q415 nielsen earnings webcast final

NYSE: NLSN

FEBRUARY 11, 2016 8:00AM ET

4TH QUARTER AND FULL YEAR 2015 RESULTS

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NLSN 4Q and FY2015 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 11, 2016.

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. 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 2016. This

information may not be appropriate for other purposes.

http://ir.nielsen.com/

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AGENDA AGENDA

Fourth Quarter & Full Year Results

Business Update

Financials and Guidance

Appendix and Reconciliations

Q&A

MITCH BARNS CHIEF EXECUTIVE OFFICER

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FULL YEAR 2015 OVERVIEW

RESILIENCE THROUGH THE CYCLES

• Financial highlights

P Revenue of $6.2 billion…up 5.0% constant currency

P Adjusted EBITDA of $1.9 billion…up 7.2% constant currency

P Adjusted net income per share of $2.63…up 12.4% constant currency

P Record free cash flow of $804 million…up 18.1% year over year

• Continued execution on our balanced capital allocation framework

P Returned ~$1.1B back to shareholders

P Additional share buyback of $500M…total authorization of ~$850M as of year-end

• Acquisitions are delivering

P Leveraging eXelate as the foundation for Nielsen’s Enterprise Marketing Platform

• Reiterating 2016 guidance

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UPDATE ON KEY STRATEGIC INITIATIVES • Watch: Total Audience Measurement

P Nielsen Social Content Ratings: Now includes Facebook…Instagram to come

P Digital Ad Ratings

• Live with Google DoubleClick in 8 countries • Significant new clients wins

P VOD/SVOD measurement

• Expanded measurement and reporting out to 35 days • 35 networks and studios covering over 6,000 episodes

P Digital Content Ratings: Momentum continues

• Adding large digital video platform to client roster

P Total Content Ratings: Over 70 networks signed up

P Next steps: Multiple meetings with key industry players over the next few weeks

• Marketing Effectiveness: +31% in 4Q; Strong momentum across client base

• Buy: Total Consumer Measurement

P New client wins

P Strong growth with retailers

P Broad-based Emerging market growth

P Developed markets exited the year with good momentum

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THREE STRATEGIC INVESTMENTS

FOCUS ON MEASURING THE TOTAL AUDIENCE & THE TOTAL CONSUMER

Enterprise Marketing

Platform

Connected Buy System Nielsen Total

Audience Measurement

JAMERE JACKSON CHIEF FINANCIAL OFFICER

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TOTAL NIELSEN RESULTS – FY 2015 ($ in millions except per share amounts, growth in constant currency, excluding Free Cash Flow)

• 38 quarters of constant currency growth • Growth initiatives & investments delivering:

‒ Watch: Nielsen Total Audience execution & reshaping portfolio ‒ Buy: Emerging markets growth & new client wins

• Expanding margins in both segments

• Record free cash flow

• Returned ~$1.1B back to shareholders

2015 2014 V%

Revenues $6,172 $6,288 5.0%

Adjusted EBITDA $1,858 $1,837 7.2%

Adjusted EBITDA margin % 30.1% 29.2% 61 bps

Adjusted Net Income (ANI) $975 $970 8.5%

Diluted ANI per share (a) $2.63 $2.52 12.4%

Free Cash Flow $804 $681 18.1%

Leverage 3.8x 3.6x 0.2

(a) Calculated using weighted average shares outstanding of 371.0 million for 2015 and 384.4 million for 2014. See appendix for detail

Highlights

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TOTAL NIELSEN RESULTS – 4Q 2015 ($ in millions except per share amounts, growth in constant currency, excluding Free Cash Flow)

• Solid revenue growth in Watch and Buy

• Strong operating leverage

• Portfolio pruning & reshaping in Watch • Solid free cash flow performance • Strong finish… good momentum into 2016

4Q 2015

4Q 2014

V%

Revenues $1,624 $1,633 5.6%

Adjusted EBITDA $531 $524 7.1%

Adjusted EBITDA margin % 32.7% 32.1% 45 bps

Adjusted Net Income (ANI) $300 $309 3.1%

Diluted ANI per share (a) $0.82 $0.81 7.9%

Free Cash Flow $306 $263 16.3%

(a) Calculated using weighted average shares outstanding of 366.5 million for 4Q 2015 and 381.8 million for 4Q 2014. See appendix for detail

Highlights

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

REVENUE

PROFITABILITY

4Q DYNAMICS

Total Watch

Adjusted EBITDA

Margin

$745

$343

46.0%

4Q 15

$725

$329

45.4%

4Q 14

5.2%

6.9%

70 bps

V%

• Strong revenue growth; +5.2% 4Q… +4.9% FY Audience Measurement (Video/Text): +7.6% Audio (6.9%)…delivery timing Marketing Effectiveness +31.3% Portfolio pruning… NRG exit

• Growth initiatives are delivering

Continued Digital Ad Ratings momentum Nielsen Catalina … majority ownership SVOD & Digital Content Ratings traction eXelate driving new client wins

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

REVENUE

PROFITABILITY

4Q DYNAMICS

Developed

Adjusted EBITDA

Margin

$607

$195

22.2%

4Q 15

$611

$202

22.3%

4Q 14

4.8%

7.1%

25 bps

V%

Emerging $272 $297 8.4%

Total Buy $879 $908 5.9%

• Solid revenue growth; +5.9% 4Q…+5.0% FY

• Developed markets strengthening... US & EU • Emerging markets resilient

• Discretionary spend remains steady overall • 6th straight quarter of margin expansion

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FOREIGN CURRENCY IMPACT

(a) Projected impact assumes rates in effect at 2/9/16 remain in effect for the balance of 2016. Also based on company estimates for future quarters on distribution of revenue and EBITDA by currency.

