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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
(X) Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1999
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Transition Period From to
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Commission file number 001-12277
ACNielsen Corporation
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(Exact name of registrant as specified in its charter)
Delaware 06-1454128
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(State of incorporation) (I.R.S. Employer Identification No.)
177 Broad Street, Stamford, Connecticut 06901
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 961-3000.
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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Common Stock, par value $.01 per share New York Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
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As of January 31, 2000, 57,816,150 shares of Common Stock of ACNielsen
Corporation were outstanding. The aggregate market value of the shares of Common
Stock held by nonaffiliates of the registrant (based upon its closing
transaction price on the Composite Tape on January 31, 2000) was approximately
$1,181 million.*
*Calculated by excluding all shares held by executive officers and directors of
the registrant, without conceding that all such persons are affiliates of the
registrant for purposes of the Federal securities laws.
Documents Incorporated by Reference
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Parts I and II: Portions of Registrant's Annual Report to Shareholders
for the 1999 Fiscal Year.
Part III: Portions of Registrant's Proxy Statement dated
March 10, 2000.
The Index to Exhibits is located on Pages 17 to 19.
PART I
As used in this report, except where the context indicates otherwise,
the terms "Company" and "ACNielsen" mean ACNielsen Corporation and all
subsidiaries consolidated in the financial statements incorporated herein by
reference.
ITEM 1. BUSINESS
General
ACNielsen Corporation began operating as an independent, publicly-held
company on November 1, 1996 (the "Distribution Date") as a result of the
distribution (the "Distribution") on that date by The Dun & Bradstreet
Corporation ("D&B") to D&B's shareholders of the Company's $.01 par value Common
Stock, at a distribution ratio of one share of the Company for three shares of
D&B. As part of a reorganization of its businesses, D&B also distributed all of
the outstanding common stock of Cognizant Corporation ("Cognizant") on the
Distribution Date.
ACNielsen Corporation, which has its headquarters in Stamford,
Connecticut, was incorporated in the State of Delaware on April 30, 1996 as a
wholly-owned subsidiary of D&B for the purpose of effecting the Distribution.
ACNielsen Corporation operates principally through subsidiaries and the Company
generally is comprised of the former D&B businesses that deliver market
research, information and analysis to the worldwide consumer products and
services industries, certain businesses acquired since the Distribution,
including ACNielsen BASES and ACNielsen EDI, and new ventures formed since the
Distribution, principally ACNielsen eRatings.com.
Description of Business
ACNielsen is a global leader in delivering market research, information
and analysis to the consumer products and services industries. ACNielsen
services are offered in over 100 countries around the globe. ACNielsen provides
its clients with market research, information and analysis for understanding and
making critical decisions about their products and their markets. ACNielsen also
conducts media and entertainment information businesses, including its
television audience measurement business which operates outside the U.S. and
Canada.
ACNielsen operates outside the United States through a number of
subsidiaries, affiliates and joint ventures. In 1999, nearly 69% of ACNielsen's
revenues were generated outside the United States.
ACNielsen operates across a wide spectrum of research services. These
services generally fall into four categories: Retail Measurement Services,
Customized Research Services, Media and Entertainment Services and Consumer
Panel Services.
ACNielsen also offers its clients, through a wide range of modeling and
analytic services, custom-tailored insights into complex marketing and sales
issues. Typical assignments range from marketing-mix modeling to category
management analysis, including topics as diverse as pricing strategy, consumer
driven market structure, variety management, outlet switching and promotion
tactics.
ACNielsen's clients include distributors and manufacturers of consumer
packaged goods and other products, retailers and brokers, as well as companies
operating in various service industries (including financial services,
telecommunications, advertising, television and radio broadcasting, motion
pictures and publishing).
ACNielsen operates in one industry segment, Market Research,
Information and Analysis Services. The approximate revenues attributable to each
category of service provided by ACNielsen were as follows for the periods shown
(in millions of dollars):
Year ended December 31,
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1999 1998 1997
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Retail Measurement $ 1,034 $ 999 $ 987
Customized Research 263 213 191
Media and Entertainment * 114 110 120
Consumer Panel 114 103 94
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Total $1,525 $1,425 $1,392
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* Reported revenue for Media and Entertainment declined in 1998, as a result of
the transfer of the Latin American media business to a joint venture (see page
4).
1
The number of full-time equivalent employees of the Company at December
31, 1999 was approximately 21,000. Of this number, approximately 3,248 full-time
equivalent employees are located in the United States, and none of these are
represented by labor unions. ACNielsen's non-U.S. employees are subject to
numerous labor council or similar relationships which vary due to the diverse
cultures in which ACNielsen operates. Management believes that labor relations
generally are satisfactory and have been maintained in a normal and customary
manner.
On February 18, 2000, the Company announced Operation Leading Edge, a
plan to accelerate the Company's growth beyond 2000 through a series of
business-building initiatives designed to accelerate both revenue and profit
growth by enhancing products and services, addressing changing client needs,
improving efficiency and reducing the Company's cost structure. Additional
information regarding Operation Leading Edge is contained in "Management's
Discussion and Analysis of Financial Condition and Results of Operations" which
is incorporated by reference into this Form 10-K in response to Part II, Item 7.
Retail Measurement Services
Through its Retail Measurement Services the Company delivers data to
clients on product movement and related causal information (i.e., coupons,
in-store promotions and other information or conditions affecting sales) on six
continents. Introduced in 1933, ACNielsen's original Food and Drug Indexes soon
became the industry measurement tool for understanding the dynamics of product
sales. Over the years, technology has dramatically improved ACNielsen's ability
to collect and analyze information from retailers and consumers. The
availability of scanning technology in retail outlets in many countries around
the world has broadened both the scope and capabilities of ACNielsen's original
retail indexes.
ACNielsen's Retail Measurement Services are available in over 80
countries. Retail Measurement Services include scanning and retail audit
services, account level reports, decision support, merchandising and category
management services and marketing and sales applications, along with modeling
and analytic services.
Scanning
Using the bar codes printed on products and scanners installed in
retail outlets, ACNielsen gathers information from stores in the United States
and Canada and certain countries in Europe, Latin America and Asia Pacific.
ACNielsen's clients can monitor performance trends and evaluate price and
promotion effectiveness by tracking and forecasting non-promoted as well as
promotional product movement.
ACNielsen offers a number of additional services to enhance each
customer's understanding of its markets. Among these are services reporting data
by customer-defined markets, services aggregating consumer data in multiple
channels, and services disaggregating data to satisfy particular needs of
clients.
Retail Audit
In addition to scanning data (which is available only in certain
industry sectors and in certain countries), retail audit is a valuable source of
market information as a basic measurement tool and as a supplement to scanning
data. Retail audit involves the continuous measurement by ACNielsen field
auditors of product and category performance in the retail trade, and reporting
to clients on sales, distribution, stocks, prices and other measures which
assist them in marketing and trade negotiations.
