- Revenues of $877 million
increased 1.6% on a reported basis, 2.5% on a constant currency
basis & 3.4% organic constant currency
- Net income per share of $0.28
(diluted, from continuing operations); Adjusted EPS of $0.45
- Reiterating 2022 financial guidance provided on February 28, 2022
- On track to deliver Nielsen ONE, transformative single
cross-media measurement solution, in 2022
NEW
YORK, April 28, 2022 /PRNewswire/ -- Today,
Nielsen Holdings plc (NYSE: NLSN) announced its results for the
quarter ended March 31, 2022. The
company is reiterating its full year 2022 guidance ranges for all
key metrics.
David Kenny, Chief Executive
Officer, commented, "We reported solid first quarter results, which
were in line with our expectations. Our results reflect the
commitment of our teams in executing on our strategy and delivering
innovation in client solutions, as well as the strength of our
client relationships. Nielsen remains the industry's currency of
choice, providing the most accurate and verifiable measurement data
in the market to guarantee this year's upfront commitments.
Furthermore, we are leading the industry into the next generation
of audience measurement with Nielsen ONE, our transformative
cross-media solution that will serve as the metrics underpinning
the more than $100 billion video
advertising ecosystem. We remain confident that Nielsen is uniquely
positioned to provide the global media industry with a
currency-grade, cross-platform measurement solution that aligns
with clients' evolving needs."
First Quarter 2022
Results
Unless indicated otherwise, the results referenced in this
press release relate to Nielsen's continuing operations. Beginning
in the first quarter of 2021, our Global Connect business was sold
and therefore reclassified as discontinued operations for all
periods presented. For comparability, non-GAAP metrics in the prior
year have been adjusted to exclude certain interest costs, as if
the sale of Global Connect and resulting de-levering occurred on
January 1, 2021.
- First quarter revenues of $877
million increased 1.6% on a reported basis, 2.5% on a
constant currency basis, and 3.4% on an organic constant currency
basis compared to the prior year period.
-
- Measurement revenues of $645
million increased 2.1% on a reported basis, 2.7% on a
constant currency basis, and 3.9% on an organic constant currency
basis compared to the prior year period. Overall growth was solid,
driven by strength in national and digital measurement products in
the US, and in international markets. Local products grew modestly
for the fourth consecutive quarter.
- Impact / Content revenues of $232
million increased 0.4% on a reported basis, 1.8% on a
constant currency basis, and 2.2% on an organic constant currency
basis compared to the prior year period. This was driven by
improving trends in short-cycle revenue and the sports business in
Impact, offset in part by a timing-related decline in Content.
- Net income from continuing operations attributable to Nielsen
shareholders for the first quarter was $101
million, compared to $106
million in the first quarter of 2021. Net income from
continuing operations per share on a diluted basis for the first
quarter was $0.28, compared to
$0.29 for the first quarter of 2021.
Net income from continuing operations was primarily driven by the
return of the temporary cost savings realized from actions taken in
response to the COVID-19 pandemic and continued investment in our
products and services, partially offset by our revenue performance
and lower interest expense.
- Reported EPS on a diluted basis of $0.29 includes EPS of $0.28 from continuing operations and $0.01 from discontinued operations.
- Adjusted EPS was $0.45 for the
first quarter, compared to $0.47 per
share in the prior year period, reflecting lower adjusted EBITDA
and higher depreciation and amortization year over year.
- Adjusted EBITDA was $372 million,
compared to $388 million in the first
quarter of 2021, down 4.1% on a reported basis and 3.9% on a
constant currency basis, as compared to the prior year.
- Adjusted EBITDA margin of 42.4% decreased 254 basis points on a
reported basis, or 279 basis points on a constant currency basis,
compared to the prior year, reflecting the return of the temporary
cost savings realized from actions taken in response to the
COVID-19 pandemic and continued investment in our products and
services, partially offset by our revenue performance.
- Reported results were impacted by weaker currencies versus the
dollar during the first quarter, which had a 90 basis point
negative impact on reported revenue growth and a 20 basis point
negative impact on adjusted EBITDA growth.
