UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission file number 001-35042

Nielsen Holdings plc

(Exact name of registrant as specified in its charter)

England and Wales	98-1225347
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
85 Broad Street New York, New York 10004 (646) 654-5000	Nielsen House John Smith Drive Oxford Oxfordshire, OX4 2WB United Kingdom +1 (646) 654-5000
(Address of principal executive offices) (Zip Code) (Registrant’s telephone numbers including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary shares, par value €0.07 per share	NLSN	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No   ☒

There were 356,753,964 shares of the registrant’s Common Stock outstanding as of June 30, 2020.

Table of Contents

Contents

			PAGE
PART I.	FINANCIAL INFORMATION	- 3 -
Item 1.	Condensed Consolidated Financial Statements	- 3 -
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	- 40 -
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	- 61 -
Item 4.	Controls and Procedures	- 62 -
PART II.	OTHER INFORMATION	- 63 -
Item 1.	Legal Proceedings	- 63 -
Item 1A.	Risk Factors	- 63 -
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	- 63 -
Item 3.	Defaults Upon Senior Securities	- 64 -
Item 4.	Mine Safety Disclosures	- 64 -
Item 5.	Other Information	- 64 -
Item 6.	Exhibits	- 64 -
	Signatures	- 66 -

PART I. FINANCIAL INFORMATION

Item  1.Condensed Consolidated Financial Statements

Nielsen Holdings plc

Condensed Consolidated Statements of Operations (Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)	2020			2019			2020			2019
Revenues	$	1,496		$	1,628		$	3,055		$	3,191
Cost of revenues, exclusive of depreciation and    amortization shown separately below		664			699			1,385			1,394
Selling, general and administrative expenses, exclusive    of depreciation and amortization shown separately    below		451			483			966			963
Depreciation and amortization		224			185			438			364
Impairment of goodwill and other long-lived assets		45			—			45			—
Restructuring charges		84			12			95			47
Operating income/(loss)		28			249			126			423
Interest income		—			1			1			3
Interest expense		(91	)		(100	)		(185	)		(199	)
Foreign currency exchange transaction gains/(losses), net		3			(1	)		(3	)		(4	)
Other income/(expense), net		(4	)		—			(5	)		5
Income/(loss) from continuing operations before income taxes and equity in net income/(loss) of affiliates		(64	)		149			(66	)	228
Benefit/(provision) for income taxes		38			(23	)		27			(55	)
Net income/(loss)		(26	)		126			(39	)		173
Net income/(loss) attributable to noncontrolling interests		4			3			9			7
Net income/(loss) attributable to Nielsen shareholders	$	(30	)	$	123		$	(48	)	$	166
Net income/(loss) per share of common stock, basic
Net income/(loss) attributable to Nielsen shareholders	$	(0.08	)	$	0.35		$	(0.13	)	$	0.47
Net income/(loss) per share of common stock, diluted
Net income/(loss) attributable to Nielsen shareholders	$	(0.08	)	$	0.34		$	(0.13	)	$	0.47
Weighted-average shares of common stock outstanding,    basic		356,672,845			355,630,327			356,532,069			355,539,038
Dilutive shares of common stock		—			997,381			—			954,854
Weighted-average shares of common stock outstanding,    diluted		356,672,845			356,627,708			356,532,069			356,493,892
Dividends declared per common share	$	0.06		$	0.35		$	0.12		$	0.70

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 3 -

Nielsen Holdings plc

Condensed Consolidated Statements of Comprehensive Income/(Loss) (Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(IN MILLIONS)	2020			2019			2020			2019
Net income/(loss)	$	(26	)	$	126		$	(39	)	$	173
Other comprehensive income/(loss), net of tax
Foreign currency translation adjustments (1)		14			9			(90	)		20
Changes in the fair value of cash flow hedges (2)		2			(20	)		(31	)		(29	)
Defined benefit pension plan adjustments (3)		3			2			7			6
Total other comprehensive income/(loss)		19			(9	)		(114	)		(3	)
Total comprehensive income/(loss)		(7	)		117			(153	)		170
Less: comprehensive income/(loss) attributable to noncontrolling interests		5			5			2			9
Total comprehensive income/(loss) attributable to Nielsen shareholders	$	(12	)	$	112		$	(155	)	$	161

(1) Net of tax of $3 million for each of the three months ended June 30, 2020 and 2019, and zero and $(1) million for the six months ended June 30, 2020 and 2019, respectively

(2) Net of tax of zero and $8 million for the three months ended June 30, 2020 and 2019, respectively, and $12 million and $11 million for the six months ended June 30, 2020 and 2019, respectively

(3) Net of tax of $(1) million and zero for the three months ended June 30, 2020 and 2019, respectively, and $(2) million and $(1) million for the six months ended June 30, 2020 and 2019, respectively.

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 4 -

Nielsen Holdings plc

Condensed Consolidated Balance Sheets

	June 30,			December 31,
(IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)	2020			2019
	(Unaudited)
Assets:
Current assets
Cash and cash equivalents	$	438		$	454
Trade and other receivables, net of allowances for doubtful accounts and sales    returns of $42 and $28 as of June 30, 2020 and December 31, 2019, respectively		1,131			1,103
Prepaid expenses and other current assets		504			420
Total current assets		2,073			1,977
Non-current assets
Property, plant and equipment, net		402			466
Operating lease right-of-use asset		377			393
Goodwill		5,984			5,993
Other intangible assets, net		4,698			4,881
Deferred tax assets		276			276
Other non-current assets		312			333
Total assets	$	14,122		$	14,319
Liabilities and equity:
Current liabilities
Accounts payable and other current liabilities	$	1,100		$	1,182
Deferred revenues		361			345
Income tax liabilities		-			60
Current portion of long-term debt, finance lease obligations and short-term borrowings		291			914
Total current liabilities		1,752			2,501
Non-current liabilities
Long-term debt and finance lease obligations		8,130			7,395
Deferred tax liabilities		1,016			1,052
Operating lease liabilities		372			370
Other non-current liabilities		645			613
Total liabilities		11,915			11,931
Commitments and contingencies (Note 13)
Equity:
Nielsen shareholders’ equity
Common stock, €0.07 par value, 1,185,800,000 and 1,185,800,000 shares    authorized, 356,767,164 and 356,158,879 shares issued and 356,753,964    and 356,149,883 shares outstanding at June 30, 2020 and    December 31, 2019, respectively		32			32
Additional paid-in capital		4,359			4,378
Retained earnings/(accumulated deficit)		(1,258	)		(1,210	)
Accumulated other comprehensive loss, net of income taxes		(1,112	)		(1,005	)
Total Nielsen shareholders’ equity		2,021			2,195
Noncontrolling interests		186			193
Total equity		2,207			2,388
Total liabilities and equity	$	14,122		$	14,319

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 5 -

Nielsen Holdings plc

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Six Months Ended
	June 30,
(IN MILLIONS)	2020			2019
Operating Activities
Net income/(loss)	$	(39	)	$	173
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
Share-based compensation expense		27			26
Currency exchange rate differences on financial transactions and other (gains)/losses		8			(1	)
Equity in net loss of affiliates, net of dividends received		1			1
Depreciation and amortization		438			364
Impairment of goodwill and other long-lived assets		45			—
Changes in operating assets and liabilities, net of effect of businesses acquired    and divested:
Trade and other receivables, net		(42	)		(118	)
Prepaid expenses and other assets		42			(4	)
Accounts payable and other current liabilities and deferred revenues		(94	)		(153	)
Other non-current liabilities		(16	)		(48	)
Interest payable		(5	)		6
Income taxes		(120	)		(63	)
Net cash provided by/(used in) operating activities		245			183
Investing Activities
Acquisition of subsidiaries and affiliates, net of cash acquired		(28	)		(60	)
Additions to property, plant and equipment and other assets		(14	)		(44	)
Additions to intangible assets		(218	)		(186	)
Other investing activities		(2	)		—
Net cash provided by/(used in) investing activities		(262	)		(290	)
Financing Activities
Net borrowings under revolving credit facility		165			296
Proceeds from issuances of debt, net of issuance costs		978			—
Repayment of debt		(1,029	)		(29	)
Increase/(decrease) in other short-term borrowings		—			(1	)
Cash dividends paid to shareholders		(43	)		(249	)
Activity from share-based compensation plans		(5	)		(4	)
Proceeds from employee stock purchase plan		2			2
Finance leases		(36	)		(29	)
Other financing activities		(11	)		(8	)
Net cash provided by/(used in) financing activities		21			(22	)
Effect of exchange-rate changes on cash and cash equivalents		(20	)		(2	)
Net increase/(decrease) in cash and cash equivalents		(16	)		(131	)
Cash and cash equivalents at beginning of period		454			524
Cash and cash equivalents at end of period	$	438		$	393
Supplemental Cash Flow Information
Cash paid for income taxes	$	(93	)	$	(118	)
Cash paid for interest, net of amounts capitalized	$	(190	)	$	(193	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 6 -

Nielsen Holdings plc

Condensed Consolidated Statements of Changes in Equity

Condensed Consolidated Statements of Changes in Equity for the Three Months Ended June 30, 2020

									Accumulated Other Comprehensive Income (Loss), Net
						Retained
			Additional			Earnings			Currency			Cash			Post			Total Nielsen
	Common		Paid-in			(Accumulated)			Translation			Flow			Employment			Shareholders’			Noncontrolling			Total
(IN MILLIONS)	Stock		Capital			(Deficit)			Adjustments			Hedges			Benefits			Equity			Interests			Equity
Balance, March 31, 2020	$	32	$	4,370		$	(1,228	)	$	(872	)	$	(52	)	$	(206	)	$	2,044		$	187		$	2,231
Net income/(loss)		—		—			(30	)		—			—			—			(30	)		4			(26	)
Currency translation adjustments, net of    tax of $3		—		—			—			13			—			—			13			1			14
Cash flow hedges, net of tax of zero		—		—			—			—			2			—			2			—			2
Unrealized gain on pension liability, net of    tax of $(1)		—		—			—			—			—			3			3			—			3
Employee stock purchase plan		—		1			—			—			—			—			1			—			1
Dividends to shareholders		—		(22	)		—			—			—			—			(22	)		(6	)		(28	)
Common stock activity from share-based    compensation plans		—		(1	)		—			—			—			—			(1	)		—			(1	)
Share-based compensation expense		—		11			—			—			—			—			11			—			11
Balance, June 30, 2020	$	32	$	4,359		$	(1,258	)	$	(859	)	$	(50	)	$	(203	)	$	2,021		$	186		$	2,207

- 7 -

Condensed Consolidated Statements of Changes in Equity for the Six Months Ended June 30, 2020

									Accumulated Other Comprehensive Income (Loss), Net
						Retained
			Additional			Earnings			Currency			Cash			Post			Total Nielsen
	Common		Paid-in			(Accumulated)			Translation			Flow			Employment			Shareholders’			Noncontrolling			Total
(IN MILLIONS)	Stock		Capital			(Deficit)			Adjustments			Hedges			Benefits			Equity			Interests			Equity
Balance, December 31, 2019	$	32	$	4,378		$	(1,210	)	$	(776	)	$	(19	)	$	(210	)	$	2,195		$	193		$	2,388
Net income/(loss)		—		—			(48	)		—			—			—			(48	)		9			(39	)
Currency translation adjustments, net of    tax of zero		—		—			—			(83	)		—			—			(83	)		(7	)		(90	)
Cash flow hedges, net of tax of $12		—		—			—			—			(31	)		—			(31	)		—			(31	)
Unrealized gain on pension liability, net of    tax of $(2)		—		—			—			—			—			7			7			—			7
Employee stock purchase plan		—		2			—			—			—			—			2			—			2
Dividends to shareholders		—		(43	)		—			—			—			—			(43	)		(9	)		(52	)
Common stock activity from share-based    compensation plans		—		(5	)		—			—			—			—			(5	)		—			(5	)
Share-based compensation expense		—		27			—			—			—			—			27			—			27
Balance, June 30, 2020	$	32	$	4,359		$	(1,258	)	$	(859	)	$	(50	)	$	(203	)	$	2,021		$	186		$	2,207

- 8 -

Condensed Consolidated Statements of Changes in Equity for the Three Months Ended June 30, 2019

									Accumulated Other Comprehensive Income (Loss), Net
						Retained
			Additional			Earnings			Currency			Cash			Post			Total Nielsen
	Common		Paid-in			(Accumulated)			Translation			Flow			Employment			Shareholders’			Noncontrolling			Total
(IN MILLIONS)	Stock		Capital			(Deficit)			Adjustments			Hedges			Benefits			Equity			Interests			Equity
Balance, March 31, 2019	$	32	$	4,614		$	(752	)	$	(768	)	$	2		$	(338	)	$	2,790		$	199		$	2,989
Net income/(loss)		—		—			123			—			—			—			123			3			126
Currency translation adjustments, net of    tax of $3		—		—			—			7			—			—			7			2			9
Cash flow hedges, net of tax of $8		—		—			—			—			(20	)		—			(20	)		—			(20	)
Unrealized gain on pension liability, net of    tax of zero		—		—			—			—			—			2			2			—			2
Employee stock purchase plan		—		1			—			—			—			—			1			—			1
Divestiture of a non-controlling interest in a    consolidated subsidiary, net		—		—			—			—			—			—			—			(2	)		(2	)
Dividends to shareholders		—		(125	)		—			—			—			—			(125	)		(3	)		(128	)
Common stock activity from share-based    compensation plans		—		(1	)		—			—			—			—			(1	)		—			(1	)
Share-based compensation expense		—		12			—			—			—			—			12			—			12
Balance, June 30, 2019	$	32	$	4,501		$	(629	)	$	(761	)	$	(18	)	$	(336	)	$	2,789		$	199		$	2,988

- 9 -

Condensed Consolidated Statements of Changes in Equity for the Six Months Ended June 30, 2019

									Accumulated Other Comprehensive Income (Loss), Net
						Retained
			Additional			Earnings			Currency			Cash			Post			Total Nielsen
	Common		Paid-in			(Accumulated)			Translation			Flow			Employment			Shareholders’			Noncontrolling			Total
(IN MILLIONS)	Stock		Capital			(Deficit)			Adjustments			Hedges			Benefits			Equity			Interests			Equity
Balance, December 31, 2018	$	32	$	4,720		$	(795	)	$	(779	)	$	11		$	(342	)	$	2,847		$	196		$	3,043
Net income/(loss)		—		—			166			—			—			—			166			7			173
Currency translation adjustments, net of    tax of $(1)		—		—			—			18			—			—			18			2			20
Cash flow hedges, net of tax of $11		—		—			—			—			(29	)		—			(29	)		—			(29	)
Unrealized gain on pension liability, net of    tax of $(1)		—		—			—			—			—			6			6			—			6
Employee stock purchase plan		—		2			—			—			—			—			2			—			2
Capital contribution by non-controlling partner		—		—			—			—			—			—			—			2			2
Divestiture of a non-controlling interest in a    consolidated subsidiary, net		—		—			—			—			—			—			—			(2	)		(2	)
Dividends to shareholders		—		(249	)		—			—			—			—			(249	)		(6	)		(255	)
Common stock activity from share-based    compensation plans		—		(4	)		—			—			—			—			(4	)		—			(4	)
Share-based compensation expense		—		32			—			—			—			—			32			—			32
Balance, June 30, 2019	$	32	$	4,501		$	(629	)	$	(761	)	$	(18	)	$	(336	)	$	2,789		$	199		$	2,988

The accompanying notes are an integral part of these condensed consolidated financial statements

- 10 -

Nielsen Holdings plc

Notes to Condensed Consolidated Financial Statements

1. Background and Basis of Presentation

Background

Nielsen Holdings plc (“Nielsen” or the “Company”), together with its subsidiaries, is a leading global measurement and data analytics company that provides the most complete and trusted view available of consumers and markets worldwide. The company’s approach marries proprietary Nielsen data with other data sources to help clients around the world understand what’s happening now, what’s happening next, and how to best act on this knowledge.

Nielsen is divided into two business units: Nielsen Global Media (“Media”) and Nielsen Global Connect (“Connect”). Media, the arbiter of truth for media markets, provides media and advertising clients with unbiased and reliable metrics that create the shared understanding of the industry required for markets to function. Media helps clients to define exactly who they want to reach, as well as optimize the outcomes they can achieve. The company's cross-platform measurement strategy brings together the best of TV and digital measurement to ensure a more functional marketplace for the industry.

Connect provides consumer packaged goods manufacturers and retailers with accurate, actionable information and a complete picture of the complex and changing marketplace that brands need to innovate and grow their businesses. Connect provides data and builds tools that use predictive models to turn observations in the marketplace into business decisions and winning solutions. The business's data and insights, combined with the only open, cloud native measurement and analytics platform that democratizes the power of data, continue to provide an essential foundation that makes markets possible in the rapidly evolving world of commerce.

On November 7, 2019, Nielsen announced its plan to spin-off the company's Global Connect business, creating two independent, publicly traded companies -- the Global Media business and the Global Connect business. On May 7, 2020, the Company filed an initial Form 10 Registration Statement with the U.S. Securities and Exchange Commission in connection with the Company’s proposed separation.

On June 30, 2020, Nielsen announced a broad-based optimization plan (the “Restructuring Plan”) to drive permanent cost savings and operational efficiencies, as well as to position the Company for greater profitability and growth. The Company expects the Restructuring Plan to be substantially completed in 2020 and for restructuring actions and other permanent cost-savings initiatives to drive approximately $250 million in pre-tax annual run-rate savings. The Company expects 2020 pre-tax restructuring charges of $150 to $170 million.  

Nielsen has operations in approximately 100 countries, with its registered office located in Oxford, the United Kingdom and its headquarters is located in New York, New York, United States. 

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited but, in the opinion of management, contain all the adjustments (consisting of those of a normal recurring nature) considered necessary to present fairly the Company’s financial position and the results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) applicable to interim periods. For a more complete discussion of significant accounting policies, commitments and contingencies and certain other information, refer to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. All amounts are presented in U.S. Dollars (“$”), except for share data or where expressly stated as being in other currencies, e.g., Euros (“€”). The condensed consolidated financial statements include the accounts of Nielsen and all subsidiaries and other controlled entities. The Company has evaluated events occurring subsequent to June 30, 2020 for potential recognition or disclosure in the condensed consolidated financial statements and concluded there were no subsequent events that required recognition or disclosure other than those provided.

Earnings per Share

Basic net income per share is computed using the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share is computed using the weighted-average number of shares of common stock and dilutive potential shares of common stock outstanding during the period. Dilutive potential shares of common stock primarily consist of employee stock options and restricted stock units.

The effect of 8,996,021 and 4,252,823 shares of common stock underlying outstanding equity awards under Nielsen’s stock compensation plans were excluded from the calculation of diluted earnings per share for the three months ended June 30, 2020 and 2019, respectively, as such shares would have been anti-dilutive.

- 11 -

The effect of 8,996,021 and 4,349,778 shares of common stock underlying outstanding equity awards under Nielsen’s stock compensation plans were excluded from the calculation of diluted earnings per share for the six months ended June 30, 2020 and 2019, respectively, as such shares would have been anti-dilutive.

Accounts Receivable

The Company extends non-interest bearing trade credit to its customers in the ordinary course of business. To minimize credit risk, ongoing credit evaluations of client’s financial condition are performed. Effective January 1, 2020, the Company adopted ASU, “Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments”. Prior to the adoption, an estimate of the allowance for doubtful accounts was made when collection of the full amount was no longer probable (incurred loss) or returns were expected. Subsequent to the adoption, as noted in Note 2, the allowance for doubtful accounts is made when collection of the full amounts is no longer probable by also incorporating reasonable and supportable forecasts (expected loss).

During the six months ended June 30, 2020, Nielsen sold $125 million of accounts receivable to third parties and recorded an immaterial loss on the sale to interest expense, net in the condensed consolidated statement of operations. As of June 30, 2020 and December 31, 2019, $30 million and $85 million of previously sold receivables, respectively, remained outstanding. The sales were accounted for as true sales, without recourse. Nielsen maintains servicing responsibilities for the majority of the receivables sold during the period, for which the related costs are not significant. The proceeds of $125 million from the sales were reported as a component of the changes in trade and other receivables, net within operating activities in the condensed consolidated statement of cash flows.