Retail Audit is divided into industry segments, traditionally called
Indexes. The Food Index is generally the largest, but there are also Health and
Beauty, Durables, Confectionery, Liquor, Cash & Carry, plus a number of other
Indexes specific to certain countries.
In-Store Observation
ACNielsen field auditors collect data on where products are located in
stores, how many facings they have, on which shelves they are positioned, etc.
(broken down by store type, store size and geographic region). ACNielsen also
collects causal data. These data add to market insights and help to monitor the
implementation of retailer/manufacturer promotional agreements in terms of
numeric distribution, space allocation and promotional execution.
Levels of Information
ACNielsen provides information and insight to clients from a macro to a
micro level. Whether on a country, market or individual retailer level,
ACNielsen generally measures the competitive environment in which manufacturers
and retailers conduct business. In some countries ACNielsen also provides store
census data which allow retailers and manufacturers to understand consumer
behavior within a group of stores as well as within a retail trading area.
2
ACNielsen's account-specific information provides sales and marketing
managers with a comprehensive array of retailer-specific sales and merchandising
information, producing reports of product and category performance that
encompass an organization's own brands as well as competing brands.
On a global basis, ACNielsen sells and provides to its multi-national
clients international reports within and across country boundaries. Products
include an International Database (periodic reports of a multi-country retail
database) and an International Market Report (a one-time report on a market and
its competitive environment).
Decision Support
ACNielsen uses its rich data sources to extract business insights that
are used by clients to create competitive advantage. ACNielsen's decision
support software offers a robust environment for data access, manipulation,
analysis and final presentation through fast access to ACNielsen as well as
clients' internal data. This decision support software can also uncover
"exceptional" information through sophisticated analytical modeling
capabilities. ACNielsen information can be delivered on-line and via other
electronic media (CD-ROM, diskette), as well as through the Internet and printed
reports.
ACNielsen INF*ACT Workstation software is ACNielsen's flagship software
offering. The Workstation is an open, Windows-based, analytical and applications
development tool set used worldwide by ACNielsen clients. ACNielsen's SalesNet
provides fast, easy access to pre-run analyses delivered via the Internet.
ACNielsen also offers a robust, proprietary and ad-hoc reporting tool called
Workstation Plus which allows users to access, query and build advanced reports
for INF*ACT and/or relational databases.
ACNielsen also offers a series of Windows-based intelligent business
applications that enhance ACNielsen INF*ACT Workstation functionality, giving
clients the ability to plan, analyze and execute successful marketing and sales
programs. These applications include Opportunity Explorer, Business Review,
Spotlight, NITE, and others.
In addition, ACNielsen offers sophisticated category management tools
such as Business Manager, SPACEMAN and PRICEMAN.
Customized Research Services
Customized Research Services are used by manufacturers, retailers,
financial institutions and other service organizations that seek to understand
the position of their current, new and proposed products and services in the
marketplace. With customized research capabilities in more than half of the
countries in which it operates, ACNielsen is well-positioned to offer its
clients, including both manufacturers and retailers, consumer insights from
customized research as well as an understanding of dynamic new markets such as
entertainment, fast foods, financial services and telecommunications.
In June 1998, the Company acquired BBI Marketing Services, Inc.
("ACNielsen BASES"). ACNielsen BASES, the global leader in simulated test
marketing, provides fast moving consumer goods marketers with sales estimates
and diagnostic analysis for their new business initiatives. In addition,
ACNielsen VANTIS, a business unit of ACNielsen BASES, focuses on researching new
business initiatives for marketers outside fast moving consumer goods
categories. The addition of ACNielsen BASES enhanced the Company's portfolio of
advanced modeling and analytical services.
In 1998, the Company launched Winning Brands, a proprietary research
product that helps clients manage and leverage their brand equity. Winning
Brands follows the successful 1997 introduction of Customer eQ, a product that
measures customer satisfaction and loyalty.
In addition to services at the country level and ACNielsen BASES
services, ACNielsen offers multi-country customized studies at both the regional
and global levels and has specialist offices in Hong Kong, London, New York,
Tokyo, Toronto and Singapore to carry out customized research in Asia Pacific,
Western Europe, North and South America, the Middle East and Africa.
Media and Entertainment Services
Media
The information produced by ACNielsen Media International includes
audience estimates for television, radio and print, plus advertising expenditure
measurement and customized media research. Television and radio ratings and
readership data are used by program producers, broadcasters, publishers, media
planners, airtime buyers and others, on behalf of manufacturers/advertisers and
media owners, to determine the best, most cost-efficient way of reaching
clients.
3
ACNielsen Media International's television audience measurement
services, which operate outside the United States and Canada, generally use
representative panels of households, each with a meter attached to each
television in the household. The meters register viewership, which can be
matched with broadcast information to identify viewing of specific programs. In
a few countries written diaries are used instead of, or in addition to, meters,
with viewers writing the channels, programs and the times watched. With both
meter and diary panels, aggregate individual and household viewing is projected
to represent national viewing habits.
Outside of Latin America, ACNielsen's television audience measurement
services are operational in 17 countries, primarily in the Asia Pacific region.
In connection with the Distribution, ACNielsen entered into the TAM
Master Agreement (the "TAM Master Agreement") with Cognizant relating to the
conduct of the television audience measurement business (the "TAM Business").
See "TAM Master Agreement" below for further information on the TAM Master
Agreement.
ACNielsen Media International's advertising expenditure measurement
services, which are marketed in 31 countries, provide to clients, primarily
advertising agencies and manufacturers/advertisers, verification that individual
commercials or commercial campaigns ran as contracted, report the costs of the
manufacturers' own and competitors' advertisements and alert users to new and
competitive ad campaigns.
Effective January 1998, the Company became a partner in a joint
venture, IBOPE Media Information and transferred its Latin American media
business to the joint venture. The joint venture, operating in Latin America,
offers television audience measurement services in ten markets, provides radio
audience measurement services in two countries and advertising expenditure
measurement services in four countries.
Media Monitoring Services Ltd. was acquired on November 30, 1999 and
is a provider of advertising measurement services in
the United Kingdom, Australia, and Asia.
Entertainment
In late 1997, ACNielsen acquired Entertainment Data, Inc. ("ACNielsen
EDI"), a provider of information for the motion picture industry. Based in
Hollywood, California, ACNielsen EDI provides box-office information to studios
and exhibitors in the motion picture industry. This information helps users
decide where and for how long a movie will play, as well as the allocation of
advertising and promotional dollars. ACNielsen EDI also provides creative and
consumer research to the studios. ACNielsen EDI provides services in the U.S.,
Canada, U.K., Germany, Spain, France, Austria, Ireland, Mexico, Argentina and
Australia.
Internet
In September 1999, ACNielsen and NetRatings, Inc. ("NetRatings")
entered into a venture to establish ACNielsen eRatings.com ("eRatings.com").
ACNielsen has an 80.1% ownership interest in the venture with NetRatings owning
the remainder. eRatings.com is primarily engaged in providing Internet
measurement services. The venture, either directly or through joint ventures, is
expected to operate in all major geographic regions worldwide other than the
United States and Canada and it plans to roll out the service initially in five
countries by the end of the first quarter of 2000.
