Thomson
Reuters Reports Second-Quarter 2016 Results
NEW YORK, July 28, 2016 -- Thomson Reuters (TSX / NYSE:
TRI) today reported results for the second quarter ended
June 30, 2016. The company also
re-affirmed its 2016 full-year outlook.
"Our core business showed resilience and we continued to make
progress throughout the second quarter despite a challenging
backdrop and turbulent market conditions for many of our largest
customers," said Jim Smith,
president and chief executive officer of Thomson Reuters. "We are
tracking to our full-year target and are well positioned to help
our customers navigate the global trends affecting their
industries."
Consolidated Financial Highlights –
Second Quarter |
(All amounts are from continuing
operations, except cash flow measures) |
|
|
Three Months Ended
June 30, |
(Millions of U.S. dollars, except earnings per share (EPS) and
margins) |
|
IFRS Financial Measures |
2016 |
2015(1) |
Change |
|
Revenues |
$2,769 |
$2,802 |
-1% |
|
Operating profit |
$401 |
$345 |
16% |
|
Diluted EPS |
$0.39 |
$0.26 |
50% |
|
Cash flow from operations (includes
discontinued operations) |
$770 |
$951 |
-19% |
|
|
|
|
|
|
|
|
|
|
|
Non-IFRS Financial Measures (2) |
2016 |
2015(1) |
Change |
Change Before
Currency |
Revenues |
$2,769 |
$2,802 |
-1% |
0% |
Adjusted EBITDA |
$757 |
$771 |
-2% |
-2% |
Adjusted EBITDA margin |
27.3% |
27.5% |
-20bp |
-60bp |
Underlying operating profit |
$505 |
$510 |
-1% |
-2% |
Underlying operating profit margin |
18.2% |
18.2% |
0bp |
-30bp |
Adjusted EPS |
$0.50 |
$0.45 |
11% |
9% |
Free cash flow (includes discontinued operations) |
$525 |
$709 |
-26% |
|
(1) |
Unless otherwise indicated, results exclude the
company's Intellectual Property & Science (IP & Science)
business, which has been classified as a discontinued operation for
2016 reporting purposes. Earlier this month, the company signed a
definitive agreement to sell IP & Science. 2015 amounts (except
cash flow measures) are restated to conform to the current year's
presentation. |
(2) |
In addition to results reported in accordance with
IFRS, the company uses certain non-IFRS financial measures as
supplemental indicators of its operating performance and financial
position. These and other non-IFRS financial measures are defined
and reconciled to the most directly comparable IFRS measures in the
tables appended to this news release. Additional information is
provided in the explanatory footnotes to the appended tables. |
IFRS Financial Measures
- Revenues declined 1% due to the impact of currency and lower
recoveries revenues
- Operating profit increased 16% to $401
million
- The increase was driven by favorable fair value adjustments
associated with foreign currency derivatives embedded in certain
customer contracts
- Diluted EPS increased 50% to $0.39
- The increase was driven by the favorable changes in fair value
described above and the benefit of lower common shares
outstanding
- Cash flow from operations, which includes discontinued
operations, decreased 19% to $770
million due to unfavorable timing of movements in working
capital
Non-IFRS Financial Measures
- Revenues declined 1%. Before currency, revenues were unchanged
- Excluding recoveries, revenues increased 1% (before
currency)
- Adjusted EBITDA decreased 2% to $757
million with a margin of 27.3% vs. 27.5% in the prior-year
period. Currency had a 40 basis point favorable impact on the
margin
- Underlying operating profit decreased 1% to $505 million with a margin of 18.2% unchanged
compared to the prior-year period. Currency had a 30 basis point
favorable impact on the margin
- Adjusted EPS increased 11% to $0.50, an increase of $0.05 per share. Currency had a $0.01 favorable impact
Other Business Highlights
- Repurchased 6.3 million shares at a cost of $258 million in the second quarter. In the first
half of the year, the company repurchased 18 million shares at a
cost of $690 million
- Signed definitive agreement to sell IP & Science business
for $3.55 billion in cash, with a
closing expected later in the year
Highlights by Business Unit
Unless otherwise noted, all revenue growth comparisons in
this news release are before the impact of foreign currency
(constant currency) as Thomson Reuters believes this provides the
best basis to measure the performance of its
business.
Financial & Risk
- Revenues decreased 1%. Revenues grew approximately 2% before
the impact of lower recoveries revenues and commercial pricing
adjustments related to the migration of certain customers to new
platforms.
- Recurring revenues were unchanged (77% of the segment's
revenues in the quarter) as the impact of an annual price increase
and a positive net sales trend was offset by lower revenues
resulting from the pricing adjustments referred to above and
macro-economic conditions affecting large European banks and banks
in several emerging markets.
- Transactions revenues were up 1% (14% of the segment's revenues
in the quarter). Transaction volumes were muted in advance of the
British referendum on June 23 on EU
membership (Brexit) yet experienced a significant increase on the
day after the vote as over $480
billion was traded through the company's foreign exchange
platforms on that date.
- Low-margin recoveries revenues decreased 17% (9% of the
segment's revenues in the quarter) as some third-party partners
continue to move to direct billing with their customers. The
decline in these revenues is expected to lessen in the second half
of the year.
- Recoveries represent revenues for content or services provided
by third parties and distributed through Financial & Risk's
platform. Reductions in recoveries revenue have no impact on EBITDA
or operating profit.
- By geography, revenues in the Americas were up 1% (up 2%
excluding recoveries). Revenues in Asia were up 1% (up 3% excluding recoveries).
Revenues in Europe, Middle East and Africa (EMEA) decreased 5% (down 2% excluding
recoveries).
- EBITDA increased 3% and the margin increased 140 basis points
to 29.1% compared to 27.7% in the prior-year period. Excluding the
impact of currency, the margin increased 90 basis points. The
increase in the margin was primarily due to savings related to
efficiency initiatives, platform closures completed in 2015 and the
reduction in low margin recoveries revenues.
- Operating profit increased 8% and the margin increased 180
basis points to 19.5% compared to 17.7% in the prior-year period.
Excluding the impact of currency, the margin increased 130 basis
points. The operating profit margin improvement reflected the same
factors that impacted EBITDA.
- Net sales were positive overall and were positive in all
regions, except for EMEA. This marked the ninth consecutive quarter
of positive net sales.
Legal
- Revenues increased 1%. Excluding US print, revenues grew 3%.
- Solutions businesses grew 3% (44% of the segment's revenues in
the quarter). Revenue growth was driven by Legal Enterprise
Solutions and businesses in the United
Kingdom/Ireland and
Latin America.
- US online legal information grew 2% (41% of the segment's
revenues in the quarter), reflecting growth for the sixth
consecutive quarter.
- US print declined 8% (15% of the segment's revenues in the
quarter).
- Subscription revenues grew 4% (73% of the segment's revenues in
the quarter). However, transactional revenues declined 4% (12% of
the segment's revenues in the quarter) due to lower Findlaw
transactional revenues which reflected difficult prior-year period
comparisons.
