Nielsen Q2 2016 Results

NYSE: NLSN

TUESDAY JULY 26, 2016 8:00AM ET

2ND QUARTER 2016 RESULTS

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2NLSN 2Q 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 July 26, 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/

MITCH BARNSCHIEF EXECUTIVE OFFICER

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SECOND QUARTER 2016 OVERVIEW

CONSISTENT, RESILIENT BUSINESS MODEL DELIVERING SOLID GROWTH AND PROFITABILITY

• Another quarter of steady, consistent performance

- Revenue of $1.6 billion…up 4.5% constant currency

- Adjusted EBITDA of $490 million…up 6.5% constant currency

- Adjusted net income per share of $0.71…up 9.2% constant currency

• Executing on our balanced capital allocation framework

- ~$550 million remaining under existing share repurchase authorization as of June 30th

• Reiterating 2016 guidance

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WATCH STRATEGIC INITIATIVES

2Q HIGHLIGHTS

Television: solid growth Digital Ad Ratings: Viewability; Hulu SVOD: strong demand Digital Content Ratings: May ’16 syndication Total Content Ratings: August ’16 syndication Currency update: continued progress Set-top box data: Charter, joining DISH Marketing Effectiveness: +15.1%

FOCUSED ON EXECUTION

Note: Growth in constant currency

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BUY STRATEGIC INITIATIVES

2Q HIGHLIGHTS

Coverage: emerging markets strong Growth with retailers

• Walmart digital content• Whole Foods

Market realignment• Speed & focus• Simplification

Connected System• Clients enthusiastic• Accelerating investments

SOLID PROGRESS

JAMERE JACKSONCHIEF FINANCIAL OFFICER

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TOTAL NIELSEN RESULTS – 2Q 2016($ in millions except per share amounts)

NON-GAAP RESULTS2Q

20162Q

2015V%(b)

Revenues $1,596 $1,559 4.5%

Adjusted EBITDA $490 $468 6.5%

Adjusted EBITDA margin % 30.7% 30.0% 60 bps

Adjusted Net Income (ANI) $257 $246 6.6%

Diluted ANI per share (c) $0.71 $0.66 9.2%

Free Cash Flow $98 $156 U

(a) Growth as reported(b) Growth in constant currency, excluding Free Cash Flow(c) Calculated using weighted average shares outstanding of 363.2 million for 2Q 2016 and 372.6 million for 2Q 2015. See appendix for detail

U.S. GAAP RESULTS2Q

20162Q

2015V%(a)

Revenues $1,596 $1,559 2.4%

Net Income (NI) $114 $116 (1.7%)

Diluted NI per share (a) $0.31 $0.31 -

CONSISTENT GROWTH…SOLID QUARTER

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

REVENUE

PROFITABILITY

2Q DYNAMICS

Total Watch

Adjusted EBITDA

Margin

$744

$332

44.6%

2Q 16

$707

$314

44.4%

2Q 15

5.8%

6.4%

24 bps

V%

• Strong revenue growth +5.8% Audience Measurement (Video/Text): +7.9% Audio +1.7% Marketing Effectiveness +15.1% Other Watch (14.8%)… NRG exit

• Growth initiatives are delivering Strong momentum in Total Audience Digital Ad Ratings adoption Continued traction with Digital Content Ratings Strong demand with publishers and advertisers

• Continued margin expansion while investing

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

REVENUE

PROFITABILITY

2Q DYNAMICS

Developed

Adjusted EBITDA

Margin

$582

$166

19.5%

2Q 16

$582

$162

19.0%

2Q 15

0.9%

6.4%

57 bps

V%

Emerging $270 $270 8.9%

Total Buy $852 $852 3.3%

• Solid revenue growth +3.3%

• Developed markets: discretionary spend softness

• Emerging markets: continue to scale

• Strong margin expansion

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FOREIGN CURRENCY IMPACT

(a) Projected impact assumes rates in effect at 7/22/16 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 - REVENUEPROJECTED FX IMPACT(a):

REPORTED VS CONSTANT CURRENCY

(320)

(210)

(130)

(40)

(170)(140)

(180)

(20)

20

(80)

