Guarantor Financial Information

12 Months Ended

Dec. 31, 2019

20. Guarantor Financial Information

The following supplemental financial information is being provided for purposes of compliance with reporting covenants contained in certain debt obligations of Nielsen and its subsidiaries. The financial information sets forth for Nielsen, its subsidiaries that have issued certain debt securities (the “Issuers”) and its guarantor and non-guarantor subsidiaries, the consolidating balance sheet as of December 31, 2019 and 2018 and consolidating statements of operations and cash flows for the periods ended December 31, 2019, 2018 and 2017.

The issued debt securities are jointly and severally guaranteed on a full and unconditional basis by Nielsen and subject to certain exceptions, each of the direct and indirect 100% owned subsidiaries of Nielsen, in each case to the extent that such entities provide a guarantee under the senior secured credit facilities. The issuers are also 100% owned indirect subsidiaries of Nielsen: Nielsen Finance LLC and Nielsen Finance Co. for certain series of debt obligations, and The Nielsen Company (Luxembourg) S.ar.l., for the other series of debt obligations. Each issuer is a guarantor of the debt obligations not issued by it.

Nielsen is a holding company and does not have any material assets or operations other than ownership of the capital stock of its direct and indirect subsidiaries. All of Nielsen’s operations are conducted through its subsidiaries, and, therefore, Nielsen is expected to continue to be dependent upon the cash flows of its subsidiaries to meet its obligations. The senior secured credit facilities contain certain limitations on the ability of Nielsen to receive the cash flows of its subsidiaries.

While all subsidiary guarantees of the issued debt securities are full and unconditional, these guarantees contain customary release provisions including when (i) the subsidiary is sold or sells all of its assets, (ii) the subsidiary is declared “unrestricted” for covenant purposes, (iii) the subsidiary’s guarantee under the senior secured credit facilities is released and (iv) the requirements for discharge of the indenture have been satisfied.

Nielsen Holdings plc

Consolidated Statement of Comprehensive Income

For the year ended December 31, 2019

										Non-
(IN MILLIONS)	Parent			Issuers			Guarantor			Guarantor			Elimination			Consolidated
Revenues	$	—		$	—		$	3,586		$	2,912		$	—		$	6,498
Cost of revenues, exclusive of depreciation and amortization shown separately below		—			—			1513			1,309			—			2,822
Selling, general and administrative expenses, exclusive of depreciation and amortization shown separately below		14			—			936			979			—			1,929
Depreciation and amortization		—			—			610			146			—			756
Impairment of goodwill and other long-lived assets		—			—			419			585			—			1,004
Restructuring charges		—			—			35			45			—			80
Operating income/(loss)		(14	)		—			73			(152	)		—			(93	)
Interest income		1			726			40			10			(771	)		6
Interest expense		—			(371	)		(756	)		(41	)		771			(397	)
Foreign currency exchange transaction gains/(losses), net		—			—			(1	)		(9	)		—			(10	)
Other income/(expense), net		—			—			86			(255	)		—			(169	)
Income/(loss) before income taxes and equity in net income/(loss) of subsidiaries		(13	)		355			(558	)		(447	)		—			(663	)
Benefit/(provision) for income taxes		—			(112	)		292			80			—			260
Equity in net income/(loss) of subsidiaries		(402	)		176			(135	)		—			361			—
Equity in net income/(loss) of affiliates		—			—			(1	)		1			—			—
Net income/(loss)		(415	)		419			(402	)		(366	)		361			(403	)
Less net income/(loss) attributable to noncontrolling interests		—			—			—			12			—			12
Net income/(loss) attributable to controlling interest		(415	)		419			(402	)		(378	)		361			(415	)
Total other comprehensive income/(loss)		105			(20	)		105			165			(248	)		107
Total other comprehensive income/(loss) attributable to noncontrolling interests		—			—			—			2			—			2
Total other comprehensive income/(loss) attributable to controlling interests		105			(20	)		105			163			(248	)		105
Total comprehensive income/(loss)		(310	)		399			(297	)		(201	)		113			(296	)
Comprehensive income/(loss) attributable to noncontrolling interests		—			—			—			14			—			14
Total comprehensive income/(loss) attributable to controlling interest	$	(310	)	$	399		$	(297	)	$	(215	)	$	113		$	(310	)