- Cash flow from operations increased to $219 million, compared to $(45) million in the prior year (the latter
included Global Connect through the closing of the sale on
March 5, 2021). The improved cash
flow performance was primarily driven by lower working capital
outflows in 2022. Cash flow from continuing operations was
$168 million in the first quarter of
2021.
- Net capital expenditures decreased to $82 million compared to $86 million in the prior year due to the absence
of Global Connect in the current period, largely offset by timing.
Net capital expenditures from continuing operations were
$61 million in the first quarter of
2021.
- Free cash flow was $137 million
compared to $115 million in the prior
year. Free cash flow in the first quarter of 2021 has been adjusted
to exclude certain interest costs, as if the sale of Global Connect
and resulting de-levering occurred on January 1, 2021, and to exclude
separation-related costs.
Financial Position
At March 31, 2022, we had cash and
cash equivalents of $482 million and
gross debt of $5.623 billion, resulting in net debt of
$5.141 billion and a net debt
leverage ratio of 3.49x.
Dividend
On April 14, 2022, our Board of
Directors declared a quarterly dividend of $0.06 per share of Nielsen's common stock. The
$22 million estimated dividend is
payable on June 16, 2022 to
shareholders of record at the close of business on June 2, 2022.
2022 Full Year Guidance
The Company is reiterating full year 2022 guidance provided on
February 28, 2022. Guidance excludes
costs that are contingent on the closing of the Proposed
Transaction (as described below).
Proposed Transaction with
Consortium of Private Investment Funds
On March 28, 2022, we entered into
a definitive agreement (the "Transaction Agreement") to be acquired
by Neptune Intermediate Jersey Limited and Neptune BidCo US Inc.
(collectively, the "Purchasing Entities," and the transaction, the
"Proposed Transaction") by way of a scheme of arrangement (the
"Scheme") between the Company and the Scheme Shareholders (as
defined in the Scheme) under Part 26 of the United Kingdom
Companies Act 2006, as amended. The Purchasing Entities are
controlled by a consortium of private investment funds led by
Evergreen Coast Capital Corporation, an affiliate of Elliott
Investment Management L.P., and Brookfield Business Partners L.P.,
together with institutional partners. The Transaction Agreement
provides that at the effective time of the Proposed Transaction,
all ordinary shares will be transferred from our shareholders to
Neptune BidCo US Inc. in accordance with the provisions of the
Scheme and the laws of England and
Wales, and that Scheme
Shareholders will receive the consideration of $28.00 in cash, without interest, per ordinary
share. The Proposed Transaction is subject to approval by Nielsen
shareholders, regulatory approvals, consultation with the works
council and other customary closing conditions. The Proposed
Transaction will also be subject to UK court approval pursuant to
the Scheme. Alternatively, pursuant to the Transaction Agreement,
the parties may elect instead to complete the Proposed Transaction
pursuant to an agreed-upon tender offer. If the closing conditions
are met, the Proposed Transaction is expected to close in the
second half of 2022.
As a result of the Proposed Transaction, the Company will not
host an earnings conference call to discuss its first quarter
results.
