343

46.0%

4Q 15

6.2%

6.8%

25 bps

V%

• Strong total revenue growth: +6.2% Audience Measurement (Video/Text): +9.0% Audio: (1.6%) Marketing Effectiveness: +9.2% Other Watch/Corporate: (2.9%)

• Growth initiatives delivering Digital Ad Ratings adoption Nielsen Marketing Cloud momentum Continued traction with Digital Content Ratings

• Continued margin expansion while investing

Core Watch $722 $679 7.1%

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BUY SEGMENT RESULTS ($ in millions, growth in constant currency)

REVENUE

PROFITABILITY

4Q DYNAMICS

Adjusted EBITDA

Margin

$193

22.2%

4Q 16

$195

22.2%

4Q 15

(1.0%)

(43 bps)

V%

Total Buy $868 $879 0.9% • Modest total revenue growth: +0.9% Developed: +0.4% Emerging: +7.2% Corporate: (24.5%)

• Emerging markets remain robust

• Portfolio pruning underway U.S. consumer segmentation U.S. custom survey research services

• Investing in the Connected System and future productivity

Core Buy $828 $825 2.6%

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FOREIGN CURRENCY IMPACT

(a) Projected impact assumes rates in effect at 2/8/17 remain in effect for the balance of 2017.

Note: We report on a constant currency basis to reflect operating performance

61%9%

3%3%3%

21%

USD EUR CAD GBP CNY Other

2016 CURRENCY PROFILE - REVENUEPROJECTED FX IMPACT(a):

REPORTED VS CONSTANT CURRENCY

(140)

(190)

(50)

(160)

(120)

30

(70)(60)(90)

20

(40) (40)

60

(10)

4Q16 FY16 1Q17E 2Q17E 3Q17E 4Q17E FY17E

Rev (bps) EBITDA (bps)

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2017 GUIDANCE(Revenue and adj. EBITDA margin growth in constant currency)

Total Revenue 5% - 6%

Total Revenue Core 6.5% - 7.5%

Total Revenue Core (ex Gracenote) 3% - 4%

Adj. EBITDA margin growth Flat

GAAP Net Income Per Share $1.40 - $1.46

Net Debt Leverage Ratio ~3.8x

Free Cash Flow ~$900M

Net book interest $365M - $375M

GAAP Tax Rate 38.0% - 38.5%

Restructuring $60M - $70M

Cash restructuring $100M - $110M

D&A $665M - $675M

Est. wtd. avg. diluted shares outstanding for FY 2017 ~359M

OTHER FINANCIAL METRICS

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&

APPENDIX

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CERTAIN NON-GAAP MEASURESOverview of Non-GAAP PresentationsWe use the non-GAAP financial measures discussed below to evaluate our results of operations, financial condition, liquidity and indebtedness. 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, cash flows and indebtedness and that when this non-GAAP financial information is viewed with our GAAP financial information, investors are provided with valuable supplemental information regarding our results of operations, thereby facilitating period-to-period comparisons of our business performance and is consistent with how management evaluates the company’s operating performance and liquidity. In addition, these non-GAAP measures address questions the Company routinely receives from analysts and investors and, in order to assure that all investors have access to similar data the Company has determined that it is appropriate to make this data available to all investors. 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 and financial condition, 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 PresentationWe 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, thereby facilitating period-to-period comparisons of our business performance and is consistent with how management evaluates the company’s 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. No adjustment has been made to foreign currency exchange transaction gains or losses in the calculation of constant currency net income.

Net Debt and Net Debt Leverage RatioThe 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.

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CERTAIN NON-GAAP MEASURES(continued)

Adjusted EBITDA

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, stock-based compensation expense and other non-operating items from our consolidated statements of operations as well as certain other items that arise outside the ordinary course of our continuing operations. 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.

Free Cash FlowWe define free cash flow as net cash provided by operating activities, plus contributions to the Nielsen Foundation, less capital expenditures, net. We believe providing free cash flow information provides valuable supplemental liquidity information regarding the cash flow that may be available for discretionary use by us in areas such as the distributions of dividends, repurchase of common stock, voluntary repayment of debt obligations or to fund our strategic initiatives, including acquisitions, if any. However, free cash flow does not represent residual cash flows entirely available for discretionary purposes; for example, the repayment of principal amounts borrowed is not deducted from free cash flow. Key limitations of the free cash flow measure include the assumptions that we will be able to refinance our existing debt when it matures and meet other cash flow obligations from financing activities, such as principal payments on debt. Free cash flow is not a presentation made in accordance with GAAP.