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

60%

9%

3% 4% 3%

21%

USD EUR CAD GBP CNY Other

2015 CURRENCY PROFILE - REVENUE PROJECTED FX IMPACT(a):

REPORTED VS CONSTANT CURRENCY

(620) (680)

(330) (300)

(160)

(80)

(210)

(580) (610)

(200) (240)

(90) (60)

(140)

4Q15 FY15 1Q16E 2Q16E 3Q16E 4Q16E FY16E

Rev (bps) EBITDA (bps)

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2016 GUIDANCE (Revenue and adj. EBITDA margin growth in constant currency)

OTHER FINANCIAL METRICS

Total Revenue 4.0% - 6.0%

Adj. EBITDA margin growth 50 - 70 bps

Adj. Net Income Per Share $2.83 - $2.93

Free Cash Flow ~$950M

Net book interest $325M- $335M

Cash Taxes 14.0% - 14.5%

Cash restructuring $50M - $75M

Est. wtd. avg. diluted shares outstanding for FY 2015

~361M

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&

APPENDIX

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CERTAIN NON-GAAP MEASURES Overview of Non-GAAP Presentations 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, cash flows and indebtedness 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 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 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, 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 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.

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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, equity in net income of affiliates, 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.

Adjusted Net Income

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, equity in net income of affiliates, 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. Free Cash Flow We define free cash flow as net cash provided by operating activities, plus the excess tax benefit on stock-based compensation, less capital expenditures, net. It 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. 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, repayment of debt obligations or to fund our strategic initiatives, including acquisitions, if any. Free cash flow is not a presentation made in accordance with GAAP.

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HISTORICAL WATCH REVENUE ($ in millions)

(a) Year-over-year growth in constant currency

2015 2014

1Q 2Q 3Q 4Q FY 1Q 2Q 3Q 4Q FY

Watch

Audience Measurement (Video and Text)

$445 $458 $458 $479 $1,840 $434 $443 $448 $459 $1,784

Audio 120 121 141 122 504 118 122 127 131 498

Marketing Effectiveness 52 74 68 88 282 44 62 65 68 239

Other Watch 43 54 48 56 201 56 67 54 67 244

Total Watch $660 $707 $715 $745 $2,827 $652 $694 $694 $725 $2,765

Y/Y Growth (a) 1Q 2Q 3Q 4Q FY 1Q 2Q 3Q 4Q FY

Watch

Audience Measurement (Video and Text)

5.5% 6.8% 5.8% 7.6% 6.4% 6.0% 6.5% 6.2% 6.5% 6.3%

Audio 1.7% (0.8)% 11.0% (6.9)% 1.2% NM NM NM (3.7)% NM

Marketing Effectiveness 22.7% 21.7% 7.9% 31.3% 21.0% 10.0% 10.7% 18.2% 19.3% 13.3%

Other Watch (20.0)% (15.5%) (5.9)% (13.8)% (14.1)% 1.8% (4.3%) (8.5)% (6.6)% (2.4)%

Total Watch 3.6% 4.7% 6.1% 5.2% 4.9% 29.4% 28.3% 29.2% 4.0% 21.3%

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ADJUSTED NET INCOME RECONCILIATION ($ in millions except per share amounts)

Quarter ended December 31,

(Unaudited)

Year ended December 31,

(Unaudited) 2015 2014 2015 2014

Net income $ 254 $ 158 $ 575 $ 381

Interest expense, net 79 71 307 297

Provision for income taxes 177 34 383 236

Depreciation and amortization 142 148 574 573

EBITDA 652 411 1,839 1,487

Equity in net loss of affiliates 2 6 3 4

Other non-operating (income) / expense, net (202) 39 (175) 171

Restructuring charges 8 46 51 89

Stock-based compensation expense 9 11 48 47

Other items (a) 62 11 92 39

Adjusted EBITDA 531 524 1,858 1,837

Interest expense, net (79) (71) (307) (297)

Depreciation and amortization (142) (148) (574) (573)

Depreciation and amortization of acquisition-related tangible and intangible assets 53 52 205 204

Cash paid for income taxes (54) (37) (159) (154)

Stock-based compensation expense (9) (11) (48) (47)

Adjusted net income $ 300 $ 309 $ 975 $ 970

Adjusted net income per share of common stock, diluted $0.82 $0.81 $2.63 $2.52

(a) See footnotes on next page

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ADJUSTED NET INCOME RECONCILIATION (continued)

(a) For the three and twelve months ended December 31, 2015, other items consists of a $36 million donation to the Nielsen Foundation, $14 million charge for the partial settlement of certain U.S. pension plans, and other non-recurring costs. For the three and twelve months ended December 31, 2014, other items consist of non-recurring costs.