2. Summary of Recent Accounting Pronouncements

Financial Instruments – Credit Losses

Effective January 1, 2020, the Company adopted ASU, “Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments”. The standard significantly changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard replaced the “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. For available-for-sale debt securities, entities are required to record allowances rather than reduce the carrying amount under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. Upon adoption, this new standard did not have a significant impact on Nielsen’s consolidated balance sheets and statements of operations.

Compensation-Retirement Benefits-Defined Benefit Plans-General

In August 2018, the FASB issued ASU No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20), which amends the current disclosure requirements regarding defined benefit pensions and other post retirement plans, and allows for the removal of certain disclosures, while adding certain new disclosure requirements. This standard is effective for fiscal years beginning after December 15, 2020 and allows for early adoption. Nielsen does not expect this new standard to have a significant impact on its disclosures.

Income Taxes (Topic 740): Simplifying the Accounting for Income taxes

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In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes which amends and aims to simplify accounting disclosure requirements regarding a number of topics including: intraperiod tax allocation, accounting for deferred taxes when there are changes in consolidation of certain investments, tax basis step up in an acquisition and the application of effective rate changes during interim periods, amongst other improvements. This standard is effective for fiscal years beginning after December 15, 2020 and allows for early adoption. Nielsen is assessing the impact of this new standard on its consolidated balance sheets, statements of operations and its future disclosures.

Reference Rate Reform-Facilitation of the Effects of Reference Rate Reform on Financial Reporting

On March 12, 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2020-04, Reference Rate Reform (“ASC 848”): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASC 848 contains optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform. The provisions of ASC 848 must be applied at a Topic, Subtopic or Industry Subtopic for all transactions other than derivatives, which may be applied at a hedging relationship level. The Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

3. Revenue Recognition

Revenue is measured based on the consideration specified in a contract with a customer.  The Company recognizes revenue when it satisfies a performance obligation by transferring control of a product or service to a customer, which generally occurs over time. Substantially all of the Company’s customer contracts are non-cancelable and non-refundable.

The following is a description of principal activities, by reportable segment, from which the Company generates its revenues.

Revenue from the Connect segment consists primarily of measurement services, which include the Company’s core tracking and scan data (primarily transactional measurement data and consumer behavior information) to businesses in the consumer packaged goods industry. Nielsen’s data is used by its clients to measure their market share, tracking billions of sales transactions per month in retail outlets around the world. Revenues for these services are recognized over the period during which the performance obligations are satisfied as the customer receives and consumes the benefits provided by the Company and control of the services are transferred to the customer.

The Company also provides consumer intelligence and analytical services that help clients make smarter business decisions throughout their product development and marketing cycles. The Company’s performance under these arrangements do not create an asset with an alternative use to the company and generally include an enforceable right to payment for performance completed to date, as such, revenue for these services is typically recognized over time. Revenue for contracts that do not include an enforceable right to payment for performance completed to date is recognized at a point in time when the performance obligation is satisfied, generally upon delivery of the services, and when control of the service is transferred to the customer.

Revenue from Nielsen’s Media segment is primarily generated from television, radio, digital and mobile audience measurement services and analytics which are used by the Company’s media clients to establish the value of airtime and more effectively schedule and promote their programming and the Company’s advertising clients to plan and optimize their spending. As the customer simultaneously receives and consumes the benefits provided by the Company’s performance, revenues for these services are recognized over the period during which the performance obligations are satisfied and control of the service is transferred to the customer.

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The Company enters into cooperation arrangements with certain customers, under which the customer provides Nielsen with its data in exchange for Nielsen’s services. Nielsen records these transactions at fair value, which is determined based on the fair value of goods or services received, if reasonably estimable. If not reasonably estimable, the Company considers the fair value of the goods or services surrendered.

The table below sets forth the Company’s revenue disaggregated within each segment by major product offerings and timing of revenue recognition.

(IN MILLIONS)   (UNAUDITED)		Three Months Ended June 30,				Six Months Ended June 30,
		2020		2019		2020		2019
Connect Segment
Measure	$	495	$	546	$	1,005	$	1,085
Predict/Activate		190		226		397		424
Connect	$	685	$	772	$	1,402	$	1,509
Media Segment
Audience Measurement	$	603	$	622	$	1,218	$	1,227
Plan/Optimize		208		234		435		455
Media	$	811	$	856	$	1,653	$	1,682
Total	$	1,496	$	1,628	$	3,055	$	3,191
Timing of revenue recognition
Products transferred at a point in time	$	147	$	145	$	284	$	276
Products and services transferred over time		1,349		1,483		2,771		2,915
Total	$	1,496	$	1,628	$	3,055	$	3,191

Contract Assets and Liabilities

Contract assets represent the Company’s rights to consideration in exchange for services transferred to a customer that have not been billed as of the reporting date. While the Company’s rights to consideration are generally unconditional at the time its performance obligations are satisfied, under certain circumstances the related billing occurs in arrears, generally within one month of the services being rendered.

At the inception of a contract, the Company generally expects the period between when it transfers its services to its customers and when the customer pays for such services will be one year or less.

Contract liabilities relate to advance consideration received or the right to consideration that is unconditional from customers for which revenue is recognized when the performance obligation is satisfied and control transferred to the customer.

The table below sets forth the Company’s contract assets and contract liabilities from contracts with customers.

(IN MILLIONS)	June 30, 2020		December 31, 2019
Contract assets	$	224	$	218
Contract liabilities	$	361	$	346

The increase in the contract assets balance during the period was primarily due to $187 million of revenue recognized that was not billed, in accordance with the terms of the contracts, as of June 30, 2020, offset by $176 million of contract assets included in the December 31, 2019 balance that were invoiced to our clients and therefore transferred to trade receivables.

The increase in the contract liability balance during the period is primarily due to $293 million of advance consideration received or the right to consideration that is unconditional from customers for which revenue was not recognized during the period, offset by $276 million of revenue recognized that was included in the December 31, 2019 contract liability balance.

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Transaction Price Allocated to the Remaining Performance Obligations

As of June 30, 2020, approximately $6.5 billion of revenue is expected to be recognized from remaining performance obligations that are unsatisfied (or partially unsatisfied) for our services. This amount excludes variable consideration allocated to performance obligations related to sales and usage based royalties on licenses of intellectual property.

The Company expects to recognize revenue on approximately 71% of these remaining performance obligations through December 31, 2021, with the balance recognized thereafter.

Deferred Costs

Incremental direct costs incurred to build the infrastructure to service new contracts are capitalized as a contract cost. As of June 30, 2020 and December 31, 2019, the balances of such capitalized costs were $10 million and $11 million, respectively. These costs are typically amortized through cost of revenues over the original contract period beginning when the infrastructure to service new clients is ready for its intended use. The amortization of these costs for the three and six months ended June 30, 2020 was $1 million and $2 million, respectively. The amortization of these costs for the three and six months ended June 30, 2019 was $2 million and $4 million, respectively. There was no impairment loss recorded in any of the periods presented.

Expected Credit Losses

Nielsen is required to measure expected credit losses on trade accounts receivable. Nielsen considered the asset’s contractual life, the risk of loss and reasonable and supportable forecasts of future economic conditions. The estimate of expected credit losses reflects the risk of loss, even if management believes no loss was incurred as of the measurement date.

The following schedule represents the allowance for doubtful accounts rollforward incorporating expected credit losses as of June 30, 2020.

(IN MILLIONS)	Balance Beginning of Period		Charges to Expense			Deductions				Effect of Foreign Currency Translation	Balance at End of Period
Allowance for accounts receivable
For the six months ended June 30, 2020	$	12		$	5	$	(5	)	$	-	$	12

4. Business Acquisitions

Acquisitions

For the six months ended June 30, 2020, Nielsen paid cash consideration of $28 million associated with current period acquisitions, net of cash acquired. Had these 2020 acquisitions occurred as of January 1, 2020, the impact on Nielsen’s consolidated results of operations would not have been material.

For the six months ended June 30, 2019, Nielsen paid cash consideration of $60 million associated with current period acquisitions, net of cash acquired. Had these 2019 acquisitions occurred as of January 1, 2019, the impact on Nielsen’s consolidated results of operations would not have been material.

5. Leases

All significant lease arrangements are generally recognized at lease commencement. Operating lease right-of-use (“ROU”) assets and lease liabilities are recognized at commencement. An ROU asset and corresponding lease liability are not recorded for leases with an initial term of 12 months or less (short term leases) and Nielsen recognizes lease expense for these leases as incurred over the lease term. ROU assets represent the Company’s right to use an underlying asset during the reasonably certain lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Nielsen’s lease terms may include options to extend or terminate the lease when it is reasonably certain that Nielsen will exercise that option. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Nielsen uses the

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rate implicit in the lease for the discount rate when determining the present value of lease payments whenever that rate is readily determinable. If the rate is not readily determinable, Nielsen uses its incremental borrowing rate, which is updated periodically, based on the information available at commencement date. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. Nielsen has lease agreements with lease and non-lease components, which are generally accounted for together.

Nielsen has operating and finance leases for real estate facilities, servers, computer hardware, and other equipment. Nielsen’s leases have remaining lease terms of 1 year to 30 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year.

The components of lease expense were as follows:

(in millions)		Three Months Ended June 30,
		2020	2019
Lease cost
Finance lease cost:
Amortization of right-of-use assets	$	15		$	25
Interest on lease liabilities		2			3
Total finance lease cost		17			28
Operating lease cost		32			36
Sublease income		(1	)		(1	)
Total lease cost	$	48		$	63

(in millions)		Six Months Ended June 30,
		2020	2019
Lease cost
Finance lease cost:
Amortization of right-of-use assets	$	32		$	37
Interest on lease liabilities		4			5
Total finance lease cost		36			42
Operating lease cost		63			58
Short-term lease cost		2			-
Sublease income		(2	)		(2	)
Total lease cost	$	99		$	98

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Supplemental balance sheet information related to leases was as follows:

(in millions, except lease term and discount rate)		June 30, 2020			December 31, 2019
Operating leases
Operating lease right-of-use assets	$	377		$		393
Other current liabilities		104				110
Operating lease liabilities		372				370
Total operating lease liabilities	$	476		$		480
Finance leases
Property, plant and equipment, gross	$	401		$		393
Accumulated depreciation		(238	)			(213	)
Property, plant and equipment, net		163				180
Other intangible assets, gross		23				24
Accumulated amortization		(17	)			(13	)
Other intangible assets, net		6				11
Accounts payable and other current liabilities		43				53
Long-term debt and capital lease obligations		79				92
Total finance lease liabilities	$	122		$		145
		Six Months Ended June 30,
Other information		2020				2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases		(4	)			(5	)
Operating cash flows from operating leases		(64	)			(65	)
Financing cash flows from finance leases		(36	)			(29	)
Right-of-use assets obtained in exchange for new finance lease liabilities		12				13
Right-of-use assets obtained in exchange for new operating lease liabilities		27				32
Weighted-average remaining lease term--finance leases		4 years		3 years
Weighted-average remaining lease term--operating leases		7 years		9 years
Weighted-average discount rate--finance leases		5.96	%			6.50	%
Weighted-average discount rate--operating leases		4.29	%			4.50	%

Annual maturities of Nielsen’s lease liabilities are as follows:

(in millions)	Operating Leases			Finance Leases
For July 1, 2020 to December 31, 2020	$	67		$	28
2021		107			43
2022		88			28
2023		63			19
2024		46			12
2025		29			4
Thereafter		160			5
Total lease payments		560			139
Less imputed interest		(84	)		(17	)
Total	$	476		$	122

6. Goodwill and Other Intangible Assets

Goodwill

During the first quarter of 2020, despite the excess fair value identified in our 2019 impairment assessment, we determined that the significant decline in Nielsen’s market capitalization and impacts of the COVID-19 pandemic indicated that there was a triggering

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event for an interim assessment. As a result, we reviewed our previous forecasts and assumptions based on our projections that are subject to various risks and uncertainties, including: forecasted revenues, expenses and cash flows, including the duration and extent of impact to our business from the COVID-19 pandemic, current discount rates, the reduction in Nielsen's market capitalization, and observable market transactions.

Based on our interim impairment assessment as of March 31, 2020, we determined that the estimated fair values of the reporting units exceeded their carrying values (including goodwill), thus no impairment was recorded. Based on our second quarter results and projections, there were no indicators of impairment during the second quarter of 2020. Nielsen will continue to closely evaluate any indicators of future impairments.

The table below summarizes the changes in the carrying amount of goodwill by reportable segment for the six months ended June 30, 2020.

(IN MILLIONS)	Connect			Media			Total
Balance, December 31, 2019	$	331		$	5,662		$	5,993
Acquisitions, divestitures and other adjustments		20			(7	)		13
Effect of foreign currency translation		(8	)		(14	)		(22	)
Balance, June 30, 2020	$	343		$	5,641		$	5,984

At June 30, 2020, $40 million of the goodwill is expected to be deductible for income tax purposes.

Other Intangible Assets

	Gross Amounts				Accumulated Amortization
	June 30,		December 31,		June 30,			December 31,
(IN MILLIONS)	2020		2019		2020			2019
Indefinite-lived intangibles:
Trade names and trademarks	$	1,921	$	1,921	$	—		$	—
Amortized intangibles:
Trade names and trademarks		145		144		(113	)		(109	)
Customer-related intangibles		3,117		3,153		(1,844	)		(1,764	)
Covenants-not-to-compete		37		37		(36	)		(36	)
Content databases		168		168		(47	)		(40	)
Computer software		2,830		2,626		(1,515	)		(1,260	)
Patents and other		183		182		(148	)		(141	)
Total	$	6,480	$	6,310	$	(3,703	)	$	(3,350	)

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During the second quarter of 2020, Nielsen decided to exit smaller, underperforming markets and non-core businesses, and concluded that this decision represented an impairment indicator for the long-lived assets within those markets and businesses.  To the extent that the carrying value of the assets exceeded the sum of the future undiscounted cash flows, we measured an impairment charge using a discounted cash flow method for estimation of the assets’ fair value.  During the second quarter of 2020 we recognized a non-cash impairment charge associated with amortizable intangibles of $37 million.  This charge was primarily recorded within our Media segment.

Amortization expense associated with the above intangible assets was $182 million and $136 million for the three months ended June 30, 2020 and 2019, respectively. These amounts included amortization expense associated with computer software of $134 million and $86 million for the three months ended June 30, 2020 and 2019, respectively.

Amortization expense associated with the above intangible assets was $350 million and $274 million for the six months ended June 30, 2020 and 2019, respectively. These amounts included amortization expense associated with computer software of $255 million and $173 million for the six months ended June 30, 2020 and 2019, respectively.

At June 30, 2020, the net book value of purchased software and internally developed software was $25 million and $1,290 million, respectively.

7. Changes in and Reclassification out of Accumulated Other Comprehensive Income/(Loss) by Component

The table below summarizes the changes in accumulated other comprehensive income/(loss), net of tax, by component for the six months ended June 30, 2020 and 2019.

	Foreign Currency
	Translation								Post Employment
	Adjustments				Cash Flow Hedges				Benefits				Total
(IN MILLIONS)
Balance December 31, 2019	$	(776		)	$	(19		)	$	(210		)	$	(1,005		)
Other comprehensive income/(loss) before    reclassifications		(90		)		(38		)		1				(127		)
Amounts reclassified from accumulated other    comprehensive (income)/loss			—				7				6				13
Net current period other comprehensive income/(loss)		(90		)		(31		)		7				(114		)
Net current period other comprehensive income/(loss) attributable to noncontrolling interest		(7		)		—				—				(7		)
Net current period other comprehensive income/(loss) attributable to Nielsen shareholders		(83		)		(31		)		7				(107		)
Balance June 30, 2020	$	(859		)	$	(50		)	$	(203		)	$	(1,112		)

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	Foreign Currency
	Translation								Post Employment
	Adjustments				Cash Flow Hedges				Benefits				Total
(IN MILLIONS)
Balance December 31, 2018	$	(779		)	$	11			$	(342		)	$	(1,110		)
Other comprehensive income/(loss) before    reclassifications		20				(24		)		—				(4		)
Amounts reclassified from accumulated other    comprehensive (income)/loss			—				(5	)			6				1
Net current period other comprehensive income/(loss)		20				(29		)		6				(3		)
Net current period other comprehensive income/(loss) attributable to noncontrolling interest		2				—				—				2
Net current period other comprehensive income/(loss) attributable to Nielsen shareholders		18				(29		)		6				(5		)
Balance June 30, 2019	$	(761		)	$	(18		)	$	(336		)	$	(1,115		)

The table below summarizes the reclassification of accumulated other comprehensive loss by component for the three months ended June 30, 2020 and 2019, respectively.

	Amount Reclassified from
	Accumulated Other
(IN MILLIONS)	Comprehensive (Income)/Loss
Details about Accumulated							Affected Line Item in the
Other Comprehensive	Three Months Ended			Three Months Ended			Condensed Consolidated
Income components	June 30, 2020			June 30, 2019			Statement of Operations
Cash flow hedges
Interest rate contracts	$	8		$	(3	)	Interest (income)/expense
		(2	)		1		(Benefit)/provision for income taxes
	$	6		$	(2	)	Total, net of tax
Amortization of Post-Employment    Benefits
Actuarial loss	$	4		$	4		(a)
		(1	)		(1	)	(Benefit)/provision for income taxes
	$	3		$	3		Total, net of tax
Total reclassification for the period	$	9		$	1		Net of tax

(a) This accumulated other comprehensive loss component is included in the computation of net periodic pension cost.

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The table below summarizes the reclassification of accumulated other comprehensive loss by component for the six months ended June 30, 2020 and 2019, respectively.

	Amount Reclassified from
	Accumulated Other
(IN MILLIONS)	Comprehensive (Income)/Loss
Details about Accumulated							Affected Line Item in the
Other Comprehensive	Six Months Ended			Six Months Ended			Condensed Consolidated
Income components	June 30, 2020			June 30, 2019			Statement of Operations
Cash flow hedges
Interest rate contracts	$	10		$	(7	)	Interest (income)/expense
		(3	)		2		(Benefit)/provision for income taxes
	$	7		$	(5	)	Total, net of tax
Amortization of Post-Employment    Benefits
Actuarial loss	$	8		$	7		(a)
		(2	)		(1	)	(Benefit)/provision for income taxes
	$	6		$	6		Total, net of tax
Total reclassification for the period	$	13		$	1		Net of tax

(a) This accumulated other comprehensive loss component is included in the computation of net periodic pension cost.

8. Restructuring Activities

Optimization Initiatives

In June, 2020, Nielsen announced a broad-based optimization plan to drive permanent cost savings and operational efficiencies, as well as to position the Company for greater profitability and growth. The Company expects the plan to be substantially completed in 2020.

Nielsen incurred $84 million of restructuring charges in the second quarter of 2020. These charges mostly represent severance costs related to employee separation packages. The amounts are calculated based on salary levels and past service periods. Severance costs are generally charged to earnings when planned employee terminations are approved.

A summary of the changes in the liabilities for restructuring activities is provided below:

	Total
(IN MILLIONS)	Initiatives
Balance at December 31, 2019	$	35
Charges (1)		88
Payments		(31	)
Balance at June 30, 2020	$	92

(1) Excludes charges related to operating lease right-of-use assets of $7 million. 

Nielsen recorded $84 million and $95 million in restructuring charges primarily relating to the optimization initiatives referenced above for the three and six months ended June 30, 2020, respectively.

Nielsen recorded $7 million and $42 million in restructuring charges for the three and six months ended June 30, 2019, respectively, primarily related to programs associated with Nielsen’s plans to reduce selling, general and administrative expenses as well as automation initiatives. These charges primarily related to severance costs associated with employee separation packages.

Of the $92 million in remaining liabilities for restructuring actions, $85 million is expected to be paid within one year and is classified as a current liability within the condensed consolidated balance sheet as of June 30, 2020.

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9. Fair Value Measurements

Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which the Company would transact, and also considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of non-performance.

There are three levels of inputs that may be used to measure fair value:

Level 1:	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2:	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3:	Pricing inputs that are generally unobservable and may not be corroborated by market data.