Forward-looking
Statements
This communication 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 include those set forth above relating to "2022
Full Year Guidance" as well as those that may be identified by
words such as "will," "intend," "expect," "anticipate," "should,"
"could" and similar expressions. These statements are subject to
risks and uncertainties, and actual results and events could differ
materially from what presently is expected, including regarding the
Proposed Transaction and Nielsen ONE. Factors leading thereto may
include, without limitation, the risks related to the Ukraine conflict or the COVID-19 pandemic on
the global economy and financial markets, the uncertainties
relating to the impact of the Ukraine conflict or the COVID-19 pandemic on
Nielsen's business, the failure of Nielsen's new business strategy
in accomplishing Nielsen's objectives, economic or other conditions
in the markets Nielsen is engaged in, impacts of actions and
behaviors of customers, suppliers and competitors, technological
developments, as well as legal and regulatory rules and processes
affecting Nielsen's business, the timing, receipt and terms and
conditions of any required governmental and regulatory approvals of
the Proposed Transaction that could reduce anticipated benefits or
cause the parties to abandon the Proposed Transaction, the
occurrence of any event, change or other circumstances that could
give rise to the termination of Transaction Agreement, the
possibility that Nielsen shareholders may not approve the Proposed
Transaction, the risk that the parties to the Transaction Agreement
may not be able to satisfy the conditions to the Proposed
Transaction in a timely manner or at all, risks related to
disruption of management time from ongoing business operations due
to the Proposed Transaction, the risk that any announcements
relating to the Proposed Transaction could have adverse effects on
the market price of Nielsen's ordinary shares, the risk of any
unexpected costs or expenses resulting from the Proposed
Transaction, the risk of any litigation relating to the Proposed
Transaction, the risk that the Proposed Transaction and its
announcement could have an adverse effect on the ability of Nielsen
to retain customers and retain and hire key personnel and maintain
relationships with customers, suppliers, employees, shareholders
and other business relationships and on its operating results and
business generally, the risk the pending Proposed Transaction could
distract management of Nielsen, and other specific risk
factors that are outlined in Nielsen's disclosure filings and
materials, which you can find on http://www.nielsen.com/investors,
such as its 10-K, 10-Q and 8-K reports that have been filed with
the Securities and Exchange Commission. Please consult these
documents for a more complete understanding of these risks and
uncertainties. This list of factors is not intended to be
exhaustive. Such forward-looking statements only speak as of the
date of these materials, and Nielsen assumes no obligation to
update any written or oral forward-looking statement made by
Nielsen or on its behalf as a result of new information, future
events or other factors, except as required by law.
About Nielsen
Nielsen shapes the world's media and content as a global leader
in audience measurement, data and analytics. Through our
understanding of people and their behaviors across all channels and
platforms, we empower our clients with independent and actionable
intelligence so they can connect and engage with their
audiences—now and into the future.
An S&P 500 company, Nielsen (NYSE: NLSN) operates around the
world in more than 55 countries. Learn more at
www.nielsen.com or www.nielsen.com/investors and
connect with us on Instagram, Facebook, Twitter, LinkedIn.
Condensed Consolidated Financial
Statements
The following sets forth our unaudited financial statements for
the periods indicated:
- Condensed Consolidated Statements of Operations
- Condensed Consolidated Balance Sheets
- Condensed Consolidated Statements of Cash Flows
These financial statements are unaudited, but in our opinion
contain necessary adjustments for a fair presentation in accordance
with GAAP. Given the sale of our Global Connect business in