Nielsen Holdings plc

Consolidated Statement of Comprehensive Income

For the year ended December 31, 2018

										Non-
(IN MILLIONS)	Parent			Issuers			Guarantor			Guarantor			Elimination			Consolidated
Revenues	$	—		$	—		$	3,566		$	2,949		$	—		$	6,515
Cost of revenues, exclusive of depreciation and amortization shown separately below		—			—			1,457			1,348			—			2,805
Selling, general and administrative expenses, exclusive of depreciation and amortization shown separately below		4			—			946			1,008			—			1,958
Depreciation and amortization		—			—			542			133			—			675
Impairment of goodwill and other long-lived assets		—			—			579			834			—			1,413
Restructuring charges		—			—			51			88			—			139
Operating income/(loss)		(4	)		—			(9	)		(462	)		—			(475	)
Interest income		1			681			38			6			(718	)		8
Interest expense		—			(369	)		(704	)		(39	)		718			(394	)
Foreign currency exchange transaction gains/(losses), net		—			—			—			(16	)		—			(16	)
Other income/(expense), net		—			(6	)		860			(859	)		—			(5	)
Income/(loss) before income taxes and equity in net income/(loss) of subsidiaries		(3	)		306			185			(1,370	)		—			(882	)
Benefit/(provision) for income taxes		—			(99	)		139			142			—			182
Equity in net income/(loss) of subsidiaries		(709	)		167			(1,033	)		—			1,575			—
Net income/(loss)		(712	)		374			(709	)		(1,228	)		1,575			(700	)
Less net income/(loss) attributable to noncontrolling interests		—			—			—			12			—			12
Net income/(loss) attributable to controlling interest		(712	)		374			(709	)		(1,240	)		1,575			(712	)
Total other comprehensive income/(loss)		(170	)		17			(170	)		(176	)		328			(171	)
Total other comprehensive income/(loss) attributable to noncontrolling interests		—			—			—			(1	)		—			(1	)
Total other comprehensive income/(loss) attributable to controlling interests		(170	)		17			(170	)		(175	)		328			(170	)
Total comprehensive income/(loss)		(882	)		391			(879	)		(1,404	)		1,903			(871	)
Comprehensive income/(loss) attributable to noncontrolling interests		—			—			—			11			—			11
Total comprehensive income/(loss) attributable to controlling interest	$	(882	)	$	391		$	(879	)	$	(1,415	)	$	1,903		$	(882	)

Nielsen Holdings plc

Consolidated Statement of Comprehensive Income

For the year ended December 31, 2017

										Non-
(IN MILLIONS)	Parent			Issuers			Guarantor			Guarantor			Elimination			Consolidated
Revenues	$	—		$	—		$	3,608		$	2,964		$	—		$	6,572
Cost of revenues, exclusive of depreciation and amortization shown separately below		—			—			1,419			1,346			—			2,765
Selling, general and administrative expenses, exclusive of depreciation and amortization shown separately below		4			—			933			936			—			1,873
Depreciation and amortization		—			—			504			136			—			640
Restructuring charges		—			—			44			36			—			80
Operating income/(loss)		(4	)		—			708			510			—			1,214
Interest income		1			839			37			4			(877	)		4
Interest expense		—			(353	)		(857	)		(41	)		877			(374	)
Foreign currency exchange transaction gains/(losses), net		—			—			(4	)		(6	)		—			(10	)
Other income/(expense), net		—			(4	)		162			(164	)		—			(6	)
Income/(loss) before income taxes and equity in net income/(loss) of subsidiaries and affiliates		(3	)		482			46			303			—			828
Benefit/(provision) for income taxes		(1	)		(146	)		(165	)		(76	)		—			(388	)
Equity in net income/(loss) of subsidiaries		433			193			553			—			(1,179	)		—
Equity in net income/(loss) of affiliates		—			—			(1	)		1			—			—
Net income/(loss)		429			529			433			228			(1,179	)		440
Less net income/(loss) attributable to noncontrolling interests		—			—			—			11			—			11
Net income/(loss) attributable to controlling interest		429			529			433			217			(1,179	)		429
Total other comprehensive income/(loss)		271			(21	)		271			308			(556	)		273
Total other comprehensive income/(loss) attributable to noncontrolling interests		—			—			—			2			—			2
Total other comprehensive income/(loss) attributable to controlling interests		271			(21	)		271			306			(556	)		271
Total comprehensive income/(loss)		700			508			704			536			(1,735	)		713
Comprehensive income/(loss) attributable to noncontrolling interests		—			—			—			13			—			13
Total comprehensive income/(loss) attributable to controlling interest	$	700		$	508		$	704		$	523		$	(1,735	)	$	700