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ADJUSTED EBITDA RECONCILIATION($ in millions)

Quarter endedDecember 31,

Year ended December 31,

2016 2015 2016 2015Net income $ 159 $ 251 $ 502 $ 570

Interest expense, net 85 79 329 307

Provision for income taxes 101 177 309 383

Depreciation and amortization 153 142 603 574

EBITDA 498 649 1,743 1,834

Equity in net loss of affiliates - 2 - 3

Other non-operating income, net (4) (199) 3 (170)

Restructuring charges 32 8 105 51

Stock-based compensation expense 14 9 51 48

Other items(a) 8 62 36 92

Adjusted EBITDA $ 548 $ 531 $ 1,938 $ 1,858

(a) For the three and twelve months ended December 31, 2016 and 2015, other items primarily consists of business optimization costs.

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($ in millions) ADJUSTED EBITDA RECONCILIATION

Operating Income

RestructuringCharges

Depreciationand

Amortization

Stock-Based Compensation

ExpenseOther

Items(1)

Adjusted EBITDA

Buy $115 $19 $54 $4 $1 $193

Watch $251 $11 $98 $3 - $363

Corporate $(25) $2 $1 $7 $7 $(8)

Total $341 $32 $153 $14 $8 $548

QUARTER ENDED DECEMBER 31, 2016

QUARTER ENDED DECEMBER 31, 2015

Operating Income


Depreciationand

Amortization


ExpenseOther

Items(1)

Adjusted EBITDA

Buy $138 $4 $50 $2 $1 $195

Watch $246 $2 $91 $3 $1 $343

Corporate $(74) $2 $1 $4 $60 $(7)

Total $310 $8 $142 $9 $62 $531

(1)Other items primarily consists of business optimization costs.

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Operating Income


Depreciationand

Amortization


Expense

Other Items(1)

Adjusted EBITDA

Buy $331 $61 $212 $16 $3 $623

Watch $935 $18 $387 $10 $2 $1,352

Corporate $(123) $26 $4 $25 $31 $(37)

Total $1,143 $105 $603 $51 $36 $1,938

YEAR ENDED DECEMBER 31, 2016

YEAR ENDED DECEMBER 31, 2015Operating

IncomeRestructuring

ChargesDepreciation

and Amortization


Expense

Other Items(1)

Adjusted EBITDA

Buy $369 $32 $207 $15 $1 $624

Watch $880 $14 $363 $8 $4 $1,269

Corporate $(156) $5 $4 $25 $87 $(35)

Total $1,093 $51 $574 $48 $92 $1,858

(1)Other items primarily consists of business optimization costs.

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2016Reported

2015Reported % V Reported

2015 Constant Currency

% V Constant Currency

Buy $193 $195 (1.0%) $195 (1.0%)

Watch $363 $343 5.8% $340 6.8%

Corporate $(8) $(7) NM $(7) NM

Total $548 $531 3.2% $528 3.8%

QUARTER ENDED DECEMBER 31,

YEAR ENDED DECEMBER 31,

2016Reported

2015Reported % V Reported



Buy $623 $624 (0.2%) $613 1.6%

Watch $1,352 $1,269 6.5% $1,264 7.0%

Corporate $(37) $(35) NM $(35) NM

Total $1,938 $1,858 4.3% $1,842 5.2%

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2016Reported

2015 Reported

% VReported



Developed Markets $545 $553 (1.4%) $543 0.4%

Emerging Markets 283 272 4.0% 264 7.2%

Core Buy $828 $825 0.4% $807 2.6%

Corporate $40 $54 (25.9%) $53 (24.5%)

Buy $868 $879 (1.3%) $860 0.9%

Video and Text $519 $479 8.4% $476 9.0%

Audio 120 122 (1.6%) 122 (1.6%)

Marketing Effectiveness 83 78 6.4% 76 9.2%

Core Watch $722 $679 6.3% $674 7.1%

Corporate/Other Watch 66 66 0.0% 68 (2.9%)

Watch $788 $745 5.8% $742 6.2%

Total Core Buy and Watch $1,550 $1,504 3.1% $1,481 4.7%

Total $1,656 $1,624 2.0% $1,602 3.4%

REVENUE RECONCILIATION

QUARTER ENDED DECEMBER 31,($ in millions)

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2016Reported

2015 Reported

% VReported



Developed Markets $2,096 $2,110 (0.7%) $2,077 0.9%

Emerging Markets 1,063 1,044 1.8% 979 8.6%

Core Buy $3,159 $3,154 0.2% $3,056 3.4%

Corporate $163 $191 (14.7%) $191 (14.7%)

Buy $3,322 $3,345 (0.7%) $3,247 2.3%

Video and Text $1,978 $1,840 7.5% $1,827 8.3%

Audio 500 504 (0.8%) 503 (0.6%)