ACNielsen's proprietary sampling methodology is used to form a
representative panel. Once an individual or household agrees to become a
panelist, software is installed on the panelist's PC. The software tracks
individuals' Internet usage on a real time basis. Aggregate information and data
are then made available on a weekly and monthly basis through a website.
The software requires virtually no panelist intervention once installed
and can be automatically upgraded. The software collects and delivers Internet
usage data using NetRatings' proprietary collection software. This allows
panelists to freely access the Internet without having to worry about data
collection.
Once the software is installed, it collects real-time data by tracking
user activity including the sites visited, duration of visits and the duration
and frequency of sessions. The technology is also able to track advertising
activity including the actual ad banners viewed, advertisers, sites the ads ran
on, and ads clicked on. The software tracks user profiles, including the age,
gender, marital status, education, occupation, income and ethnicity of the panel
member.
eRatings.com's Internet Measurement Service will be marketed under the
Nielsen//NetRatings brand and will provide clients with the ability to
accurately track and analyze Internet audience behavior, in addition to in-depth
research reports across a variety of Internet related subjects.
4
eRatings.com has exclusive rights to market the Nielsen//NetRatings
Internet Measurement Service in countries outside the United States, Canada and
Japan. In France the Nielsen//NetRatings service will be offered via a company
called Mediametrie eRatings.com, which is a venture among Mediametrie, the
French audience measurement and survey company, NetRatings and eRatings.com. In
March 2000, eRatings.com formed a joint venture with IBOPE Media Information
called IBOPE eRatings.com that will launch the Nielsen//NetRatings service in
Latin America. Also, in March 2000, eRatings.com acquired an ownership interest
in the Japanese venture previously established by NetRatings to provide the
Nielsen//NetRatings service in Japan.
Consumer Panel Services
Consumer Panel Services help organizations achieve competitive
advantage by applying consumer insights derived from the ACNielsen consumer
panel database. With a comprehensive portfolio of tools for reporting and
analysis, ACNielsen measures the multi-faceted dynamics of consumer behavior
across all outlets including: consumer demographics, percentages of households
purchasing, products and quantities purchased, frequency of purchases, shopping
trips and shopping expenditures, price and promotion sensitivity, price paid,
and attitude and usage information.
The ACNielsen Consumer Panel, called Homescan, consists of
approximately 55,000 demographically balanced U.S. households that use hand-held
scanners to record every bar-coded item purchased and, outside the United
States, is comprised of more than 80,000 households in 19 countries.
ACNielsen employs multiple data collection processes throughout the
world. In the United States and several other countries covering approximately
90% of total panel households worldwide, ACNielsen installs in-home scanners
with which panelists scan items at home as they unpack purchases from each
shopping trip, recording price, promotions and quantity purchased, as well as
the age and gender of the shopper and intended user. Information detailing each
shopping trip is transmitted, via telephone lines, to ACNielsen.
Consumer panel applications can be used by both manufacturers and
retailers to understand demographics and purchasing habits of consumers. As with
all information derived from the ACNielsen Consumer Panel, data capture activity
is from all outlet types including grocery, drug, mass merchandiser and
warehouse clubs. Clients can choose from a wide variety of applications or
analyses, from syndicated to customized and basic to complex. ACNielsen offers a
full suite of syndicated category management applications. These reports give
manufacturers and retailers insights into cross outlet shopping, consumer
loyalty and the value of consumer segments such as the value of core versus
occasional shoppers.
ACNielsen also provides delivery tools that allow marketers to process,
chart and analyze ACNielsen Consumer Panel information quickly and easily. Among
these are CD-ROM tools and Panel*Fact for Windows, which enable managers to
create customized reports to meet their individual analytic needs and to share
data and analyses with various members within an organization.
Relationship Among ACNielsen, D&B and Cognizant after the Distribution
Prior to the Distribution, D&B, Cognizant and ACNielsen entered into
certain agreements (the "Spin Agreements") governing their relationship
subsequent to the Distribution and providing for the allocation of tax, employee
benefits and certain other liabilities and obligations arising from periods
prior to the Distribution. The following description summarizes terms of certain
of these agreements, but is qualified by reference to the texts of such
agreements which were previously filed with the Securities and Exchange
Commission.
In June 1998, D&B changed its name to R.H. Donnelley Corporation and
spun off a company now named The Dun & Bradstreet Corporation ("New D&B"), and
Cognizant changed its name to Nielsen Media Research, Inc. ("NMR") and spun off
a company named IMS Health Incorporated ("IMS Health"). As required by the terms
of the Distribution Agreement referred to below, each of New D&B and IMS Health
has provided an undertaking to the Company to be jointly and severally liable
with its former parent company for any liabilities of such former parent company
arising out of the Spin Agreements. In July 1999, IMS Health distributed shares
of Gartner Group, Inc. ("Gartner") class B stock to its shareholders. In
connection with such distribution and pursuant to the Distribution Agreement
referred to below, Gartner provided an undertaking to the Company to be jointly
and severally liable for any liabilities of Cognizant (now NMR) arising out of
the Spin Agreements.
Distribution Agreement
D&B, Cognizant and ACNielsen entered into a Distribution Agreement
providing for, among other things, certain corporate transactions required to
effect the Distribution and other arrangements among D&B, Cognizant and
ACNielsen subsequent to the Distribution. In particular, the Distribution
Agreement defined the assets and liabilities allocated to and assumed by
Cognizant and those allocated to and assumed by ACNielsen. The Distribution
Agreement also defined what constituted the "Cognizant Business" and what
constituted the "ACNielsen Business". It also provided for, among other things,
assumptions of liabilities and cross indemnities designed to allocate generally,
effective as of the Distribution Date, financial responsibility for the
liabilities arising out of or in connection with (i) the Cognizant Business to
Cognizant, (ii) the ACNielsen Business to ACNielsen and (iii) all other
liabilities to D&B.
5
Indemnity and Joint Defense Agreement
D&B, Cognizant and ACNielsen entered into the Indemnity and Joint
Defense Agreement pursuant to which they agreed (i) to certain arrangements
allocating potential liabilities ("IRI Liabilities") that may arise out of or in
connection with the IRI Action, as defined below in "Item 3, Legal Proceedings",
and (ii) to conduct a joint defense of such action. See "Relationship Among
ACNielsen, D&B and Cognizant after the Distribution" above for information
regarding name changes and certain post-Distribution events affecting Cognizant
and D&B.