- EBITDA decreased 3% and the margin decreased 110 basis points
to 36.6% compared to 37.7% in the prior-year period. Currency had
no impact on the margin.
- Operating profit decreased 5% and the margin decreased 120
basis points to 29.2% compared to 30.4% in the prior-year period.
Currency had no impact on the margin.
Tax & Accounting
- Revenues increased 1%, primarily driven by the Professional
business, offset by a decline in the Government business. Recurring
revenues increased 7% (87% of the segment's revenues in the
quarter).
- EBITDA decreased 9% and the margin decreased 220 basis points
to 25.3% compared to 27.5% in the prior-year period primarily due
to the decline in Government-related revenues and additional
expenses related to implementation delays in several large
contracts. Excluding the impact of currency, the margin declined
340 basis points.
- Operating profit decreased 13% and the margin decreased 230
basis points to 17.0% compared to 19.3% in the prior-year period.
Excluding the impact of currency, the margin declined 290 basis
points for the same reasons that drove EBITDA margin
performance.
- The timing of revenues and expenses can impact margins in any
given quarter for the Tax & Accounting business. Full-year
margins are more reflective of the segment's underlying
performance.
Corporate & Other (Including
Reuters News)
- Reuters News revenues were $79
million, up 7% compared to the prior-year period.
- Corporate & Other costs were $94
million compared to $86
million in the prior-year period. The increase was largely
due to costs related to the company's Transformation program.
Discontinued Operations – IP &
Science
- On July 11, 2016, the company
announced that it had agreed to sell its IP & Science business
to Onex and Baring Private Equity Asia for $3.55 billion. Net proceeds are expected to be
between $3.1 billion and $3.2 billion
after taxes and transaction related expenses. The company plans to
use $1 billion of the net proceeds to
buy back shares as part of its previously announced $1.5 billion program, and it plans to use the
balance of proceeds to repay debt and reinvest in the business.
Closing of the transaction is expected later in the year following
regulatory approvals and satisfaction of other customary closing
conditions.
- The IP & Science business has been classified as a
discontinued operation for 2016 reporting purposes.
Consolidated
Financial Highlights - Six Months |
(All amounts are from
continuing operations, except cash flow measures) |
|
|
Six Months Ended
June 30, |
|
(Millions of U.S.
dollars, except EPS and margins) |
|
|
IFRS Financial Measures |
2016 |
2015(1) |
Change |
|
Revenues |
$5,562 |
$5,623 |
-1% |
|
Operating profit |
$711 |
$707 |
1% |
|
Diluted EPS |
$0.65 |
$0.59 |
10% |
|
Cash flow from operations (includes
discontinued operations) |
$1,228 |
$1,195 |
3% |
|
|
|
|
|
|
Non-IFRS Financial
Measures (2) |
2016 |
2015(1) |
Change |
Change Before
Currency |
Revenues |
$5,562 |
$5,623 |
-1% |
1% |
Adjusted EBITDA |
$1,505 |
$1,505 |
0% |
0% |
Adjusted EBITDA
margin |
27.1% |
26.8% |
30bp |
-20bp |
Underlying operating
profit |
$1,003 |
$971 |
3% |
2% |
Underlying operating
profit margin |
18.0% |
17.3% |
70bp |
30bp |
Adjusted EPS |
$0.98 |
$0.84 |
17% |
14% |
Free cash flow (includes
discontinued operations) |
$748 |
$644 |
16% |
|
(1) |
Unless otherwise indicated, results exclude the
company's IP & Science business, which has been classified as a
discontinued operation for 2016 reporting purposes. Earlier this
month, the company signed a definitive agreement to sell IP &
Science. 2015 amounts (except cash flow measures) are restated to
conform to the current period's presentation. |
(2) |
In addition to results reported in accordance with
IFRS, the company uses certain non-IFRS financial measures as
supplemental indicators of its operating performance and financial
position. These and other non-IFRS financial measures are defined
and reconciled to the most directly comparable IFRS measures in the
tables appended to this news release. Additional information is
provided in the explanatory footnotes to the appended tables. |
IFRS Financial Measures
- Revenues declined 1% due to the impact of currency and lower
recoveries revenues
- Operating profit increased 1% as lower depreciation and
amortization of software and other identifiable intangible assets
more than offset unfavorable fair value adjustments
- Diluted EPS increased 10% to $0.65 due to the same factors that impacted
operating profit and the benefit of lower common shares
outstanding
- Cash flow from operations, which includes discontinued
operations, increased 3% due to lower income tax payments
Non-IFRS Financial Measures
- Revenues declined 1%. Before currency, revenues increased 1%.
Excluding recoveries, revenues increased 2% (before currency)
- Adjusted EBITDA was unchanged at $1.5
billion with a margin of 27.1% vs. 26.8% in the prior-year
period. Currency had a 50 basis point favorable impact on the
margin
- Underlying operating profit increased 3% to $1 billion with a margin of 18.0% vs. 17.3% in
the prior-year period. Currency had a 40 basis point favorable
impact on the margin
- Adjusted EPS increased 17% to $0.98, an increase of $0.14 per share. Currency had a $0.02 favorable impact
- Free cash flow for the first six months of the year increased
16% to $748 million compared to
$644 million in the prior-year
period
Future Changes to Definitions of
Adjusted Earnings and Adjusted EPS
When the company reports its results for the third quarter of
2016, it plans to redefine adjusted earnings and adjusted EPS in
relation to certain tax computations to better align these
definitions with current market practices and to reflect guidance
recently issued by the U.S. Securities and Exchange Commission.
These changes will not impact the company's reporting of
revenues, adjusted EBITDA, underlying operating profit or free cash
flow.
Appendix A to this news release reflects the changes that the
company plans to make to adjusted earnings and adjusted EPS and
also includes reconciliations from earnings attributable to common
shareholders to adjusted earnings and adjusted EPS on a redefined
basis for 2015, 2014 and 2013. Additional details and
reconciliations for 2015, 2014, 2013 and for the first and second
quarters of 2016 (excluding the results for IP & Science for
each period) may be found in the Investor Relations section of the
company's website.
Business Outlook (Before Currency)
Thomson Reuters today re-affirmed its full-year business outlook
for 2016, which was previously communicated in February 2016. The company's 2016 Outlook assumes
constant currency rates compared to 2015 and all metrics below
(except for free cash flow) exclude the IP & Science business,
which has been classified as a discontinued operation for 2016
reporting purposes. The 2016 Outlook is based on the expected
performance of the company's remaining businesses and does not
factor in the impact of any other acquisitions or divestitures that
may occur during the year.
The company continues to expect:
- Low single-digit revenue growth
- 2% to 3% revenue growth excluding Financial & Risk's
recoveries revenues, which are low margin revenues and are expected
to decline as partners move to direct billing with their
customers
- Adjusted EBITDA margin to range between 27.3% and 28.3%
- Comparable 2015 adjusted EBITDA margin (excluding IP &
Science business) was 27.3%
- Underlying operating profit margin to range between 18.4% and
19.4%
- Comparable 2015 underlying operating profit margin
(excluding IP & Science business) was 18.1%
- Free cash flow to range between $1.7
billion and $1.9 billion in 2016
The information in this section is
forward-looking and should be read in conjunction with the section
below entitled "Special Note Regarding Forward-Looking Statements,
Material Assumptions and Material Risks."