Nielsen Holdings plc

Consolidated Balance Sheet

December 31, 2019

							Non-
(IN MILLIONS)	Parent		Issuers		Guarantor		Guarantor		Elimination			Consolidated
Assets:
Current assets
Cash and cash equivalents	$	2	$	-	$	48	$	404	$	-		$	454
Trade and other receivables, net		-		-		404		699		-			1,103
Prepaid expenses and other current assets		-		-		291		129		-			420
Intercompany receivables		7		1,615		278		69		(1,969	)		-
Total current assets		9		1,615		1,021		1,301		(1,969	)		1,977
Non-current assets													-
Property, plant and equipment, net		-		-		292		174		-			466
Operating lease right-of-use asset		-		-		190		203		-			393
Goodwill		-		-		5,103		890		-			5,993
Other intangible assets, net		-		-		4,370		511		-			4,881
Deferred tax assets		1		-		-		275		-			276
Other non-current assets		-		-		256		77		-			333
Equity investment in subsidiaries		2,170		1,298		4,576		-		(8,044	)		-
Intercompany loans		25		8,887		896		1,605		(11,413	)		-
Total assets	$	2,205	$	11,800	$	16,704	$	5,036	$	(21,426	)	$	14,319
Liabilities and equity:
Current liabilities
Accounts payable and other current liabilities	$	10	$	62	$	517	$	593	$	-		$	1,182
Deferred revenues		-		-		217		128		-			345
Income tax liabilities		-		-		4		56		-			60
Current portion of long-term debt, finance lease obligations and short-term borrowings		-		861		46		7		-			914
Intercompany payables		-		3		1,689		277		(1,969	)		-
Total current liabilities		10		926		2,473		1,061		(1,969	)		2,501
Non-current liabilities													-
Long-term debt and finance lease obligations		-		7,302		80		13		-			7,395
Operating lease liabilities		-		-		213		157		-			370
Deferred tax liabilities		-		71		887		94		-			1,052
Intercompany loans		-		-		10,516		897		(11,413	)		-
Other non-current liabilities		-		22		365		226		-			613
Total liabilities		10		8,321		14,534		2,448		(13,382	)		11,931
Total shareholders’ equity		2,195		3,479		2,170		2,395		(8,044	)		2,195
Noncontrolling interests		-		-		-		193		-			193
Total equity		2,195		3,479		2,170		2,588		(8,044	)		2,388
Total liabilities and equity	$	2,205	$	11,800	$	16,704	$	5,036	$	(21,426	)	$	14,319