The Indemnity and Joint Defense Agreement provides that ACNielsen will
assume exclusive liability for IRI Liabilities up to a maximum amount to be
determined at the time such liabilities, if any, become payable (the "ACN
Maximum Amount") and that Cognizant and D&B will share liability equally for any
amounts in excess of the ACN Maximum Amount. The ACN Maximum Amount will be
determined by an investment banking firm as the maximum amount which ACNielsen
is able to pay after giving effect to (i) any plan submitted by such investment
bank which is designed to maximize the claims paying ability of ACNielsen
without impairing the investment banking firm's ability to deliver a viability
opinion (but which will not require any action requiring stockholder approval),
and (ii) payment of related fees and expenses. For these purposes, financial
viability means the ability of ACNielsen, after giving effect to such plan, the
payment of related fees and expenses and the payment of the ACN Maximum Amount,
to pay its debts as they become due and to finance the current and anticipated
operating and capital requirements of its business, as reconstituted by such
plan, for two years from the date any such plan is expected to be implemented.
In addition, ACNielsen agreed to certain restrictions on payments of
dividends and share repurchases above specified levels. ACNielsen also agreed
not to engage in mergers, acquisitions or dispositions, including joint venture
investments, if, after giving effect to any such transaction, ACNielsen would be
unable to meet a specified fixed charge coverage ratio, and, if any such
transaction involves aggregate consideration in excess of $50 million, then
ACNielsen is also required to receive and to cause to be delivered to Cognizant
and D&B an investment banker's fairness opinion.
The Indemnity and Joint Defense Agreement also sets forth certain
provisions governing the defense of the IRI Action pursuant to which the parties
agree to be represented by the same counsel. Legal expenses are to be shared
equally by the three parties.
TAM Master Agreement
Cognizant (now called NMR) and ACNielsen entered into the TAM Master
Agreement relating to the conduct of the television audience measurement
business (the "TAM Business").
Pursuant to the TAM Master Agreement and certain ancillary trademark
and technology licensing agreements (together with the TAM Master Agreement, the
"TAM Agreement"), Cognizant or a newly established entity is required to license
to ACNielsen (i) a non-exclusive right to use certain trademarks in connection
with the TAM Business outside the United States and Canada for five years and
(ii) a non-exclusive right to use specified technology in Australia, Ireland and
India in connection with the TAM Business for five years or such longer period
as is required to fulfill contractual obligations existing on the Distribution
Date.
Competition
ACNielsen has numerous competitors in its various lines of business
throughout the world. Some are companies with diverse product and service lines;
others have more limited product and service offerings. Competition comes from
companies specializing in marketing research; the in-house research departments
of manufacturers and advertising agencies; retailers selling information
directly or through brokers; information management and software companies; and
consulting and accounting firms.
In Retail Measurement Services, ACNielsen's principal competitor in the
United States is Information Resources, Inc. (IRI). IRI is also active in
Canada, Europe and Latin America by itself and through joint ventures with GfK
(Germany), Taylor Nelson Sofres in Europe, and other companies, and is expanding
globally.
In Customized Research Services, a significant competitor is Kantar,
the marketing research arm of WPP Group Plc., which operates globally through
BMRB International, Millward Brown International and Research International.
In Media and Entertainment Services, significant competitors include
Taylor Nelson Sofres, GfK, AGB Media Services, and Video Research (Japan) and,
with respect to Internet Measurement Services, Media Metrix, NetValue, IMR
Worldwide and PC Data.
6
In Consumer Panel Services, significant competitors include IRI in the
United States, and the Europanel consortium, which includes Taylor Nelson Sofres
and GfK, operating in Europe. NPD also competes in this area.
Principal competitive factors include innovation, the quality,
timeliness, reliability and comprehensiveness of analytical services and data,
flexibility in tailoring services to client needs, price, and geographic and
market coverage.
Non-U.S. Operations
As indicated above, ACNielsen engages in a significant portion of its
business outside of the United States, with nearly 69% of its revenues in 1999
being generated through non-U.S. sources. ACNielsen's non-U.S. operations are
subject to the usual risks inherent in carrying on business outside the United
States, including fluctuations in relative currency values, possible
nationalization, expropriation, price controls or other restrictive government
actions. ACNielsen believes that the risk of nationalization or expropriation is
reduced because its products are services and information, rather than products
which require manufacturing facilities or the use of natural resources.
Intellectual Property
ACNielsen owns and controls trade secrets, confidential information,
trademarks, trade names, copyrights and other intellectual property rights
which, in the aggregate, are of material importance to ACNielsen's business.
Management of ACNielsen believes that the "ACNielsen" name and related names,
marks and logos are of material importance to ACNielsen. ACNielsen is licensed
to use certain technology and other intellectual property rights owned and
controlled by others, and, similarly, other companies are licensed to use
certain technology and other intellectual property rights owned and controlled
by ACNielsen.
Pursuant to an Intellectual Property Agreement (the "IP Agreement")
among D&B, Cognizant (now called NMR) and ACNielsen, entered into in connection
with the Distribution, ACNielsen has exclusive rights to the use of the
"ACNielsen" name worldwide; however, ACNielsen's future use of the "Nielsen"
name standing alone is prohibited and, as a part of a name describing new
products and services to be offered, is subject to certain limitations. In
addition, the IP Agreement also provided for the establishment of a new entity,
jointly owned by Cognizant and ACNielsen, into which certain trademarks
incorporating or relating to the "Nielsen" name in various countries were
assigned. This entity is obligated to license such trademarks on a royalty-free
basis to Cognizant or ACNielsen for use in a manner consistent with the terms of
the IP Agreement and for purposes of conducting their respective businesses
after the Distribution, and is responsible for preserving the quality of those
trademarks and minimizing any risk of possible confusion. Pursuant to the TAM
Agreement, Cognizant is required to grant ACNielsen a non-exclusive right to use
certain trademarks and technology, as described in "TAM Master Agreement" above.
ACNielsen shall not be licensed to use any such trademarks or technology in
connection with the conduct of the TAM Business within the United States or
Canada.
The technology and other intellectual property rights licensed by
ACNielsen are important to its business, although management of ACNielsen
believes that ACNielsen's business, as a whole, is not dependent upon any one
intellectual property or group of such properties.
The names of ACNielsen's products and services referred to herein are
registered or unregistered trademarks or service marks owned by or licensed to
ACNielsen or its subsidiaries.
Forward-Looking Statements
Certain statements contained herein or incorporated herein by reference
are forward looking. These may be identified by the use of forward-looking words
or phrases, such as "anticipate," "believe," "expect," "designed," "intend,"
"could," "should," "planned," "estimated," "potential," "target," "aim,"
"objective" and "goal," among others. In addition, the Company may from time to
time make oral forward-looking statements. In connection with the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995, the Company
is hereby identifying important factors that could cause actual results to
differ materially from those contained in forward-looking statements made by or
on behalf of the Company. Any such statement is qualified by reference to the
following cautionary statement.