Financial Assets and Liabilities Measured on a Recurring Basis

The Company’s financial assets and liabilities are measured and recorded at fair value, except for equity method investments and long-term debt. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. The Company’s assessment of the significance of a particular input to the fair value measurements requires judgment, and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. In addition, the Company records changes in the fair value of equity investments with readily determinable fair values in net income rather than in accumulated other comprehensive income/(loss). Investments that do not have readily determinable fair values are recognized at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The adjustments related to the observable price changes will also be recognized in net income.

The following table summarizes the valuation of the Company’s material financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019:

	June 30,
(IN MILLIONS)	2020		Level 1		Level 2		Level 3
Assets:
Plan assets for deferred compensation (1)	$	25	$	25	—		—
Investment in mutual funds (2)		2		2	—		—
Interest rate swap arrangements (3)		—		—	—		—
Total	$	27	$	27	$	—	—
Liabilities:
Interest rate swap arrangements (3)	$	67	—		$	67	—
Deferred compensation liabilities (4)		25		25	—		—
Total	$	92	$	25	$	67	—

	December 31,
	2019		Level 1		Level 2		Level 3
Assets:
Plan assets for deferred compensation (1)	$	26	$	26	—		—
Investment in mutual funds (2)		2		2	—		—
Interest rate swap arrangements (3)		—		—	—		—
Total	$	28	$	28	—		—
Liabilities:
Interest rate swap arrangements (3)	$	22	—		$	22	—
Deferred compensation liabilities (4)		26		26	—		—
Total	$	48	$	26	$	22	—

(1) Plan assets are comprised of investments in mutual funds, which are intended to fund liabilities arising from deferred compensation plans. These investments are carried at fair value, which is based on quoted market prices at period end in active markets. These investments are classified as equity securities with any gains or losses resulting from changes in fair value recorded in other income/(expense), net in the condensed consolidated statement of operations.

(2) Investments in mutual funds are money-market accounts held with the intention of funding certain specific retirement plans.

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(3) Derivative financial instruments include interest rate swap arrangements recorded at fair value based on externally-developed valuation models that use readily observable market parameters and the consideration of counterparty risk.

(4) The Company offers certain employees the opportunity to participate in a deferred compensation plan. A participant’s deferrals are invested in a variety of participant directed stock and bond mutual funds and are classified as equity securities. Changes in the fair value of these securities are measured using quoted prices in active markets based on the market price per unit multiplied by the number of units held exclusive of any transaction costs. A corresponding adjustment for changes in fair value of the equity securities is also reflected in the changes in fair value of the deferred compensation obligation.

Derivative Financial Instruments

Nielsen primarily uses interest rate swap derivative instruments to manage the risk that changes in interest rates will affect the cash flows of its underlying debt obligations.

To qualify for hedge accounting, the hedging relationship must meet several conditions with respect to documentation, probability of occurrence, hedge effectiveness and reliability of measurement. Nielsen documents the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions as well as the hedge effectiveness assessment, both at the hedge inception and on an ongoing basis. Nielsen recognizes all derivatives at fair value either as assets or liabilities in the consolidated balance sheets and changes in the fair values of such instruments are recognized currently in earnings unless specific hedge accounting criteria are met. If specific cash flow hedge accounting criteria are met, Nielsen recognizes the changes in fair value of these instruments in accumulated other comprehensive income/(loss).

Nielsen manages exposure to possible defaults on derivative financial instruments by monitoring the concentration of risk that Nielsen has with any individual bank and through the use of minimum credit quality standards for all counterparties. Nielsen does not require collateral or other security in relation to derivative financial instruments. A derivative contract entered into between Nielsen or certain of its subsidiaries and a counterparty that was also a lender under Nielsen’s senior secured credit facilities at the time the derivative contract was entered into is guaranteed under the senior secured credit facilities by Nielsen and certain of its subsidiaries (see Note 10 – (“Long-term Debt and Other Financing Arrangements”) for more information). Since it is Nielsen’s policy to only enter into derivative contracts with banks of internationally acknowledged standing, Nielsen considers the counterparty risk to be remote.

It is Nielsen’s policy to have an International Swaps and Derivatives Association (“ISDA”) Master Agreement established with every bank with which it has entered into any derivative contract. Under each of these ISDA Master Agreements, Nielsen agrees to settle only the net amount of the combined market values of all derivative contracts outstanding with any one counterparty should that counterparty default. Certain of the ISDA Master Agreements contain cross-default provisions where if the Company either defaults in payment obligations under its credit facility or if such obligations are accelerated by the lenders, then the Company could also be declared in default on its derivative obligations. At June 30, 2020, Nielsen had no material exposure to potential economic losses due to counterparty credit default risk or cross-default risk on its derivative financial instruments.

Foreign Currency Exchange Risk

During the six months ended June 30, 2020 and 2019, Nielsen recorded a net loss of $3 million and zero, respectively, associated with foreign currency derivative financial instruments within foreign currency exchange transactions losses, net in its condensed consolidated statements of operations.  As of June 30, 2020 and December 31, 2019 the notional amount of the outstanding foreign currency derivative financial instruments were $111 million and $125 million, respectively.  

Interest Rate Risk

Nielsen is exposed to cash flow interest rate risk on the floating-rate U.S. Dollar and Euro Term Loans, and uses floating-to-fixed interest rate swaps to hedge this exposure. For these derivatives, Nielsen reports the after-tax gain or loss from the effective portion of the hedge as a component of accumulated other comprehensive income/(loss) and reclassifies it into earnings in the same period or periods in which the hedged transaction affects earnings, and within the same income statement line item as the impact of the hedged transaction.

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As of June 30, 2020, the Company had the following outstanding interest rate swaps utilized in the management of its interest rate risk:

		Notional Amount	Maturity Date	Currency
Interest rate swaps designated as hedging instruments
US Dollar term loan floating-to-fixed rate swaps	$	250,000,000	July 2020	U.S. Dollar
US Dollar term loan floating-to-fixed rate swaps	$	250,000,000	July 2020	U.S. Dollar
US Dollar term loan floating-to-fixed rate swaps	$	250,000,000	October 2020	U.S. Dollar
US Dollar term loan floating-to-fixed rate swaps	$	250,000,000	October 2021	U.S. Dollar
US Dollar term loan floating-to-fixed rate swaps	$	250,000,000	July 2022	U.S. Dollar
US Dollar term loan floating-to-fixed rate swaps	$	150,000,000	April 2023	U.S. Dollar
US Dollar term loan floating-to-fixed rate swaps	$	250,000,000	May 2023	U.S. Dollar
US Dollar term loan floating-to-fixed rate swaps	$	250,000,000	June 2023	U.S. Dollar
US Dollar term loan floating-to-fixed rate swaps	$	150,000,000	July 2023	U.S. Dollar

The effect of cash flow hedge accounting on the condensed consolidated statement of operations for the three and six months ended June 30, 2020 and 2019 respectively:

	Interest Expense					Interest Expense
	Three Months Ended June 30,					Six Months Ended June 30,
(IN MILLIONS)	2020			2019		2020			2019
Interest expense (Location in the consolidated statement of    operations in which the effects of cash flow hedges are    recorded)	$	91		$	100	$	185		$	199
Amount of gain/(loss) reclassified from accumulated other    comprehensive income into income, net of tax	$	(6	)	$	2	$	(7	)	$	5
Amount of loss reclassified from accumulated other comprehensive    income into income as a result that a forecasted transaction is no    longer probable of occurring, net of tax	$	—		$	—	$	—		$	—

Nielsen expects to recognize approximately $27 million of net pre-tax losses from accumulated other comprehensive loss to interest expense in the next 12 months associated with its interest-related derivative financial instruments.

Fair Values of Derivative Instruments in the Consolidated Balance Sheets

The fair values of the Company’s derivative instruments as of June 30, 2020 and December 31, 2019 were as follows:  

June 30, 2020

December 31, 2019

Derivatives Designated as Hedging Instruments

Prepaid Expense

Prepaid Expense

Other

and Other Current

Other Current

Other Non-Current

Other Current

Other Current

Non-Current

(IN MILLIONS)

Assets

Liabilities

Liabilities

Assets

Liabilities

Liabilities

Interest rate swaps

$

—

$

2

$

65

$

—

$

—

$

22

- 24 -

Derivatives in Cash Flow Hedging Relationships

The pre-tax effect of derivative instruments in cash flow hedging relationships for the three months ended June 30, 2020 and 2019 was as follows:

						Amount of (Gain)/Loss
	Amount of (Gain)/Loss					Reclassified from AOCI
	Recognized in OCI				Location of Loss	into Income
	(Effective Portion)				Reclassified from AOCI	(Effective Portion)
Derivatives in Cash Flow	Three Months Ended				into Income  (Effective	Three Months Ended
Hedging Relationships	June 30,				Portion)	June 30,
(IN MILLIONS)	2020		2019			2020		2019
Interest rate swaps	$	6	$	25	Interest expense	$	8	$	(3	)

The pre-tax effect of derivative instruments in cash flow hedging relationships for the six months ended June 30, 2020 and 2019 was as follows:

						Amount of (Gain)/Loss
	Amount of (Gain)/Loss					Reclassified from AOCI
	Recognized in OCI				Location of Loss	into Income
	(Effective Portion)				Reclassified from AOCI	(Effective Portion)
Derivatives in Cash Flow	Six Months Ended				into Income	Six Months Ended
Hedging Relationships	June 30,				(Effective Portion)	June 30,
(IN MILLIONS)	2020		2019			2020		2019
Interest rate swaps	$	53	$	33	Interest expense	$	10	$	(7	)

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

During the second quarter of 2020, Nielsen concluded that the decision to exit smaller, underperforming markets and non-core businesses was an impairment indicator for the long-lived assets within those exits.  Where the carrying value of the assets exceeded the sum of the future undiscounted cash flows, we measured an impairment charge using a discounted cash flow method for estimation of the assets’ fair value.  During the second quarter of 2020 we recognized a pre-tax non-cash impairment charge associated with long- lived assets of $45 million, including $37 million of definite-lived intangible assets and $8 million of property, plant and equipment.    

The Company did not measure any material non-financial assets or liabilities at fair value during the six months ended June 30, 2020.

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10. Long-term Debt and Other Financing Arrangements

Unless otherwise stated, interest rates are as of June 30, 2020.

	June 30, 2020							December 31, 2019
	Weighted							Weighted
	Interest			Carrying		Fair		Interest			Carrying		Fair
(IN MILLIONS)	Rate			Amount		Value		Rate			Amount		Value
$1,125 million Senior secured term loan (LIBOR based variable rate of    1.93%) due 2023				$	1,072		1,056				$	1,086		1,079
$2,303 million Senior secured term loan (LIBOR based variable rate of    2.18%) due 2023					2,252		2,174					2,263		2,273
€545 million Senior secured term loan (Euro LIBOR based variable rate    of 2.50%) due 2023					601		594					603		606
€420 million Senior secured term loan (Euro LIBOR based variable rate    of 3.75%) due 2025					459		468				—		—
$550 million Senior secured term loan (LIBOR based variable rate of    4.75%) due 2025					534		544				—		—
$850 million senior secured revolving credit facility (Euro LIBOR or    LIBOR based variable rate) due 2023					165		162				—		—
Total senior secured credit facilities (with weighted-average interest    rate)		2.81	%		5,083		4,998		3.52	%		3,952		3,958
$800 million 4.500% senior debenture loan due 2020					—		—					799		802
$425 million 5.500% senior debenture loan due 2021					424		425					622		629
$2,300 million 5.00% senior debenture loan due 2022					2,295		2,290					2,293		2,312
$500 million 5.00% senior debenture loan due 2025					497		492					497		516
Total debenture loans (with weighted-average interest rate)		5.29	%		3,216		3,207		5.22	%		4,211		4,259
Other loans					—		—					1		1
Total long-term debt		3.77	%		8,299		8,205		4.40	%		8,164		8,218
Finance lease and other financing obligations					122							145
Total debt and other financing arrangements					8,421							8,309
Less: Current portion of long-term debt, finance lease and other    financing obligations and other short-term borrowings					291							914
Non-current portion of long-term debt and finance lease and other    financing obligations				$	8,130						$	7,395

The fair value of the Company’s long-term debt instruments was based on the yield on public debt where available or current borrowing rates available for financings with similar terms and maturities and such fair value measurements are considered Level 1 or Level 2 in nature, respectively.

Senior Secured Credit Facilities

Term Loan Facilities

In June 2020, Nielsen entered into a Credit Agreement that provides for: (i) a new dollar term loan facility, the “Dollar Term B-5 Loans” having commitments in an aggregate principal amount of $550 million and (ii) a new euro term loan facility, the “Euro Term B-3 Loans” in an aggregate principal amount of €420 million. On June 4, 2020, Nielsen borrowed the full amount of the Dollar Term B-5 Loans and the Euro Term B-3 Loans.

The proceeds of the Dollar Term B-5 Loans and Euro Term B-3 Loans were used to redeem all of the $800 million outstanding aggregate principal amount of their 4.500% Notes due 2020 and redeem $200 million of the $625 million outstanding aggregate principal amount of its 5.500% Senior Notes due 2021. The partial redemption of the 5.500% Notes resulted in $425 million aggregate principal amount of 2021 Notes remaining outstanding.

The Dollar Term B-5 Loans and the Euro Term B-3 Loans will mature in full on the earlier of (i) June 4, 2025 and (ii) if the existing Class B Term Loans incurred pursuant to and as defined in the Existing Credit Agreement have not been repaid or refinanced

- 26 -

(subject to additional limitations in the Credit Agreement) on or prior to the date that is 91 days prior to October 4, 2023, on October 4, 2023.

The Dollar Term B-5 Loans bear interest at a rate per annum equal to, at the election of Nielsen, (i) a base rate or eurocurrency rate, plus (ii) an applicable margin of 2.75%, in the case of base rate loans, and 3.75%, in the case of eurocurrency rate loans. The Euro Term B-3 Loans bear interest at a rate per annum equal to (i) a eurocurrency rate plus (ii) an applicable margin of 3.75%.

The Credit Agreement contains substantially the same affirmative and negative covenants as those of the Fifth Amended and Restated Credit Agreement, dated as of June 29, 2018 (as amended, restated, supplemented, replaced or otherwise modified from time to time), however, the Credit Agreement expressly permits actions in connection with and resulting in the disposition of Nielsen Global Connect, including by way of a spin-off of the Connect Business, as previously announced by Nielsen. The obligations under the Credit Agreement are secured on a pari passu basis with the obligations under the Existing Credit Agreement.

Nielsen wrote-off certain previously capitalized deferred financing fees of $1 million associated with the June 2020 debt refinancing and capitalized certain costs in connection with the refinancing of $9 million.

Annual maturities of Nielsen’s long-term debt are as follows:

(IN MILLIONS)
For July 1, 2020 to December 31, 2020	$	197
2021		504
2022		2,399
2023		3,713
2024		10
2025(1)		1,476
Thereafter		—
	$	8,299

(1) If the existing €545 million Senior secured term loan and $2,303 million Senior secured term loan have not been repaid or refinanced (subject to additional limitations in the Credit Agreement) on or prior to the date that is 91 days prior to October 4, 2023, the €420 million senior secured loan and $550 million senior secured loan are due on October 4, 2023.

Subsequent Events

In July, 2020, Nielsen entered into Amendment No. 1 (“Amendment No. 1”), relating to its Credit Agreement, dated as of June 4, 2020. Pursuant to Amendment No. 1, the Company incurred new Euro Term B-3 Loans in an aggregate principal amount of €240 million (the “Incremental Euro Term B-3 Loans”), thereby increasing the outstanding amount of existing Euro Term B-3 Loans under the 2020 Credit Agreement to approximately €660 million. The proceeds of the Incremental Euro Term B-3 Loans were used by Nielsen to prepay the €545 million Senior secured term loan due 2023 under the Existing Credit Agreement in an aggregate principal amount of €240 million and all accrued interest and expenses.

The Incremental Euro Term B-3 Loans are subject to the same terms, maturity date and interest rate as the existing Euro Term B-3 Loans. The Incremental Euro Term B-3 Loans are subject to customary affirmative and negative covenants and events of default.

In July, 2020, Nielsen entered into an Amendment Agreement (the “Amendment Agreement”) amending and restating the Fifth Amended and Restated Credit Agreement, dated as of June 29, 2018 (as amended before July 21, 2020, the “Existing Credit Agreement”). The modifications in the agreement primarily conform the covenants and certain other terms to the terms of the 2020 Credit Agreement. The amended agreement expressly permits actions in connection with and resulting in the disposition of Nielsen Global Connect, including by way of a spin-off of the Connect Business, as previously announced by Nielsen.

- 27 -

11. Shareholders’ Equity

Common stock activity is as follows:

	Six Months Ended
	June 30, 2020
Actual number of shares of common stock outstanding
Beginning of period		356,149,883
Shares of common stock issued through compensation plans		608,285
Employee benefit trust activity		(4,204	)
End of period		356,753,964

On January 31, 2013, the Company’s Board of Directors (the “Board”) adopted a cash dividend policy to pay quarterly cash dividends on its outstanding common stock. The following table represents the cash dividends declared by the Board and paid to shareholders for the years ended December 31, 2019 and the six months ended June 30, 2020, respectively.

Declaration Date	Record Date	Payment Date	Dividend Per Share
February 21, 2019	March 7, 2019	March 21, 2019	$	0.35
April 18, 2019	June 5, 2019	June 19, 2019	$	0.35
July 18, 2019	August 22, 2019	September 5, 2019	$	0.35
November 3, 2019	November 21, 2019	December 5, 2019	$	0.06
February 20, 2020	March 5, 2020	March 19, 2020	$	0.06
April 16, 2020	June 4, 2020	June 18, 2020	$	0.06

On November 3, 2019 the Board approved a plan to reduce the quarterly cash dividend, with the goal of strengthening Nielsen’s balance sheet and providing added flexibility to invest for growth. On July 16, 2020, the Board declared a cash dividend of $0.06 per share on Nielsen’s common stock. The dividend is payable on September 3, 2020 to shareholders of record at the close of business on August 20, 2020.

The dividend policy and the payment of future cash dividends are subject to the discretion of the Board.

Nielsen’s Board approved a share repurchase program, as included in the below table, for up to $2 billion in the aggregate of our outstanding common stock. The primary purpose of the program is to return value to shareholders and to mitigate dilution associated with Nielsen’s equity compensation plans.

Board Approval	Share Repurchase Authorization ($ in millions)
July 25, 2013	$	500
October 23, 2014		1,000
December 11, 2015		500
Total Share Repurchase Authorization	$	2,000

Repurchases under this program will be made in accordance with applicable securities laws from time to time and depending on Nielsen’s evaluation of market conditions and other factors. This program has been executed within the limitations of the authority granted Nielsen on August 6, 2015 (which will expire on August 6, 2020) and which has been extended by the authority approved by Nielsen's shareholders at its annual general meeting of shareholders held on May 12, 2020, which authority will expire on May 12, 2025.

As of June 30, 2020, there were 39,426,521 shares of the Company’s common stock purchased at an average price of $44.95 per share (total consideration of approximately $1,772 million) under this program. There were no share repurchases for the six months ended June 30, 2020.

- 28 -

12. Income Taxes

The effective tax rates before discrete tax items for the three months ended June 30, 2020 and 2019 were 62% ($40 million tax benefit) and 31% ($46 million tax expense), respectively. The tax rate for the three months ended June 30, 2020 was higher than the statutory rate as a result of the impact of tax rate differences in other jurisdictions where the Company files tax returns, BEAT tax, and withholding taxes. The tax rate for the three months ended June 30, 2019 was higher than the statutory rate as a result of the impact of tax rate differences in other jurisdictions where the Company files tax returns offset by the favorable impact of certain financing activities. For the three months ended June 30, 2020, the total tax benefit was $38 million. For the three months ended June 30, 2019, the total tax expense was $23 million which includes the favorable impact of releasing certain tax contingencies and other discrete items recognized in the second quarter.

