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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 4, 2000
Commission file number 001-12275
NIELSEN MEDIA RESEARCH, INC.
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(Exact name of registrant as specified in its charter)
Delaware 06-1450569
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(State of Incorporation) (I.R.S. Employer Identification No.)
299 Park Avenue, New York, New York 10171
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 708-7500
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Pursuant to the requirements of the Securities Exchange Act of 1934, Nielsen
Media Research, Inc., a Delaware corporation hereby amends the following items,
financial statements, exhibits or other portions of its Current Report on Form
8-K dated January 4, 2000 (the "Form 8-K") as set forth in the pages attached
hereto.
Item 7. Financial Statements and Exhibits
This amendment is being filed within 60 days of filing of the Form 8-K.
(a) Financial statements of businesses acquired
The financial statements of NetRatings, Inc., including audited
financial statements as of and for the nine months ended September 30,
1999, have been previously filed with the Securities and Exchange
Commission on NetRatings, Inc.'s Form S-1 dated December 8, 1999
(Registration No. 333-87717).
(b) Pro forma financial information
The pro forma financial statements being filed with this amendment are
as follows:
Pro Forma Financial Statements--Introduction F-1
Nielsen Media Research, Inc.
Unaudited Pro Forma Combined Balance Sheet as of
September 30, 1999 and Notes thereto F-2
Nielsen Media Research, Inc.
Unaudited Pro Forma Combined Statement of Income
for the year ended December 31, 1998 and Notes
thereto F-4
Nielsen Media Research, Inc.
Unaudited Pro Forma Combined Statement of Income
for the nine months ended September 30, 1999 and
Notes thereto F-5
(c) Exhibits
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Unaudited Pro Forma Combined Financial Statements
The unaudited pro forma combined financial statements give effect to (a)
the initial public offering ("IPO") of NetRatings, Inc. ("NetRatings") and (b)
the acquisition by Nielsen Media Research, Inc. ("Nielsen Media Research") of a
majority of the shares outstanding of NetRatings as described in Item 2 of the
Form 8-K (the "Acquisition"). The pro forma combined income statements for the
year ended December 31, 1998 and for the nine months ended September 30, 1999
have been prepared as if the Acquisition had occurred on the first day of the
relevant period presented. The pro forma combined balance sheet as at September
30, 1999 has been prepared as if the IPO and the Acquisition had occurred as at
the date of the balance sheet.
The pro forma adjustments, which are based on certain assumptions that the
management of Nielsen Media Research believe are reasonable, are applied to the
historical financial statements of Nielsen Media Research and NetRatings. The
Acquisition is accounted for under the purchase method of accounting. Nielsen
Media Research's allocation of the purchase price is based on the estimated fair
value of the assets acquired and liabilities assumed. The purchase price
allocation reflected in the accompanying unaudited pro forma combined financial
statements may be different from the actual allocation of the purchase price and
any such difference could be material.