the first quarter of 2021, Global Connect amounts are presented in
separate discontinued operations line items in the Statements of
Operations and in the Balance Sheets. The Condensed Consolidated
Statement of Cash Flows presents combined cash flows from
continuing operations with cash flows from discontinued
operations within each cash flow statement category.
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
March 31,
(Unaudited)
|
|
(In millions,
except share and per share data)
|
|
2022
|
|
|
2021
|
|
Revenues
|
|
$
|
877
|
|
|
$
|
863
|
|
Cost of
revenues
|
|
|
314
|
|
|
|
277
|
|
Selling, general and
administrative expenses, exclusive of
depreciation and amortization shown separately
below
|
|
|
224
|
|
|
|
206
|
|
Depreciation and
amortization
|
|
|
130
|
|
|
|
127
|
|
Restructuring
charges
|
|
|
12
|
|
|
|
—
|
|
Operating
income
|
|
|
197
|
|
|
|
253
|
|
Interest expense,
net
|
|
|
66
|
|
|
|
80
|
|
Other (income)/expense,
net
|
|
|
(9)
|
|
|
|
4
|
|
Income from continuing
operations before income taxes and
equity in net income of affiliates
|
|
|
140
|
|
|
|
169
|
|
Provision for income
taxes
|
|
|
33
|
|
|
|
60
|
|
Equity in net income of
affiliates
|
|
|
(4)
|
|
|
|
—
|
|
Net income from
continuing operations
|
|
|
111
|
|
|
|
109
|
|
Net income from
discontinued operations, net of income taxes
|
|
|
4
|
|
|
|
467
|
|
Net income
|
|
|
115
|
|
|
|
576
|
|
Net income attributable
to noncontrolling interests
|
|
|
10
|
|
|
|
3
|
|
Net income attributable
to Nielsen shareholders
|
|
$
|
105
|
|
|
$
|
573
|
|
Net income per share of
common stock, basic
|
|
|
|
|
|
|
|
|
Net
income from continuing operations attributable to
Nielsen
shareholders
|
|
$
|
0.28
|
|
|
$
|
0.30
|
|
Net
income from discontinued operations attributable to
Nielsen
shareholders
|
|
$
|
0.01
|
|
|
$
|
1.30
|
|
Net income attributable
to Nielsen
shareholders
|
|
$
|
0.29
|
|
|
$
|
1.60
|
|
|
|
|
|
|
|
|
|
|
Net income per share of
common stock, diluted
|
|
|
|
|
|
|
|
|
Net
income from continuing operations attributable to
Nielsen
shareholders
|
|
$
|
0.28
|
|
|
$
|
0.29
|
|
Net
income from discontinued operations attributable to
Nielsen
shareholders
|
|
$
|
0.01
|
|
|
$
|
1.30
|
|
Net income attributable
to Nielsen
shareholders
|
|
$
|
0.29
|
|
|
$
|
1.59
|
|
Weighted average shares
of common stock outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
|
359,531,490
|
|
|
|
357,944,731
|
|
Diluted
|
|
|
360,662,265
|
|
|
|
360,189,322
|
|
Condensed
Consolidated Balance Sheets
|
|
|
|
March 31,
|
|
|
December 31,
|
|
(In millions,
except share and per share data)
|
|
2022
|
|
|
2021
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
482
|
|
|
$
|
380
|
|
Trade and other receivables, net
|
|
|
543
|
|
|
|
517
|
|
Prepaid expenses and other current assets
|
|
|
256
|
|
|
|
243
|
|
Total current assets
|
|
|
1,281
|
|
|
|
1,140
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
266
|
|
|
|
273
|
|
Operating lease right-of-use asset
|
|
|
124
|
|
|
|
144
|
|
Goodwill
|
|
|
5,593
|
|
|
|
5,599
|
|
Other intangible assets, net
|
|
|
3,421
|
|
|
|
3,462
|
|
Deferred tax assets
|
|
|
50
|
|
|
|
55
|
|
Other non-current assets
|
|
|
147
|
|
|
|
147
|
|
Total assets
|
|
$
|
10,882
|
|
|
$
|
10,820
|
|
Liabilities and equity:
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and other current liabilities
|
|
$
|
454
|
|
|
$
|
478
|
|
Deferred revenues
|
|
|
145
|
|
|
|
131
|
|
Income tax liabilities
|
|
|
21
|
|
|
|
13
|
|
Current portion of long-term debt, finance lease obligations
and
short-term borrowings
|
|
|
35
|
|
|
|
35
|
|
Total current liabilities
|
|
|
655
|
|
|
|
657
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
Long-term debt and finance lease obligations
|
|
|
5,588
|
|
|
|
5,591
|
|
Deferred tax liabilities
|
|
|
560
|
|
|
|
561
|
|
Operating lease liabilities
|
|
|
118
|
|
|
|
126
|
|
Other non-current liabilities
|
|
|
364
|
|
|
|
389
|
|
Total liabilities
|
|
|
7,285
|
|
|
|
7,324
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
|
|
|
|
|
|
Common stock, €0.07 par value,
1,185,800,000 shares
authorized,
359,693,302 and 359,267,580 shares issued and
359,693,302 and
359,267,535 shares outstanding at March
31, 2022 and
December 31, 2021, respectively
|
|
|
32
|
|
|
|
32
|
|
Additional paid-in
capital
|
|
|
4,256
|
|
