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Nielsen Reports Third Quarter 2012 Results

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/(loss) 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 nine months ended September 30, 2012 and 2011, respectively:

       
 
Three Months Ended

September 30,

(Unaudited)

Nine Months Ended

September 30,

(Unaudited)

(IN MILLIONS EXCEPT SHARE AND PER SHARE DATA)     2012   2011 2012 2011
Net income/(loss) $ 106 $ 103 $ 234 $ (9 )
Loss from discontinued operations, net of tax 1
Interest expense, net 105 112 316 363
Provision/(benefit) for income taxes 69 44 114 (51 )
Depreciation and amortization   130     125     388     396  
 
EBITDA 410 384 1,052 700
Equity in net loss/(income) of affiliates 1 2 (1 ) 1
Other non-operating expense, net 4 9 229
Restructuring charges 3 9 56 55
Stock-based compensation expense 10 8 24 18
Other items (a)       1     5     111  
 
Adjusted EBITDA 424 408 1,145 1,114
Interest expense, net (105 ) (112 ) (316 ) (363 )
Depreciation and amortization (130 ) (125 ) (388 ) (396 )
Depreciation and amortization associated with acquisition-related tangible and intangible assets 41 41 123 140
Cash paid for income taxes (26 ) (29 ) (88 ) (92 )
Stock-based compensation expense (10 ) (8 ) (24 ) (18 )
Interest expense attributable to mandatory convertible bonds   6     6     18     15  
 
Adjusted net income $ 200   $ 181   $ 470   $ 400  
 
Adjusted net income per share of common stock, diluted $ 0.53   $ 0.48   $ 1.25   $ 1.10  
 
Weighted-average shares of common stock outstanding, basic 362,016,373 359,381,233 361,477,554 349,910,371
Dilutive shares of common stock from stock compensation plans 4,205,147 5,090,571 4,511,519 5,020,344
Shares of common stock convertible associated with the mandatory convertible bonds   10,416,700     10,416,700     10,416,700     9,233,851  
 
Weighted-average shares of common stock outstanding, diluted   376,638,220     374,888,504     376,405,773     364,164,566  
 
(a)   Other items primarily consist of Sponsor Advisory Fees (including termination payments of $102 million for the nine months ended September 30, 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 September 30, 2012 is as follows:

 
(IN MILLIONS)
Total indebtedness as of September 30, 2012   $ 6,680
Less: mandatory convertible subordinated bonds due 2013   288
 
Gross debt as of September 30, 2012 6,392
Less: cash and cash equivalents as of September 30, 2012   325
 
Net debt as of September 30, 2012 $ 6,067
 
Adjusted EBITDA for the year ended December 31, 2011 $ 1,546
Less: Adjusted EBITDA for the nine months ended September 30, 2011 1,114
Add: Adjusted EBITDA for the nine months ended September 30, 2012   1,145
 
Adjusted EBITDA for the twelve months ended September 30, 2012 $ 1,577
Net debt leverage ratio as of September 30, 2012 3.8x
 




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