Risks and uncertainties that may affect the operations, performance,
development and results of the Company's business include: (i) the availability
of retail sources that are willing to sell data to the Company at prices
acceptable to the Company; (ii) changes in general economic or competitive
conditions which impact the Company's clients' demand for the Company's
services; (iii) significant price and service competition; (iv) rapid
technological developments in the collection, manipulation and delivery of
information; (v) the Company's ability to complete the implementation of its
Euro plans on a timely basis; (vi) the likely incurrence of significant losses
by ACNielsen eRatings.com while its business is being developed, the difficulty
of forecasting its future revenues and costs and uncertainties associated with
the international development of an Internet ratings service; (vii) the
Company's ability to successfully implement Operation Leading Edge (its
announced plan to enhance its products and services, address changing clients
needs, improve efficiency and reduce its cost structure) and to achieve the
estimated levels of revenue and profit growth therefrom; (viii) the impact of
foreign currency fluctuations since so much of the Company's earnings are
generated abroad; (ix) the degree of acceptance of new product introductions;
(x) the uncertainties of litigation, including the IRI Action; as well as other
risks and uncertainties detailed from time to time in the Company's Securities
and Exchange Commission filings.
7
Developments in any of the areas referred to above could cause the
Company's results to differ from results that have been or may be projected by
or on behalf of the Company. The Company cautions that the foregoing list of
important factors is not exclusive. The Company does not undertake to update any
forward-looking statement that may be made from time to time by or on behalf of
the Company.
Financial Information about Segments
The response to item 101(d) of Regulation S-K is incorporated herein by
reference to Note 15 Operations by Geographic Segment on Pages 53-54 of the 1999
Annual Report. Additionally, long-lived assets totaled $266,014, $260,842 and
$151,269 in the U.S. and $412,061, $391,118 and $367,334 (in thousands of U.S.
dollars) in the Non-U.S. in 1999, 1998 and 1997, respectively.
ITEM 2. PROPERTIES
ACNielsen's real properties are geographically distributed to meet
sales and operating requirements worldwide. Most of ACNielsen's properties are
leased from third parties, including D&B and NMR. ACNielsen's properties are
generally considered to be both suitable and adequate to meet current operating
requirements and virtually all space is being utilized.
ITEM 3. LEGAL PROCEEDINGS
On July 29, 1996, Information Resources, Inc. ("IRI") filed a complaint
in the United States District Court for the Southern District of New York,
naming as defendants D&B, A.C. Nielsen Company (which is a subsidiary of the
Company, "ACNielsenCo") and I.M.S. International, Inc. ("IMS"), formerly a
subsidiary of Cognizant Corporation ("Cognizant") and a predecessor of IMS
Health Incorporated (the "IRI Action").
The complaint alleges various violations of the United States antitrust
laws: (1) a violation of Section 1 of the Sherman Act through an alleged
practice of tying ACNielsenCo services in different countries or of ACNielsenCo
and IMS services; (2) a violation of Section 1 of the Sherman Act through
alleged unreasonable restraints of trade consisting of the contracts described
above and through alleged long-term agreements with multi-national clients; (3)
a violation of Section 2 of the Sherman Act for monopolization and attempted
monopolization of export markets through alleged exclusive data acquisition
agreements with retailers in foreign countries, the contracts with clients
described above, and other means; (4) a violation of Section 2 of the Sherman
Act for attempted monopolization of the United States market through the alleged
exclusive data agreements described above, predatory pricing, and other means;
and (5) a violation of Section 2 of the Sherman Act for an alleged use of market
power in export markets to gain an unfair competitive advantage in the United
States.
The complaint also alleges two claims of tortious interference with
contract and tortious interference with a prospective business relationship.
These claims relate to the acquisition by defendants of Survey Research Group
Limited ("SRG"). IRI alleges that SRG violated an alleged agreement with IRI
when it agreed to be acquired by defendants and that defendants induced SRG to
breach that agreement.
IRI's complaint alleges damages in excess of $350 million, which amount
IRI has asked to be trebled under the antitrust laws. IRI also seeks punitive
damages in an unspecified amount.
By notice of motion dated October 15, 1996, defendants moved for an
order dismissing all claims in the complaint. On May 6, 1997 the United States
District Court for the Southern District of New York issued a decision on the
motion to dismiss. The Court dismissed IRI's claim of attempted monopolization
in the United States with leave to replead within sixty days. The Court denied
defendants' motion with respect to the remaining claims in the complaint.
On June 3, 1997, defendants filed an answer and counterclaims.
Defendants denied all material allegations of the complaint. In addition,
ACNielsenCo asserted counterclaims against IRI alleging that IRI has made false
and misleading statements about ACNielsenCo's services and commercial activities
and that such conduct constitutes a violation of Section 43(a) of the Lanham Act
and unfair competition. ACNielsenCo seeks injunctive relief and damages.
On July 7, 1997, IRI filed an amended complaint seeking to replead the
claim of attempted monopolization in the United States, which had been dismissed
by the Court in its May 6, 1997 decision. By notice of motion dated August 18,
1997, defendants moved for an order dismissing the amended claim. On December 1,
1997, the Court denied defendants' motion. Discovery is currently ongoing.
8
In connection with the IRI Action, D&B, Cognizant (the former parent
company of IMS) and the Company entered into an Indemnity and Joint Defense
Agreement (the "Indemnity and Joint Defense Agreement") pursuant to which they
agreed (i) to certain arrangements allocating potential liabilities ("IRI
Liabilities") that may arise out of or in connection with the IRI Action and
(ii) to conduct a joint defense of such action. In particular, the Indemnity and
Joint Defense Agreement provides that the Company will assume exclusive
liability for IRI Liabilities up to a maximum amount to be calculated at the
time such liabilities, if any, become payable (the "ACN Maximum Amount"), and
that Cognizant and D&B will share liability equally for any amounts in excess of
the ACN Maximum Amount. The ACN Maximum Amount will be determined by an
investment banking firm as the maximum amount which the Company is able to pay
after giving effect to (i) any plan submitted by such investment bank which is
designed to maximize the claims paying ability of the Company without impairing
the investment banking firm's ability to deliver a viability opinion (but which
will not require any action requiring stockholder approval), and (ii) payment of
related fees and expenses. For these purposes, financial viability means the
ability of the Company, after giving effect to such plan, the payment of related
fees and expenses and the payment of the ACN Maximum Amount, to pay its debts as
they become due and to finance the current and anticipated operating and capital
requirements of its business, as reconstituted by such plan, for two years from
the date any such plan is expected to be implemented.
The Indemnity and Joint Defense Agreement also imposes certain
restrictions on the payment of cash dividends and the ability of the Company to
purchase its stock.
In June 1998 (i) D&B changed its name to R.H. Donnelley Corporation and
spun off (the "D&B Spin") a company now named The Dun & Bradstreet Corporation
("New D&B"), and (ii) Cognizant changed its name to Nielsen Media Research, Inc.
("NMR") and spun off (the "Cognizant Spin") a company named IMS Health
Incorporated ("IMS Health"). Pursuant to the terms of a Distribution Agreement
dated as of October 28, 1996 among the Company, D&B and Cognizant, New D&B was
required as a condition to the D&B Spin, and IMS Health was required as a
condition to the Cognizant Spin, to undertake to the Company to be jointly and
severally liable with its former parent company for, among other things, the
obligations of such former parent company under the Indemnity and Joint Defense
Agreement. Each of New D&B and IMS Health did provide such undertaking to the
Company.