Nielsen Holdings plc

Consolidated Balance Sheet

December 31, 2018

							Non-
(IN MILLIONS)	Parent		Issuers		Guarantor		Guarantor		Elimination			Consolidated
Assets:
Current assets
Cash and cash equivalents	$	3	$	—	$	79	$	442	$	—		$	524
Trade and other receivables, net		—		1		377		740		—			1,118
Prepaid expenses and other current assets		—		3		234		124		—			361
Intercompany receivables		3		1,310		399		94		(1,806	)		—
Total current assets		6		1,314		1,089		1,400		(1,806	)		2,003
Non-current assets													-
Property, plant and equipment, net		—		—		303		165		—			468
Goodwill		—		—		5,531		1,456		—			6,987
Other intangible assets, net		—		—		4,545		479		—			5,024
Deferred tax assets		1		—		—		332		—			333
Other non-current assets		—		19		273		72		—			364
Equity investment in subsidiaries		2,815		1,232		1,936		—		(5,983	)		—
Intercompany loans		25		8,822		2,220		105		(11,172	)		—
Total assets	$	2,847	$	11,387	$	15,897	$	4,009	$	(18,961	)	$	15,179
Liabilities and equity:
Current liabilities
Accounts payable and other current liabilities	$	—	$	62	$	541	$	516	$	—		$	1,119
Deferred revenues		—		—		225		130		—			355
Income tax liabilities		—		—		20		56		—			76
Current portion of long-term debt, finance lease obligations and short-term borrowings		—		54		46		7		—			107
Intercompany payables		—		—		1,408		398		(1,806	)		—
Total current liabilities		—		116		2,240		1,107		(1,806	)		1,657
Non-current liabilities													—
Long-term debt and finance lease obligations		—		8,170		95		15		—			8,280
Deferred tax liabilities		—		71		956		81		—			1,108
Intercompany loans		—		—		8,952		2,220		(11,172	)		—
Other non-current liabilities		—		3		839		249		—			1,091
Total liabilities		—		8,360		13,082		3,672		(12,978	)		12,136
Total shareholders’ equity		2,847		3,027		2,815		141		(5,983	)		2,847
Noncontrolling interests		—		—		—		196		—			196
Total equity		2,847		3,027		2,815		337		(5,983	)		3,043
Total liabilities and equity	$	2,847	$	11,387	$	15,897	$	4,009	$	(18,961	)	$	15,179

Nielsen Holdings plc

Consolidated Statement of Cash Flows

For the year ended December 31, 2019

										Non-
(IN MILLIONS)	Parent			Issuers			Guarantor			Guarantor			Consolidated
Net cash provided by/(used in) operating activities	$	(8	)	$	90		$	482		$	502		$	1,066
Investing activities:														—
Acquisition of subsidiaries and affiliates, net of cash acquired		—			—			(11	)		(50	)		(61	)
Proceeds from the sale of subsidiaries and affiliates								17			—			17
Additions to property, plant and equipment and other assets		—			—			(55	)		(61	)		(116	)
Additions to intangible assets		—			—			(326	)		(77	)		(403	)
Other investing activities		—			—			(18	)		(1	)		(19	)
Net cash provided by/(used in) investing activities		—			—			(393	)		(189	)		(582	)
Financing activities:
Repayments of debt		—			(57	)		—			—			(57	)
Increase/(decrease) in short term borrowings		—			—			—			(1	)		(1	)
Cash dividends paid to shareholders		(395	)		—			—			—			(395	)
Activity under stock plans		—			—			(8	)		—			(8	)
Proceeds from employee stock purchase plan		4			—			—			—			4
Finance leases		—			—			(54	)		(6	)		(60	)
Settlement of intercompany and other financing activities		398			(33	)		(58	)		(334	)		(27	)
Net cash provided by/(used in) financing activities		7			(90	)		(120	)		(341	)		(544	)
Effect of exchange-rate changes on cash and cash equivalents		—			—			—			(10	)		(10	)
Net increase/(decrease) in cash and cash equivalents		(1	)		—			(31	)		(38	)		(70	)
Cash and cash equivalents at beginning of period		3			—			79			442			524
Cash and cash equivalents at end of period	$	2		$	—		$	48		$	404		$	454