1Q16 2Q16 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 2016

~361M

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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 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 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 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, restructuring 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 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 NET INCOME RECONCILIATION: Q2($ in millions except per share amounts)

(a) See footnotes on next page

Quarter ended June 30,(Unaudited)

2016 2015Net income $ 114 $ 116

Interest expense, net 82 78

(Benefit)/Provision for income taxes 82 86

Depreciation and amortization 152 146

EBITDA 430 426

Other non-operating expense, net 4 6

Restructuring charges 34 14

Stock-based compensation expense 13 13

Other items (a) 9 9

Adjusted EBITDA 490 468

Interest expense, net (82) (78)

Depreciation and amortization (152) (146)

Depreciation and amortization of acquisition-related tangible and intangible assets 53 51

Cash paid for income taxes (39) (36)

Stock-based compensation expense (13) (13)

Adjusted net income $ 257 $ 246

Adjusted net income per share of common stock, diluted $0.71 $0.66

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ADJUSTED NET INCOME RECONCILIATION(continued)

(a) For the three months ended June 30, 2016 and 2015, other items primarily consists of transaction related costs.

Weighted-average shares of common stock outstanding as of quarter ended June 30, 2016, basic

359,264,465

Dilutive shares of common stock from stock compensation plans 3,952,412

Weighted-average shares of common stock outstanding, diluted 363,216,877

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($ in millions) ADJUSTED EBITDA RECONCILIATION

2016Reported

2015Reported % V Reported

2015 Constant Currency

% V Constant Currency

Buy $166 $162 2.5% $156 6.4%

Watch $332 $314 5.7% $312 6.4%

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

Total $490 $468 4.7% $460 6.5%

QUARTER ENDED JUNE 30,

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(continued, $ in millions)ADJUSTED NET INCOME RECONCILIATION

2016Reported

2015Reported

% VReported



Adjusted Net Income $257 $246 4.5% $241 6.6%

QUARTER ENDED JUNE 30,

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2016Reported

2015 Reported

% VReported



Developed Markets $582 $582 0.0% $577 0.9%

Emerging Markets 270 270 0.0% 248 8.9%

Buy $852 $852 0.0% $825 3.3%

Video and Text $491 458 7.2% $455 7.9%

Audio 123 121 1.7% 121 1.7%

Marketing Effectiveness 84 74 13.5% 73 15.1%

Other Watch 46 54 (14.8)% 54 (14.8)%

Watch $744 $707 5.2% $703 5.8%

Total $1,596 $1,559 2.4% $1,528 4.5%

REVENUE RECONCILIATION

QUARTER ENDED JUNE 30,($ in millions)

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FREE CASH FLOW RECONCILIATION($ in millions)

QUARTER ENDED JUNE 30 2016 2015

Net cash provided by operating activities $210 $253

Less: Capital expenditures, net (112) (97)

Free cash flow $98 $156

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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

6/30/16 12/31/15 Change

Loan Debt (secured) $4,165 $3,496 $669

4.50% Sr. Notes (10/1/20) 793 792 1

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

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

Capital lease/misc. debt 148 149 (1)

Total Debt $8,008 $7,338 $670

Less Cash 346 357 (11)

Net Debt $7,662 $6,981 $681

Adjusted EBITDA(a) $1,902 $1,858 44

Net Debt Ratio (b) 4.03x 3.76x 0.27x

Weighted avg. interest rate (c) 3.97% 4.04% (7) bps

($ in millions)

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SELECTED FINANCIAL METRICS & BALANCE SHEET ITEMS

FINANCIAL METRICS

2Q 16

Free Cash Flow $98

Capital Expenditures, net $112

D&A $152

Net Book Interest $82

Cash Taxes $39

Cash Restructuring $17

Wtd. avg. diluted shares 363.2

BALANCE SHEET – 6/30/16

Gross Debt $8,008

Cash $346

Net Debt $7,662

Net Debt Ratio (a) 4.03x

CURRENT DEBT MATURITY PROFILE – 6/30/16 (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 ($141M) and Revolver ($385M)

($ in millions)

$89

$677

$270

$1,389

$806

$1,944

$2,307

2016 2017 2018 2019 2020 2021 2022

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