Management of ACNielsen is unable to predict at this time the final
outcome of the IRI Action or whether its resolution could materially affect the
Company's results of operations, cash flows or financial position.
The Company and its subsidiaries are also involved in other legal
proceedings and litigation arising in the ordinary course of business. In the
opinion of management, the outcome of such current legal proceedings, claims and
litigation, if decided adversely, could have a material effect on quarterly or
annual operating results or cash flows when resolved in a future period.
However, in the opinion of management, these matters will not materially affect
the Company's consolidated financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT
Executive officers are elected by the Board of Directors to hold office
at the pleasure of the Board of Directors.
Listed below are the executive officers of the registrant at March 1,
2000 and brief summaries of their business experience during the past five
years.
Name Title Age
------ --------- -------
Nicholas L. Trivisonno Chairman and Chief Executive Officer* 52
Michael P. Connors Vice Chairman* 44
Robert J. Chrenc Executive Vice President and Chief Financial Officer 55
Earl H. Doppelt Executive Vice President and General Counsel 46
*Member of the Board of Directors.
9
Mr. Trivisonno was elected Chairman and Chief Executive Officer of
ACNielsen, effective May 1996; he served as Executive Vice President-Finance and
Chief Financial Officer of D&B (business information), effective September 1995
through November 1, 1996. Prior thereto, he had served with GTE Corporation
(telecommunications) as Executive Vice President-Strategic Planning and Group
President, effective October 1993 through July 1995. He also served as a
director of GTE Corporation from April 1995 through July 1995.
Mr. Connors was elected Vice Chairman of ACNielsen, effective May 1996;
he served as Senior Vice President of D&B (business information), effective
April 1995 through November 1, 1996. Prior thereto, he had served as Senior Vice
President of American Express Travel Related Services (travel and financial
services), effective September 1989 through March 1995.
Mr. Chrenc was elected Executive Vice President and Chief Financial
Officer of ACNielsen, effective June 1996. Prior thereto he was a Partner of
Arthur Andersen LLP (accounting), effective September 1979 through May 1996.
Mr. Doppelt was elected Executive Vice President and General Counsel of
ACNielsen, effective May 1996; he had served as Senior Vice President and
General Counsel of D&B, effective May 1994 through November 1, 1996.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Information in response to this Item is set forth under Liquidity and
Capital Resources, Dividends and Common Stock Information in "Management's
Discussion and Analysis of Financial Condition and Results of Operations" on
Pages 34 and 36 of the 1999 Annual Report, which information is incorporated
herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
Selected financial data required by this Item are incorporated herein
by reference to the information relating to the years 1995 through 1999 set
forth in "Summary Financial Data" on Page 56 of the 1999 Annual Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Information in response to this Item is set forth in "Management's
Discussion and Analysis of Financial Condition and Results of Operations" on
Pages 32 to 36 of the 1999 Annual Report, which information is incorporated
herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company uses foreign-currency forward-exchange contracts to hedge
forecasted intercompany transactions and forecasted purchases of data services
from a third party provider. The Company enters into foreign-currency
forward-exchange contracts with durations of less than twelve months. The
Company adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," on January 1, 1999. The cumulative effect of adoption was not
material to the consolidated financial statements. Gains or losses on such
contracts were not material to the consolidated financial statements for the
years ended December 31, 1999 and 1998. The Company does not utilize derivative
financial instruments for trading or other speculative purposes.
The following table presents the notional amounts, fair values and
average exchange rates of foreign-currency forward-exchange contracts
outstanding at December 31, 1999 (in thousands of U.S. dollars):
Average Foreign-
Notional Fair Currency Forward-
Amounts Value Exchange Rates
---------- ------- ------------------
Euro $ 5,923 $ 99 .9755
Japanese yen 660 (24) 102.7958
Australian dollars 109 (1) 1.5793
Other 154 16
---------------------- --------- --------
Total $ 6,846 $ 90
---------------------- --------- --------
10
At December 31, 1999, the Company had outstanding fixed-rate short-term
debt of $95,139 (in thousands of U.S. dollars) borrowed under its credit
facilities. The weighted-average interest rate of this debt at December 31, 1999
was 3.32%.
The Company had intercompany loans of $2,319 and $3,367 (in thousands
of U.S. dollars) denominated in U.S. dollars and Canadian dollars, respectively,
on a Colombian Peso functional currency balance sheet at December 31, 1999 which
were paid in January 2000.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Index to Financial Statements and Schedule under Item 14 on Page 14.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information in response to this Item is incorporated herein by
reference to the section entitled "Proposals To Be Voted On; Proposal No.
1-Election of Directors" in the Company's proxy statement dated March 10, 2000
filed with the Securities and Exchange Commission, except that "Executive
Officers of the Registrant" on Page 9 of this report responds to Item 401(b) and
(e) of Regulation S-K with respect to the Company's executive officers.
ITEM 11. EXECUTIVE COMPENSATION
Information in response to this Item is incorporated herein by
reference to the sections entitled "Board Structure and Compensation" and
"Compensation of Executive Officers" in the Company's proxy statement dated
March 10, 2000 filed with the Securities and Exchange Commission.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information in response to this Item is incorporated herein by
reference to the section entitled "Common Stock Ownership of Management and
Certain Beneficial Owners" in the Company's proxy statement dated March 10, 2000
filed with the Securities and Exchange Commission.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not applicable.
11
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) List of documents filed as part of this report.
(1) Financial Statements.
See Index to Financial Statements and Schedule
on Page 14.
(2) Financial Statement Schedule.
See Index to Financial Statements and Schedule
on Page 14.
(3) Other Financial Information.
Summary Financial Data. See Index to Financial
Statements and Schedule on Page 14.
(4) Exhibits.
See Index to Exhibits on Pages 17 to 19, which
indicates which Exhibits are management contracts or
compensatory plans required to be filed as Exhibits.
Only responsive information appearing on Pages 32
to 56 to Exhibit 13 is incorporated herein by
reference, and no other information appearing in
Exhibit 13 is or shall be deemed to be filed as part
of this Form 10-K.
(b) Reports on Form 8-K.
None.