F-1
NIELSEN MEDIA RESEARCH INC.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
SEPTEMBER 30,1999
(Dollar amounts in thousands)
PRO FORMA ADJUSTMENTS
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NETRATINGS ACQUISITION CONSOL- PRO-FORMA
NIELSEN MEDIA NETRATINGS IPO(1) (2) IDATION(3) COMBINED
Assets
Current Assets
Cash and Cash Equivalents $ 17,952 $ 28,650 $ 73,173 $ 235,858 $ -- $ 355,633
Accounts Receivable-Net 53,331 1,069 -- -- (2,164) 52,236
Other Current Assets 5,981 294 -- -- -- 6,275
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Total Current Assets 77,264 30,013 73,173 235,858 (2,164) 414,144
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Property, Plant and Equipment--Net 73,858 593 -- -- -- 74,451
Computer Software 51,534 -- -- -- -- 51,534
Deferred Charges and Intangibles 13,947 -- -- -- -- 13,947
Investment in NetRatings 11,048 -- -- 246,000 (257,048) --
Deferred Compensation -- -- -- -- 3,196 3,196
Goodwill -- -- -- -- 63,290 63,290
Other Assets 22,385 480 -- -- -- 22,865
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Total Assets $ 250,036 $ 31,086 $ 73,173 $ 481,858 $(192,726) $ 643,427
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Liabilities and Shareholders' Equity (Deficit)
Current Liabilities
Accounts Payable $ 8,203 $ 328 $ -- $ -- $ -- $ 8,531
Accrued and Other Current Liabilities 49,515 973 -- -- -- 50,488
Accrued Income Taxes 3,069 -- -- -- -- 3,069
Deferred Revenues 2,140 2,010 -- -- -- 4,150
Other Short-term Liabilites -- 276 -- -- -- 276
Amount due to Nielsen Media Research -- 2,164 -- -- (2,164) --
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Total Current Liabilities 62,927 5,751 -- -- (2,164) 66,514
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Other Liabilities 12,263 320 -- -- -- 12,583
Deferred Income Taxes 59,788 -- -- -- -- 59,788
Loan from VNU-Ireland -- -- -- 246,000 -- 246,000
Long-term Debt 200,000 -- -- -- -- 200,000
Minority Interest -- -- -- -- 143,484 143,484
Redeemable Convertible Preferred Stock -- 35,743 (35,743) -- -- --
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Total Liabilities 334,978 41,814 (35,743) 246,000 141,320 728,369
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Shareholders' Equity (Deficit)
Common Stock 577 4 12 16 (32) 577
Capital Surplus 8,893 31,144 108,904 235,842 (375,890) 8,893
Treasury Stock -- -- -- -- -- --
Deferred Compensation -- (3,196) -- -- 3,196 --
Deferred Service Costs -- (22,225) -- -- 22,225 --
Note Receivable from Stockholder -- (125) -- -- 125 --
Distribution in Excess of Net Book Value (163,542) -- -- -- -- (163,542)
Retained Earnings / (Deficit) 67,031 (16,330) -- -- 16,330 67,031
Cumulative Translation Adjustment 1,066 -- -- -- -- 1,066
Unrealized Gains on Investments 1,033 -- -- -- -- 1,033
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Total Shareholders' Equity (Deficit) (84,942) (10,728) 108,916 235,858 (334,046) (84,942)
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Total Liabilities and Shareholders' Equity/(Deficit) $ 250,036 $ 31,086 $ 73,173 $ 481,858 $(192,726) $ 643,427
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See accompanying notes to the Unaudited Proforma Combined Balance Sheet.
F-2
NOTES TO UNAUDITED PRO FORMA COMBINED BALANCE SHEET
(1) To reflect the sale of 4,600,000 shares of NetRatings common stock in an
IPO on December 8, 1999. The net proceeds to NetRatings were
approximately $15.81 per share, after deducting the underwriting
discount and offering expenses. The pro forma adjustments also reflect
the automatic conversion of all outstanding shares of NetRatings
redeemable convertible preferred stock into shares of NetRatings common
stock, which occurred prior to the IPO and the exercise of warrants to
purchase NetRatings Series B preferred stock, resulting in proceeds of
$447,000, and the automatic conversion of such shares into shares of
NetRatings common stock.
(2) To reflect the purchase by Nielsen Media Research of 17,188,349 shares
of NetRatings common stock on December 21, 1999 through the exercise of
warrants and purchase of shares from NetRatings and several of its
shareholders. The aggregate purchase price was approximately $246
million, of which approximately $236 million was paid to NetRatings and
approximately $10 million was paid directly to several of its
shareholders. VNU-Ireland advanced such funds to Nielsen Media Research
to fund the purchase of the NetRatings common stock.