|
|
4,273
|
|
Retained earnings/(accumulated
deficit)
|
|
|
(148)
|
|
|
|
(253)
|
|
Accumulated other comprehensive
loss, net of income taxes
|
|
|
(734)
|
|
|
|
(738)
|
|
Total shareholders'
equity
|
|
|
3,406
|
|
|
|
3,314
|
|
Noncontrolling
interests
|
|
|
191
|
|
|
|
182
|
|
Total equity
|
|
|
3,597
|
|
|
|
3,496
|
|
Total liabilities and equity
|
|
$
|
10,882
|
|
|
$
|
10,820
|
|
Condensed
Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
(In millions)
|
|
2022
|
|
|
2021
|
|
Operating Activities
|
|
|
|
|
|
|
|
|
Net income from
continuing operations
|
|
$
|
111
|
|
|
$
|
109
|
|
Net income/(loss) from
discontinued operations
|
|
|
4
|
|
|
|
(75)
|
|
Gain on disposal of
Connect, net of tax, within discontinued operations
|
|
|
-
|
|
|
|
542
|
|
Net income
|
|
|
115
|
|
|
|
576
|
|
Adjustments to
reconcile net income/(loss) to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Share-based compensation expense
|
|
|
8
|
|
|
|
8
|
|
Gain on disposal of Connect, net of tax, within discontinued
operations
|
|
|
-
|
|
|
|
(542)
|
|
Currency exchange rate differences on financial transactions
and other
|
|
|
(9)
|
|
|
|
11
|
|
Equity in net income of affiliates, net of dividends
received
|
|
|
(4)
|
|
|
|
(1)
|
|
Depreciation and amortization
|
|
|
130
|
|
|
|
163
|
|
Changes in operating
assets and liabilities, net of effect of businesses
acquired and divested:
|
|
|
|
|
|
|
|
|
Trade and other receivables, net
|
|
|
(16)
|
|
|
|
(57)
|
|
Prepaid expenses and other assets
|
|
|
16
|
|
|
|
(71)
|
|
Accounts payable and other current liabilities and deferred
revenues
|
|
|
(7)
|
|
|
|
(147)
|
|
Other non-current liabilities
|
|
|
(19)
|
|
|
|
(17)
|
|
Interest payable
|
|
|
-
|
|
|
|
31
|
|
Income taxes
|
|
|
5
|
|
|
|
1
|
|
Net cash provided
by/(used in) operating activities
|
|
|
219
|
|
|
|
(45)
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
Proceeds from the sale of subsidiaries and affiliates,
net
|
|
|
1
|
|
|
|
2,245
|
|
Additions to property, plant and equipment and other
assets
|
|
|
(17)
|
|
|
|
(7)
|
|
Additions to intangible assets
|
|
|
(65)
|
|
|
|
(82)
|
|
Proceeds from the sale of property, plant and equipment and
other assets
|
|
|
-
|
|
|
|
3
|
|
Other investing activities
|
|
|
-
|
|
|
|
(1)
|
|
Net cash (used
in)/provided by investing activities
|
|
|
(81)
|
|
|
|
2,158
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
Repayment of debt
|
|
|
-
|
|
|
|
(1,478)
|
|
Cash dividends paid to shareholders
|
|
|
(22)
|
|
|
|
(21)
|
|
Payments related to tax withholding for share-based
payment
arrangements
|
|
|
(4)
|
|
|
|
(7)
|
|
Proceeds from employee stock purchase plan
|
|
|
1
|
|
|
|
-
|
|
Finance leases
|
|
|
(7)
|
|
|
|
(14)
|
|
Other financing activities
|
|
|
(4)
|
|
|
|
(3)
|
|
Net cash used in
financing activities
|
|
|
(36)
|
|
|
|
(1,523)
|
|
Effect of exchange-rate
changes on cash and cash equivalents
|
|
|
-
|
|
|
|
(3)
|
|
Net increase in cash
and cash equivalents
|
|
|
102
|
|
|
|
587
|
|
Cash and cash
equivalents at beginning of period
|
|
|
380
|
|
|
|
610
|
|
Cash and cash
equivalents at end of period
|
|
$
|
482
|
|
|
$
|
1,197
|
|
Supplemental Cash Flow
Information
|
|
|
|
|
|
|
|
|
Cash paid for income taxes
|
|
$
|
28
|
|
|
$
|
38
|
|
Cash paid for interest, net of amounts capitalized
|
|
$
|
66
|
|
|
$
|
57
|
|
Certain Non-GAAP
Measures
We report information in accordance with U.S. Generally Accepted
Accounting Principles ("GAAP"). We use non-GAAP financial measures
discussed below to monitor and evaluate our results of operations,
financial condition, liquidity and indebtedness. We believe that
the presentation of these non-GAAP measures provides useful
supplemental information to investors that will allow them to
evaluate our results using the same measures that management uses
to measure and monitor performance and to facilitate
period-to-period comparisons. 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, we have determined that it is
appropriate to make this data available to all investors. None of
the non-GAAP measures presented should be considered in isolation
from, or as an alternative to financial information presented in
accordance with GAAP. The non-GAAP financial measures may not be
comparable to similarly-titled measures used by other
companies.