The effective tax rates before discrete tax items for the six months ended June 30, 2020 and 2019 were 62% ($41 million tax benefit) and 31% ($71 million tax expense), respectively. The tax rate for the six months ended June 30, 2020 was higher than the statutory rate as a result of the impact of tax rate differences in other jurisdictions where the Company files tax returns, Base Erosion and Anti-Abuse Tax (“BEAT tax”), and withholding taxes offset by reversal of valuation allowance related to certain loss carryforwards. The tax rate for the six months ended June 30, 2019 was higher than the statutory rate as a result of the impact of tax rate differences in other jurisdictions where the Company files tax returns offset by the favorable impact of certain financing activities. For the six months ended June 30, 2020, the total tax benefit was $27 million which includes the impact of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act and other discrete items recognized in the period. For the six months ended June 30, 2019, the total tax expense was $55 million which includes the favorable impact of releasing certain tax contingencies and other discrete items recognized in the period.

The estimated liability for unrecognized tax benefits as of December 31, 2019 was $164 million. If the Company’s tax positions are favorably sustained by the taxing authorities, the reversal of the underlying liabilities would reduce the Company’s effective tax rate in future periods.

The Company files numerous consolidated and separate income tax returns in the U.S. and in many state and foreign jurisdictions. The Company is no longer subject to U.S. Federal income tax examination for 2015 and prior periods. In addition, the Company has subsidiaries in various states, provinces and countries that are currently under audit for years ranging from 2007 through 2019.

To date, the Company is not aware of any material adjustments not already accrued related to any of the current Federal, state or foreign audits under examination.

13. Commitments and Contingencies

Legal Proceedings and Contingencies

In August 2018, a putative shareholder class action lawsuit was filed in the Southern District of New York, naming as defendants Nielsen, former Chief Executive Officer Dwight Mitchell Barns, and former Chief Financial Officer Jamere Jackson. Another lawsuit, which alleged similar facts but also named other Nielsen officers, was filed in the Northern District of Illinois in September 2018 and transferred to the Southern District of New York in December 2018. The actions were consolidated on April 22, 2019, and the Public Employees’ Retirement System of Mississippi was appointed lead plaintiff for the putative class. The operative complaint was filed on September 27, 2019, and asserts violations of certain provisions of the Securities Exchange Act of 1934, as amended, based on allegedly false and materially misleading statements relating to the outlook of Nielsen’s Buy (now “Connect”) segment, Nielsen’s preparedness for changes in global data privacy laws and Nielsen’s reliance on third-party data. Nielsen moved to dismiss the operative complaint on November 26, 2019. Briefing of Nielsen’s motion concluded on February 26, 2020. In addition, in January 2019, a shareholder derivative lawsuit was filed in New York Supreme Court against a number of Nielsen’s current and former officers and directors. The derivative lawsuit alleges that the named officers and directors breached their fiduciary duties to the Company in connection with factual assertions substantially similar to those in the putative class action complaint. The derivative lawsuit further alleges that certain officers and directors engaged in trading Nielsen stock based on material, nonpublic information. By agreement dated June 26, 2019, the derivative lawsuit has been stayed pending resolution of Nielsen’s motion to dismiss the aforementioned securities litigation. Nielsen intends to defend these lawsuits vigorously. Based on currently available information, Nielsen believes that the Company has meritorious defenses to these actions and that their resolution is not likely to have a material adverse effect on Nielsen’s business, financial position, or results of operations.

- 29 -

Nielsen is subject to litigation and other claims in the ordinary course of business, some of which include claims for substantial sums. Accruals have been recorded when the outcome is probable and can be reasonably estimated. While the ultimate results of claims and litigation cannot be determined, the Company does expect that the ultimate disposition of these matters will not have a material adverse effect on its operations or financial condition. However, depending on the amount and the timing, an unfavorable resolution of some or all of these matters could materially affect the Company’s future results of operations or cash flows in a particular period.

14. Segments

The Company aligns its operating segments in order to conform to management’s internal reporting structure, which is reflective of service offerings by industry. Operating segments are aggregated into two reporting segments: Nielsen Global Connect (“Connect”), consisting principally of market research information and analytical services; and Nielsen Global Media (“Media”), consisting principally of television, radio, online and mobile audience and advertising measurement and corresponding analytics.

Corporate consists principally of unallocated items such as certain facilities and infrastructure costs as well as intersegment eliminations. Certain corporate costs, other than those described above, including those related to selling, finance, legal, human resources, and information technology systems, are considered operating costs and are allocated to the Company’s segments based on either the actual amount of costs incurred or on a basis consistent with the operations of the underlying segment. Information with respect to the operations of each of Nielsen’s business segments is set forth below based on the nature of the services offered and geographic areas of operations.

Business Segment Information

(IN MILLIONS)	Connect			Media		Corporate				Total
Three Months Ended June 30, 2020
Revenues	$	685		$	811	$		—		$	1,496
Operating income/(loss)		(36	)		120		(56		)		28
Depreciation and amortization		66			156		2				224
Impairment of other long-lived assets		4			41		—				45
Restructuring charges		55			25		4				84
Share-based compensation expense		1			4		6				11
Other items(1)		1			—		7				8
Separation-related costs(2)		—			—		26				26
Business segment income/(loss)(3)	$	91		$	346	$	(11		)	$	426
Total assets as of June 30, 2020	$	4,481		$	9,457	$	184			$	14,122

(IN MILLIONS)
Three Months Ended June 30, 2019
Revenues	$	772	$	856	$		—		$	1,628
Operating income/(loss)		46		237		(34		)		249
Depreciation and amortization		55		128		2				185
Restructuring charges		4		3		5				12
Share-based compensation expense		4		3		4				11
Other items(1)		—		—		13				13
Business segment income/(loss)(3)	$	109	$	371	$	(10		)	$	470
Total assets as of December 31, 2019	$	4,376	$	9,675	$	268			$	14,319

- 30 -

(IN MILLIONS)	Connect			Media		Corporate			Total
Six Months Ended June 30, 2020
Revenues	$	1,402		$	1,653	$	—		$	3,055
Operating income/(loss)		(51	)		311		(134	)		126
Depreciation and amortization		131			303		4			438
Impairment of other long-lived assets		4			41		—			45
Restructuring charges		63			26		6			95
Share-based compensation expense		6			8		13			27
Other items (1)		1			—		28			29
Separation-related costs(2)		—			—		61			61
Business segment income/(loss) (3)	$	154		$	689	$	(22	)	$	821

(IN MILLIONS)
Six Months Ended June 30, 2019
Revenues	$	1,509	$	1,682	$	—		$	3,191
Operating income/(loss)		44		451		(72	)		423
Depreciation and amortization		110		251		3			364
Restructuring charges		26		10		11			47
Share-based compensation expense		8		6		12			26
Other items (1)		—		—		25			25
Business segment income/(loss) (3)	$	188	$	718	$	(21	)	$	885

(1) Other items primarily consist of business optimization costs and transaction related costs for the three and six months ended June 30, 2020.  Other items primarily consist of business optimization costs, including strategic review costs, and transaction related costs for the three and six months ended June 30, 2019.

(2) Separation-related costs consists of costs that would not have been incurred if Nielsen was not undertaking the separation of the Nielsen Global Connect business from the Nielsen Global Media business and positioning Global Connect and Global Media to operate as two independent companies.

(3) The Company’s chief operating decision maker uses business segment income/(loss) to measure performance from period to period both at the consolidated level as well as within its operating segments.

15. 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 June 30, 2020 and December 31, 2019, and consolidating statements of operations and cash flows for the periods ended June 30, 2020 and 2019. During the six months ended June 30, 2020, the Company re-designated certain subsidiaries between guarantor and non-guarantor. As a result, the Company adjusted the prior period condensed consolidated statement of comprehensive income and the condensed consolidated balance sheet to reflect the current year structure.

The issued debt securities are jointly and severally guaranteed on a full and unconditional basis by Nielsen, Valcon Acquisition B.V. and, subject to certain exceptions, each of the other 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.à r.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.

- 31 -

Nielsen Holdings plc

Condensed Consolidated Statement of Comprehensive Income (Unaudited)

For the three months ended June 30, 2020

										Non-
(IN MILLIONS)	Parent			Issuers			Guarantor			Guarantor			Elimination			Consolidated
Revenues	$	—		$	—		$	1,019		$	477		$	—		$	1,496
Cost of revenues, exclusive of depreciation and    amortization shown separately below		—			—			394			270			—			664
Selling, general and administrative expenses, exclusive    of depreciation and amortization shown    separately below		10			—			220			221			—			451
Depreciation and amortization		—			—			184			40			—			224
Impairment of goodwill and other long-lived assets		—			—			45			—			—			45
Restructuring charges		—			—			28			56			—			84
Operating income/(loss)		(10	)		—			148			(110	)		—			28
Interest income		1			161			—			—			(162	)		—
Interest expense		—			(85	)		(167	)		(1	)		162			(91	)
Foreign currency exchange transaction gains/(losses), net		—			—			1			2			—			3
Other income/(expense), net		—			(1	)		(66	)		63			—			(4	)
Income/(loss) from continuing operations before    income taxes and equity in net income/(loss) of    subsidiaries		(9	)		75			(84	)		(46	)		—			(64	)
Benefit/(provision) for income taxes		—			85			(19	)		(28	)		—			38
Equity in net income/(loss) of subsidiaries		(21	)		29			83			—			(91	)		—
Equity on net income/(loss) of affiliates		—			—			(1	)		1			—			—
Net income/(loss)		(30	)		189			(21	)		(73	)		(91	)		(26	)
Less net income/(loss) attributable to noncontrolling interests		—			—			—			4			—			4
Net income/(loss) attributable to controlling interest		(30	)		189			(21	)		(77	)		(91	)		(30	)
Total other comprehensive income/(loss)		18			(6	)		18			39			(50	)		19
Total other comprehensive income/(loss) attributable to    noncontrolling interests		—			—			—			1			—			1
Total other comprehensive income/(loss) attributable    to controlling interests		18			(6	)		18			38			(50	)		18
Total comprehensive income/(loss)		(12	)		183			(3	)		(34	)		(141	)		(7	)
Comprehensive income/(loss) attributable to noncontrolling interest		—			—			—			5			—			5
Total comprehensive income/(loss) attributable to controlling interest	$	(12	)	$	183		$	(3	)	$	(39	)	$	(141	)	$	(12	)

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Nielsen Holdings plc

Condensed Consolidated Statement of Comprehensive Income (Unaudited)

For the three months ended June 30, 2019

										Non-
(IN MILLIONS)	Parent			Issuers			Guarantor			Guarantor			Elimination			Consolidated
Revenues	$	—		$	—		$	1,057		$	571		$	—		$	1,628
Cost of revenues, exclusive of depreciation and    amortization shown separately below		—			—			383			316			—			699
Selling, general and administrative expenses, exclusive    of depreciation and amortization shown    separately below		1			—			250			232			—			483
Depreciation and amortization		—			—			154			31			—			185
Restructuring charges		—			—			12			—			—			12
Operating income/(loss)		(1	)		—			258			(8	)		—			249
Interest income		1			201			1			1			(203	)		1
Interest expense		—			(93	)		(209	)		(1	)		203			(100	)
Foreign currency exchange transaction gains/(losses), net		—			—			(14	)		13			—			(1	)
Other income/(expense), net		—			—			(13	)		13			—			—
Income/(loss) from continuing operations before    income taxes and equity in net income/(loss) of    subsidiaries		—			108			23			18			—			149
Benefit/(provision) for income taxes		—			(29	)		37			(31	)		—			(23	)
Equity in net income/(loss) of subsidiaries		123			33			63			—			(219	)		—
Net income/(loss)		123			112			123			(13	)		(219	)		126
Less net income/(loss) attributable to noncontrolling interests		—			—			—			3			—			3
Net income/(loss) attributable to controlling interest		123			112			123			(16	)		(219	)		123
Total other comprehensive income/(loss)		(11	)		(26	)		(11	)		(16	)		55			(9	)
Total other comprehensive income/(loss) attributable to    noncontrolling interests		—			—			—			2			—			2
Total other comprehensive income/(loss) attributable    to controlling interests		(11	)		(26	)		(11	)		(18	)		55			(11	)
Total comprehensive income/(loss)		112			86			112			(29	)		(164	)		117
Comprehensive income/(loss) attributable to noncontrolling interest		—			—			—			5			—			5
Total comprehensive income/(loss) attributable to controlling interest	$	112		$	86		$	112		$	(34	)	$	(164	)	$	112

- 33 -

Nielsen Holdings plc

Condensed Consolidated Statement of Comprehensive Income (Unaudited)

For the six months ended June 30, 2020

										Non-
(IN MILLIONS)	Parent			Issuers			Guarantor			Guarantor			Elimination			Consolidated
Revenues	$	—		$	—		$	2,051		$	1,004		$	—		$	3,055
Cost of revenues, exclusive of depreciation and    amortization shown separately below		—			—			817			568			—			1,385
Selling, general and administrative expenses, exclusive    of depreciation and amortization shown    separately below		11			—			512			443			—			966
Depreciation and amortization		—			—			366			72			—			438
Impairment of goodwill and other long-lived assets		—			—			45			—			—			45
Restructuring charges		—			—			33			62			—			95
Operating income/(loss)		(11	)		—			278			(141	)		—			126
Interest income		1			372			16			11			(399	)		1
Interest expense		—			(176	)		(391	)		(17	)		399			(185	)
Foreign currency exchange transaction gains/(losses), net		—			—			18			(21	)		—			(3	)
Other income/(expense), net		—			(1	)		(55	)		51			—			(5	)
Income/(loss) from continuing operations before    income taxes and equity in net income/(loss) of    subsidiaries and affiliates		(10	)		195			(134	)		(117	)		—			(66	)
Benefit/(provision) for income taxes		—			53			(24	)		(2	)		—			27
Equity in net income/(loss) of subsidiaries		(38	)		82			121			—			(165	)		—
Equity in net income/(loss) of affiliates		—			—			(1	)		1			—			—
Net income/(loss)		(48	)		330			(38	)		(118	)		(165	)		(39	)
Less net income/(loss) attributable to noncontrolling interests		—			—			—			9			—			9
Net income/(loss) attributable to controlling interest		(48	)		330			(38	)		(127	)		(165	)		(48	)
Total other comprehensive income/(loss)		(107	)		(32	)		(107	)		(97	)		229			(114	)
Total other comprehensive income/(loss) attributable to noncontrolling interests		—			—			—			(7	)		—			(7	)
Total other comprehensive income/(loss) attributable    to controlling interests		(107	)		(32	)		(107	)		(90	)		229			(107	)
Total comprehensive income/(loss)		(155	)		298			(145	)		(215	)		64			(153	)
Comprehensive income/(loss) attributable to noncontrolling    interests		—			—			—			2			—			2
Total comprehensive income/(loss) attributable to    controlling interest	$	(155	)	$	298		$	(145	)	$	(217	)	$	64		$	(155	)

- 34 -

Nielsen Holdings plc

Condensed Consolidated Statement of Comprehensive Income (Unaudited)

For the six months ended June 30, 2019

										Non-
(IN MILLIONS)	Parent			Issuers			Guarantor			Guarantor			Elimination			Consolidated
Revenues	$	—		$	—		$	2,070		$	1,121		$	—		$	3,191
Cost of revenues, exclusive of depreciation and    amortization shown separately below		—			—			776			618			—			1,394
Selling, general and administrative expenses, exclusive    of depreciation and amortization shown    separately below		2			—			494			467			—			963
Depreciation and amortization		—			—			302			62			—			364
Restructuring charges		—			—			25			22			—			47
Operating income/(loss)		(2	)		—			473			(48	)		—			423
Interest income		1			385			2			3			(388	)		3
Interest expense		—			(186	)		(398	)		(3	)		388			(199	)
Foreign currency exchange transaction gains/(losses), net		—			—			6			(10	)		—			(4	)
Other income/(expense), net		—			—			(97	)		102			—			5
Income/(loss) from continuing operations before    income taxes and equity in net income/(loss) of    subsidiaries and affiliates		(1	)		199			(14	)		44			—			228
Benefit/(provision) for income taxes		—			(54	)		59			(60	)		—			(55	)
Equity in net income/(loss) of subsidiaries		167			89			122			—			(378	)		—
Net income/(loss)		166			234			167			(16	)		(378	)		173
Less net income/(loss) attributable to noncontrolling interests		—			—			—			7			—			7
Net income/(loss) attributable to controlling interest		166			234			167			(23	)		(378	)		166
Total other comprehensive income/(loss)		(5	)		(25	)		(5	)		37			(5	)		(3	)
Total other comprehensive income/(loss) attributable to noncontrolling interests		—			—			—			2			—			2
Total other comprehensive income/(loss) attributable    to controlling interests		(5	)		(25	)		(5	)		35			(5	)		(5	)
Total comprehensive income/(loss)		161			209			162			21			(383	)		170
Comprehensive income/(loss) attributable to noncontrolling    interests		—			—			—			9			—			9
Total comprehensive income/(loss) attributable to    controlling interest	$	161		$	209		$	162		$	12		$	(383	)	$	161

- 35 -

Nielsen Holdings plc

Condensed Consolidated Balance Sheet (Unaudited)

June 30, 2020

							Non-
(IN MILLIONS)	Parent		Issuers		Guarantor		Guarantor			Elimination			Consolidated
Assets:
Current assets
Cash and cash equivalents	$	3	$	1	$	107	$	327		$	—		$	438
Trade and other receivables, net		—		—		635		496			—			1,131
Prepaid expenses and other current assets		—		—		366		138			—			504
Intercompany receivables		—		1,791		227		281			(2,299	)		—
Total current assets		3		1,792		1,335		1,242			(2,299	)		2,073
Non-current assets
Property, plant and equipment, net		—		—		265		137			—			402
Operating lease right-of-use asset		—		—		181		196						377
Goodwill		—		—		5,106		878			—			5,984
Other intangible assets, net		—		—		5,450		(752	)		—			4,698
Deferred tax assets		1		—		—		275			—			276
Other non-current assets		—		—		241		71			—			312
Equity investment in subsidiaries		1,993		1,294		3,167		—			(6,454	)		—
Intercompany loans		25		8,633		95		143			(8,896	)		—
Total assets	$	2,022	$	11,719	$	15,840	$	2,190		$	(17,649	)	$	14,122
Liabilities and equity:
Current liabilities
Accounts payable and other current liabilities	$	1	$	50	$	541	$	508		$	—		$	1,100
Deferred revenues		—		—		257		104			—			361
Current portion of long-term debt, finance lease obligations and short-term borrowings		—		80		205		6			—			291
Intercompany payables		—		1		2,073		225			(2,299	)		—
Total current liabilities		1		131		3,076		843			(2,299	)		1,752
Non-current liabilities
Long-term debt and finance lease obligations		—		7,595		525		10			—			8,130
Operating lease liabilities		—		—		213		159			—			372
Deferred tax liabilities		—		71		863		82			—			1,016
Intercompany loans		—		—		8,801		95			(8,896	)		—
Other non-current liabilities		—		64		369		212			—			645
Total liabilities		1		7,861		13,847		1,401			(11,195	)		11,915
Total shareholders’ equity		2,021		3,858		1,993		603			(6,454	)		2,021
Noncontrolling interests		—		—		—		186			—			186
Total equity		2,021		3,858		1,993		789			(6,454	)		2,207
Total liabilities and equity	$	2,022	$	11,719	$	15,840	$	2,190		$	(17,649	)	$	14,122