Dividend and Share Repurchases
In February 2016, the Thomson
Reuters board of directors approved a $0.02 per share annualized increase in the
dividend to $1.36 per common share. A
quarterly dividend of $0.34 per share
is payable on September 15, 2016 to
common shareholders of record as of August
18, 2016.
From January 1, 2016 through
June 30, 2016, the company
repurchased approximately 18 million shares at a cost of
$690 million. Of this amount, 6.3
million shares were repurchased in the second quarter at a cost of
$258 million. Under the current
$1.5 billion share repurchase program
announced in February 2016, the
company has repurchased approximately 13.3 million shares at a cost
of $517 million.
Thomson Reuters
Thomson Reuters is the world's leading source of news and
information for professional markets. Our customers rely on us to
deliver the intelligence, technology and expertise they need to
find trusted answers. The business has operated in more than 100
countries for more than 100 years. Thomson Reuters shares are
listed on the Toronto and New York
Stock Exchanges (symbol: TRI). For more information, visit
http://www.thomsonreuters.com/.
NON-IFRS FINANCIAL MEASURES
Thomson Reuters prepares its
financial statements in accordance with International Financial
Reporting Standards (IFRS), as issued by the International
Accounting Standards Board (IASB).
This news release includes certain
non-IFRS financial measures, such as adjusted EBITDA and the
related margin, underlying operating profit and the related margin,
free cash flow, adjusted EPS, and selected measures before the
impact of foreign currency. Thomson Reuters uses these non-IFRS
financial measures as supplemental indicators of its operating
performance and financial position. These measures do not have any
standardized meanings prescribed by IFRS and therefore are unlikely
to be comparable to the calculation of similar measures used by
other companies, and should not be viewed as alternatives to
measures of financial performance calculated in accordance with
IFRS. Non-IFRS financial measures are defined and reconciled to the
most directly comparable IFRS measures in the appended tables.
The company's outlook contains
various non-IFRS financial measures. For outlook purposes only, the
company is unable to reconcile these non-IFRS measures to the most
comparable IFRS measures because it cannot predict, with reasonable
certainty, the 2016 impact of changes in foreign exchange rates or
the company's share price which impact (i) the translation of its
results reported at average foreign currency rates for the year,
(ii) fair value adjustments associated with foreign currency
derivatives embedded in certain customer contracts, (iii) the
valuation of certain share-based awards and (iv) other finance
income or expense related to foreign exchange contracts and
intercompany financing arrangements. Additionally, the company
cannot reasonably predict the occurrence or amount of other
operating gains and losses, which generally arise from business
transactions that it does not anticipate.
SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS, MATERIAL ASSUMPTIONS AND MATERIAL RISKS
Certain statements in this news release, including, but not
limited to, statements in the "2016 Business Outlook (Before
Currency)" section, Mr. Smith's comments and statements regarding
the company's expected uses of proceeds from the planned sale of
its IP & Science business, are forward-looking. As a result,
forward-looking statements are subject to a number of risks and
uncertainties that could cause actual results or events to differ
materially from current expectations. There is no assurance
that the events described in any forward-looking statement will
materialize. A business outlook is provided for the purpose of
presenting information about current expectations for 2016. This
information may not be appropriate for other purposes. You are
cautioned not to place undue reliance on forward-looking statements
which reflect expectations only as of the date of this news
release. Except as may be required by applicable law, Thomson
Reuters disclaims any obligation to update or revise any
forward-looking statements.
The company's 2016 Business Outlook
is based on various external and internal assumptions. Economic and
market assumptions include, but are not limited to, GDP growth in
most of the countries where Thomson Reuters operates and a
continued increase in the number of professionals around the world
and their demand for high quality information and workflow
solutions. Internal financial and operational assumptions include,
but are not limited to, the successful execution of sales
initiatives, ongoing product release programs, our globalization
strategy and other growth and efficiency initiatives. The 2016
Business Outlook also assumes that the closing of the sale of the
company's IP & Science business will be later in 2016.
Some of the material risk factors that could cause
actual results or events to differ materially from those expressed
in or implied by forward-looking statements in this news
release include, but are not limited to, changes in the
general economy; actions of competitors; failure to develop new
products, services, applications and functionalities to meet
customers' needs, attract new customers or expand into new
geographic markets and identify areas of higher growth; failures or
disruptions of telecommunications, network systems or the Internet;
fraudulent or unpermitted data access or other cyber-security or
privacy breaches; increased accessibility to free or relatively
inexpensive information sources; failure to maintain a high renewal
rate for subscription-based services; dependency on third parties
for data, information and other services; changes to law and
regulations, including the impact of the Dodd-Frank legislation and
similar financial services laws around the world; tax matters,
including changes to tax laws, regulations and treaties;
fluctuations in foreign currency exchange and interest rates;
failure to adapt to recent organizational changes and effectively
implement strategic initiatives; failure to recruit, motivate and
retain high quality management and key employees; failure to meet
the challenges involved in operating globally; failure to derive
fully the anticipated benefits from existing or future
acquisitions, joint ventures, investments or dispositions; failure
to protect the brands and reputation of Thomson Reuters; impairment
of goodwill and identifiable intangible assets; inadequate
protection of intellectual property rights; threat of legal actions
and claims; risk of antitrust/competition-related claims or
investigations; downgrading of credit ratings and adverse
conditions in the credit markets; the effect of factors outside of
the control of Thomson Reuters on funding obligations in respect of
pension and post-retirement benefit arrangements; and actions or
potential actions that could be taken by the company's principal
shareholder, The Woodbridge Company Limited. These and other
factors are discussed in materials that Thomson Reuters from time
to time files with, or furnishes to, the Canadian securities
regulatory authorities and the U.S. Securities and Exchange
Commission. Thomson Reuters annual and quarterly reports are also
available in the "Investor Relations" section of
http://www.thomsonreuters.com/.
CONTACTS |
|
|
|
MEDIA |
INVESTORS |
David Crundwell |
Frank J. Golden |
Senior Vice President, Corporate Affairs |
Senior Vice President, Investor Relations |
+1 646 223 5285 |
+1 646 223 5288 |
david.crundwell@tr.com |
frank.golden@tr.com |
Thomson Reuters will webcast a discussion of its
second-quarter 2016 results today beginning at 8:30 a.m. Eastern Time (ET). You can
access the webcast by visiting the "Investor Relations" section
of http://www.thomsonreuters.com/. An archive of the webcast
will be available following the presentation.