12
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
ACNIELSEN CORPORATION
(Registrant)
By: /s/ROBERT J. CHRENC
------------------------------------------
Robert J. Chrenc
(Executive Vice President and Chief
Financial Officer)
Date: March 27, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
/s/NICHOLAS L. TRIVISONNO /s/KAREN L. HENDRICKS*
- - -------------------------------------- -----------------------------------
Nicholas L. Trivisonno (Karen L. Hendricks, Director)
(Chairman, Chief Executive Officer
and Director)
(Principal Executive Officer)
/s/ROBERT J. CHRENC /s/ROBERT M. HENDRICKSON*
- - -------------------------------------- -----------------------------------
Robert J. Chrenc (Robert M. Hendrickson, Director)
(Executive Vice President and Chief
Financial Officer)
(Principal Financial and Accounting Officer)
/s/MICHAEL S. GELTZEILER /s/ROBERT HOLLAND, JR.*
- - -------------------------------------- -----------------------------------
Michael S. Geltzeiler (Robert Holland, Jr., Director)
(Senior Vice President and Controller)
/s/ROBERT H. BEEBY* /s/JOHN R. MEYER*
- - -------------------------------------- -----------------------------------
(Robert H. Beeby, Director) (John R. Meyer, Director)
/s/MICHAEL P. CONNORS* /s/BRIAN B. PEMBERTON*
- - -------------------------------------- -----------------------------------
(Michael P. Connors, Director) (Brian B. Pemberton, Director)
/s/DONALD W. GRIFFIN* /s/ROBERT N. THURSTON*
- - -------------------------------------- -----------------------------------
(Donald W. Griffin, Director) (Robert N. Thurston, Director)
/s/THOMAS C. HAYS*
- - --------------------------------------
(Thomas C. Hays, Director)
*By: /s/ Ellenore O'Hanrahan
--------------------------------------------------
(Ellenore O'Hanrahan, attorney-in-fact)
Date: March 27, 2000
13
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
FINANCIAL STATEMENTS:
The Company's consolidated financial statements, the notes thereto and
the related report thereon of Arthur Andersen LLP, independent public
accountants, for the year ended December 31, 1999 appearing on Pages 37 to 56 of
the 1999 Annual Report, are incorporated by reference into this Annual Report on
Form 10-K (see below). The additional financial data indicated below should be
read in conjunction with such consolidated financial statements.
Page
-------------------------
10-K 1999 Annual
Report
---------- ------------
Report of Independent Public Accountants F-6 37
Statement of Management Responsibility
for Financial Statements F-6 37
As of December 31, 1999 and 1998:
Consolidated Balance Sheets F-8 39
For the years ended December 31, 1999, 1998 and 1997:
Consolidated Statements of Income F-7 38
Consolidated Statements of Cash Flows F-9 40
Consolidated Statements of Shareholders' Equity F-10 41
Notes to Consolidated Financial Statements F-11 42
Quarterly Financial Data (Unaudited) for the years
ended December 31, 1999 and 1998 F-23 55
Management's Discussion and Analysis of Financial
Condition and Results of Operations F-1 32
Other financial information:
Five-year selected financial data F-24 56
SCHEDULE:
Report of Independent Public Accountants 15 --
ACNielsen Corporation and Subsidiaries:
II-Valuation and Qualifying Accounts for the
years ended December 31, 1999, 1998 and 1997 16 --
Schedules other than the one listed above are omitted as not required
or inapplicable or because the required information is provided in the
consolidated financial statements, including the notes thereto.
14
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors of ACNielsen Corporation:
We have audited in accordance with generally accepted auditing
standards, the 1999, 1998 and 1997 consolidated financial statements included in
ACNielsen Corporation's 1999 Annual Report incorporated by reference in this
Form 10-K, and have issued our report thereon dated February 17, 2000. Our audit
was made for the purpose of forming an opinion on those statements taken as a
whole. The 1999, 1998 and 1997 schedule listed in the accompanying index is the
responsibility of the Company's management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic financial statements. This schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
/s/ARTHUR ANDERSEN LLP
Stamford, Connecticut
February 17, 2000
15
ACNIELSEN CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
for the years ended December 31, 1999, 1998, 1997
(In thousands)
- - ---------------------------------------------------- ------------------ --------------- ----------------- --------------
COL. A COL. B COL. C COL. D COL. E
- - ---------------------------------------------------- ------------------ --------------- ----------------- --------------
- - ---------------------------------------------------- ------------------ --------------- ----------------- --------------
Balance Additions Balance
Beginning Charged to at End
Description of Period Operations Deductions(a) of Period
----------- ------------ --------------- -----------
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
For the Year Ended December 31, 1999 $ 13,890 $ 843 $ 4,405 (b) $ 10,328
======== ======== ======= ========
For the Year Ended December 31, 1998 $ 12,114 $ 4,140 (b) $ 2,364 $ 13,890
======== ======== ======= ========
For the Year Ended December 31, 1997 $ 10,847 $ 2,330 $ 1,063 $ 12,114
======== ======== ======= ========
<FN>
NOTE: (a) Represents primarily the charge-off of uncollectible accounts for
which a reserve was provided.
(b) During 1998, an unusually large reserve was provided due to the
difficult economic climate in Asia Pacific and the Emerging
Markets. Deductions in 1999 reflect the resolution of the accounts
for which a reserve was provided in 1998.
</FN>
Balance Additions Balance
Beginning Charged to At End
Description of Period Operations Deductions Of Period
------------- ----------- ------------ ------------ -----------
ACCRUALS FOR SPECIAL CHARGES:
For the Year Ended December 31, 1999
Postemployment Benefits/Workforce Reductions $ 3,103 $ 0 $ 3,103 $ 0
Contractual Obligations 5,240 0 1,843 3,397(d)
Rationalize Product Lines 413 0 413 0
Facilities/Real Estate 248 0 248 0
--------- ------- --------- ----------
$ 9,004 $ 0 $ 5,607 $ 3,397
========= ======= ========= ==========
For the Year Ended December 31, 1998
Postemployment Benefits/Workforce Reductions $ 13,200 $ 0 $ 10,097 $ 3,103
Contractual Obligations 8,769 0 3,529 5,240
Rationalize Product Lines 18,300 0 17,887 413
Facilities/Real Estate 5,300 0 5,052 248
--------- ------- --------- ----------
$ 45,569 $ 0 $ 36,565 (c) $ 9,004
========= ======= ========= ==========
For the Year Ended December 31, 1997
Postemployment Benefits/Workforce Reductions $ 8,563 $ 12,400 $ 7,763 $ 13,200
Contractual Obligations 30,826 0 22,057 8,769
Asset Revaluations 3,580 0 3,580 0
Rationalize Product Lines 0 18,300 0 18,300
Facilities/Real Estate 0 5,300 0 5,300
--------- -------- --------- ----------
$ 42,969 $ 36,000 $ 33,400 $ 45,569
========= ========== ========= ==========
<FN>
NOTE: (c) Includes non-cash charges of $6,132 to rationalize product lines and $1,130 for consolidation of facilities.
(d) Represents a long-term lease obligation that will be paid through 2003.
</FN>
16
INDEX TO EXHIBITS
Exhibit Number
Regulation S-K Description
- - ------------------ -------------
3 Articles of Incorporation and By-laws.
(a) Restated Certificate of Incorporation of *
the Company dated October 7, 1996
(incorporated herein by reference to
Exhibit 3.1 to the Company's Registration
Statement on Form 10, Commission File No.
001-12277 (the "Form 10")).
(b) Amended and Restated By-laws of the Company *
(incorporated herein by reference to
Exhibit 3.2 to the Form 10).
4 Instruments Defining the Rights of Security Holders,
Including Indentures.