- 36 -

Nielsen Holdings plc

Condensed Consolidated Balance Sheet

December 31, 2019

							Non-
(IN MILLIONS)	Parent		Issuers		Guarantor		Guarantor			Elimination			Consolidated
Assets:
Current assets
Cash and cash equivalents	$	2	$	—	$	78	$	374		$	—		$	454
Trade and other receivables, net		—		—		539		564			—			1,103
Prepaid expenses and other current assets		—		—		296		124			—			420
Intercompany receivables		7		1,615		309		328			(2,259	)		-
Total current assets		9		1,615		1,222		1,390			(2,259	)		1,977
Non-current assets														-
Property, plant and equipment, net		—		—		303		163			—			466
Operating lease right-of-use asset		—		—		190		203			—			393
Goodwill		—		—		5,103		890			—			5,993
Other intangible assets, net		—		—		5,597		(716	)		—			4,881
Deferred tax assets		1		—		—		275			—			276
Other non-current assets		—		—		260		73			—			333
Equity investment in subsidiaries		2,170		1,298		4,285		—			(7,753	)		—
Intercompany loans		25		8,887		98		1,605			(10,615	)		—
Total assets	$	2,205	$	11,800	$	17,058	$	3,883		$	(20,627	)	$	14,319
Liabilities and equity:
Current liabilities
Accounts payable and other current liabilities	$	10	$	62	$	564	$	546		$	—		$	1,182
Deferred revenues		—		—		257		88			—			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		1,948		308			(2,259	)		—
Total current liabilities		10		926		2,819		1,005			(2,259	)		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		99			(10,615	)		—
Other non-current liabilities		—		22		373		218			—			613
Total liabilities		10		8,321		14,888		1,586			(12,874	)		11,931
Total shareholders’ equity		2,195		3,479		2,170		2,104			(7,753	)		2,195
Noncontrolling interests		—		—		—		193			—			193
Total equity		2,195		3,479		2,170		2,297			(7,753	)		2,388
Total liabilities and equity	$	2,205	$	11,800	$	17,058	$	3,883		$	(20,627	)	$	14,319

- 37 -

Nielsen Holdings plc

Condensed Consolidated Statement of Cash Flows (Unaudited)

For the six months ended June 30, 2020

										Non-
(IN MILLIONS)	Parent			Issuers			Guarantor			Guarantor			Consolidated
Net cash (used in)/provided by operating activities	$	(13	)	$	51		$	312		$	(105	)	$	245
Investing activities:
Acquisition of subsidiaries and affiliates, net of cash acquired		—			—			(14	)		(14	)		(28	)
Additions to property, plant and equipment and other assets		—			—			(6	)		(8	)		(14	)
Additions to intangible assets		—			—			(176	)		(42	)		(218	)
Other investing activities		—			—			1			(3	)		(2	)
Net cash used in investing activities		—			—			(195	)		(67	)		(262	)
Financing activities:
Net borrowings under revolving credit facility		—			—			165			—			165
Proceeds from the issuance of debt, net of issuance costs		—			535			443			—			978
Repayments of debt		—			(1,029	)		—			—			(1,029	)
Cash dividends paid to shareholders		(43	)		—			—			—			(43	)
Activity from share-based compensation plans		(1	)		—			(4	)		—			(5	)
Proceeds from employee stock purchase plan		2			—			—			—			2
Finance leases		—			—			(33	)		(3	)		(36	)
Settlement of intercompany and other financing activities		56			444			(655	)		144			(11	)
Net cash provided by/(used in) financing activities		14			(50	)		(84	)		141			21
Effect of exchange-rate changes on cash and cash equivalents		—			—			(4	)		(16	)		(20	)
Net increase/(decrease) in cash and cash equivalents		1			1			29			(47	)		(16	)
Cash and cash equivalents at beginning of period		2			—			78			374			454
Cash and cash equivalents at end of period	$	3		$	1		$	107		$	327		$	438

- 38 -

Nielsen Holdings plc

Condensed Consolidated Statement of Cash Flows (Unaudited)

For the six months ended June 30, 2019

										Non-
(IN MILLIONS)	Parent			Issuers			Guarantor			Guarantor			Consolidated
Net cash (used in)/provided by operating activities	$	(7	)	$	39		$	245		$	(94	)	$	183
Investing activities:														-
Acquisition of subsidiaries and affiliates, net of cash acquired		—			—			(11	)		(49	)		(60	)
Additions to property, plant and equipment and other assets		—			—			(24	)		(20	)		(44	)
Additions to intangible assets		—			—			(158	)		(28	)		(186	)
Net cash used in investing activities		—			—			(193	)		(97	)		(290	)
Financing activities:
Net borrowings under revolving credit facility		—			—			296			—			296
Repayments of debt		—			(29	)		—			—			(29	)
Increase/(decrease) in other short-term borrowings		—			—			—			(1	)		(1	)
Cash dividends paid to shareholders		(249	)		—			—			—			(249	)
Activity from share-based compensation plans		—			—			(4	)		—			(4	)
Proceeds from employee stock purchase plan		2			—			—			—			2
Finance leases		—			—			(26	)		(3	)		(29	)
Settlement of intercompany and other financing activities		253			(10	)		(397	)		146			(8	)
Net cash provided by/(used in) financing activities		6			(39	)		(131	)		142			(22	)
Effect of exchange-rate changes on cash and cash equivalents		—			—			(2	)		—			(2	)
Net increase/(decrease) in cash and cash equivalents		(1	)		—			(81	)		(49	)		(131	)
Cash and cash equivalents at beginning of period		3			—			132			389			524
Cash and cash equivalents at end of period	$	2		$	—		$	51		$	340		$	393

- 39 -

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

The following discussion and analysis supplements management’s discussion and analysis of Nielsen Holdings plc (“the Company” or “Nielsen”) for the year ended December 31, 2019 as contained in the Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission (“SEC”) on February 27, 2020, and presumes that readers have read or have access to such discussion and analysis. The following discussion and analysis should also be read together with the accompanying Condensed Consolidated Financial Statements and related notes thereto. Further, this report may contain material that includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect, when made, Nielsen’s current views with respect to current events and financial performance. Statements, other than those based on historical facts, which address activities, events or developments that we expect or anticipate may occur in the future are forward-looking statements. Such forward-looking statements are subject to many risks, uncertainties and factors relating to Nielsen’s operations and business environment that may cause actual results to be materially different from any future results, express or implied, by such forward-looking statements, including but not limited to, those set forth in this Item 2 and Part II, Item 1A, if any, those noted in Part II, Item 1A in our Form 10-Q for the quarter ended March 31, 2020 and those noted in our 2019 Annual Report on Form 10-K under “Risk Factors.” Forward-looking statements speak only as of the date of this report or as of the date they were made. We disclaim any intention to update the current expectations or forward-looking statements contained in this report. Unless required by context, references to “we,” “us,” and “our” refer to Nielsen Holdings plc and each of its consolidated subsidiaries unless otherwise stated or indicated by context.

From time to time, Nielsen may use its website and social media outlets as channels of distribution of material company information. Financial and other material information regarding the company is routinely posted and accessible on our website at http://www.nielsen.com/investors and our Twitter account at http://twitter.com/nielsen.

Background and Executive Summary

We are a leading global measurement and data analytics company that provides the most complete and trusted view available of consumers and markets worldwide. Our approach marries our proprietary data with other data sources to help clients around the world understand what’s happening now, what’s happening next, and how to best act on this knowledge. An S&P 500 company, we have operations in approximately 100 countries, including many emerging markets, covering more than 90% of the world’s population, and hold leading market positions in many of our services and geographies.

We believe that important measures of our results of operations include revenue, operating income/(loss) and Adjusted EBITDA (defined below). Our long-term financial objectives include consistent revenue growth and expanding operating margins. Accordingly, we are focused on geographic market and service offering expansion to drive revenue growth and improve operating efficiencies, including effective resource utilization, information technology leverage and overhead cost management.

Our business strategy is built upon a model that has traditionally yielded consistent revenue performance. Typically, before the start of each year, more than 70% of our annual revenue has been committed under contracts in our combined Nielsen Global Connect and Nielsen Global Media segments, which provides us with a greater degree of stability for our revenue and allows us to more effectively manage our profitability and cash flows. See “Business Segment Overview” below for further discussion. We continue to look for growth opportunities through global expansion, specifically within emerging markets, as well as through the cross-platform expansion of our analytical services and measurement services.

On November 7, 2019, Nielsen announced its plan to spin-off the company's Global Connect business, creating two independent, publicly traded companies -- the Global Media business and the Global Connect business. We continue to believe that a separation of Nielsen Global Media and Nielsen Global Connect is the best path forward.  We continue to make operational progress towards separation, and expect the closing to take place in the first quarter of 2021. On May 7, 2020, the Company filed an initial Form 10 Registration Statement with the U.S. Securities and Exchange Commission in connection with the Company’s proposed separation.

Our restructuring and other productivity initiatives have been focused on a combination of improving operating leverage through targeted cost-reduction programs, business process improvements and portfolio restructuring actions, while at the same time investing in key programs to enhance future growth opportunities.

On June 30, 2020, we announced a broad-based optimization plan (the “Restructuring Plan”) to drive permanent cost savings and operational efficiencies, as well as to position us for greater profitability and growth. We expect the Restructuring Plan to be substantially completed in 2020 and for restructuring actions and other permanent cost-savings initiatives to drive approximately $250 million in pre-tax annual run-rate savings.  We expect 2020 pre-tax restructuring charges of $150 to $170 million.

- 40 -

Achieving our business objectives requires us to manage a number of key risk areas. Our growth objective of geographic market and service expansion requires us to maintain the consistency and integrity of our information and underlying processes on a global scale, and to invest effectively our capital in technology and infrastructure to keep pace with our clients’ demands and our competitors. Core to managing these key risk areas is our commitment to data privacy and security as it drives our ability to deliver quality insights for our clients in line with evolving regulatory requirements and governing standards across all the geographies and industries in which we operate. Our operating footprint across approximately 100 countries requires disciplined global and local resource management of internal and third party providers to ensure success. In addition, our high level of indebtedness requires active management of our debt profile, with a focus on underlying maturities, interest rate risk, liquidity and operating cash flows.

COVID-19

          In March 2020, the global outbreak of the novel coronavirus (“COVID-19”) was categorized as a pandemic by the World Health Organization and has negatively affected the global economy, disrupted global supply chains, resulted in significant travel and transport restrictions, including mandated closures and orders to “shelter-in-place,” and created significant disruption of the financial markets.

          We have established a global task force to ensure execution of our key priorities during the COVID-19 pandemic-- the health and safety of our global workforce, maintaining our financial position with ample liquidity, and continuity of critical business processes. 

          We have taken measures to protect the health and safety of our employees, their families and our clients, with a large majority of our worldwide workforce working from home. We have halted in-store field research and in-person client engagements in many markets and are adapting processes and developing innovative solutions to ensure continuity of critical business processes. In addition, we are sharing retail measurement data with several government entities to support our communities.

         We faced increased pressure in both Nielsen Global Media and Nielsen Global Connect in the second quarter. For Nielsen Global Media, this pressure was primarily due to the impact of COVID-19 on sports and non-contracted revenue. For Nielsen Global Connect, this was primarily due to the impact of COVID-19 on retail measurement services in markets that are heavy in traditional trade as well as pressures on custom insights and innovation. These pressures are continuing, though to a lesser extent, primarily due to non-contracted revenues in both Nielsen Global Media and Nielsen Global Connect.

          On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was signed into law. The CARES Act provides a substantial stimulus and assistance package intended to address the impact of the COVID-19 pandemic, including tax relief and government loans, grants and investments. The CARES Act is expected to have a material impact on our effective tax rate, partly as a result of the reversal of certain tax benefits from 2019.  However, we also expect lower U.S. federal tax payments for the full year. We continue to monitor any future effects that may result from the CARES Act.

          We believe we have a sound plan in place to mitigate the financial impacts of the COVID-19 pandemic in the face of ongoing economic uncertainty. We have taken aggressive cost actions to date and continue to closely monitor the situation. We remain well- capitalized, have sufficient liquidity to satisfy our cash needs and will take additional actions as required. We continue to believe that a separation of Nielsen Global Media and Nielsen Global Connect is the best path forward and continue to make operational progress towards separation.  As previously announced, the closing is expected to take place in the first quarter of 2021.

          For further discussion regarding the potential impacts of COVID-19 and related economic conditions on the Company, see "Part II—Item 1A—Risk Factors.".

Business Segment Overview

We are divided into business units: Nielsen Global Media (“Media”) and Nielsen Global Connect (“Connect”). Media, the arbiter of truth for media markets, provides media and advertising clients with unbiased and reliable metrics that create the shared understanding of the industry required for markets to function, enabling its clients to grow and succeed across the $600 billion global advertising market. Media helps clients to define exactly who they want to reach, as well as optimize the outcomes they can achieve. Our cross-platform measurement strategy brings together the best of TV and digital measurement to ensure a more functional marketplace for the industry.

Connect provides consumer packaged goods manufacturers and retailers with accurate, actionable information and a complete picture of the complex and changing marketplace that brands need to innovate and grow their businesses. Connect provides data and builds tools that use predictive models to turn observations in the marketplace into business decisions and winning solutions. The business's data and insights, combined with the only open, cloud native measurement and analytics platform that democratizes the power of data, continue to provide an essential foundation that makes markets possible in the rapidly evolving world of commerce.

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Certain corporate costs, other than those described above, including those related to selling, finance, legal, human resources, and information technology systems, are considered operating costs and are allocated to our segments based on either the actual amount of costs incurred or on a basis consistent with the operations of the underlying segment.

Critical Accounting Policies

Our accounting policies are set forth in Note 1 to Consolidated Financial Statements contained in the Company’s 2019 Annual Report on Form 10-K. We include herein certain updates to those policies.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill and other indefinite-lived intangible assets are stated at historical cost less accumulated impairment losses, if any.

Goodwill and other indefinite-lived intangible assets, consisting of certain trade names and trademarks, are each tested for impairment on an annual basis and whenever events or circumstances indicate that the carrying amount of such asset may not be recoverable. We review the recoverability of our goodwill by comparing the estimated fair values of reporting units with their respective carrying amounts. During the first quarter of 2020, we concluded that there was a triggering event for an interim assessment.

The estimates of fair value of a reporting unit are determined using a combination of valuation techniques, primarily by an income approach using a discounted cash flow analysis and supplemented by a market-based approach.

A discounted cash flow analysis requires the use of various assumptions, including expectations of future cash flows, growth rates, discount rates and tax rates in developing the present value of future cash flow projections. Many of the factors used in assessing fair value are outside of the control of management, and these assumptions and estimates can change in future periods. Changes in assumptions or estimates could materially affect the determination of the fair value of a reporting unit, and therefore could affect the amount of potential impairment. The following assumptions are significant to our discounted cash flow analysis:

• Business projections – expected future cash flows and growth rates are based on assumptions about the level of business activity in the marketplace as well as applicable cost levels that drive our budget and business plans. Management updated the business projections in light of the estimated impacts from the COVID-19 pandemic. Actual results of operations, cash flows and other factors will likely differ from the estimates used in our valuation, and it is possible that differences and changes could be material. A deterioration in profitability, adverse market conditions and a slower or weaker economic recovery than currently estimated by management could have a significant impact on the estimated fair value of our reporting units and could result in an impairment charge in the future. Should such events or circumstances arise, management would evaluate other options available at that time that, if executed, could result in future profitability.

• Long-term growth rates – the assumed long-term growth rate representing the expected rate at which a reporting unit’s earnings stream, beyond that of the budget and business plan period, is projected to grow. These rates are used to calculate the terminal value, or value at the end of the future earnings stream, of our reporting units, and are added to the cash flows projected for the budget and business plan period. The long-term growth rate for each reporting unit is influenced by general market conditions as well as factors specific to the reporting unit such as the maturity of the underlying services. The long-term growth rates we used for each of our reporting units in our latest evaluation were between 1.5% and 2.5%.

• Discount rates – the reporting unit’s combined future cash flows are discounted at a rate that is consistent with a weighted-average cost of capital that is likely to be used by market participants. The weighted-average cost of capital is our estimate of the overall after-tax rate of return required by equity and debt holders of a business enterprise. The discount rate for each reporting unit is influenced by general market conditions as well as factors specific to the reporting unit. The discount rates we used in our latest evaluation of our reporting units were between 11.0% and 12.0%.

These estimates and assumptions vary between each reporting unit depending on the facts and circumstances specific to that unit. We believe that the estimates and assumptions we made are reasonable, but they are susceptible to change from period to period.

We also use a market-based approach in estimating the fair value of our reporting units. The market-based approach utilizes available market comparisons such as indicative industry multiples that are applied to current year revenue and earnings, next year’s revenue and earnings as well as recent comparable transactions.

To validate the reasonableness of the reporting unit fair values, we reconcile the aggregate fair values of our reporting units to our enterprise market capitalization. Enterprise market capitalization includes, among other factors, the market value of our common stock and the appropriate redemption values of our debt. We perform sensitivity analyses on our assumptions, primarily around both

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long-term growth rate and discount rate assumptions. Our sensitivity analyses include several combinations of reasonably possible scenarios with regard to these assumptions, including a one percent movement in both our long-term growth rate and discount rate assumptions. When applying these sensitivity analyses, we noted that the fair value was greater than the carrying value for both of our reporting units. While management believes that these sensitivity analyses provide a reasonable basis on which to evaluate the recovery of our goodwill, other facts or circumstances may arise that could impact the impairment assessment and therefore these analyses should not be used as a sole predictor of impairment. Based on our second quarter results and projections, there were no indicators of impairment during the second quarter of 2020. Nielsen will continue to closely evaluate any indicators of future impairments.

The impairment test for other indefinite-lived intangible assets consists of a comparison of the fair value of the intangible asset with its carrying amount. If the carrying amount of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The estimates of fair value of trade names and trademarks are determined using a “relief from royalty” discounted cash flow valuation methodology, which includes revenue projections. Significant assumptions inherent in this methodology include estimates of royalty rates and discount rates. Discount rate assumptions are based on an assessment of the risk inherent in the respective intangible assets. Assumptions about royalty rates are based on the rates at which comparable trade names and trademarks are being licensed in the marketplace. There was no impairment noted in any period presented with respect to the Company’s indefinite-lived intangible assets. As of the March 31, 2020 assessment, one of our indefinite-lived intangible assets had a fair value that exceeded its carrying value by less than 5%. The valuation is sensitive to the assumptions listed above. A downward trend in revenue projections or an increase in discount rate could lead to a future impairment. We concluded that there was no triggering event for an interim impairment assessment for the three-month period ending June 30, 2020. We will continue to closely evaluate any indicators of future impairments.

Factors Affecting Our Financial Results

Acquisitions and Investments in Affiliates

Acquisitions

For the six months ended June 30, 2020, we paid cash consideration of $28 million associated with current period acquisitions, net of cash acquired. Had these 2020 acquisitions occurred as of January 1, 2020, the impact on our consolidated results of operations would not have been material.

For the six months ended June 30, 2019, we paid cash consideration of $60 million associated with current period acquisitions, net of cash acquired. Had these 2019 acquisitions occurred as of January 1, 2019, the impact on our consolidated results of operations would not have been material.

Foreign Currency

Our financial results are reported in U.S. dollars and are therefore subject to the impact of movements in exchange rates on the translation of the financial information of individual businesses whose functional currencies are other than U.S. dollars. Our principal foreign exchange revenue exposure is spread across several currencies, primarily the Euro. The table below sets forth the profile of our revenue by principal currency.

	Six Months Ended June 30,
	2020			2019
U.S. Dollar		60	%		58	%
Euro		10	%		10	%
Other Currencies		30	%		32	%
Total		100	%		100	%

Fluctuations in the value of foreign currencies relative to the U.S. dollar impact our operating results. Impacts associated with fluctuations in foreign currency are discussed in more detail under “Item 3.—Quantitative and Qualitative Disclosures about Market Risk.” In countries with currencies other than the U.S. dollar, assets and liabilities are translated into U.S. dollars using end-of-period exchange rates while; revenues, expenses and cash flows are translated using average rates of exchange. The average U.S. dollar to Euro exchange rate was $1.10 to €1.00 and $1.13 to €1.00 for the six months ended June 30, 2020 and 2019, respectively. Constant currency growth rates used in the following discussion of results of operations eliminate the impact of year-over-year foreign currency fluctuations.

We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation is a non-GAAP financial measure, which excludes the impact of period-over-period fluctuations in foreign currency exchange rates. We

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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 our performance. We calculate constant currency percentages by converting our prior-period local currency financial results using the current period foreign currency exchange rates and comparing these adjusted amounts to our current period reported results. This calculation may differ from similarly-titled measures used by others.  In addition, the constant currency presentation is not meant to be a substitution for recorded amounts presented in conformity with GAAP nor should such amounts be considered in isolation.