Thomson Reuters
Corporation |
Consolidated Income
Statement |
(millions of U.S.
dollars, except per share data) |
(unaudited) |
|
|
|
Three Months
Ended |
|
Six Months
Ended |
|
June 30, |
|
June 30, |
|
2016 |
2015(1) |
|
2016 |
2015(1) |
CONTINUING OPERATIONS |
|
|
|
|
|
Revenues |
$2,769 |
$2,802 |
|
$5,562 |
$5,623 |
Operating expenses |
(1,991) |
(2,091) |
|
(4,100) |
(4,125) |
Depreciation |
(80) |
(85) |
|
(161) |
(178) |
Amortization of computer software |
(172) |
(176) |
|
(341) |
(356) |
Amortization of other identifiable intangible
assets |
(132) |
(140) |
|
(260) |
(280) |
Other operating gains, net |
7 |
35 |
|
11 |
23 |
Operating profit |
401 |
345 |
|
711 |
707 |
Finance costs, net: |
|
|
|
|
|
Net interest expense |
(103) |
(107) |
|
(196) |
(212) |
Other finance income
(costs) |
9 |
(5) |
|
(25) |
39 |
Income before tax and equity method investments |
307 |
233 |
|
490 |
534 |
Share of post-tax (losses) earnings
in equity method
investments |
(1) |
3 |
|
- |
7 |
Tax (expense) benefit |
(2) |
(10) |
|
24 |
(35) |
Earnings from continuing
operations |
304 |
226 |
|
514 |
506 |
Earnings from discontinued operations, net of tax |
46 |
55 |
|
108 |
95 |
Net earnings |
$350 |
$281 |
|
$622 |
$601 |
|
|
|
|
|
|
Earnings attributable to: |
|
|
|
|
|
Common shareholders |
337 |
262 |
|
599 |
567 |
Non-controlling interests |
13 |
19 |
|
23 |
34 |
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
Basic earnings per share: |
|
|
|
|
|
From continuing operations |
$0.39 |
$0.26 |
|
$0.65 |
$0.60 |
From discontinued operations |
0.06 |
0.07 |
|
0.14 |
0.12 |
Basic earnings per share |
$0.45 |
$0.33 |
|
$0.79 |
$0.72 |
|
|
|
|
|
|
Diluted earnings per share: |
|
|
|
|
|
From continuing operations |
$0.39 |
$0.26 |
|
$0.65 |
$0.59 |
From discontinued operations |
0.06 |
0.07 |
|
0.14 |
0.12 |
Diluted earnings per share |
$0.45 |
$0.33 |
|
$0.79 |
$0.71 |
|
|
|
|
|
|
Basic weighted-average common shares |
751,598,761 |
785,441,698 |
|
756,163,267 |
789,793,561 |
Diluted weighted-average common shares |
753,350,217 |
788,852,919 |
|
757,795,444 |
793,192,368 |
(1) |
Prior-year period amounts have been restated to
reflect the current presentation. |
Thomson Reuters
Corporation |
Consolidated
Statement of Financial Position |
(millions of U.S.
dollars) |
(unaudited) |
|
|
June 30, |
|
December 31, |
2016 |
|
2015(1) |
Assets |
|
|
|
Cash and cash equivalents |
$686 |
|
$966 |
Trade and other receivables |
1,479 |
|
1,755 |
Other financial assets |
115 |
|
176 |
Prepaid expenses and other current assets |
698 |
|
683 |
Current assets excluding assets held for
sale |
2,978 |
|
3,580 |
Assets held for sale |
1,700 |
|
- |
Current assets |
4,678 |
|
3,580 |
|
|
|
|
Computer hardware and other property, net |
968 |
|
1,067 |
Computer software, net |
1,403 |
|
1,486 |
Other identifiable intangible assets, net |
6,007 |
|
6,417 |
Goodwill |
14,838 |
|
15,878 |
Other financial assets |
114 |
|
116 |
Other non-current assets |
555 |
|
544 |
Deferred tax |
46 |
|
47 |
Total assets |
$28,609 |
|
$29,135 |
|
|
|
|
Liabilities and equity |
|
|
|
Liabilities |
|
|
|
Current indebtedness |
$1,904 |
|
$1,595 |
Payables, accruals and provisions |
2,002 |
|
2,278 |
Deferred revenue |
999 |
|
1,319 |
Other financial liabilities |
221 |
|
238 |
Current liabilities excluding liabilities associated
with assets held for sale |
5,126 |
|
5,430 |
Liabilities associated with assets held for sale |
576 |
|
- |
Current liabilities |
5,702 |
|
5,430 |
|
|
|
|
Long-term indebtedness |
6,870 |
|
6,829 |
Provisions and other non-current liabilities |
2,344 |
|
2,124 |
Other financial liabilities |
341 |
|
387 |
Deferred tax |
1,039 |
|
1,265 |
Total liabilities |
16,296 |
|
16,035 |
|
|
|
|
Equity |
|
|
|
Capital |
9,721 |
|
9,852 |
Retained earnings |
5,938 |
|
6,458 |
Accumulated other comprehensive loss |
(3,828) |
|
(3,697) |
Total shareholders' equity |
11,831 |
|
12,613 |
Non-controlling interests |
482 |
|
487 |
Total equity |
12,313 |
|
13,100 |
Total liabilities and equity |
$28,609 |
|
$29,135 |
(1) |
Prior-year period amounts have been restated to
reflect the current presentation. |
Thomson Reuters
Corporation |
Consolidated
Statement of Cash Flow |
(millions of U.S.