Quarter ended December 31,

(Unaudited)

Year ended December 31,

(Unaudited) 2015 2014 2015 2014

Weighted-average shares of common stock outstanding basic

363,059,789

377,676,631

366,996,788

379,333,037

Dilutive shares of common stock from stock compensation plans

3,436,080

4,164,203

3,961,016

5,038,415

Weighted-average shares of common stock outstanding, diluted

366,495,869 381,840,834 370,957,804 384,371,452

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($ in millions) ADJUSTED EBITDA RECONCILIATION

2015 Reported

2014 Reported

% V Reported

2014 Constant Currency

% V Constant Currency

Buy $624 $658 (5.2)% $579 7.8%

Watch $1,269 $1,214 4.5% $1,190 6.6%

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

Total $1,858 $1,837 1.1% $1,734 7.2%

2015 Reported

2014 Reported

% V Reported



Buy $195 $202 (3.5)% $182 7.1%

Watch $343 $329 4.3% $321 6.9%

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

Total $531 $524 1.3% $496 7.1%

QUARTER ENDED DECEMBER 31,

YEAR ENDED DECEMBER 31,

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(continued, $ in millions) ADJUSTED NET INCOME RECONCILIATION

2015 Reported

2014 Reported

% V Reported



Adjusted Net Income $300 $309 (2.9)% $291 3.1%



2015 Reported

2014 Reported

% V Reported



Adjusted Net Income $975 $970 0.5% $899 8.5%

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2015 Reported

2014 Reported

% V Reported



Developed Markets $607 $611 (0.7)% $579 4.8%

Emerging Markets 272 297 (8.4)% 251 8.4%

Buy $879 $908 (3.2)% $830 5.9%

Video and Text $479 459 4.4% $445 7.6%

Audio 122 131 (6.9)% 131 (6.9)%

Marketing Effectiveness 88 68 29.4% 67 31.3%

Other Watch 56 67 (16.4)% 65 (13.8)%

Watch $745 $725 2.8% $708 5.2%

Total $1,624 $1,633 (0.6)% $1,538 5.6%

REVENUE RECONCILIATION


($ in millions)

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(continued, $ in millions)

2015 Reported

2014 Reported

% V Reported



Developed Markets $2,301 $2,390 (3.7)% $2,224 3.5%

Emerging Markets 1,044 1,133 (7.9)% 962 8.5%

Buy $3,345 $3,523 (5.1)% $3,186 5.0%

Video and Text $1,840 $1,784 3.1% $1,729 6.4%

Audio 504 498 1.2% 498 1.2%

Marketing Effectiveness 282 239 18.0% 233 21.0%

Other Watch 201 244 (17.6)% 234 (14.1)%

Watch $2,827 $2,765 2.2% $2,694 4.9%

Total $6,172 $6,288 (1.8)% $5,880 5.0%

REVENUE RECONCILIATION


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FREE CASH FLOW RECONCILIATION ($ in millions)


YEAR ENDED DECEMBER 31

2015 2014 2015 2014

Net cash provided by operating activities $401 $401 $1,179 $1,093

Plus: Excess tax benefit on stock-based compensation

-- -- 26 --

Less: Capital expenditures, net (95) (138) (401) (412)

Free cash flow $306 $263 $804 $681

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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 (d) Due to the adoption of a new accounting standard in the fourth quarter, debt issuances costs have been reclassified from assets to the related debt instrument in order to conform to year end presentation

DEBT CAPITAL TABLE

12/31/15(d) 9/30/15(d) Change

Loan Debt (secured) $3,496 $3,573 $(77)

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

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

5.00% Sr. Notes (4/15/22) 2,284 2,283 1

Capital lease/misc. debt 149 133 16

Total Debt $7,338 $7,398 $(60)

Less Cash 357 358 (1)

Net Debt $6,981 $7,040 $(59)

Adjusted EBITDA(a) $1,858 $1,851 7

Net Debt Ratio (b) 3.8x 3.8x --

Weighted avg. interest rate (c) 4.04% 3.98% 6 bps

($ in millions)

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SELECTED FINANCIAL METRICS & BALANCE SHEET ITEMS

FINANCIAL METRICS

4Q 15

Free Cash Flow $306

Capital Expenditures, net $95

D&A $142

Net Book Interest $79

Cash Taxes $54

Cash Restructuring $14

Wtd. avg. diluted shares 366.5

BALANCE SHEET – 12/31/15

Gross Debt $7,338

Cash $357

Net Debt $6,981

Net Debt Ratio (a) 3.8x

CURRENT DEBT MATURITY PROFILE – 12/31/15(b)

$113

$632

$202

$1,033

$806

$1,946

$2,300

2016 2017 2018 2019 2020 2021 2022

(a) Reflects net debt (gross debt minus deferred financing fees and cash), divided by Adjusted EBITDA calculated on last twelve months basis (b) Excludes Revolver ($164M) and Capital Leases ($142M)

($ in millions)

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