Accounts Receivable

We extend non-interest bearing trade credit to our customers in the ordinary course of business. To minimize credit risk, ongoing credit evaluations of client’s financial condition are performed. Effective January 1, 2020, we adopted ASU, “Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments”. Prior to the adoption, an estimate of the allowance for doubtful accounts was made when collection of the full amount was no longer probable (incurred loss) or returns were expected. Subsequent to the adoption, as noted in “Summary of Recent Accounting Pronouncements” below, the allowance for doubtful accounts is made when collection of the full amounts is no longer probable by also incorporating reasonable and supportable forecasts (expected loss).

The uncertainty regarding the length of lock-downs related to the COVID-19 pandemic and speed of recovery may impact our level of reserves in future periods. We continue to monitor and assess the impacts related to our different clients and will base our reasonable forecasts on the latest information available.

During the six months ended June 30, 2020, we sold $125 million of accounts receivable to third parties and recorded an immaterial loss on the sale to interest expense, net in the condensed consolidated statement of operations. As of June 30, 2020 and December 31, 2019, $30 million and $85 million of previously sold receivables, respectively, remained outstanding. The sales were accounted for as true sales, without recourse. We maintain servicing responsibilities for the majority of the receivables sold during the period, for which the related costs are not significant. The proceeds of $125 million from the sales were reported as a component of the changes in trade and other receivables, net within operating activities in the condensed consolidated statement of cash flows.

Results of Operations – Three Months Ended June 30, 2020 Compared to the Three Months Ended June 30, 2019

The following table sets forth, for the periods indicated, the amounts included in our Condensed Consolidated Statements of Operations:

	Three Months Ended June 30,
(IN MILLIONS)	2020			2019
Revenues	$	1,496		$	1,628
Cost of revenues, exclusive of depreciation and amortization shown separately below		664			699
Selling, general and administrative expenses, exclusive of depreciation and amortization shown separately below		451			483
Depreciation and amortization		224			185
Impairment of other long-lived assets		45			—
Restructuring charges		84			12
Operating income/(loss)		28			249
Interest income		—			1
Interest expense		(91	)		(100	)
Foreign currency exchange transaction gains/(losses), net		3			(1	)
Other income/(expense), net		(4	)		—
Income/(loss) from continuing operations before income taxes and equity in net income/(loss) of affiliates		(64	)		149
Benefit/(provision) for income taxes		38			(23	)
Net income/(loss)		(26	)		126
Net income/(loss) attributable to noncontrolling interests		4			3
Net income/(loss) attributable to Nielsen shareholders	$	(30	)	$	123

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Net Income/(Loss) to Adjusted EBITDA Reconciliation

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, impairment of goodwill and other long-lived assets, share-based compensation expense and other non-operating items from our consolidated statements of operations as well as certain other items considered outside the normal course of our operations specifically described below.

Restructuring charges: We exclude restructuring expenses, which primarily include employee severance, office consolidation and contract termination charges, from our Adjusted EBITDA to allow more accurate comparisons of the financial results to historical operations and forward-looking guidance. By excluding these expenses from our non-GAAP measures, we are better able to evaluate our ability to utilize our existing assets and estimate the long-term value these assets will generate for us. Furthermore, we believe that the adjustments of these items more closely correlate with the sustainability of our operating performance.

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. Given the significance of the impairment of goodwill and other long-lived assets, we reported it separately in the consolidated statements of operations. We believe that the exclusion of these impairments, which are non-cash, allows for meaningful comparisons of operating results to peer companies. We believe that this increases period-to-period comparability and is useful to evaluate the performance of the total company.

Share-based compensation expense: We exclude the impact of costs relating to share-based compensation. Due to the subjective assumptions and a variety of award types, we believe that the exclusion of share-based compensation expense, which is typically non-cash, allows for more meaningful comparisons of our operating results to peer companies. Share-based compensation expense can vary significantly based on the timing, size and nature of awards granted.

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, pension settlements, net income/(loss) attributable to noncontrolling interests and early redemption payments made in connection with debt refinancing. We believe that the adjustments of these items more closely correlate with the sustainability of our operating performance.

Other items: To measure operating performance, we exclude certain expenses and gains that arise outside the ordinary course of our operations. Such costs primarily include legal settlements, acquisition related expenses, business optimization costs and other transactional costs. We believe the exclusion of such amounts allows management and the users of the financial statements to better understand our financial results.

Separation-related costs: To measure operating performance, we exclude certain separation-related costs that would not be incurred if we were not undertaking a separation of our Global Connect business from our Global Media business and positioning Global Connect and Global Media to operate as two independent companies. These costs include: third-party advisor costs, tax friction, technology related spend, and incremental costs of beginning to operate as two independent companies. We believe that exclusion of these costs will allow users of our financial statements to better understand our financial performance in 2020.

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Adjusted EBITDA is not a presentation made in accordance with GAAP, and our use of the term Adjusted EBITDA 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. Adjusted EBITDA margin is Adjusted EBITDA for a particular period expressed as a percentage of revenues for that period.

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. In addition to Adjusted EBITDA being a significant measure of performance for management purposes, we also believe that this presentation provides useful information to investors regarding financial and business trends related to our results of operations and that when non-GAAP financial information is viewed with GAAP financial information, investors are provided with a more meaningful understanding of our ongoing operating performance.

Adjusted EBITDA should not be considered as an alternative to net income or loss, operating income, cash flows from operating activities or any other performance measures derived in accordance with GAAP as measures of operating performance or cash flows as measures of liquidity. Adjusted EBITDA has important limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. In addition, our definition of Adjusted EBITDA may not be comparable to similarly titled measures of other companies and may, therefore, have limitations as a comparative analytical tool.

The below table presents a reconciliation from net income to Adjusted EBITDA for the three months ended June 30, 2020 and 2019:

	Three Months Ended June 30,
(IN MILLIONS)	2020			2019
Net income/(loss) attributable to Nielsen shareholders	$	(30	)	$	123
Interest expense, net		91			99
(Benefit)/provision for income taxes		(38	)		23
Depreciation and amortization		224			185
EBITDA		247			430
Other non-operating (income)/expense, net		5			4
Restructuring charges		84			12
Impairment of other long-lived assets		45			—
Share-based compensation expense		11			11
Separation-related costs(b)		26			—
Other items(a)		8			13
Adjusted EBITDA	$	426		$	470

(a) Other items primarily consist of business optimization costs and transaction related costs for the three months ended June 30, 2020.  Other items primarily consist of business optimization costs, including strategic review costs, and transaction related costs for the three months ended June 30, 2019.

(b) Separation-related costs consist of costs that would not have been incurred if we were not undertaking the separation of the Nielsen Global Connect business from the Nielsen Global Media business and positioning Global Connect and Global Media to operate as two independent companies.

Consolidated Results for the Three Months Ended June 30, 2020 Compared to the Three Months Ended June 30, 2019

Revenues

Revenues decreased 8.1% to $1,496 million for the three months ended June 30, 2020 from $1,628 million for the three months ended June 30, 2019, or a decrease of 5.9% on a constant currency basis. Revenues within our Connect segment decreased 11.3%, or a decrease of 7.4% on a constant currency basis. Revenues within our Media segment decreased 5.3%, or a decrease of 4.6% on a constant currency basis. Refer to the “Business Segment Results for the Three Months Ended June 30, 2020 Compared to the Three Months Ended June 30, 2019” section for further discussion of our revenue performance.

Cost of Revenues, Exclusive of Depreciation and Amortization

Cost of revenues decreased 5.0% to $664 million for the three months ended June 30, 2020 from $699 million for the three months ended June 30, 2019, or a decrease of 2.6% on a constant currency basis.

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Costs within our Connect segment decreased 8.4%, or a decrease of 5.0% on a constant currency basis.  The decrease in cost of revenues for the three months ended June 30, 2020 as compared to the three months ended June 30, 2019 was primarily due to our productivity initiatives and temporary costs savings due to actions taken in response to the COVID-19 pandemic, partially offset by global investments in our services, including retailer investments.

Costs within our Media segment were flat, or an increase of 0.7% on a constant currency basis.  Cost of revenues increased primarily due to the impact of our investments and higher spending on product portfolio management initiatives, partially offset by productivity initiatives and temporary actions taken in response to the COVID-19 pandemic, partially offset by global investments in our services, including retailer investments.

Selling, General and Administrative Expenses, Exclusive of Depreciation and Amortization

Selling, general and administrative expenses decreased 6.6% to $451 million for the three months ended June 30, 2020 from $483 million for the three months ended June 30, 2019, or a decrease of 4.2% on a constant currency basis.

Costs within our Connect segment decreased 13.5%, or a decrease of 9.9% on a constant currency basis. Selling, general and administrative expenses decreased primarily due to our productivity initiatives.

Costs within our Media segment decreased 10.6%, or a decrease of 9.6% on a constant currency basis. Selling, general and administrative expenses decreased primarily due to our productivity initiatives.

Costs within our Corporate segment increased 114% on a reported and constant currency basis, primarily due to separation-related costs relating to the separation of our Global Connect business from our Global Media business. These costs include third-party advisor costs, technology and other similar costs associated with separating the businesses and operations.

Depreciation and Amortization

Depreciation and amortization expense was $224 million for the three months ended June 30, 2020, as compared to $185 million for the three months ended June 30, 2019. This increase was primarily due to higher depreciation and amortization expense associated with higher capital expenditures, partially offset by lower depreciation and amortization expense associated with tangible and intangible assets acquired in business combinations.

Depreciation and amortization expense associated with tangible and intangible assets acquired in business combinations was $50 million for the three months ended June 30, 2020, as compared to $53 million for the three months ended June 30, 2019.

Impairment of goodwill and other long-lived assets

          We recorded a non-cash charge of $45 million for the impairment of other long-lived assets for the three months ended June 30, 2020, related to management’s decision to exit certain smaller, underperforming markets and non-core businesses. This charge was primarily recorded within our Media segment.

Restructuring Charges

In June, 2020, we announced a broad-based optimization plan to drive permanent cost savings and operational efficiencies, as well as to position us for greater profitability and growth. We expect the plan to be substantially completed in 2020. Cash payments for the severance costs will continue into late 2021.

We recorded $84 million in restructuring charges for the three months ended June 30, 2020. These charges primarily related to severance costs associated with employee severance packages.

We recorded $12 million in restructuring charges for the three months ended June 30, 2019, primarily related to employee severance costs associated with our plans to reduce selling, general and administrative expenses and consolidate operations centers, as well as automation initiatives.

Operating Income

Operating income for the three months ended June 30, 2020 was $28 million as compared to $249 million for the three months ended June 30, 2019. Operating loss within our Connect segment was $36 million for the three months ended June 30, 2020 as compared to operating income of $46 million for the three months ended June 30, 2019. Operating income within our Media segment was $120 million for the three months ended June 30, 2020 as compared to $237 million for the three months ended June 30, 2019.

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Corporate operating expenses were $56 million for the three months ended June 30, 2020 as compared to $34 million for the three months ended June 30, 2019. Refer to the “Business Segment Results for the Three Months Ended June 30, 2020 Compared to the Three Months Ended June 30, 2019” section for further discussion of our operating income.

Interest Expense

Interest expense was $91 million for the three months ended June 30, 2020, as compared to $100 million for the three months ended June 30, 2019. This decrease was primarily due to lower USD LIBOR senior secured term loan interest rates without hedged positions.

Foreign Currency Exchange Transaction Gains/(Losses), Net

Foreign currency exchange transaction losses, net, primarily represent the net loss on revaluation of intercompany loans and other receivables and payables denominated in currencies other than the respective entity’s functional currency. Fluctuations in the value of foreign currencies relative to the U.S. Dollar, primarily the Euro, have a significant effect on our operating results. The average U.S. Dollar to Euro exchange rate was $1.10 to €1.00 for the three months ended June 30, 2020 as compared to $1.12 to €1.00 for the three months ended June 30, 2019.

We realized net gains of $3 million and net losses of $1 million for the three months ended June 30, 2020 and 2019, respectively, resulting primarily from fluctuations in certain foreign currencies associated with intercompany transactions.

Other Income/(Expense), Net

Other expense, net of $4 million for the three months ended June 30, 2020, was primarily related to a loss from businesses classified as held for sale within our Media segment, and the write-off of certain previously capitalized deferred financing fees in conjunction with the June 2020 debt refinancing.

Income Taxes

The effective tax rates before discrete tax items for the three months ended June 30, 2020 and 2019 were 62% ($40 million tax benefit) and 31% ($46 million tax expense), respectively. The tax rate for the three months ended June 30, 2020 was higher than the statutory rate as a result of the impact of tax rate differences in other jurisdictions where we file tax returns, BEAT tax, and withholding taxes. The tax rate for the three months ended June 30, 2019 was higher than the statutory rate as a result of the impact of tax rate differences in other jurisdictions where we file tax returns offset by the favorable impact of certain financing activities. For the three months ended June 30, 2020, the total tax benefit was $38 million. For the three months ended June 30, 2019, the total tax expense was $23 million which includes the favorable impact of releasing certain tax contingencies and other discrete items recognized in the second quarter.

The estimated liability for unrecognized tax benefits as of December 31, 2019 was $164 million. If our tax positions are favorably sustained by the taxing authorities, the reversal of the underlying liabilities would reduce our effective tax rate in future periods.

Adjusted EBITDA

Adjusted EBITDA decreased 9.4% to $426 million for the three months ended June 30, 2020 from $470 million for the three months ended June 30, 2019, a decrease of 7.6% on a constant currency basis. See “Results of Operations – Three Months Ended June 30, 2020 Compared to the Three Months Ended June 30, 2019” for the reconciliation of net income/(loss) to Adjusted EBITDA.

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Business Segment Results for the Three Months Ended June 30, 2020 Compared to the Three Months Ended June 30, 2019

Revenues

The table below sets forth our segment revenue performance data for the three months ended June 30, 2020 compared to the three months ended June 30, 2019, both on an as-reported and constant currency basis.

(IN MILLIONS)	Three Months Ended June 30, 2020		Three Months Ended June 30, 2019		% Variance 2020 vs. 2019 Reported			Three Months Ended June 30, 2019 Constant Currency		% Variance 2020 vs. 2019 Constant  Currency
Measure	$	495	$	546		(9.3	)%	$	521		(5.0	)%
Predict/Activate		190		226		(15.9	)%		219		(13.2	)%
Connect Segment	$	685	$	772		(11.3	)%	$	740		(7.4	)%
Audience Measurement	$	603		622		(3.1	)%	$	618		(2.4	)%
Plan/Optimize		208		234		(11.1	)%		232		(10.3	)%
Media Segment	$	811	$	856		(5.3	)%	$	850		(4.6	)%
Total	$	1,496	$	1,628		(8.1	)%	$	1,590		(5.9	)%

Connect Segment Revenues

Revenues decreased 11.3% to $685 million for the three months ended June 30, 2020 from $772 million for the three months ended June 30, 2019, or a decrease of 7.4% on a constant currency basis. Revenues from Measure decreased 9.3% to $495 million, or a decrease of 5.0% on a constant currency basis, reflecting the impact of the COVID-19 pandemic on retail measurement services in markets that are heavy in traditional trade. Revenues from Predict/Activate decreased 15.9% to $190 million, or a decrease of 13.2% on a constant currency basis, reflecting the impact of the COVID-19 pandemic, particularly in custom insights and innovation, partially offset by the January 2020 acquisition of Precima.

Media Segment Revenues  

Revenues decreased 5.3% to $811 million for the three months ended June 30, 2020 from $856 million for the three months ended June 30, 2019, or a decrease of 4.6% on a constant currency basis. Revenues from Audience Measurement decreased 3.1% to $603 million, or a decrease of 2.4% on a constant currency basis, reflecting the impact of the COVID-19 pandemic on sports and non-contracted revenue and ongoing pressure in local television. Plan/Optimize revenues decreased 11.1%, or a decrease of 10.3% on a constant currency basis, primarily reflecting the impact of the COVID-19 pandemic on sports, Gracenote auto and short-cycle revenue and ongoing pressure in Telecom.

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Business Segment Profitability

We do not allocate items below operating income/(loss) to our business segments and therefore the tables below set forth a reconciliation of operating income/(loss) at the business segment level for the three months ended June 30, 2020 and 2019, adjusting for certain items affecting operating income/(loss), such as restructuring charges, depreciation and amortization, share-based compensation expense and certain other items described below resulting in a presentation of our non-GAAP business segment profitability. Non-GAAP business segment profitability provides useful supplemental information to management and investors regarding financial and business trends related to our results of operations. When this non-GAAP financial information is viewed with our GAAP financial information, investors are provided with a meaningful understanding of our ongoing operating performance. It is important to note that the non-GAAP business segment profitability corresponds in total to our consolidated Adjusted EBITDA described within our consolidated results of operations above, which our chief operating decision maker and other members of management use 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. These non-GAAP measures should not be considered as an alternative to net income/(loss), operating income/(loss), cash flows from operating activities or any other performance measures derived in accordance with GAAP as measures of operating performance or cash flows as measures of liquidity. These non-GAAP measures may differ from similarly titled measures used by others and have important limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.

(IN MILLIONS)	Connect			Media		Corporate			Total
Three Months Ended June 30, 2020
Operating income/(loss)	$	(36	)	$	120	$	(56	)	$	28
Depreciation and amortization		66			156		2			224
Restructuring charges		55			25		4			84
Impairment of other long-lived assets		4			41		—			45
Share-based compensation expense		1			4		6			11
Other items(1)		1			—		7			8
Separation-related costs(2)		—			—		26			26
Non-GAAP Business segment income/(loss)	$	91		$	346	$	(11	)	$	426

(IN MILLIONS)		Connect		Media			Corporate			Total
Three Months Ended June 30, 2019
Operating income/(loss)	$	46	$	237		$	(34	)	$	249
Depreciation and amortization		55			128		2			185
Restructuring charges		4			3		5			12
Share-based compensation expense		4			3		4			11
Other items(1)		—			—		13			13
Non-GAAP Business segment income/(loss)	$	109	$	371		$	(10	)	$	470

(1) For the three months ended June 30, 2020, other items primarily consist of business optimization costs and transaction related costs. For the three months ended June 30, 2019, other items primarily consist of business optimization costs, including strategic review costs, and transaction related costs.

(2) Separation-related costs consist of costs that would not have been incurred if we were not undertaking the separation of the Nielsen Global Connect business from the Nielsen Global Media business and positioning Global Connect and Global Media to operate as two independent companies.

(IN MILLIONS)	Three  Months Ended June 30, 2020 Reported			Three  Months Ended June 30, 2019 Reported			% Variance 2020 vs. 2019 Reported			Three  Months Ended June 30, 2019 Constant Currency			% Variance 2020 vs. 2019 Constant Currency
Non-GAAP Business Segment    Income/(Loss)
Connect	$	91		$	109			(16.5	)%	$	101			(9.9	)%
Media		346			371			(6.7	)%		370			(6.5	)%
Corporate and Eliminations		(11	)		(10	)		NM			(10	)		NM
Total Nielsen	$	426		$	470			(9.4	)%	$	461			(7.6	)%

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Connect Segment Profitability

Operating loss was $36 million for the three months ended June 30, 2020, as compared to operating income of $46 million for the three months ended June 30, 2019. The decrease was primarily driven by the revenue decrease due to the COVID-19 pandemic  discussed above, an increase in restructuring charges and depreciation and amortization expense, as well as our continued global investments in our services, including retailer investments for the three months ended June 30, 2020. Non-GAAP business segment income decreased 9.9% on a constant currency basis.

Media Segment Profitability  

Operating income was $120 million for the three months ended June 30, 2020 as compared to $237 million for the three months ended June 30, 2019. The decrease was driven primarily by the revenue decrease due to the COVID-19 pandemic discussed above, an increase in depreciation and amortization expense and restructuring charges, as well as the long-lived assets impairment for the three months ended June 30, 2020. Non-GAAP business segment income decreased 6.5% on a constant currency basis.

Corporate Expenses and Eliminations

Operating expenses were $56 million for the three months ended June 30, 2020 as compared to $34 million for the three months ended June 30, 2019. The increase was primarily driven by separation-related costs, partially offset by lower business optimization costs and transaction related costs for the three months ended June 30, 2020.