Marketing Effectiveness 287 251 14.3% 247 16.2%

Core Watch $2,765 $2,595 6.6% $2,577 7.3%

Corporate/Other Watch 222 232 (4.3%) 234 (5.1%)

Watch $2,987 $2,827 5.7% $2,811 6.3%

Total Core Buy and Watch $5,924 $5,749 3.0% $5,633 5.2%

Total $6,309 $6,172 2.2% $6,058 4.1%


YEAR ENDED DECEMBER 31,($ in millions)

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OTHER NON-OPERATING (LOSS)/INCOME IMPACT ON DILUTED EARNINGS PER SHARE(amounts in millions, except per share information)

All amounts are presented net of the estimated tax impact

Q4’15 FY’15Business acquisition/disposition and sale of investment $ 187 $ 187

Diluted per share impact $ 0.51 $ 0.51

GAAP weighted-average shares of common stock outstanding, diluted 366.5 371.0

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($ in millions)

2017 GUIDANCE NON-GAAP RECONCILIATIONS

NET DEBT LEVERAGE RATIO

Gross Debt ~$ 8,320

Cash ~$ 580

Net Debt ~$ 7,740

Adjusted EBITDA $2,030 - $2,050

Net Debt Leverage Ratio ~3.8x

FREE CASH FLOW

Net cash provided by operating activities ~$1,360

Less: Capital expenditures, net ~(460)

Free cash flow ~$900

ADJUSTED EBITDA RECONCILIATION

2017 Guidance Range

Net income $500 - $525 Interest expense, net $365 - $375

Provision for income taxes $310 – $330Depreciation and amortization $665 – $675

Restructuring charges $60 – $70Stock-based compensation and other $100 - $105

Adjusted EBITDA $2,030 - $2,050

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($ in millions)

2017 GUIDANCE NON-GAAP RECONCILIATIONS

2017 Guidance

Low% V Constant

Currency

2017 Guidance

High% V Constant

Currency2016 Constant

Currency

Total Revenue $6,578 5.0% $6,640 6.0% $6,265

Total Revenue Core $6,268 6.5% $6,326 7.5% $5,885

Total Revenue Core (ex. Gracenote)

$6,062 3.0% $6,120 4.0% $5,885


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FREE CASH FLOW RECONCILIATION($ in millions)

Quarter EndedDecember 31,(Unaudited)

Year EndedDecember 31,(Unaudited)

2016 2015 2016 2015Net cash provided by operating activities $ 543 $ 401 $ 1,296 $ 1,209Plus: Non-recurring contribution to the Nielsen

Foundation — — 36 —Less: Capital expenditures, net (67) (95) (391) (401)Free cash flow $ 476 $ 306 $ 941 $ 808

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DEBT CAPITAL TABLE

(a) Adjusted EBITDA calculated based on last twelve months basis(b) Reflects Net Debt (gross debt minus deferred financing fees and cash), divided by Adjusted EBITDA calculated on last twelve months basis (c) Excludes capital leases

DEBT CAPITAL TABLE

12/31/16 12/31/15 Change

Loan Debt (secured) $4,059 $3,496 $563

4.50% Sr. Notes (10/1/20) 794 792 2

5.50% Sr. Notes (10/1/21) 618 617 1

5.00% Sr. Notes (4/15/22) 2,285 2,284 1

Capital lease/misc. debt 170 149 21

Total Debt $7,926 $7,338 $588

Less Cash 754 357 397

Net Debt $7,172 $6,981 $191

Adjusted EBITDA(a) $1,938 $1,858 80

Net Debt Leverage Ratio (b) 3.70x 3.76x (0.06)x

Weighted avg. interest rate (c) 4.04% 4.04% - bps

($ in millions)

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SELECTED FINANCIAL METRICS & BALANCE SHEET ITEMS

FINANCIAL METRICS

4Q 16

Free Cash Flow $476

Capital Expenditures, net $67

D&A(c) $153

Net Book Interest $85

Cash Taxes $50

Cash Restructuring $20

Wtd. avg. diluted shares 359.7

BALANCE SHEET – 12/31/16

Gross Debt $7,926

Cash $754

Net Debt $7,172

Net Debt Leverage Ratio (a) 3.70x

CURRENT DEBT MATURITY PROFILE – 12/31/16 (b)

(a) Reflects net debt (gross debt minus deferred financing fees and cash), divided by Adjusted EBITDA calculated on last twelve months basis(b) Excludes Capital Leases ($158M) and other debt ($12M)(c) Includes $52 million of depreciation and amortization associated with tangible and intangible assets acquired in business combinations

($ in millions)

$138$278

$1,397

$814

$1,021

$2,323

$1,785

2017 2018 2019 2020 2021 2022 2023

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4 q fy16 earnings webcast deck - final

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