dollars) |
(unaudited) |
|
|
|
Three Months
Ended
June 30, |
|
Six Months
Ended
June 30, |
|
2016 |
2015(1) |
|
2016 |
2015(1) |
Cash provided by (used in): |
|
|
|
|
|
Operating activities |
|
|
|
|
|
Earnings from continuing operations |
$304 |
$226 |
|
$514 |
$506 |
Adjustments for: |
|
|
|
|
|
Depreciation |
80 |
85 |
|
161 |
178 |
Amortization of computer software |
172 |
176 |
|
341 |
356 |
Amortization of other identifiable intangible
assets |
132 |
140 |
|
260 |
280 |
Net gains on disposals of businesses and
investments |
(1) |
(25) |
|
(2) |
(25) |
Deferred tax |
(26) |
(40) |
|
(84) |
(65) |
Other |
47 |
115 |
|
225 |
96 |
Changes in working capital and other items |
(10) |
159 |
|
(381) |
(366) |
Operating cash flows from continuing operations |
698 |
836 |
|
1,034 |
960 |
Operating cash flows from discontinued operations |
72 |
115 |
|
194 |
235 |
Net cash provided by operating activities |
770 |
951 |
|
1,228 |
1,195 |
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
Acquisitions, net of cash acquired |
(65) |
(7) |
|
(111) |
(15) |
(Payments for) proceeds from
disposals of businesses and
investments, net of taxes paid |
(1) |
75 |
|
1 |
75 |
Capital expenditures, less proceeds from
disposals |
(212) |
(210) |
|
(445) |
(500) |
Other investing activities |
1 |
1 |
|
20 |
3 |
Investing cash flows from continuing operations |
(277) |
(141) |
|
(535) |
(437) |
Investing cash flows from discontinued operations |
(14) |
(13) |
|
(25) |
(26) |
Net cash used in investing activities |
(291) |
(154) |
|
(560) |
(463) |
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
Proceeds from debt |
498 |
- |
|
498 |
- |
Repayments of debt |
(500) |
- |
|
(503) |
- |
Net (repayments) borrowings under short-term loan
facilities |
(138) |
170 |
|
304 |
570 |
Repurchases of common shares |
(258) |
(348) |
|
(690) |
(696) |
Dividends paid on preference shares |
- |
- |
|
(1) |
(1) |
Dividends paid on common shares |
(248) |
(254) |
|
(497) |
(512) |
Dividends paid to non-controlling interests |
(20) |
(20) |
|
(29) |
(27) |
Other financing activities |
9 |
11 |
|
13 |
52 |
Net cash used in financing activities |
(657) |
(441) |
|
(905) |
(614) |
(Decrease) increase in cash and bank overdrafts |
(178) |
356 |
|
(237) |
118 |
Translation adjustments |
(5) |
3 |
|
(1) |
(9) |
Cash and bank overdrafts at beginning of period |
867 |
765 |
|
922 |
1,015 |
Cash and bank overdrafts at end of period |
$684 |
$1,124 |
|
$684 |
$1,124 |
|
|
|
|
|
|
Cash and bank overdrafts at end of period comprised
of: |
|
|
|
|
|
Cash and cash equivalents |
$686 |
$1,289 |
|
$686 |
$1,289 |
Bank overdrafts |
(2) |
(165) |
|
(2) |
(165) |
|
$684 |
$1,124 |
|
$684 |
$1,124 |
(1) |
Prior-year period amounts have been restated to
reflect the current presentation. |
Thomson Reuters
Corporation |
Reconciliation of
Changes in Revenues, Adjusted EBITDA, Underlying Operating
Profit and the Related Margins |
Excluding the
Effects of Foreign Currency by Business Segment |
(millions of U.S.
dollars, except for margins) |
(unaudited) |
|
|
|
Three Months
Ended |
|
|
|
|
|
|
|
June 30, |
|
|
Change |
|
|
|
|
2016 |
2015(1) |
|
Total |
Foreign
Currency (4) |
Before
Currency (4) |
Revenues |
|
|
|
|
|
|
|
|
Financial & Risk |
|
$1,524 |
$1,552 |
|
-2% |
-1% |
-1% |
|
Legal |
|
846 |
852 |
|
-1% |
-2% |
1% |
|
Tax & Accounting |
|
324 |
327 |
|
-1% |
-2% |
1% |
|
Corporate & Other (includes
Reuters News) |
|
79 |
74 |
|
7% |
0% |
7% |
|
Eliminations |
|
(4) |
(3) |
|
|
|
|
|
Revenues |
|
$2,769 |
$2,802 |
|
-1% |
-1% |
0% |
|
|
|
|
|
|
Change |
|
|
|
|
|
|
|
Total |
Foreign
Currency (4) |
Before
Currency (4) |
Adjusted EBITDA(2) |
|
|
|
|
|
|
|
|
Financial & Risk |
|
$443 |
$430 |
|
3% |
1% |
2% |
|
Legal |
|
310 |
321 |
|
-3% |
-1% |
-2% |
|
Tax & Accounting |
|
82 |
90 |
|
-9% |
2% |
-11% |
|
Corporate & Other (includes
Reuters News) |
|
(78) |
(70) |
|
n/a |
n/a |
n/a |
|
Adjusted EBITDA |
|
$757 |
$771 |
|
-2% |
0% |
-2% |
|
Adjusted EBITDA
Margin(2) |
|
|
|
|
|
|
|
Financial & Risk |
|
29.1% |
27.7% |
|
140bp |
50bp |
90bp |
Legal |
|
36.6% |
37.7% |
|
-110bp |
0bp |
-110bp |
Tax & Accounting |
|
25.3% |
27.5% |
|
-220bp |
120bp |
-340bp |
Corporate & Other (includes
Reuters News) |
|
n/a |
n/a |
|
n/a |
n/a |
n/a |
Adjusted EBITDA margin |
|
27.3% |
27.5% |
|
-20bp |
40bp |
-60bp |
|
|
|
|
|
Change |
|
|
|
|
|
|
|
Total |
Foreign
Currency (4) |
Before
Currency (4) |
Underlying Operating Profit
(3) |
|
|
|
|
|
|
|
|
Financial & Risk |
|
$297 |
$274 |
|
8% |
2% |
6% |
|
Legal |
|
247 |
259 |
|
-5% |
-2% |
-3% |
|
Tax & Accounting |
|
55 |
63 |
|
-13% |
1% |
-14% |
|
Corporate & Other (includes
Reuters News) |
|
(94) |
(86) |
|
n/a |
n/a |
n/a |
|
Underlying operating profit |
|
$505 |
$510 |
|
-1% |
1% |
-2% |
|
Underlying Operating Profit Margin
(3) |
|
|
|
|
|
|
|
Financial & Risk |
|
19.5% |
17.7% |
|
180bp |
50bp |
130bp |
Legal |
|
29.2% |
30.4% |
|
-120bp |
0bp |
-120bp |
Tax & Accounting |
|
17.0% |
19.3% |
|
-230bp |
60bp |
-290bp |
Corporate & Other (includes
Reuters News) |
|
n/a |
n/a |
|
n/a |
n/a |
n/a |
Underlying operating profit margin |
|
18.2% |
18.2% |
|
0bp |
30bp |
-30bp |
Thomson Reuters
Corporation |
Reconciliation of
Changes in Revenues, Adjusted EBITDA, Underlying Operating
Profit and the Related Margins |
Excluding the
Effects of Foreign Currency by Business Segment |
(millions of U.S.