Results of Operations – Six Months Ended June 30, 2020 Compared to the Six Months Ended June 30, 2019

The following table sets forth, for the periods indicated, the amounts included in our Condensed Consolidated Statements of Operations:

	Six Months Ended June 30,
(IN MILLIONS)	2020			2019
Revenues	$	3,055		$	3,191
Cost of revenues, exclusive of depreciation and amortization shown separately below		1,385			1,394
Selling, general and administrative expenses, exclusive of depreciation and amortization shown separately below		966			963
Depreciation and amortization		438			364
Impairment of other long-lived assets		45			—
Restructuring charges		95			47
Operating income/(loss)		126			423
Interest income		1			3
Interest expense		(185	)		(199	)
Foreign currency exchange transaction gains/(losses), net		(3	)		(4	)
Other income/(expense), net		(5	)		5
Income/(loss) from continuing operations before income taxes and equity in net income/(loss) of affiliates		(66	)		228
Benefit/(provision) for income taxes		27			(55	)
Net income/(loss)		(39	)		173
Net income/(loss) attributable to noncontrolling interests		9			7
Net income/(loss) attributable to Nielsen shareholders	$	(48	)	$	166

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Net Income/(Loss) to Adjusted EBITDA Reconciliation

The below table presents a reconciliation from net income/(loss) to Adjusted EBITDA for the six months ended June 30, 2020 and 2019:

	Six Months Ended June 30,
(IN MILLIONS)	2020			2019
Net income/(loss) attributable to Nielsen shareholders	$	(48	)	$	166
Interest expense, net		184			196
(Benefit)/provision for income taxes		(27	)		55
Depreciation and amortization		438			364
EBITDA		547			781
Other non-operating (income)/expense, net		17			6
Restructuring charges		95			47
Impairment of other long-lived assets		45			—
Share-based compensation expense		27			26
Other items(1)		29			25
Separation-related costs(2)		61			—
Adjusted EBITDA	$	821		$	885

(1) For the six months ended June 30, 2020, other items primarily consist of business optimization costs and transaction related costs. For the six months ended June 30, 2019, other items primarily consist of transaction related costs and business optimization costs, including strategic review costs.

(2) Separation-related costs consists\ of costs that would not have been incurred if we were not undertaking the separation of the Nielsen Global Connect business from the Nielsen Global Media business and positioning Global Connect and Global Media to operate as two independent companies.

Consolidated Results for the Six Months Ended June 30, 2020 Compared to the Six Months Ended June 30, 2019

Revenues

Revenues decreased 4.3% to $3,055 million for the six months ended June 30, 2020 from $3,191 million for the six months ended June 30, 2019, or a decrease of 2.3% on a constant currency basis. Revenues within our Connect segment decreased 7.1%, or a decrease of 3.6% on a constant currency basis. Revenues within our Media segment decreased 1.7%, or a decrease of 1.1% on a constant currency basis. Refer to the “Business Segment Results for the Six Months Ended June 30, 2020 Compared to the Six Months Ended June 30, 2019” section for further discussion of our revenue performance.

Cost of Revenues, Exclusive of Depreciation and Amortization

Cost of revenues decreased 0.6% to $1,385 million for the six months ended June 30, 2020 from $1,394 million for the six months ended June 30, 2019, or an increase of 1.3% on a constant currency basis.

Costs within our Connect segment decreased 3.6%, or a decrease of 0.8% on a constant currency basis, primarily due to our productivity initiatives and lower variable costs associated with lower revenues.

Costs within our Media segment increased 3.9%, or an increase of 4.7% on a constant currency basis, primarily due to the impact of our investments and higher spending on product portfolio management initiatives, partially offset by productivity initiatives.

Selling, General and Administrative Expenses, Exclusive of Depreciation and Amortization

Selling, general and administrative expenses increased 0.3% to $966 million for the six months ended June 30, 2020 from $963 million for the six months ended June 30, 2019, or an increase of 2.5% on a constant currency basis.

Costs within our Connect segment decreased 8.4%, or a decrease of 5.3% on a constant currency basis. Selling, general and administrative expenses decreased primarily due to the impact of our productivity initiatives.

Costs within our Media segment decreased 5.6%, or a decrease of 4.8% on a constant currency basis. Selling, general and administrative expenses decreased primarily due to the impact of our productivity initiatives.  

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Costs within our Corporate segment increased 171% on a reported and constant currency basis, primarily due to separation-related costs relating to the separation of our Global Connect business from our Global Media business. These costs include third-party advisor costs, technology and other similar costs associated with separating the businesses and operations.

Depreciation and Amortization

Depreciation and amortization expense was $438 million for the six months ended June 30, 2020 as compared to $364 million for the six months ended June 30, 2019. This increase was primarily due to higher depreciation and amortization expense associated with higher capital expenditures, partially offset by lower depreciation and amortization expense associated with tangible and intangible assets acquired in business combinations.  

Depreciation and amortization expense associated with tangible and intangible assets acquired in business combinations was $101 million for the six months ended June 30, 2020 as compared to $107 million for the six months ended June 30, 2019.

Impairment of goodwill and other long-lived assets

         We recorded a non-cash charge of $45 million for the impairment of other long-lived assets for the six months ended June 30, 2020, related to management’s decision to exit certain smaller, underperforming markets and non-core businesses. This charge was primarily recorded within our Media segment.

Restructuring Charges

In June, 2020, we announced a broad-based optimization plan to drive permanent cost savings and operational efficiencies, as well as to position us for greater profitability and growth. We expect the plan to be substantially completed in 2020. Cash payments for the severance costs will continue into late 2021.

We recorded $95 million in restructuring charges for the six months ended June 30, 2020. These charges primarily related to severance costs associated with employee separation packages.

We recorded $47 million in restructuring charges primarily relating to employee severance costs associated with our plans to reduce selling, general and administrative expenses as well as automation initiatives for the six months ended June 30, 2019.

Operating Income

Operating income for the six months ended June 30, 2020 was $126 million as compared to $423 million for the six months ended June 30, 2019. Operating loss within our Connect segment was $51 million for the six months ended June 30, 2020 as compared to $44 million for the six months ended June 30, 2019. Operating income within our Media segment was $311 million for the six months ended June 30, 2020 as compared to $451 million for the six months ended June 30, 2019. Corporate operating expenses were $134 million for the six months ended June 30, 2020 as compared to $72 million for the six months ended June 30, 2019. Refer to the “Business Segment Results for the Six Months Ended June 30, 2020 Compared to the Six Months Ended June 30, 2019” section for further discussion of our operating income.

Interest Expense

Interest expense was $185 million for the six months ended June 30, 2020 as compared to $199 million for the six months ended June 30, 2019. This decrease was primarily due to lower USD LIBOR senior secured term loan interest rates without hedged positions.

Foreign Currency Exchange Transaction Gains/(Losses), Net

Foreign currency exchange transaction losses, net, primarily represent the net loss on revaluation of intercompany loans and other receivables and payables denominated in currencies other than the respective entity’s functional currency. Fluctuations in the value of foreign currencies relative to the U.S. Dollar, primarily the Euro, have a significant effect on our operating results. The average U.S. Dollar to Euro exchange rate was $1.10 to €1.00 for the six months ended June 30, 2020 as compared to $1.13 to €1.00 for the six months ended June 30, 2019.

We realized net losses of $3 million and $4 million for the six months ended June 30, 2020 and 2019, respectively, resulting primarily from fluctuations in certain foreign currencies associated with intercompany transactions.

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Other Income/(Expense), Net

Other expense, net of $5 million for the six months ended June 30, 2020, was primarily related to a loss from businesses classified as held for sale within our Media segment, and the write-off of certain previously capitalized deferred financing fees in conjunction with the June 2020 debt refinancing.

Other income, net of $5 million for the six months ended June 30, 2019, was primarily related to certain non-service related pension transactions and a gain from the sale of a cost method investment.

Income Taxes

The effective tax rates before discrete tax items for the six months ended June 30, 2020 and 2019 were 62% ($41 million tax benefit) and 31% ($71 million tax expense), respectively. The tax rate for the six months ended June 30, 2020 was higher than the statutory rate as a result of the impact of tax rate differences in other jurisdictions where we file tax returns, BEAT tax, and withholding taxes offset by reversal of valuation allowance related to certain loss carryforwards. The tax rate for the six months ended June 30, 2019 was higher than the statutory rate as a result of the impact of tax rate differences in other jurisdictions where we file tax returns offset by the favorable impact of certain financing activities. For the six months ended June 30, 2020, the total tax benefit was $27 million which includes the impact of the CARES Act and other discrete items recognized in the period. For the six months ended June 30, 2019, the total tax expense was $55 million which includes the favorable impact of releasing certain tax contingencies and other discrete items recognized in the period.

Adjusted EBITDA

Adjusted EBITDA decreased 7.2% to $821 million for the six months ended June 30, 2020 from $885 million for the six months ended June 30, 2019, a decrease of 5.4% on a constant currency basis. See “Results of Operations – Six Months Ended June 30, 2020 Compared to the Six Months Ended June 30, 2019” for the reconciliation of net income to Adjusted EBITDA.

Business Segment Results for the Six Months Ended June 30, 2020 Compared to the Six Months Ended June 30, 2019

Revenues

The table below sets forth our segment revenue performance data for the six months ended June 30, 2020 compared to the six months ended June 30, 2019, both on an as-reported and constant currency basis.

(IN MILLIONS)	Six Months Ended June 30, 2020		Six Months Ended June 30, 2019		% Variance 2020 vs. 2019 Reported			Six Months Ended June 30, 2019 Constant Currency		% Variance 2020 vs. 2019 Constant  Currency
Measure	$	1,005	$	1,085		(7.4	)%	$	1,043		(3.6	)%
Predict/Activate		397		424		(6.4	)%		412		(3.6	)%
Connect Segment	$	1,402	$	1,509		(7.1	)%	$	1,455		(3.6	)%
Audience Measurement	$	1,218	$	1,227		(0.7	)%	$	1,220		(0.2	)%
Plan/Optimize		435		455		(4.4	)%		451		(3.5	)%
Media Segment	$	1,653	$	1,682		(1.7	)%	$	1,671		(1.1	)%
Total	$	3,055	$	3,191		(4.3	)%	$	3,126		(2.3	)%

Connect Segment Revenues

Revenues decreased 7.1% to $1,402 million for the six months ended June 30, 2020 from $1,509 million for the six months ended June 30, 2019, or a decrease of 3.6% on a constant currency basis. Revenues from Measure decreased 7.4% to $1,005 million, or a decrease of 3.6% on a constant currency basis, reflecting the impact of the COVID-19 pandemic on retail measurement services in markets that are heavy in traditional trade. Revenues from Predict/Activate decreased 6.4% to $397 million, or a decrease of 3.6% on a constant currency basis, reflecting the impact of the COVID-19 pandemic, particularly in custom insights and innovation, partially offset by the January 2020 acquisition of Precima.

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Media Segment Revenues  

Revenues decreased 1.7% to $1,653 million for the six months ended June 30, 2020 from $1,682 million for the six months ended June 30, 2019, or a decrease of 1.1% on a constant currency basis. Revenues from Audience Measurement decreased 0.7%, or a decrease of 0.2% on a constant currency basis, reflecting the impact of the COVID-19 pandemic on sports and non-contracted revenue and ongoing pressure in local television. Plan/Optimize revenues decreased 4.4%, or a decrease of 3.5% on a constant currency basis, primarily reflecting the impact of the COVID-19 pandemic on sports, Gracenote auto and short-cycle revenue and ongoing pressure in Telecom.

.

Business Segment Profitability

(IN MILLIONS)	Connect			Media		Corporate			Total
Six Months Ended June 30, 2020
Operating income/(loss)	$	(51	)	$	311	$	(134	)	$	126
Depreciation and amortization		131			303		4			438
Restructuring charges		63			26		6			95
Impairment of other long-lived assets		4			41		—			45
Share-based compensation expense		6			8		13			27
Other items(1)		1			—		28			29
Separation-related costs(2)		—			—		61			61
Non-GAAP Business segment income/(loss)	$	154		$	689	$	(22	)	$	821

(IN MILLIONS)		Connect		Media		Corporate			Total
Six Months Ended June 30, 2019
Operating income/(loss)	$	44	$	451	$	(72	)	$	423
Depreciation and amortization		110		251		3			364
Restructuring charges		26		10		11			47
Share-based compensation expense		8		6		12			26
Other items(1)		—		—		25			25
Non-GAAP Business segment income/(loss)	$	188	$	718	$	(21	)	$	885

(1) Other Items primarily consists of separation-related costs, business optimization costs and transaction related costs for the six months ended June 30, 2020. Other Items primarily consists of business optimization costs, including strategic review costs, and transaction related costs for the six months ended June 30, 2019.

(2) Separation-related costs consist of costs that would not have been incurred if we were not undertaking the separation of the Nielsen Global Connect business from the Nielsen Global Media business and positioning Global Connect and Global Media to operate as two independent companies.

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(IN MILLIONS)	Six  Months Ended June 30, 2020 Reported			Six  Months Ended June 30, 2019 Reported			% Variance 2020 vs. 2019 Reported			Six Months Ended June 30, 2019 Constant Currency			% Variance 2020 vs. 2019 Constant Currency
Non-GAAP Business Segment Income/(Loss)
Connect	$	154		$	188			(18.1	)%	$	173			(11.0	)%
Media		689			718			(4.0	)%		716			(3.8	)%
Corporate and Eliminations		(22	)		(21	)		NM			(21	)		NM
Total Nielsen	$	821		$	885			(7.2	)%	$	868			(5.4	)%

Connect Segment Profitability

Operating loss was $51 million for the six months ended June 30, 2020 as compared to $44 of operating income million for the six months ended June 30, 2019. The decrease was driven primarily by the revenue decrease due to the COVID-19 pandemic discussed above, higher restructuring costs and higher depreciation and amortization expense for the six months ended June 30, 2020. Non-GAAP business segment income decreased 11.0% on a constant currency basis.

Media Segment Profitability

Operating income was $311 million for the six months ended June 30, 2020 as compared to $451 million for the six months ended June 30, 2019. The decrease was driven primarily by the revenue decrease due to the COVID-19 pandemic discussed above, higher depreciation and amortization expense, the impairment of other long-lived assets, and higher restructuring charges for the six months ended June 30, 2020. Non-GAAP business segment income decreased 3.8% on a constant currency basis.

Corporate Expenses and Eliminations

Operating expenses were $134 million for the six months ended June 30, 2020 as compared to $72 million for the six months ended June 30, 2019. The increase was driven primarily by separation-related costs for the six months ended June 30, 2020.

Liquidity and Capital Resources

Overview

Cash flows from operations were $245 million for the six months ended June 30, 2020 as compared to $183 million for the six months ended June 30, 2019, an increase of $62 million primarily due to working capital timing and lower income tax payments and interest payments, partially offset by the Adjusted EBITDA performance discussed above and higher employee annual incentive payments.

We provide additional liquidity through several sources including maintaining an adequate cash balance, access to global funding sources and a committed revolving credit facility. The following table provides a summary of the major sources of liquidity as of and for the six months ended June 30, 2020 and 2019:

(IN MILLIONS)	Six  Months Ended June 30, 2020		Six  Months Ended June 30, 2019
Net cash from operating activities	$	245	$	183
Cash and cash equivalents	$	438	$	393
Availability under revolving credit facility	$	668	$	539

Of the $438 million in cash and cash equivalents, approximately $378 million was held in jurisdictions outside the U.S. and as a result there may be tax consequences if such amounts were moved out of these jurisdictions or repatriated to the U.S. We regularly review the amount of cash and cash equivalents held outside of the U.S. to determine the amounts necessary to fund the current operations of our foreign operations and their growth initiatives and amounts needed to service our U.S. indebtedness and related obligations.

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The below table illustrates our weighted average interest rate and cash paid for interest over the six months ended June 30, 2020 and 2019.

	Six  Months Ended June 30, 2020			Six Months Ended June 30, 2019
Weighted average interest rate		3.77	%		4.67	%
Cash paid for interest, net of amounts capitalized (in millions)	$	190		$	193

Our contractual obligations, commitments and debt service requirements over the next several years are significant. We believe we will have available resources to meet both our short-term and long-term liquidity requirements, including our senior secured debt service. We expect the cash flow from our operations, combined with existing cash and amounts available under the revolving credit facility, will provide sufficient liquidity to fund our current obligations, projected working capital requirements, restructuring obligations, dividend payments and capital spending over the next year. In addition, we may, from time to time, purchase, repay, redeem or retire any of our outstanding debt securities (including any publicly issued debt securities) in privately negotiated or open market transactions, by tender offer or otherwise.

Senior Secured Credit Facilities

Term Loan Facilities

In June 2020, we entered into a Credit Agreement that provides for: (i) a new dollar term loan facility, the “Dollar Term B-5 Loans”) having commitments in an aggregate principal amount of $550 million and (ii) a new euro term loan facility, the “Euro Term B-3 Loans” in an aggregate principal amount of €420 million. On June 4, 2020, Nielsen borrowed the full amount of the Dollar Term B-5 Loans and the Euro Term B-3 Loans.

The proceeds of the Dollar Term B-5 Loans and Euro Term B-3 Loans were used to redeem all of the $800 million outstanding aggregate principal amount of their 4.500% Notes due 2020 and redeem $200 million of the $625 million outstanding aggregate principal amount of its 5.500% Senior Notes due 2021. The partial redemption of the Notes resulted in $425 million aggregate principal amount of 2021 Notes remaining outstanding.

The Dollar Term B-5 Loans and the Euro Term B-3 Loans will mature in full on the earlier of (i) June 4, 2025 and (ii) if the existing Class B Term Loans incurred pursuant to and as defined in the Existing Credit Agreement have not been repaid or refinanced (subject to additional limitations in the Credit Agreement) on or prior to the date that is 91 days prior to October 4, 2023, on October 4, 2023.

The Dollar Term B-5 Loans bear interest at a rate per annum equal to, at the election of us, (i) a base rate or eurocurrency rate, plus (ii) an applicable margin of 2.75%, in the case of base rate loans, and 3.75%, in the case of eurocurrency rate loans. The Euro Term B-3 Loans bear interest at a rate per annum equal to (i) a eurocurrency rate plus (ii) an applicable margin of 3.75%.

The Credit Agreement contains substantially the same affirmative and negative covenants as those of the Fifth Amended and Restated Credit Agreement, dated as of June 29, 2018 (as amended, restated, supplemented, replaced or otherwise modified from time to time), however, the Credit Agreement expressly permits actions in connection with and resulting in the disposition of Nielsen Global Connect, including by way of a spin-off of the Connect Business, as previously announced by us. The obligations under the Credit Agreement are secured on a pari passu basis with the obligations under the Existing Credit Agreement.

We wrote-off certain previously capitalized deferred financing fees of $1 million associated with the June 2020 debt refinancing and capitalized certain costs in connection with the refinancing of $9 million.

Subsequent Events

In July, 2020, we entered into Amendment No. 1 (“Amendment No. 1”), relating to its Credit Agreement, dated as of June 4, 2020. Pursuant to Amendment No. 1, we incurred new Euro Term B-3 Loans in an aggregate principal amount of €240 million (the “Incremental Euro Term B-3 Loans”), thereby increasing the outstanding amount of existing Euro Term B-3 Loans under the 2020 Credit Agreement to approximately €660 million. The proceeds of the Incremental Euro Term B-3 Loans were used us to prepay the €545 million Senior secured term loan due 2023. Class B-2 Euro Term Loans under the Existing Credit Agreement in an aggregate principal amount of €240 million and all accrued interest and expenses.

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The Incremental Euro Term B-3 Loans are subject to the same terms, maturity date and interest rate as the existing Euro Term B-3 Loans. The Incremental Euro Term B-3 Loans are subject to customary affirmative and negative covenants and events of default.