Nielsen Holdings plc

Consolidated Statement of Cash Flows

For the year ended December 31, 2018

										Non-
(IN MILLIONS)	Parent			Issuers			Guarantor			Guarantor			Consolidated
Net cash provided by/(used in) operating activities	$	(2	)	$	240		$	383		$	437		$	1,058
Investing activities:														—
Acquisition of subsidiaries and affiliates, net of cash acquired		—			—			(15	)		(28	)		(43	)
Proceeds from the sale of subsidiaries and affiliates								51			—			51
Additions to property, plant and equipment and other assets		—			—			(53	)		(53	)		(106	)
Additions to intangible assets		—			—			(356	)		(58	)		(414	)
Proceeds from the sale of property, plant and equipment and other assets		—			—			—			4			4
Other investing activities		—			—			9			(7	)		2
Net cash provided by/(used in) investing activities		—			—			(364	)		(142	)		(506	)
Financing activities:
Repayments of debt		—			(818	)		—			(1	)		(819	)
Proceeds from the issuance of debt, net of issuance costs		—			781			—			—			781
Increase/(decrease) in short term borrowings		—			—			—			1			1
Cash dividends paid to shareholders		(494	)		—			—			—			(494	)
Repurchase of common stock		(70	)		—			—			—			(70	)
Activity under stock plans		23			—			(8	)		—			15
Proceeds from employee stock purchase plan		5			—			—			—			5
Finance leases		—			—			(69	)		(7	)		(76	)
Settlement of intercompany and other financing activities		539			(204	)		67			(421	)		(19	)
Net cash provided by/(used in) financing activities		3			(241	)		(10	)		(428	)		(676	)
Effect of exchange-rate changes on cash and cash equivalents		—			—			1			(9	)		(8	)
Net increase/(decrease) in cash and cash equivalents		1			—			10			(142	)		(132	)
Cash and cash equivalents at beginning of period		2			1			69			584			656
Cash and cash equivalents at end of period	$	3		$	—		$	79		$	442		$	524

Nielsen Holdings plc

Consolidated Statement of Cash Flows

For the year ended December 31, 2017

											Non-
(IN MILLIONS)	Parent				Issuers			Guarantor			Guarantor			Consolidated
Net cash provided by/(used in) operating activities	$	(1	)		$	171		$	789		$	351		$	1,310
Investing activities:															—
Acquisition of subsidiaries and affiliates, net of cash acquired		—				—			(755	)		(23	)		(778	)
Proceeds from the sale of subsidiaries and affiliates									1			1			2
Additions to property, plant and equipment and other assets		—				—			(63	)		(56	)		(119	)
Additions to intangible assets		—				—			(307	)		(63	)		(370	)
Proceeds from the sale of property, plant and equipment and other assets		—				—			29			13			42
Other investing activities		—				—			(11	)		(2	)		(13	)
Net cash provided by/(used in) investing activities		—				—			(1,106	)		(130	)		(1,236	)
Financing activities:
Repayments of debt		—				(2,295	)		—			(1	)		(2,296	)
Proceeds from the issuance of debt, net of issuance costs		—				2,744			1			—			2,745
Increase/(decrease) in short term borrowings		—		-		—			—			(5	)		(5	)
Cash dividends paid to shareholders		(474	)			—			—			—			(474	)
Repurchase of common stock		(140	)			—			—			—			(140	)
Activity under stock plans		32				—			(11	)		—			21
Proceeds from employee stock purchase plan		6				—			—			—			6
Finance leases		—				—			(51	)		(4	)		(55	)
Settlement of intercompany and other financing activities		574				(620	)		236			(207	)		(17	)
Net cash provided by/(used in) financing activities		(2	)			(171	)		175			(217	)		(215	)
Effect of exchange-rate changes on cash and cash equivalents		—				—			(4	)		47			43
Net increase/(decrease) in cash and cash equivalents		(3	)			—			(146	)		51			(98	)
Cash and cash equivalents at beginning of period		5				1			215			533			754
Cash and cash equivalents at end of period	$	2			$	1		$	69		$	584		$	656