dollars, except for margins) |
(unaudited) |
|
|
|
Six Months
Ended |
|
|
|
|
|
|
|
June 30, |
|
|
Change |
|
|
|
|
2016 |
2015(1) |
|
Total |
Foreign
Currency (4) |
Before
Currency (4) |
Revenues |
|
|
|
|
|
|
|
|
Financial & Risk |
|
$3,033 |
$3,104 |
|
-2% |
-1% |
-1% |
|
Legal |
|
1,668 |
1,676 |
|
0% |
-1% |
1% |
|
Tax & Accounting |
|
713 |
700 |
|
2% |
-3% |
5% |
|
Corporate & Other (includes Reuters News) |
|
154 |
148 |
|
4% |
-1% |
5% |
|
Eliminations |
|
(6) |
(5) |
|
|
|
|
|
Revenues |
|
$5,562 |
$5,623 |
|
-1% |
-2% |
1% |
|
|
|
|
|
|
Change |
|
|
|
|
|
|
|
Total |
Foreign
Currency (4) |
Before
Currency (4) |
Adjusted EBITDA(2) |
|
|
|
|
|
|
|
|
Financial & Risk |
|
$880 |
$831 |
|
6% |
0% |
6% |
|
Legal |
|
608 |
607 |
|
0% |
0% |
0% |
|
Tax & Accounting |
|
196 |
216 |
|
-9% |
2% |
-11% |
|
Corporate & Other (includes
Reuters News) |
|
(179) |
(149) |
|
n/a |
n/a |
n/a |
|
Adjusted EBITDA |
|
$1,505 |
$1,505 |
|
0% |
0% |
0% |
|
Adjusted EBITDA
Margin(2) |
|
|
|
|
|
|
|
Financial & Risk |
|
29.0% |
26.8% |
|
220bp |
50bp |
170bp |
Legal |
|
36.5% |
36.2% |
|
30bp |
70bp |
-40bp |
Tax & Accounting |
|
27.5% |
30.9% |
|
-340bp |
120bp |
-460bp |
Corporate & Other (includes Reuters News) |
|
n/a |
n/a |
|
n/a |
n/a |
n/a |
Adjusted EBITDA margin |
|
27.1% |
26.8% |
|
30bp |
50bp |
-20bp |
|
|
|
|
|
Change |
|
|
|
|
|
|
|
Total |
Foreign
Currency (4) |
Before
Currency (4) |
Underlying Operating Profit
(3) |
|
|
|
|
|
|
|
|
Financial & Risk |
|
$592 |
$515 |
|
15% |
1% |
14% |
|
Legal |
|
485 |
478 |
|
1% |
0% |
1% |
|
Tax & Accounting |
|
138 |
161 |
|
-14% |
2% |
-16% |
|
Corporate & Other (includes
Reuters News) |
|
(212) |
(183) |
|
n/a |
n/a |
n/a |
|
Underlying operating profit |
|
$1,003 |
$971 |
|
3% |
1% |
2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying Operating Profit Margin
(3) |
|
|
|
|
|
|
|
Financial & Risk |
|
19.5% |
16.6% |
|
290bp |
30bp |
260bp |
Legal |
|
29.1% |
28.5% |
|
60bp |
70bp |
-10bp |
Tax & Accounting |
|
19.4% |
23.0% |
|
-360bp |
110bp |
-470bp |
Corporate & Other (includes Reuters News) |
|
n/a |
n/a |
|
n/a |
n/a |
n/a |
Underlying operating profit margin |
|
18.0% |
17.3% |
|
70bp |
40bp |
30bp |
Thomson Reuters
Corporation |
Reconciliation of
Operating Profit to Adjusted EBITDA (2) |
(millions of U.S.
dollars) |
(unaudited) |
|
|
Three Months Ended |
|
|
Six Months
Ended |
|
June 30, |
|
|
June 30, |
|
|
2016 |
2015(1) |
Change |
|
2016 |
2015(1) |
Change |
|
|
|
|
|
|
|
|
Operating profit |
$401 |
$345 |
16% |
|
$711 |
$707 |
1% |
Adjustments to remove: |
|
|
|
|
|
|
|
Amortization
of other identifiable intangible assets |
132 |
140 |
|
|
260 |
280 |
|
Fair value adjustments |
(21) |
60 |
|
|
43 |
7 |
|
Other operating gains,
net |
(7) |
(35) |
|
|
(11) |
(23) |
|
Underlying operating profit |
$505 |
$510 |
-1% |
|
$1,003 |
$971 |
3% |
Remove: depreciation and amortization
of computer
software |
252 |
261 |
|
|
502 |
534 |
|
Adjusted EBITDA |
$757 |
$771 |
-2% |
|
$1,505 |
$1,505 |
0% |
|
|
|
|
|
|
|
|
Underlying operating profit margin
(3) |
18.2% |
18.2% |
0bp |
|
18.0% |
17.3% |
70bp |
Adjusted EBITDA margin (2) |
27.3% |
27.5% |
-20bp |
|
27.1% |
26.8% |
30bp |
|
|
|
|
|
|
|
|
|
Thomson Reuters
Corporation |
Reconciliation of
Earnings from Continuing Operations to Adjusted EBITDA
(2) |
(millions of U.S.
dollars) |
(unaudited) |
|
|
Three Months Ended |
|
|
Six
Months Ended |
|
June 30, |
|
|
June 30, |
|
|
2016 |
2015(1) |
Change |
|
2016 |
2015(1) |
Change |
|
|
|
|
|
|
|
|
Earnings from continuing
operations |
$304 |
$226 |
35% |
|
$514 |
$506 |
2% |
Adjustments to remove: |
|
|
|
|
|
|
|
Tax expense (benefit) |
2 |
10 |
|
|
(24) |
35 |
|
Other finance (income) costs |
(9) |
5 |
|
|
25 |
(39) |
|
Net interest expense |
103 |
107 |
|
|
196 |
212 |
|
Amortization of other identifiable intangible
assets |
132 |
140 |
|
|
260 |
280 |
|
Amortization of computer software |
172 |
176 |
|
|
341 |
356 |
|
Depreciation |
80 |
85 |
|
|
161 |
178 |
|
EBITDA |
$784 |
$749 |
|
|
$1,473 |
$1,528 |
|
Adjustments to remove: |
|
|
|
|
|
|
|
Share of post-tax losses (earnings) in equity
method investments |
1 |
(3) |
|
|
- |
(7) |
|
Other operating gains, net |
(7) |
(35) |
|
|
(11) |
(23) |
|
Fair value adjustments |
(21) |
60 |
|
|
43 |
7 |
|
Adjusted EBITDA |
$757 |
$771 |
-2% |
|
$1,505 |
$1,505 |
0% |
Thomson Reuters
Corporation |
Reconciliation of
Underlying Operating Profit (3) to Adjusted EBITDA
(2) by Business Segment |
(millions of U.S.