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.
Organic Constant Currency
Presentation
We define organic constant currency revenue as constant currency
revenue excluding the net effect of business acquisitions and
divestitures over the past 12 months. Refer to the Constant
Currency Presentation section above for the definition of constant
currency. We believe that this measure is useful to investors and
management in understanding our ongoing operations and in analysis
of ongoing operating trends.
The below table presents a reconciliation from revenue on a
reported basis to revenue on a constant currency basis and organic
constant currency basis for the three months ended March 31, 2022.
(In millions) (Unaudited)
|
|
Reported
|
|
|
Constant Currency
|
|
|
Organic Constant Currency
|
|
|
|
3/31/2022
|
|
|
3/31/2021
|
|
|
%
Variance
|
|
|
3/31/2021
|
|
|
%
Variance
|
|
|
3/31/2022
|
|
|
3/31/2021
|
|
|
%
Variance
|
|
Measurement
|
|
$
|
645
|
|
|
$
|
632
|
|
|
|
2.1%
|
|
|
$
|
628
|
|
|
|
2.7%
|
|
|
$
|
645
|
|
|
$
|
621
|
|
|
|
3.9%
|
|
Impact /
Content
|
|
|
232
|
|
|
|
231
|
|
|
|
0.4%
|
|
|
|
228
|
|
|
|
1.8%
|
|
|
|
230
|
|
|
|
225
|
|
|
|
2.2%
|
|
Total
|
|
$
|
877
|
|
|
$
|
863
|
|
|
|
1.6%
|
|
|
$
|
856
|
|
|
|
2.5%
|
|
|
$
|
875
|
|
|
$
|
846
|
|
|
|
3.4%
|
|
The below table presents a reconciliation of Net Income from
Continuing Operations, less net income attributable to
noncontrolling interest, and Adjusted EBITDA on a reported basis to
a constant currency basis for the three months ended March 31, 2022.
(In millions) (Unaudited)
|
|
Reported
|
|
|
Constant Currency
|
|
|
|
|
3/31/2022
|
|
|
3/31/2021
|
|
|
%
Variance
|
|
|
3/31/2021
|
|
|
%
Variance
|
|
|
Net income from
continuing operations
attributable to Nielsen shareholders
|
|
|
$101
|
|
|
|
$106
|
|
|
|
(4.7)
|
%
|
|
|
$106
|
|
|
|
(4.7)
|
%
|
|
Adjusted
EBITDA
|
|
|
$372
|
|
|
|
$388
|
|
|
|
(4.1)
|
%
|
|
|
$387
|
|
|
|
(3.9)
|
%
|
|
Adjusted EBITDA
Internally management uses Adjusted EBITDA, a non-GAAP measure
to monitor and evaluate our financial performance, as a metric in
our incentive compensation programs and to compare our results to
those of our competitors.
We define Adjusted EBITDA as net income or loss from continuing
operations of our condensed consolidated statements of operations
before interest income and expense, income taxes, depreciation and
amortization, restructuring charges, impairment of goodwill and
other long-lived assets, share-based compensation expense and other
non-operating items from our condensed consolidated statements of
operations, as well as certain other items that arise outside the
ordinary course of our continuing operations specifically described
below. Adjusted EBITDA margin is Adjusted EBITDA for a particular
period expressed as a percentage of revenues for that period.
Impairment of goodwill and other long-lived
assets: We exclude the impact of charges related to the impairment
of goodwill and other long-lived assets. We believe that the
exclusion of these impairments, which are non-cash, allows for a
meaningful measure that increases period-to-period
comparability.
Share-based compensation expense: We exclude the
impact of costs relating to share-based compensation. Share-based
compensation expense can vary significantly based on the timing,
size and nature of awards granted. We believe that the exclusion of
share-based compensation expense, which is typically non-cash,
allows for a meaningful measure that increases period-to-period
comparability.