In July, 2020, we entered into an Amendment Agreement (the “Amendment Agreement”) amending and restating the Fifth Amended and Restated Credit Agreement, dated as of June 29,2018, by and among Nielsen Finance, TNC (US) Holdings Inc. and the Dutch Borrower, as borrowers, the guarantors party thereto, the lenders and agents party thereto from time to time, and Citibank, N.A., as administrative agent (as amended before July 21, 2020, the “Existing Credit Agreement”)." The modifications in the agreement primarily conform the covenants and certain other terms to the terms of the 2020 Credit Agreement. The amended agreement expressly permits actions in connection with and resulting in the disposition of Nielsen Global Connect, including by way of a spin-off of the Connect Business, as previously announced by us.

Financial Debt Covenants Attributable to The Nielsen Company B.V.

The Fifth Amended and Restated Credit Agreement, (the “Amended Credit Agreement”) contains a financial covenant consisting of a maximum leverage ratio applicable to our indirect wholly-owned subsidiary, Nielsen Holding and Finance B.V. and its restricted subsidiaries. The leverage ratio requires that we not permit the ratio of total net debt (as defined in the Amended Credit Agreement) at the end of any calendar quarter to Consolidated EBITDA (as defined in the Amended Credit Agreement) for the four quarters then ended to exceed a specified threshold. The maximum permitted ratio is 5.50 to 1.00.

Failure to comply with this financial covenant would result in an event of default under our Amended Credit Agreement unless waived by our senior credit lenders. An event of default under our Amended Credit Agreement can result in the acceleration of our indebtedness under the facilities, which in turn would result in an event of default and possible acceleration of indebtedness under the agreements governing our debt securities as well. As our failure to comply with the financial covenant described above can cause us to go into default under the agreements governing our indebtedness, management believes that our Amended Credit Agreement and this covenant are material to us. As of June 30, 2020, we were in full compliance with the financial covenant described above.

Revolving Credit Facility

The Amended Credit Agreement contains a senior secured revolving credit facility with aggregate revolving credit commitments of $850 million and a final maturity of April 2023 under which Nielsen Finance LLC, TNC (US) Holdings, Inc., and Nielsen Holding and Finance B.V. can borrow revolving loans. The revolving credit facility can also be used for letters of credit, guarantees and swingline loans.

The senior secured revolving credit facility is provided under the Amended Credit Agreement and so contains covenants and restrictions as noted above with respect to the Amended Credit Agreement. Obligations under the revolving credit facility are guaranteed by the same entities that guarantee obligations under the Amended Credit Agreement.

As of June 30, 2020 and 2019, we had $165 million and $296 million borrowings outstanding and had outstanding letters of credit of $17 million and $15 million, respectively. As of June 30, 2020, we had $668 million available for borrowing under the revolving credit facility.

Dividends and Share Repurchase Program

We continue to drive shareholder value through our quarterly cash dividend policy which was adopted by our Board of Directors ("Board") in 2013. Under this plan we have paid $43 million and $249 million in cash dividends during the years ended June 30, 2020 and 2019, respectively. Any decision to declare and pay dividends in the future will be made at the discretion of our Board and will be subject to the Board’s continuing determination that the dividend policy and the declaration of dividends thereunder are in the best interests of our shareholders, and are in compliance with all laws and agreements to which we are subject. The below table summarizes the dividends declared on our common stock during 2019 and the six months ended June 30, 2020.

Declaration Date		Record Date		Payment Date		Dividend Per Share
	February 21, 2019		March 7, 2019		March 21, 2019	$	0.35
	April 18, 2019		June 5, 2019		June 19, 2019	$	0.35
	July 18, 2019		August 22, 2019		September 5, 2019	$	0.35
	November 3, 2019		November 21, 2019		December 5, 2019	$	0.06
	February 20, 2020		March 5, 2020		March 19, 2020	$	0.06
	April 16, 2020		June 4, 2020		June 18, 2020	$	0.06

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On July 16, 2020, our Board of Directors declared a cash dividend of $0.06 per share on our common stock. The dividend is payable on September 3, 2020 to shareholders of record at the close of business on August 20, 2020.

Our Board approved a share repurchase program, as included in the below table, for up to $2 billion of our outstanding common stock. The primary purpose of the program is to return value to shareholders and to mitigate dilution associated with our equity compensation plans.

Board Approval	Share Repurchase Authorization ($ in millions)
July 25, 2013	$	500
October 23, 2014	$	1,000
December 11, 2015	$	500
Total Share Repurchase Authorization	$	2,000

Repurchases under this program will be made in accordance with applicable securities laws from time to time and depending on our evaluation of market conditions and other factors. This program has been executed within the limitations of the authority granted us on August 6, 2015, (which will expire on August 6, 2020) and which has been extended by the authority approved by Nielsen's shareholders at its annual general meeting held on May 12, 2020 (which authority will expire on May 12, 2025).

As of June 30, 2020, there have been 39,426,521 shares of our common stock purchased at an average price of $44.95 per share (total consideration of approximately $1,772 million) under this program. There were no share repurchases for the six months ended June 30, 2020.

Cash Flows

Operating activities. Net cash provided by operating activities was $245 million for the six months ended June 30, 2020, as compared to $183 million for the six months ended June 30, 2019. This increase in net cash provided in operating activities was primarily due to working capital timing and lower income tax payments and interest payments, partially offset by the Adjusted EBITDA performance discussed above and higher employee annual incentive payments. Our key collections performance measure, days billing outstanding (DBO), increased by 3 days as compared to the same period last year.

Investing activities. Net cash used in investing activities was $262 million for the six months ended June 30, 2020, as compared to $290 million for the six months ended June 30, 2019. The primary driver for the decrease was lower acquisition payments during the six months ended June 30, 2020 as compared to the same period for 2019.  

Financing activities. Net cash provided by financing activities was $21 million for the six months ended June 30, 2020 as compared to net cash used in financing activities of $22 million for the six months ended June 30, 2019. The increase in net cash provided by financing activities was primarily due to the decrease in cash dividends, as described in “Dividends and Share Repurchase Program”, partially offset by lower net borrowings from the revolving credit facility and lower net proceeds from debt issuances and repayments as compared to the same period for 2019.

Capital Expenditures

Investments in property, plant, equipment, software and other assets totaled $232 million for the six months ended June 30, 2020 as compared to $230 million for the six months ended June 30, 2019.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that currently have or are reasonably likely to have a material effect on our consolidated financial condition, changes in financial condition, results of operations, liquidity, capital expenditures or capital resources.

Summary of Recent Accounting Pronouncements

Financial Instruments – Credit Losses

Effective January 1, 2020, we adopted ASU, “Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments”. The standard significantly changes how entities measure credit losses for most financial assets and certain

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other instruments that are not measured at fair value through net income. The standard replaced the “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. For available-for-sale debt securities, entities are required to record allowances rather than reduce the carrying amount under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. Upon adoption, this new standard did not have a significant impact on our consolidated balance sheets and statements of operations.

Compensation-Retirement Benefits-Defined Benefit Plans-General

In August 2018, the FASB issued ASU No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20), which amends the current disclosure requirements regarding defined benefit pensions and other post retirement plans, and allows for the removal of certain disclosures, while adding certain new disclosure requirements. This standard is effective for fiscal years beginning after December 15, 2020 and allows for early adoption. We do not expect this new standard to have a significant impact on our disclosures.

Income Taxes (Topic 740): Simplifying the Accounting for Income taxes

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes which amends and aims to simplify accounting disclosure requirements regarding a number of topics including: intraperiod tax allocation, accounting for deferred taxes when there are changes in consolidation of certain investments, tax basis step up in an acquisition and the application of effective rate changes during interim periods, amongst other improvements. This standard is effective for fiscal years beginning after December 15, 2020 and allows for early adoption. We are assessing the impact of this new standard on our consolidated balance sheets, statements of operations and our future disclosures.

Reference Rate Reform-Facilitation of the Effects of Reference Rate Reform on Financial Reporting

On March 12, 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2020-04, Reference Rate Reform (“ASC 848”): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASC 848 contains optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform. The provisions of ASC 848 must be applied at a Topic, Subtopic or Industry Subtopic for all transactions other than derivatives, which may be applied at a hedging relationship level. We have elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. We continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

Commitments and Contingencies

Legal Proceedings and Contingencies

In August 2018, a putative shareholder class action lawsuit was filed in the Southern District of New York, naming as defendants Nielsen, former Chief Executive Officer Dwight Mitchell Barns, and former Chief Financial Officer Jamere Jackson. Another lawsuit, which alleged similar facts but also named other Nielsen officers, was filed in the Northern District of Illinois in September 2018 and transferred to the Southern District of New York in December 2018. The actions were consolidated on April 22, 2019, and the Public Employees’ Retirement System of Mississippi was appointed lead plaintiff for the putative class. The operative complaint was filed on September 27, 2019, and asserts violations of certain provisions of the Securities Exchange Act of 1934, as amended, based on allegedly false and materially misleading statements relating to the outlook of Nielsen’s Buy (now “Connect”) segment, Nielsen’s preparedness for changes in global data privacy laws and Nielsen’s reliance on third-party data. Nielsen moved to dismiss the operative complaint on November 26, 2019. Briefing of Nielsen’s motion concluded on February 26, 2020. In addition, in January 2019, a shareholder derivative lawsuit was filed in New York Supreme Court against a number of Nielsen’s current and former officers and directors. The derivative lawsuit alleges that the named officers and directors breached their fiduciary duties to the Company in connection with factual assertions substantially similar to those in the putative class action complaint. The derivative lawsuit further alleges that certain officers and directors engaged in trading Nielsen stock based on material, nonpublic information. By agreement dated June 26, 2019, the derivative lawsuit has been stayed pending resolution of Nielsen’s motion to dismiss the aforementioned securities litigation. Nielsen intends to defend these lawsuits vigorously. Based on currently available information, Nielsen believes that the Company has meritorious defenses to these actions and that their resolution is not likely to have a material adverse effect on Nielsen’s business, financial position, or results of operations.

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We are subject to litigation and other claims in the ordinary course of business, some of which include claims for substantial sums. Accruals have been recorded when the outcome is probable and can be reasonably estimated. While the ultimate results of claims and litigation cannot be determined, we expect that the ultimate disposition of these matters will not have a material adverse effect on our operations or financial condition. However, depending on the amount and the timing, an unfavorable resolution of some or all of these matters could materially affect our future results of operations or cash flows in a particular period.

Other Contractual Obligations

Our other contractual obligations include capital lease obligations (including interest portion), facility leases, leases of certain computer and other equipment, agreements to purchase data and telecommunication services and the payment of principal and interest on debt and pension fund obligations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the potential loss arising from adverse changes in market rates and market prices such as interest rates, foreign currency exchange rates, and changes in the market value of equity instruments. We are exposed to market risk, primarily related to foreign exchange and interest rates. We actively monitor these exposures. Historically, in order to manage the volatility relating to these exposures, we entered into a variety of derivative financial instruments, mainly interest rate swaps, cross-currency swaps and forward rate agreements. Currently we only employ basic contracts, that is, without options, embedded or otherwise. Our objective is to reduce, where it is deemed appropriate to do so, fluctuations in earnings, cash flows and the value of our net investments in subsidiaries resulting from changes in interest rates and foreign currency rates. It is our policy not to trade in financial instruments for speculative purposes.

Foreign Currency Exchange Risk

We operate globally and predominantly generate revenues and expenses in local currencies. Approximately 40% of our revenues and 38% of our operating costs were generated in currencies other than the U.S. Dollar for the six months ended June 30, 2019. Because of fluctuations (including possible devaluations) in currency exchange rates or the imposition of limitations on conversion of foreign currencies into our reporting currency, we are subject to currency translation exposure on the profits of our operations, in addition to transaction exposure. Typically, a one cent change in the U.S. Dollar/Euro exchange rate, holding all other currencies constant, will impact revenues by approximately $6 million annually, with an immaterial impact on our profitability.

We recorded a net loss of $3 million and zero income/loss for the six months ended June 30, 2020 and 2019, respectively, associated with foreign currency derivative financial instruments within foreign currency exchange transactions gains/(losses), net in our condensed consolidated statements of operations.  As of June 30, 2020 and December 31, 2019, the notional amounts of outstanding foreign currency derivative financial instruments were $111 million and $125 million, respectively.

The table below details the percentage of revenues and expenses by currency for the six months ended June 30, 2020:

	U.S. Dollar		Euro		Other Currencies
Revenues	60	%	10	%	30	%
Operating costs	62	%	10	%	28	%

Interest Rate Risk

We continually review our fixed and variable rate debt along with related hedging opportunities in order to ensure our portfolio is appropriately balanced as part of our overall interest rate risk management strategy. At June 30, 2020, we had $5,083 million in carrying value of floating-rate debt under our senior secured credit facilities of which $2,050 million was subject to effective floating-fixed interest rate swaps. A one percent increase in interest rates applied to our floating rate indebtedness would therefore increase annual interest expense by approximately $30 million ($51 million without giving effect to any of our interest rate swaps).

Derivative instruments involve, to varying degrees, elements of non-performance, or credit risk. We do not believe that we currently face a significant risk of loss in the event of non-performance by the counterparties associated with these instruments, as these transactions were executed with a diversified group of major financial institutions with a minimum investment-grade or better credit rating. Our credit risk exposure is managed through the continuous monitoring of our exposures to such counterparties.

Equity Price Risk

We are not exposed to material equity price risk.

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Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in the reports that the Company files or submits to the SEC under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures as of June 30, 2020 (the “Evaluation Date”). Based on such evaluation and subject to the foregoing, such officers have concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures are effective at the reasonable assurance level.

(b) Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item  1. Legal Proceedings

In August 2018, a putative shareholder class action lawsuit was filed in the Southern District of New York, naming as defendants Nielsen, former Chief Executive Officer Dwight Mitchell Barns, and former Chief Financial Officer Jamere Jackson. Another lawsuit, which alleged similar facts but also named other Nielsen officers, was filed in the Northern District of Illinois in September 2018 and transferred to the Southern District of New York in December 2018. The actions were consolidated on April 22, 2019, and the Public Employees’ Retirement System of Mississippi was appointed lead plaintiff for the putative class. The operative complaint was filed on September 27, 2019, and asserts violations of certain provisions of the Securities Exchange Act of 1934, as amended, based on allegedly false and materially misleading statements relating to the outlook of Nielsen’s Buy (now “Connect”) segment, Nielsen’s preparedness for changes in global data privacy laws and Nielsen’s reliance on third-party data. Nielsen moved to dismiss the operative complaint on November 26, 2019. Briefing of Nielsen’s motion concluded on February 26, 2020. In addition, in January 2019, a shareholder derivative lawsuit was filed in New York Supreme Court against a number of Nielsen’s current and former officers and directors. The derivative lawsuit alleges that the named officers and directors breached their fiduciary duties to the Company in connection with factual assertions substantially similar to those in the putative class action complaint. The derivative lawsuit further alleges that certain officers and directors engaged in trading Nielsen stock based on material, nonpublic information. By agreement dated June 26, 2019, the derivative lawsuit has been stayed pending resolution of Nielsen’s motion to dismiss the aforementioned securities litigation. Nielsen intends to defend these lawsuits vigorously. Based on currently available information, Nielsen believes that the Company has meritorious defenses to these actions and that their resolution is not likely to have a material adverse effect on Nielsen’s business, financial position, or results of operations.

We are subject to litigation and other claims in the ordinary course of business, some of which include claims for substantial sums. Accruals have been recorded when the outcome is probable and can be reasonably estimated. While the ultimate results of claims and litigation cannot be determined, we do expect that the ultimate disposition of these matters will not have a material adverse effect on our operations or financial condition. However, depending on the amount and the timing, an unfavorable resolution of some or all of these matters could materially affect our future results of operations or cash flows in a particular period.

Item 1A. Risk Factors

There have been no material changes to our Risk Factors as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019, as updated by our Form 10-Q for the quarter ended March 31, 2020, other than as set forth below, which, along with the Risk Factors previously disclosed, could materially adversely affect our business, financial condition and results of operations. Additional risks and uncertainties that are not presently known to us or that we deem immaterial may also impair our business operations and financial condition.

Our operations are vulnerable to the effects of epidemics, such as COVID-19, which has and is expected to continue to adversely affect our business.

We are vulnerable to the general economic effects of epidemics and other public health crises, including the ongoing novel coronavirus (“COVID-19”) outbreak that has spread throughout the world and has been declared a pandemic by the World Health Organization. Due to the recent outbreak of COVID-19, there has been a substantial curtailment of business activities in many countries around the world, which is affecting and may continue to affect our ability to conduct fieldwork, operate call centers, and provide other services that require manual data collection. In addition, we have closed numerous offices and personnel are working from home where possible, which is and may continue to affect overall business performance. The risk is particularly pronounced in the Connect business where our teams need to visit traditional stores to collect information where electronic data transmission is not possible, where the services rely on call centers, and where we need to conduct face to face consumer research interviews. With respect to the Media business, because our measurement services require Nielsen to recruit new panelist households and interact with existing panelists to install metering equipment, over time the pandemic and related social distancing requirements and “stay at home” orders may adversely affect Nielsen’s audio and television ratings and measurement services. Further, the COVID-19 pandemic has had and could continue to have a negative impact on our business as clients cut back on services that are not already contracted, delay their spending, or declare bankruptcy in light of poor business performance due to the pandemic.  If the pandemic is not contained or otherwise continues, it will continue to have an adverse effect on our business, results of operations and financial position.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

There were no unregistered sales of our common stock during the three months ended June 30, 2020.

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Purchases of Equity Securities by the Issuer

There were no share repurchases for the three months ended June 30, 2020.

Our Board approved a share repurchase program for up to $2 billion of our outstanding common stock on the dates indicated under Part 1- Item 2- Management’s Discussion and Analysis of Financial Condition and Results of Operations- Liquidity and Capital Resources- Dividends and Share Repurchase Program.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item  6. Exhibits

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EXHIBIT INDEX

The agreements and other documents filed as exhibits to this quarterly report on Form 10-Q are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by the registrant in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

Exhibit Number	Description of Exhibits
4.1	Credit Agreement, dated as of June 4, 2020, by and among Nielsen Finance LLC, the other borrowers party thereto, the guarantors party thereto, Citibank, N.A., as administrative agent, and certain of the lenders (incorporated herein by reference to the Current Report on Form 8-K filed on June 4, 2020).
4.2	Amendment No. 1, dated as of July 21, 2020, among Nielsen Finance LLC, Nielsen Holding and Finance B.V., the guarantors party thereto, Citibank, N.A., as administrative agent, and the lenders party thereto from time to time (incorporated herein by reference to the Current Report on Form 8-K of Nielsen Holdings plc filed on July 21, 2020 (File No. 001-35042)).
4.3	Amendment Agreement, dated as of July 21, 2020, among Nielsen Finance LLC, TNC (US) Holdings Inc., Nielsen Holding and Finance B.V., the guarantors party thereto, Citibank, N.A., as Administrative Agent, a Swing Line Lender and an L/C Issuer, and the lenders party thereto from time to time (incorporated herein by reference to the Current Report on Form 8-K of Nielsen Holdings plc filed on July 21, 2020 (File No. 001-35042)).
31.1*	CEO 302 Certification Pursuant to Rule 13a-15(e)/15d-15(e)
31.2*	CFO 302 Certification Pursuant to Rule 13a-15(e)/15d-15(e)
32.1*	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)
101*	The following financial information from Nielsen Holdings plc’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in inline eXtensible Business Reporting Language (iXBRL): (i) Condensed Consolidated Statements of Operations (Unaudited) for the three and six months ended June 30, 2020 and 2019, (ii) Condensed Consolidated Statements of Comprehensive Income (Unaudited) for the three and six months ended June 30, 2020 and 2019, (iii) Condensed Consolidated Balance Sheets at June 30, 2020 (Unaudited) and December 31, 2019, (iv) Condensed Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 30, 2020 and 2019, (v) Condensed Consolidated Statement of Changes in Equity for the three and six months ended June 30, 2020 and 2019 (Unaudited), and (vi) the Notes to Condensed Consolidated Financial Statements.
104*	Cover Page Interactive Data File (embedded within the Inline XBRL and included in Exhibit 101)

* Filed or furnished herewith

.

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Nielsen Holdings plc (Registrant)
Date: August 5, 2020	/s/ Christopher Taft
	Christopher Taft Senior Vice President and Corporate Controller (Duly Authorized Officer and Principal Accounting Officer)

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