dollars) |
(unaudited) |
|
|
Three Months
Ended
June 30, 2016 |
|
Three Months
Ended
June 30, 2015(1) |
|
Underlying
Operating Profit |
Add:
Depreciation
and
Amortization
of Computer Software |
Adjusted
EBITDA |
|
Underlying
Operating Profit |
Add:
Depreciation and Amortization of Computer Software |
Adjusted
EBITDA |
|
|
|
|
|
|
|
|
Financial & Risk |
$297 |
$146 |
$443 |
|
$274 |
$156 |
$430 |
Legal |
247 |
63 |
310 |
|
259 |
62 |
321 |
Tax & Accounting |
55 |
27 |
82 |
|
63 |
27 |
90 |
Corporate & Other (includes
Reuters News) |
(94) |
16 |
(78) |
|
(86) |
16 |
(70) |
|
$505 |
$252 |
$757 |
|
$510 |
$261 |
$771 |
|
Six Months
Ended
June 30, 2016 |
|
Six Months
Ended
June 30, 2015(1) |
|
Underlying
Operating Profit |
Add:
Depreciation
and
Amortization
of Computer Software |
Adjusted
EBITDA |
|
Underlying
Operating Profit |
Add:
Depreciation and Amortization of Computer Software |
Adjusted
EBITDA |
|
|
|
|
|
|
|
|
Financial & Risk |
$592 |
$288 |
$880 |
|
$515 |
$316 |
$831 |
Legal |
485 |
123 |
608 |
|
478 |
129 |
607 |
Tax & Accounting |
138 |
58 |
196 |
|
161 |
55 |
216 |
Corporate & Other (includes
Reuters News) |
(212) |
33 |
(179) |
|
(183) |
34 |
(149) |
|
$1,003 |
$502 |
$1,505 |
|
$971 |
$534 |
$1,505 |
Thomson Reuters
Corporation
Reconciliation of Earnings Attributable to Common Shareholders to
Adjusted Earnings (5)
(millions of U.S. dollars, except for share and per share data)
(unaudited) |
|
|
Three
Months Ended
June 30, |
|
Six
Months Ended
June 30, |
|
|
|
2016 |
2015(1) |
Change |
|
2016 |
2015(1) |
Change |
Earnings attributable to common
shareholders |
$337 |
$262 |
29% |
|
$599 |
$567 |
6% |
Adjustments to remove: |
|
|
|
|
|
|
|
Fair value adjustments |
(21) |
60 |
|
|
43 |
7 |
|
Other operating gains, net |
(7) |
(35) |
|
|
(11) |
(23) |
|
Other finance (income) costs |
(9) |
5 |
|
|
25 |
(39) |
|
Share of post-tax losses (earnings) in
equity method investments |
1 |
(3) |
|
|
- |
(7) |
|
Tax on above items |
(1) |
(12) |
|
|
(26) |
2 |
|
Tax items impacting comparability |
13 |
4 |
|
|
6 |
(2) |
|
Amortization of other identifiable
intangible assets |
132 |
140 |
|
|
260 |
280 |
|
Earnings from discontinued operations,
net of tax |
(46) |
(55) |
|
|
(108) |
(95) |
|
Interim period effective tax rate
normalization (6) |
(9) |
5 |
|
|
(14) |
6 |
|
Tax charge amortization
(7) |
(16) |
(16) |
|
|
(32) |
(32) |
|
Dividends declared on preference
shares |
- |
- |
|
|
(1) |
(1) |
|
Adjusted earnings |
$374 |
$355 |
5% |
|
$741 |
$663 |
12% |
Adjusted earnings per share |
$0.50 |
$0.45 |
11% |
|
$0.98 |
$0.84 |
17% |
Foreign currency(4) |
|
|
2% |
|
|
|
3% |
Before currency(4) |
|
|
9% |
|
|
|
14% |
|
|
|
|
|
|
|
|
Diluted weighted-average common shares (millions) |
753.4 |
788.9 |
|
|
757.8 |
793.2 |
|
Thomson Reuters
Corporation |
Reconciliation of
Net Cash Provided by Operating Activities to Free Cash Flow
(8) |
(millions of U.S.
dollars) |
(unaudited) |
|
|
Three Months
Ended |
Six Months
Ended |
June 30, |
June 30, |
|
2016 |
2015(1) |
2016 |
2015(1) |
Net cash provided by operating activities |
$770 |
$951 |
$1,228 |
$1,195 |
Capital expenditures, less proceeds from
disposals |
(212) |
(210) |
(445) |
(500) |
Other investing activities |
1 |
1 |
20 |
3 |
Dividends paid on preference shares |
- |
- |
(1) |
(1) |
Dividends paid to non-controlling interests |
(20) |
(20) |
(29) |
(27) |
Capital expenditures from discontinued operations |
(14) |
(13) |
(25) |
(26) |
Free cash flow |
$525 |
$709 |
$748 |
$644 |
Footnotes |
(1) |
Prior-year period amounts have been restated to
reflect the reclassification of the Intellectual Property &
Science segment as a discontinued operation. |
(2) |
Thomson Reuters defines adjusted EBITDA as underlying
operating profit excluding the related depreciation and
amortization of computer software. Adjusted EBITDA margin is
adjusted EBITDA expressed as a percentage of revenues. Thomson
Reuters uses adjusted EBITDA as it provides a measure commonly
reported and widely used by investors as an indicator of a
company's operating performance and ability to incur and service
debt and as a valuation metric. |
(3) |
Underlying operating profit is operating profit from
reportable segments and Corporate & Other (includes Reuters
News). Underlying operating profit margin is the underlying
operating profit expressed as a percentage of revenues. Thomson
Reuters uses underlying operating profit as it provides a basis to
evaluate operating profitability and performance trends, excluding
the impact of items which distort the performance of the company's
operations. |
(4) |
The changes in revenues, adjusted EBITDA and
underlying operating profit and the related margins, and adjusted
earnings per share before currency (at constant currency or
excluding the effects of currency) are determined by converting the
current and prior-year period's local currency equivalent using the
same exchange rates. |
(5) |
Adjusted earnings and adjusted earnings per share
(EPS) include dividends declared on preference shares and
amortization of the 2013 tax charges associated with the
consolidation of technology and content assets but exclude the
pre-tax impacts of amortization of other identifiable intangible
assets as well as the post-tax impacts of fair value adjustments,
other operating (gains) and losses, certain impairment charges,
other finance (income) costs, Thomson Reuters share of post-tax
(earnings) losses in equity method investments, discontinued
operations and other items affecting comparability. Adjusted
earnings per share is calculated using diluted weighted-average
shares and does not represent actual earnings or loss per share
attributable to shareholders. Thomson Reuters uses adjusted
earnings and adjusted EPS as they provide a more comparable basis
to analyze earnings and they are also measures commonly used by
shareholders to measure the company's performance. |
(6) |
Adjustment to reflect income taxes based on estimated
full-year effective tax rate. Earnings or losses for interim
periods under IFRS reflect income taxes based on the estimated
effective tax rates of each of the jurisdictions in which Thomson
Reuters operates. The non-IFRS adjustment reallocates estimated
full-year income taxes between interim periods, but has no effect
on full-year income taxes. |
(7) |
Reflects amortization of the 2013 tax charges
associated with the consolidation of the ownership and management
of technology and content assets. For the non-IFRS measure, the
majority of the charges are amortized over seven years, the period
over which the tax is expected to be paid. |
(8) |
Free cash flow (includes free cash flow from
continuing and discontinued operations) is net cash provided by
operating activities, and other investing activities less capital
expenditures, dividends paid on the company's preference shares,
and dividends paid to non-controlling interests. Thomson Reuters
uses free cash flow as it helps assess the company's ability, over
the long term, to create value for its shareholders because it
represents cash available to repay debt, pay common dividends and
fund share repurchases and new acquisitions. |
Appendix A
Thomson
Reuters Corporation
Supplemental Information
Adjusted Earnings and Adjusted EPS - Current Basis Compared to
Redefined Basis
Includes IP & Science Results for 2015, 2014 and
2013
(millions of U.S. dollars, except for per share data and
percentages)
(unaudited)
When the company reports its results in the third quarter of
2016, it plans to redefine adjusted earnings and adjusted EPS to
better align these definitions with current market practices and to
reflect guidance recently issued by the U.S. Securities and
Exchange Commission. These changes will not impact revenue,
adjusted EBITDA, underlying operating profit or free cash flow.