Restructuring charges: We exclude restructuring
expenses, which primarily include employee severance, office
consolidation and contract termination charges to allow for a
meaningful measure that increases period-to-period
comparability. Furthermore, we exclude these expenses as we
believe these expenses in any specific period may not directly
correlate to the underlying performance of our business.
Other non-operating (income)/expense, net: We
exclude foreign currency exchange transaction gains and losses,
primarily related to intercompany financing arrangements, as well
as other non-operating income and expense items, such as gains and
losses recorded on business combinations or dispositions, sales of
investments, net (income)/loss attributable to noncontrolling
interests and early redemption payments made in connection with
debt refinancing. We exclude these non-operating income and expense
items as we believe these items in any specific period may not
directly correlate to the underlying performance of our
business.
Other items: We exclude certain expenses and
gains that arise outside the ordinary course of our continuing
operations. Such costs primarily include legal settlements and
related fees, acquisition related expenses, business optimization
costs and other transaction costs. We believe excluding these items
allows for a meaningful measure that increases period to period
comparability.
Adjusted Earnings per
Share
We define Adjusted Earnings per Share as net income attributable
to Nielsen shareholders from continuing operations per share
(diluted) from our consolidated statements of operations, excluding
depreciation and amortization associated with acquired tangible and
intangible assets, restructuring charges, impairment of goodwill
and other long-lived assets, share-based compensation expense,
other non-operating items from our consolidated statements of
operations, certain other items considered unusual or non-recurring
in nature, adjusted for income taxes related to these items.
Management believes that this non-GAAP measure is useful in
providing period-to-period comparisons of the results of the
Company's ongoing operating performance.
The below table
presents reconciliations from net income to
Adjusted EBITDA for the
three months ended March 31, 2022 and 2021.
|
|
|
|
Three Months Ended
March 31,
(Unaudited)
|
|
|
(In millions)
|
|
2022
|
|
|
2021
|
|
|
Net income from
continuing operations
|
|
$
|
111
|
|
|
$
|
109
|
|
|
Less: Net income
attributable to noncontrolling interests
|
|
|
10
|
|
|
|
3
|
|
|
Net income from continuing operations attributable
to
Nielsen shareholders
|
|
|
101
|
|
|
|
106
|
|
|
Interest expense,
net
|
|
|
66
|
|
|
|
80
|
|
|
Provision for income
taxes
|
|
|
33
|
|
|
|
60
|
|
|
Depreciation and
amortization
|
|
|
130
|
|
|
|
127
|
|
|
EBITDA
|
|
|
330
|
|
|
|
373
|
|
|
Equity in net income of
affiliates
|
|
|
(4)
|
|
|
|
-
|
|
|
Other non-operating
expense, net
|
|
|
1
|
|
|
|
7
|
|
|
Restructuring
charges(1)
|
|
|
12
|
|
|
|
-
|
|
|
Share-based
compensation expense
|
|
|
8
|
|
|
|
7
|
|
|
Other
items(2)
|
|
|
25
|
|
|
|
1
|
|
|
Adjusted EBITDA
|
|
$
|
372
|
|
|
$
|
388
|
|
|
|
|
(1)
|
For the three months
ended March 31, 2022, restructuring charges primarily consist of
real estate consolidation
|
(2)
|
For the three months
ended March 31, 2022, other items primarily consist of business
optimization costs and transaction related costs, including costs
related to the Proposed Transaction. For the three months ended
March 31, 2021, other items primarily consist of business
optimization costs and transaction related costs.