(a) Rights Agreement dated as of October 17, *
1996 between ACNielsen Corporation and
First Chicago Trust Company of New York
(incorporated herein by reference to
Exhibit 1 to the Company's Form 8-A filed
on October 18, 1996, Commission File No.
001-12277).
(b) ACNielsen Corporation U.S. $250,000,000 *
Credit Agreement dated as of April 15,
1998 (incorporated herein by reference to
Exhibit 4(b) to the Company's Quarterly
Report on Form 10-Q for the quarterly
period ended June 30, 1998, Commission File
No. 001-12277).
10 Material Contracts. (All of the following documents,
except for items (a) through (f), are management
contracts or compensatory plans or arrangements
required to be filed pursuant to Item 14(c).)
(a) Distribution Agreement dated as of October *
28, 1996 among The Dun & Bradstreet
Corporation, Cognizant Corporation and
ACNielsen Corporation (incorporated herein
by reference to Exhibit 10(a) to the 1996
Form 10-K).
(b) Tax Allocation Agreement dated as of *
October 28, 1996 among The Dun & Bradstreet
Bradstreet Corporation, Cognizant Corporation
and ACNielsen Corporation (incorporated
herein by reference to Exhibit 10(b) to the
1996 Form 10-K).
(c) Employee Benefits Agreement dated as of *
October 28, 1996 among The Dun & Bradstreet
Corporation, Cognizant Corporation and
ACNielsen Corporation (incorporated herein
by reference to Exhibit 10(c) to the 1996
Form 10-K).
(d) Intellectual Property Agreement dated as of *
October 28, 1996 among The Dun & Bradstreet
Corporation, Cognizant Corporation and
ACNielsen Corporation (incorporated herein
by reference to Exhibit 10(d) to the 1996
Form 10-K).
+This exhibit constitutes a management contract, compensatory plan, or
arrangement.
*Incorporated herein by reference to a previously filed document.
17
Exhibit Number
Regulation S-K Description
- - ------------------ -------------
(e) TAM Master Agreement dated as of October *
28, 1996 between Cognizant Corporation
and ACNielsen Corporation (incorporated
herein by reference to Exhibit 10(e) to the
1996 Form 10-K).
(f) Indemnity and Joint Defense Agreement dated *
as of October 28, 1996 among The Dun &
Bradstreet Corporation, Cognizant
Corporation and ACNielsen Corporation
(incorporated herein by reference to
Exhibit 10(f) to the 1996 Form 10-K).
(g) 1996 ACNielsen Corporation Non-Employee +*
Directors' Stock Incentive Plan
(incorporated herein by reference to
Exhibit 10(g) to the Company's Quarterly
Report on Form 10-Q for the quarterly
period ended March 31, 1998, Commission
File No. 001-12277).
(h) 1996 ACNielsen Corporation Non-Employee +*
Directors' Deferred Compensation Plan
(incorporated herein by reference to
Exhibit 10(h) to the 1996 Form 10-K).
(i) 1996 ACNielsen Corporation Key Employees' +*
Stock Incentive Plan (incorporated
herein by reference to Exhibit 10(i) to the
Company's Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 1998,
Commission File No. 001-12277).
(j) 1996 ACNielsen Corporation Replacement Plan +*
for Certain Employees Holding The Dun &
Bradstreet Corporation Equity-Based Awards
(incorporated herein by reference to
Exhibit 10(j) to the 1996 Form 10-K).
(k) 1996 ACNielsen Corporation Senior Executive +*
Incentive Plan (incorporated herein by
reference to Exhibit 10(k) to the 1996 Form
10-K).
(l) 1996 ACNielsen Corporation Management +*
Incentive Bonus Plan (incorporated
herein by reference to Exhibit 10(l) to the
1996 Form 10-K).
(m) ACNielsen Corporation Supplemental +*
Executive Retirement Plan (incorporated
herein by reference to Exhibit 10(m) to the
1996 Form 10-K).
(n) ACNielsen Corporation Retirement Benefit +*
Excess Plan (incorporated herein by
reference to Exhibit 10(n) to the 1996 Form
10-K).
(o) ACNielsen Corporation Executive Transition +*
Plan (incorporated herein by reference
to Exhibit 10(o) to the 1996 Form 10-K).
(p) Form of Change-in-Control Agreements +*
(incorporated herein by reference to
Exhibit 10(p) to the 1996 Form 10-K).
(q) Form of Option Agreement under the 1996 +
ACNielsen Corporation Key Employees'
Stock Incentive Plan (filed herewith).
(r) Form of LSAR Agreement (incorporated herein +*
by reference to Exhibit 10(r) to the
1996 Form 10-K).
+This exhibit constitutes a management contract, compensatory plan, or
arrangement.
*Incorporated herein by reference to a previously filed document.
18
Exhibit Number
Regulation S-K Description
- - ------------------ -------------
(s) Form of Directors' Restricted Stock +*
Agreement (incorporated herein by
reference to Exhibit 10(s) to the 1996 Form
10-K).
(t) Form of Option Agreement under the 1996 +*
ACNielsen Corporation Non-Employee
Directors' Stock Incentive Plan
(incorporated herein by reference to
Exhibit 10(t) to the 1998 Form 10-K).
(u) ACNielsen Corporation Deferred Compensation +*
Plan (incorporated herein by reference to
Exhibit 4.1 to the Company's Form S-8 filed
on February 25, 2000, Commission File No.
333-31152).
(v) Letter Agreement dated December 16, 1999 +
between ACNielsen Corporation and Robert J
Lievense (filed herewith).
13 Annual Report to Security Holders (filed herewith).
1999 Annual Report (pages 32 to 56)
Only responsive information appearing on
Pages 32 to 56 to Exhibit 13 is
incorporated herein by reference, and no
other information appearing in Exhibit 13
is or shall be deemed to be filed as part
of this Form 10-K.
21 Subsidiaries of the Registrant (filed herewith).
List of Active Subsidiaries as of January 31, 2000
23 Consents of Experts and Counsel (filed herewith).
Consent of Arthur Andersen LLP
24 Power of Attorney (filed herewith).
Powers of Attorney dated February 17, 2000
27 Financial Data Schedule (filed herewith).
99 Other Exhibits
(a) Letter of Undertaking dated June 29, 1998 *
from the New Dun & Bradstreet Corporation
to Cognizant Corporation and ACNielsen
Corporation (incorporated herein by
reference to Exhibit 99(a) to the Company's
Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1998,
Commission File No. 001-12277).
(b) Letter of Undertaking dated June 29, 1998 *
from IMS Health Incorporated to The Dun &
Bradstreet Corporation and ACNielsen
Corporation (incorporated herein by
reference to Exhibit 99(b) to the Company's
Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1998
Commission File No. 001-12277).
(c) Letter of Undertaking dated July 16, 1999
from Gartner Group, Inc. to R.H. Donnelley
Corporation and ACNielsen Corporation
(filed herewith).
+This exhibit constitutes a management contract, compensatory plan, or
arrangement.
*Incorporated herein by reference to a previously filed document.
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