The company's modified definitions of adjusted earnings and
adjusted EPS will reflect the following changes:
- Tax effect of amortization of other identifiable intangible
assets - the company will remove the post-tax impact of
amortization of other identifiable intangible assets (IIA). The
company previously removed the amortization of other identifiable
intangible assets on a pre-tax basis.
- Tax charge amortization - the company will no longer
amortize the tax charge generated from its 2013 sale of technology
and content assets to a related subsidiary over seven years.
To illustrate the impact of these changes, set forth below is a
summary of the currently defined amounts compared to the redefined
amounts, including IP & Science results, for 2015, 2014
and 2013.
|
Twelve Months Ended
December 31, 2015 |
|
|
Changes |
|
|
Current basis |
Remove: Deferred
tax benefit on IIA
amortization |
Remove: Tax
charge
amortization |
Redefined basis |
Adjusted earnings |
$1,672 |
$(148) |
$86 |
$1,610 |
Adjusted EPS |
$2.13 |
$(0.19) |
$0.11 |
$2.05 |
Effective tax rate |
11.3% |
|
|
11.1% |
|
Twelve Months Ended
December 31, 2014 |
|
|
Changes |
|
|
Current basis |
Remove: Deferred
tax benefit on IIA
amortization |
Remove: Tax
charge
amortization |
Redefined basis |
Adjusted earnings |
$1,497 |
$(167) |
$86 |
$1,416 |
Adjusted EPS |
$1.85 |
$(0.21) |
$0.11 |
$1.75 |
Effective tax rate |
13.9% |
|
|
13.4% |
|
Twelve Months Ended
December 31, 2013 |
|
|
Changes |
|
|
Current basis |
Remove: Deferred
tax benefit on IIA
amortization |
Remove: Tax
charge
amortization |
Redefined basis |
Adjusted earnings |
$1,283 |
$(174) |
$76 |
$1,185 |
Adjusted EPS |
$1.54 |
$(0.21) |
$0.10 |
$1.43 |
Effective tax rate |
11.2% |
|
|
13.0% |
Refer to the Investor Relations section of the Thomson Reuters
website for further financial information and reconciliations
associated with the company's planned changes to the definitions
for adjusted earnings and adjusted EPS, including redefined amounts
by quarter.
PREPARED ON A REDEFINED BASIS
Appendix A (continued)
Thomson
Reuters Corporation
Supplemental Information
Reconciliation of Earnings Attributable to Common Shareholders
to Adjusted Earnings
(millions of U.S. dollars, except for share, per share data and
percentages)
(unaudited)
|
Twelve Months Ended
December 31, 2015 |
|
Twelve Months Ended
December 31, 2014 |
|
Twelve Months Ended
December 31, 2013 |
|
|
Adjusted Earnings Pre-tax |
Tax |
Adjusted Earnings |
|
Adjusted Earnings Pre-tax |
Tax |
Adjusted Earnings |
|
Adjusted Earnings Pre-tax |
Tax |
Adjusted Earnings |
Earnings attributable to common
shareholders |
$1,311 |
$(56) |
$1,255 |
|
$1,971 |
$(62) |
$1,909 |
|
$985 |
$(848) |
$137 |
Adjustments to remove: |
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustments |
(7) |
- |
(7) |
|
(91) |
- |
(91) |
|
(14) |
- |
(14) |
Other operating gains, net |
(15) |
- |
(15) |
|
(969) |
- |
(969) |
|
(198) |
- |
(198) |
Other finance (income) costs |
(39) |
- |
(39) |
|
85 |
- |
85 |
|
53 |
- |
53 |
Share of post-tax earnings in equity
method investments |
(10) |
- |
(10) |
|
(3) |
- |
(3) |
|
(20) |
- |
(20) |
Operating loss from Other Businesses
(1) |
- |
|
- |
|
6 |
- |
6 |
|
(64) |
- |
(64) |
Tax on above items |
- |
(6) |
(6) |
|
- |
12 |
12 |
|
- |
64 |
64 |
Tax items impacting comparability |
- |
1 |
1 |
|
- |
(10) |
(10) |
|
- |
773 |
773 |
Amortization of other identifiable
intangible assets |
581 |
- |
581 |
|
647 |
- |
647 |
|
641 |
- |
641 |
Earnings from discontinued operations,
net of tax |
- |
- |
- |
|
- |
- |
- |
|
(10) |
- |
(10) |
Tax charge amortization |
- |
(86) |
(86) |
|
- |
(86) |
(86) |
|
- |
(76) |
(76) |
Dividends declared on preference
shares |
(2) |
- |
(2) |
|
(3) |
- |
(3) |
|
(3) |
- |
(3) |
Adjusted earnings -
current |
1,819 |
(147) |
1,672 |
|
1,643 |
(146) |
1,497 |
|
1,370 |
(87) |
1,283 |
Remove: |
|
|
|
|
|
|
|
|
|
|
|
Deferred tax benefit on
amortization of other identifiable intangible assets |
- |
(148) |
(148) |
|
- |
(167) |
(167) |
|
- |
(174) |
(174) |
Tax charge
amortization |
- |
86 |
86 |
|
- |
86 |
86 |
|
- |
76 |
76 |
Adjusted earnings -
redefined |
$1,819 |
$(209) |
$1,610 |
|
$1,643 |
$(227) |
$1,416 |
|
$1,370 |
$(185) |
$1,185 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per share-
redefined |
|
|
$2.05 |
|
|
|
$1.75 |
|
|
|
$1.43 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted-average common shares
(millions) |
|
|
784.1 |
|
|
|
810.9 |
|
|
|
831.0 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings effective tax rate - redefined
(2) |
|
|
11.1% |
|
|
|
13.4% |
|
|
|
13.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Other businesses are businesses that have been exited
through sale or closure that did not qualify for discontinued
operations classification. |
(2) |
Calculated as income tax expense divided by pre-tax
adjusted earnings plus non-controlling interests and preferred
dividends as follows: |
|
Twelve Months Ended December 31, |
|
2015 |
2014 |
2013 |
Adjusted pre-tax earnings |
$1,819 |
$1,643 |
$1,370 |
Add Dividends declared on preference shares |
2 |
3 |
3 |
Add Non-controlling interests |
56 |
50 |
48 |
Pre-Tax Earnings |
$ 1,877 |
$1,696 |
$1,421 |
Tax Expense |
$209 |
$227 |
$185 |
Adjusted earnings effective tax rate -
redefined |
11.1% |
13.4% |
13.0% |
Refer to the Investor Relations section of Thomson Reuters
website for further financial information and reconciliations
associated with the company's planned changes to the definitions
for adjusted earnings and adjusted EPS, including redefined amounts
by quarter.
Logo -
http://photos.prnewswire.com/prnh/20130208/MM57185LOGO