(3) The acquisition has been accounted for by the purchase method. The
aggregate purchase price (including the previous purchase of NetRatings
Series C and Series D redeemable convertible preferred stock, which were
automatically converted to NetRatings common stock prior to the IPO) was
allocated to the assets acquired and the liabilities assumed of
NetRatings as follows:
($ in thousands)
Purchase price $ 256,246
Plus: Estimated professional fees 802
Less: Estimated share of book value of net assets acquired
(after IPO) (193,758)(a)
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Intangible Assets $ 63,290
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Allocation of Intangible Assets:
Goodwill $ 63,290
Annual amortization over a period of seven years using the
straight-line method $ 9,041
(a) At approximately 57% ownership interest
F-3
NIELSEN MEDIA RESEARCH INC.
UNAUDITED PRO FORMA COMBINED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1998
(DOLLAR AMOUNTS IN THOUSANDS)
PRO FORMA PRO FORMA
NIELSEN MEDIA NETRATINGS ADJUSTMENTS COMBINED
Operating Revenue $ 401,932 $ 237 $ -- $ 402,169
Operating Costs 195,301 2,246 -- 197,547
Selling and Administrative Expenses 80,867 1,534 -- 82,401
Depreciation and Amortization 31,385 200 9,041 (b) 40,626
Stock Based Compensation -- 25 -- 25
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Operating Income 94,379 (3,768) (9,041) 81,570
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Minority Interest Expense -- -- 1,666 (c) 1,666
Interest Expense--Net (8,156) (111) -- (8,267)
Interest Expense--VNU -- -- (20,418)(d) (20,418)
Gain on Sale of Marketable Securities 8,008 -- -- 8,008
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Non-Operating Income (148) (111) (18,752) (19,011)
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Income before Provision for Taxes 94,231 (3,879) (27,793) 62,559
Provision for Income Taxes (39,483) -- -- (39,483)
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Net Income $ 54,748 $ (3,879) $ (27,793) $ 23,076
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See accompanying notes to the Unaudited Pro Forma Combined Income Statement.
F-4
NIELSEN MEDIA RESEARCH INC.
UNAUDITED PRO FORMA COMBINED INCOME STATEMENT
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(DOLLAR AMOUNTS IN THOUSANDS)
PRO FORMA PRO FORMA
NIELSEN MEDIA NETRATINGS ADJUSTMENTS COMBINED
Operating Revenue $ 332,622 $ 1,486 $ (29)(a) $ 334,079
Operating Costs 167,009 6,075 -- 173,084
Selling and Administrative Expenses 55,940 3,452 (334)(a) 59,058
Depreciation and Amortization 27,258 277 6,781 (b) 34,316
Stock-Based Compensation 2,327 (375)(a) 1,952
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Operating Income 82,415 (10,645) (6,101) 65,669
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Minority Interest Expense -- -- 4,583 (c) 4,583
Interest Expense--Net (10,523) (25) -- (10,548)
Interest Expense--VNU -- -- (15,314)(d) (15,314)
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Non-Operating Income (10,523) (25) (10,731) (21,279)
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Income before Provision for Taxes 71,892 (10,670) (16,832) 44,390
Provision for Income Taxes (30,122) -- -- (30,122)
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Net Income $ 41,770 $ (10,670) $ (16,832) $ 14,268
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See accompanying notes to the Unaudited Pro Forma Combined Income Statement.
F-5
NOTES TO UNAUDITED PRO FORMA COMBINED INCOME STATEMENTS
(a) To eliminate intercompany transactions between Nielsen Media Research
and NetRatings.
(b) To record the amortization of goodwill related to the acquisition of
NetRatings.
(c) To record minority interest expense.
(d) To record interest expense on a $246 million loan from VNU-Ireland
related to the funding of the acquisition of NetRatings.
F-6
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 MEDIA RESEARCH, INC.
Date: March 1, 2000 By:
Thomas W. Young
Executive Vice President & Chief
Financial Officer
/s/ THOMAS W. YOUNG
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Thomas W. Young
Stuart J. Goldshein
Vice President and Controller
/s/ STUART J. GOLDSHEIN
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Stuart J. Goldshein
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