|
The below table
presents reconciliations from diluted net income per share to Adjusted
Earnings per Share for the three months ended March 31, 2022 and
2021:
|
|
|
|
Three Months Ended
March 31,
(Unaudited)
|
|
|
(In millions)
|
|
2022
|
|
|
2021
|
|
|
Net income from continuing operations attributable
to
Nielsen shareholders per share of common stock,
diluted
|
|
$
|
0.28
|
|
|
$
|
0.29
|
|
|
Depreciation and
amortization associated with
acquisition-related tangible and intangible
assets
|
|
|
0.10
|
|
|
|
0.11
|
|
|
Restructuring
(1)
|
|
|
0.03
|
|
|
|
-
|
|
|
Share-based
compensation
|
|
|
0.02
|
|
|
|
0.02
|
|
|
Other non-operating
(income)/expense, net
|
|
|
(0.01)
|
|
|
|
0.01
|
|
|
Other items
(2)
|
|
|
0.07
|
|
|
|
-
|
|
|
Interest
adjustment(3)
|
|
|
-
|
|
|
|
0.03
|
|
|
Tax effect of above
items
|
|
|
(0.05)
|
|
|
|
(0.04)
|
|
|
Discrete tax
benefit
|
|
|
-
|
|
|
|
0.04
|
|
|
Adjusted earnings per share
|
|
$
|
0.45
|
|
|
$
|
0.47
|
|
|
|
|
(1)
|
For the three months
ended March 31, 2022, restructuring charges primarily consist of
real estate consolidation.
|
(2)
|
For the three months
ended March 31, 2022, other items primarily consist of business
optimization costs and transaction related costs, including costs
related to the Proposed Transaction. For the three months ended
March 31, 2021, other items primarily consist of business
optimization costs and transaction related costs.
|
(3)
|
As if the Global
Connect sale and resulting de-leveraging occurred on January 1,
2021.
|
Free Cash Flow
We define free cash flow as net cash provided by operating
activities, 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. The following table presents a reconciliation from
consolidated net cash provided by operating activities to free cash
flow. Free cash flow is presented as if the Global Connect
transaction and resulting de-levering occurred on January 1, 2021. Management believes that this
non-GAAP measure is useful in providing period-to-period
comparisons of the free cash flow results.
|
|
Three Months Ended
March 31,
(Unaudited)
|
|
(In millions)
|
|
2022
|
|
|
2021
|
|
Consolidated net cash
used in operating activities
|
|
$
|
219
|
|
|
$
|
(45)
|
|
Less: Capital
expenditures, net
|
|
|
(82)
|
|
|
|
(86)
|
|
Consolidated free cash
flow
|
|
|
137
|
|
|
|
(131)
|
|
Less: Discontinued
operations free cash flow
|
|
|
-
|
|
|
|
(238)
|
|
Free cash flow from
continuing operations
|
|
|
137
|
|
|
|
107
|
|
Interest
adjustment(1)
|
|
|
-
|
|
|
|
4
|
|
Separation-related cash
costs (2)
|
|
|
-
|
|
|
|
4
|
|
Free cash
flow
|
|
$
|
137
|
|
|
$
|
115
|
|
|
|
(1)
|
Reflects an adjustment
to interest payments assuming the Global Connect transaction and
the resulting de-levering occurred on January 1, 2021.
|
(2)
|
Primarily includes
capital expenditures to position Nielsen to be a standalone
company.
|
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 12 months then ended. Net debt
and the net debt leverage ratio are commonly used metrics to
evaluate and compare leverage between companies and are not
presentations made in accordance with GAAP. The calculation of net
debt and the net debt leverage ratio as of March 31, 2022 is as follows:
(In millions) (Unaudited)
|
|
Gross debt as of
March 31, 2022
|
|
$
|
5,623
|
|
Less: Cash and cash
equivalents as of March 31, 2022
|
|
|
(482)
|
|
Net debt as of March 31, 2022
|
|
$
|
5,141
|
|
Adjusted EBITDA for
the year ended December 31, 2021
|
|
$
|
1,491
|
|
Less: Adjusted EBITDA
for the three ended March 31, 2021
|
|
|
(388)
|
|
Add: Adjusted EBITDA
for the three months ended March 31, 2022
|
|
|
372
|
|
Adjusted EBITDA for the twelve months ended
March 31, 2022
|
|
$
|
1,475
|
|
Net debt leverage ratio as of March 31,
2022
|
|
|
3.49x
|
|
Investor Relations: Sara
Gubins, +1 646 283 7571;
sara.gubins@nielsen.com
Media Relations: Connie Kim, +1 240 274 9999;
connie.kim@nielsen.com
View original
content:https://www.prnewswire.com/news-releases/nielsen-reports-1st-quarter-2022-results-301534833.html
SOURCE Nielsen Holdings plc